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Straight from the Specialists

Markets Weekahead: After new Modi govt, correction to continue for a few weeks

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

After a dream run for markets, we witnessed a correction last week with the Nifty declining about 1.86 percent to close at 7,229. The smaller stocks also paused — the NSE mid-cap index lost about 4.5 percent.

Incidentally, India entered the top 10 markets in terms of market capitalization and we should soon cross the market capitalization of US $ 1.5 trillion once the upswing resumes.

Till late last week, it looked that the honeymoon would continue for a while. But, neither politics nor markets remain in a constant mode. The markets seem to have discounted the best possible scenario of implementation of manifesto promises and the economy getting back on growth path.

PM Modi greets Harsimrat Kaur Badal after she took her oath of office as a cabinet minister at the presidential palace in New Delhi The first signs of correction were seen on Monday before the swearing-in of the new council of ministers – the reaction seemed inverse of the May 9 movement when the markets seemed to have got the whiff of the exit polls and a new rally had started. Now, the first phase of the welcome rally seems to be over and we should be entering into a phase of consolidation.

LIC launches online term insurance plan, finally

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

There are 24 life insurance companies operating in India, and Life Insurance Corporation of India (LIC), the industry’s biggest player, was one of only five which did not have an online term plan, until now.

LIC had earlier tested the online waters with an immediate annuity plan, but stayed away from the most-purchased plan – online term insurance.

Food prices matter: here’s why

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

Investors are cautiously starting to examine the topic of food price inflation once again. The United States recently saw a sharp rise in producer price food inflation. Further down the economic development ladder, producer prices for the food manufacturing industry of China have been steadily creeping higher from the lows reached two years ago.

The rupee at a crossroads

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

The rupee was tossed around quite a bit in the last 10 months. It dropped to a low of nearly 69 to the dollar, creating an economic crisis, before it recovered and is now at 59-60. The threat is not that it may drop once again, but that it may appreciate further and upset the economy in other ways.

Why would the rupee appreciate? Because there are expectations the Narendra Modi government will facilitate development and enable the economy to get back on course. This is what drove the Sensex beyond 25,000. But the currency market was more stable in spite of the huge inflow of $2.2 billion in 10 trading days of May.

Markets Weekahead: A decisive mandate for equities

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

Not even exit polls could have predicted the landslide election victory that ‎has put the BJP’s Narendra Modi in the driver’s seat for India.

The Nifty, after the initial euphoria of a 6 percent upswing, ended Friday at 7203, merely 80 points higher than the previous day. It was a typical “sell on news” phenomenon.

Challenges ahead for Narendra Modi

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

Supporters of Hindu nationalist Narendra Modi, prime ministerial candidate for India's main opposition Bharatiya Janata Party (BJP), wear masks depicting Modi outside their party office in MumbaiThe swearing in of Narendra Modi as India’s next prime minister is imminent. Voters have given the BJP an overwhelming majority and the party is all set to form the next government on its own.

Modi, who ran a blistering campaign on the promise of better governance and a crackdown on corruption that had progressively hobbled the Congress-led UPA government, raised huge expectations among a jaded and weary populace.

Debating India’s election cheat sheets

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

As the sun set on the final phase of polling in India on May 12, newsrooms were waiting impatiently for 6.30 p.m. — the deadline set by the Election Commission for airing survey results on post-poll predictions.

Elaborate studio sets packed with guests and news anchors flanked by psephologists armed with data sets were all waiting to declare that Narendra Modi is coming to Delhi.

Markets Weekahead: ‎Time to book profits and not be greedy

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

The highlight of the past week was a stupendous 3 percent rally on Friday with the Nifty ending at a record high of 6858. Investors were in a sombre mood earlier in the week, when the market was threatening to break a crucial support level around 6650.

The sudden turn on Friday and the ferocity of the move took most participants by surprise. It was a combination of fresh buying as well as short covering which resulted in a near 200 point rally. It seemed everyone wanted to join the bandwagon due to the fear of missing a bigger rally.

The Modi view on security issues

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

A Sadhu or a Hindu holyman wears a badge with an image of Hindu nationalist Narendra Modi, prime ministerial candidate for India's main opposition Bharatiya Janata Party (BJP), outside an ashram in Ayodhya, Uttar Pradesh May 6, 2014. REUTERS/Anindito MukherjeeResults of the five-week general election will be announced on May 16, with the Bharatiya Janata Party (BJP) led by Narendra Modi favoured to win.

Thus Modi’s views on major security and strategic issues facing India acquire greater salience.

A shortcut to industrial recovery

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

A worker sprays water over piles of coal at Mundra Port Coal Terminal in the western Indian state of GujaratThe rate of growth in infrastructure industries falling to 2.6 percent in FY2013-14 came as a shock. That’s because these industries had been consistently growing at relatively high rates in the previous three years, in spite of the drop in production in other industries.

Infrastructure industries include coal, crude oil, natural gas, refinery products, fertilizer, steel, cement and electricity. Production of natural gas has been shrinking since FY2011-12. Even so, the infrastructure group maintained steady growth between 5 percent and 6 percent. The sharp drop last year was caused by lower growth in the steel and cement industries.

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