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India Markets Weekahead: Tough for Nifty to climb above 7,800

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

Indian markets were unaffected by the week’s international developments, with some help from encouraging domestic macro data and a pep talk by Finance Minister Arun Jaitley in post-budget discussions.

The Nifty recovered from the previous week’s losses, closing 2.67 percent up at 7664. Positive IIP data was followed by benign inflation at 5.43 percent, a four-month low. Monsoon rains, which had been playing truant, recovered substantially with the deficit shrinking to 15 percent below average last week and covering the entire country.

The geo-political tension in west Asia as well as the shooting down of a civilian aircraft in the war-torn region of Ukraine did not affect Indian markets though the U.S. and European markets reacted adversely.

Prime Minister Narendra Modi earned a feather in his cap when he negotiated for an Indian to be the first president of the $100 billion BRICS Bank. It is expected that this would supplement government spending in the Indian infrastructure sector in the next two-three years.

Budget strikes the right chord on reviving investment

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

Finance Minister Arun Jaitley (C) poses as he leaves his office to present the federal budget for the 2014/15 fiscal year, in New Delhi July 10, 2014. REUTERS/StringerPatient, consistent baseline play rather than aggressive serve and volley — that about sums up the Narendra Modi-led government’s maiden budget.

Budget 2014/15 reveals priorities, sets the stage

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

The new Narendra Modi government rides on a long wishlist of policies and reforms, with limited resources. Budget 2014/15, as expected, reveals the government’s priorities in the near and medium term.

Arun Jaitley poses as he leaves his office to present the union budget for the 2014/15 fiscal year in New DelhiThe inflation moderation imperative overshadows near-term headline growth desires, manifested in aggressive (albeit challenging) fiscal deficit targets. The projected fiscal deficit of 4.1 percent (3.6 percent of GDP in FY16) versus the 4.6 percent recorded in FY14, is in line with expectations. The reduction in the budget deficit is driven by hoped-for revenue growth rather than depressed spending growth.

India Markets Weekahead: ‎Book out of high-beta stocks

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

Finance Minister Arun Jaitley (C) poses as he leaves his office to present the federal budget for the 2014/15 fiscal year, in New Delhi July 10, 2014. REUTERS/StringerThe Narendra Modi government presented its maiden budget on Thursday. Although the budget was welcomed by industry leaders, the market meltdown seems to be telling a different story, with the Nifty posting its biggest weekly loss in 15 months.

Should it have been a path-breaking budget or is it prudent to build the economy brick-by-brick by walking the middle path? The much hyped “bitter pill” turned out to be a “bland” one.

‎India Markets Weekahead: Correction could follow budget week

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

Last week’s robust pre-budget rally belied expectations, with the Nifty closing up more than 3 percent at a record high of 7,751‎. Automobile sales, manufacturing PMI as well as services PMI showed an uptick. The Iraq turmoil seems to have taken a back seat with oil prices receding from a nine-month peak. A rally in world markets, with life highs for the DJIA and S&P 500, also aided sentiment.

India’s fiscal deficit in the first two months has already touched 45.6 percent of the full-year target. Though this would have been a negative indicator, the markets welcomed Finance Minister Arun Jaitley’s remarks about focusing on fiscal consolidation against “mindless populism“.

India Markets Weekahead: Pre-budget rally may be muted

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A man looks at a screen across the road displaying the election results on the facade of the Bombay Stock Exchange (BSE) building in Mumbai May 16, 2014. REUTERS/Danish Siddiqui/Files(Any opinions expressed here are those of the author and not of Thomson Reuters)

The Nifty touched a new high of 7,700 before cracking on Friday to slip about 0.5 percent for the week. This was primarily triggered by the unrest in Iraq and the subsequent rise in crude prices.

The markets were also overbought aided by a relentless rally since May 9‎, with the CNX Nifty climbing about 16 percent, S&P BSE Midcap Index rising 26 percent and the S&P BSE Small cap index jumping 35 percent. The last one-month saw 115 multi-baggers with 92 percent of traded stocks gaining during the period. The probability of picking a loser was minimal. It seemed making money had never been so easy.

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.

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.

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.

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.

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