Expert Zone

Straight from the Specialists

India Markets Weekahead: Continue pruning your portfolio

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

Markets began the week on an optimistic note with the Nifty touching a new high of 8,178 but fatigue was noticeable in frontline stocks as action shifted to the mid- and small-caps.

Though continued weakness in crude oil has been fanning the move beyond 8,000, the fear of a U.S. Fed rate hike and the flood of fresh paper from the government stable kept the lid on the upside. Global markets were also not supportive with most ending in the red except some Asian markets and Japan, which gained due to a weaker yen. The Supreme Court decision on the illegal allocation of coal blocks was deferred, prolonging uncertainty for the sector.

Index of Industrial Production (IIP) data, released after market hours on Friday, turned out to be a dismal 0.5 percent, marking the third consecutive month of decline. Though a number of analysts believe this could be a blip and not a cause for alarm, figures remained positive primarily due to double-digit growth in electricity.

How high will the Sensex go?

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

A bronze bull sculpture is seen as an employee walks out of the Bombay Stock Exchange building in MumbaiSince April, the stock market has been in a frenzy after a long period of utter gloom. In quick succession, the Sensex jumped month after month to cross 26,000 on July 7. This was not mere euphoria created by the election of the Narendra Modi government, with a single-party majority in the Lok Sabha after a long time.

National agenda to bring $100 billion of domestic household savings in capital markets in next five years

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(Rajiv Deep Bajaj is the Vice Chairman and Managing Director of Bajaj Capital Ltd. The views expressed in this column are his own and do not represent those of Thomson Reuters)

Currency of different denominations are seen in this picture illustration taken in Mumbai April 30, 2012. REUTERS/Vivek Prakash/FilesIndia is an attractive investment destination for foreign institutional investors, due to its vibrant economy, favourable demographics, high growth potential and well diversified capital markets. In fact, the benchmark Nifty has representation from 10 broad sectors, four with weightage in double digits.

Indian markets: Earnings in focus, better to stick to fundamentals

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

It’s reasonable to ask whether the Indian stock market has lost steam after the blistering run-up seen over the past couple of months. Since August, the markets have rallied about 40 percent, with many stocks in high-beta sectors such as infrastructure generating a return of more than 100 percent. At a one-year forward price-to-earnings (P/E) multiple of 15x, the Nifty isn’t exactly cheap for retail investors right now.

The Narendra Modi-led government, which contested and won the elections on the development plank, is expected to push for reforms in no time, taking on knotty issues related to taxation and infrastructure.

India Market Weekahead: Ride the election rally with some caution

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

The Nifty touched a high of 6758 during the week, part of a market rally for 10 consecutive sessions – the longest streak in five years.‎ An overdue correction set in towards the end of the week with the Nifty ending flat at 6694.

Advance-decline data suggests that interest is shifting to the small and mid-cap space where advances outpaced declines. Although we are touching new highs, the missing euphoria indicates investor caution  that is good for the health of the market.

Is the current euphoria in equity markets justified?

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

The third-quarter results season corroborates my view that 2014 will be a year of fragile recovery for the Indian economy. Fragile, I reiterate.

The market, however, has run up to an all-time high, with the Nifty breaching the psychological barrier of 6,500. Is the euphoria justified?

India Markets Weekahead: Markets back on track for pre-election rally

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

The week started on a sombre note but with institutional activity picking up, the Nifty closed with gains of 1.97 percent at 6276 despite a mid-week trading holiday. Political activity also gained momentum with 11 parties coming together to form a Third Front to oppose both national parties.

 

The Election Commission may announce election dates in the coming week — the code of conduct coming in will halt any policy decisions.

Will 2014 be any better for investors?

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

High inflation, low GDP growth and a sharp depreciation in the rupee led to subdued returns of 6.8 percent for the Nifty in 2013.

The core sectors — steel, cement, industrials, energy, infrastructure and capital goods — continued their poor performance and hence valuations shrunk, while consumer staples, IT, pharma and private sector financials bucked the trend. But the polarisation towards a few sectors underscores growing risk aversion.

Indian hedge funds get knocked down but get up again

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

The fortunes of hedge funds focused on India continue to twist and turn, with many plots and subplots. After witnessing widespread losses and heavy redemptions in 2008, Indian hedge fund managers bounced back remarkably to post a 50 percent return in 2009. They continued their good form in 2010, delivering healthy gains of 12 percent during the year.

But in 2011, the managers witnessed losses amid declining markets and a depreciating rupee. At the end of that year, many managers expressed confidence in the underlying market for the following year and predicted gains for the rupee by mid-2012 — both these predictions came to pass. The Eurekahedge Indian Hedge Fund Index was up 13.13 percent in 2012, making it the strongest regional hedge fund mandate for the year. Some of the funds even witnessed asset inflows in 2012 and early 2013, a rarity for Indian hedge funds since the financial crisis.

India Markets Weekahead: Results of state elections a key driver

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

Markets had been on a roller-coaster ride but closed weak for the third week in the row with the Nifty in the 5950-6000 range providing support.

A hint from the U.S. Federal Reserve on tapering its bond-buying programme was enough to spook the markets. Though this is expected in the first quarter of the new year, it remains to be seen whether chairman-elect Janet Yellen’s dovish stance would postpone it further.

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