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India Markets Weekahead: Await a sharper correction to nibble in

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

The truncated week which opened after a five-day vacation was in a sombre mood except on Thursday, when markets bounced back due to a dovish Fed commentary. Friday again saw a correction, with the Nifty closing the week at 7860, down 1.07 percent.

People walk past the Bombay Stock Exchange (BSE) building in Mumbai May 13, 2014. REUTERS/Danish Siddiqui/FilesThe prospect of world economic slowdown perturbed international markets, and the Dow saw its worst week since May 2012, which in turn affected Indian markets. FIIs continued to pull out, increasingly worrying traders who are already baffled by the volatility.

The results season started off on a positive note with Infosys declaring better-than-expected profits and a bonus of 1:1. Although the stock rose 7 percent, it wasn’t enough to support sentiment in the rest of the market including the IT pack.

The automobile sales data for September continued to show an uptick while the HSBC PMI data for September was mixed, with services rising to 51.6 but manufacturing declining to 51.

India Markets Weekahead: Continue pruning your portfolio

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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.

India Markets Weekahead: Time to prune positions in an extended honeymoon

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The Nifty closed at a new closing high of 7,954 amid volatility in an eventful week that started with the Supreme Court ruling that the allocation of more than 200 coal blocks over the past two decades was illegal.

With nearly 3 trillion rupees at stake, this had a direct effect on the metals and power sector. It also affected banking, which has exposure to the two sectors.

How high will the Sensex go?

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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.

India Markets Weekahead: Wait for post-budget opportunities

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Markets were fairly volatile last week, reacting to tough measures taken by the Narendra Modi government to get India’s economy back on track amid worries over monsoon rains and the situation in Iraq.
cfcd208495d565ef66e7dff9f98764da.jpgLong-term investors hailed the hike in railway freight and passenger fares as a step in the right direction to bring down indirect subsidies. However, the government rolled back the hikes on suburban fares to a large extent due to political considerations.

Monsoon rains have started on a weak note but if the rains pick up in July and the El Nino effect is tempered, it would have a direct impact on inflation and interest rates.

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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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.

In defence of the defensives: Why IT, pharma stocks are not pariahs

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Expectation that the ongoing general election will throw up a stable government has spurred a return to risk in domestic equities. The consequent rally has meant those favoured defensives of the sluggish times – information technology and pharma stocks – received a shearing.

The CNX IT index shed 7.8 percent and CNX Pharma 10.1 percent in March – even as the benchmark Nifty surged 6.8 percent.

India Market Weekahead: Time to take some profits off the table

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A rally of hope tempered by caution pushed the Nifty 1.2 percent up to 6,776 for the week. Investors believe the worst is over and a new government would be the catalyst for a sustained economic upturn. In election season, hope for a better tomorrow helps the market ignore ground realities.

A record turnout in the ongoing general election is being seen as an anti-incumbency vote. As the market continues moving up, investor hopes for a stable government get priced in, leaving hardly any room for a disappointment. On the other hand, fence sitters who got left out of the rally will join the fray, adding to the momentum already built by investors.

India Markets Weekahead: ‎Ride the election rally but skim the profits

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The market began the week on a high note after an extended weekend but could not sustain the rally due to profit booking. The Nifty was at a high of 6570 on Tuesday but the rest of the trading days remained lackluster and it ended the week with a marginal loss – at 6495 after the extended trading session on Saturday.

Although the week was marked with heightened political activity as candidates for the general election were announced, the U.S Federal Reserve had a sobering effect on the markets. The Fed decision to continue with further tapering of $10 billion and focus on interest rates, which should start rising sooner than expected, saw corrections in most markets as the dollar strengthened.

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