Expert Zone
Straight from the Specialists
Gold not a good investment for now
(Any opinions expressed here are those of the author and not of Thomson Reuters)
Since November, the price of gold has been unstable but in April, its decline was precipitated. What is surprising is not the fall itself but its speed. In just two sessions, gold prices dropped 13 percent in the steepest fall in 33 years. It wasn’t gold alone that got caught in the bear grip. Prices of other commodities such as silver, crude oil, copper and so on also declined, but not as sharply.
Why? Simply because the factors that caused commodity prices to rise in the last five years were no longer relevant. Gold was selling at $625 an ounce (860 rupees per gram) only six years back in 2008. That October, the world was plunged into a financial crisis of an unusual magnitude. Since then, there has been a rush for gold as an investment. Stock markets crashed, interest rates plunged, investors lost faith in financial assets and opted for gold as a safe investment.
That presumption was supported by subsequent trends in gold prices. Over the next five years, prices shot up in India as much as 3-1/2 times, making gold not only safe but also the most lucrative investment. The stock market took all that time to recover from the 2008 shock but has not, even now, come up to pre-crisis levels. Gold became a preferred part of the portfolio and gold-backed exchange traded funds (ETFs) were a favourite with investors.
Budget 2013 does have some words of wisdom
(Any opinions expressed here are those of the author and not of Reuters)
The finance minister had a tough job in hand with this being the government’s last budget before elections due in 2014. P. Chidambaram had to focus on fiscal consolidation while walking a tightrope between populism and pragmatism.
In my previous column, I had written about the issues he needs to address. Here’s a look at how Budget 2013 fared on these counts.
India Markets Weekahead – Opportunity for those who missed out rally
(Any opinions expressed here are those of the author, and not necessarily of Thomson Reuters)
It was a second straight week of losses of 1.59 percent with the Nifty closing at 5,903. As discussed in this column a fortnight back, we are in a phase which would tire out the participants and change the mood to a negative consensus on the street.
India Markets Weekahead – Still time to tank up for a pre-budget rally
(Any opinions expressed here are those of the author, and not necessarily of Thomson Reuters)
The Nifty has crossed 6,000 levels while the Sensex breached the psychological barrier of 20,000 to touch a two-year high — triggered by an overdrive of government action, encouraging macro numbers, corporate results and no bad news internationally.
India Markets Weekahead – Company results key for market direction
(Any opinions expressed here are those of the author, and not necessarily of Thomson Reuters)
Infosys stumped Indian markets again but for a change — positively. Recent management comments had built expectations of underperformance which led to cautious to negative views on the stock. Institutional investors were light on Infosys whereas the more adventurous speculators were short. And we were all caught on the wrong foot when the company declared a revenue growth as well as a net profit much better than consensus expectations.
India Markets Weekahead – Set for new high with no roadblock in sight
A resolution for the U.S. “fiscal cliff” helped the markets cross the psychological Nifty benchmark of 6,000 to close the week up 1.82 percent at 6,016.
Though I expected a spirited rally, what we witnessed last week is a strong consolidation around 6,000 which could form a solid bottom for the next leg of the rally. This is also facilitating the entry of domestic retail investors which is visible in the mid-cap and small-cap volume and performance. The BSE small-cap index moved up 3.71 percent whereas the BSE mid-cap index gained 3.13 percent.
India Markets in 2013: ball is in government’s court
(The views expressed in this column are the author’s own and do not represent those of Reuters)
If calendar year 2012 was the year of scams in India which helped induce some much needed government reforms, the year 2013 is expected to be a year of hope and expectation for India and India Inc. There are expectations on better political governance, fall in inflation levels and hence interest rates, creation of an investment friendly business environment and lots more. It’s also the year with the last finance budget before the 2014 general elections.
India Markets Weekahead – A breakout expected before the year ends
(The views expressed in this column are the author’s own and do not represent those of Reuters)
Markets struggled to hold beyond Nifty levels of 5900 and closed the week 0.47 percent down, breaking a three-week streak of gains. Uncertainty over the banking regulations bill seems to have overshadowed better-than-expected wholesale price index-based inflation data in November. Industrial production soared by 8.2 percent, surprising analysts and sending signals that green shoots of economic recovery are visible.
India Market Weekahead – Reforms, RBI rate cut could help Nifty break 5,800
There was consolidation within a narrow Nifty band of 5,640 and 5,720 last week, with a bit of volatility and a flat closing at 5,684.
Heavyweight results and political heat dominated the mood on the street. The government’s reform agenda continued with a Group of Ministers (GoM) panel clearing a watered down land acquisition bill, a development which was cheered by industry leaders only to be later vetoed by Congress chief Sonia Gandhi. The much awaited expose by activist-turned-politician Arvind Kejriwal failed to create ripples.
Temporary market correction an opportunity to buy
(The views expressed in this column are the author’s own and do not represent those of Reuters)
Opposition party protests against the UPA coalition government’s economic reforms could not puncture market sentiment in the past four weeks. One domestic brokerage house dealer’s “fat finger” did it in just a few seconds.
