India Insight

Markets this quarter: Sensex gains 5.7 percent, L&T surges 19 percent

By Aditya Kalra and Sankalp Phartiyal

Indian shares posted record highs in March as strong foreign buying sent blue-chip stocks such as Larsen & Toubro higher and boosted overall investor sentiment ahead of a general election.

Provisional data showed foreign investors bought shares worth more than $3 billion in March, pushing the BSE Sensex to a life high of 22,467.21 points on the last trading day of the quarter. While the index rose 6 percent during the month, it rose 5.7 percent in the Jan-March period.

Markets rallied on hopes that the main opposition Bharatiya Janata Party, perceived to be more business -friendly, would emerge as a winner in the general election, while hopes of a recovery in the domestic economy also aided sentiment.

The rupee also gained during the period and posted its best quarter since Sept. 2012. In March, the Indian unit also breached the 60/dollar mark for the first time in eight months.

Market participants would focus on the Reserve Bank of India monetary policy review on Tuesday, in which the central bank is expected to keep its key interest rate steady at 8 percent. February wholesale price inflation has slowed to below 5 percent and retail price rises have eased to a 25-month low.

Equity mutual funds record best monthly performance since Jan 2012

India’s diversified equity funds posted their best monthly performance since Jan 2012 as the benchmark Sensex scaled record highs in October, with bets on sectors such as banking and capital goods boosting mutual fund returns.

Such schemes, which form the largest category of equity funds in India by number and assets, rose 9.2 percent on average, mirroring returns on the 30-share BSE Sensex, data from fund tracker Lipper, a Thomson Reuters company, showed.

The Sensex hit an all-time closing high in October — and went on to touch a life high on Nov. 1 ahead of the Diwali weekend — bolstered by foreign inflows of around $3.5 billion after the U.S. Fed decided to delay stimulus tapering.

Markets this week: Sensex falls 2.6 percent, Jindal Steel slumps 9 percent

After rising for four consecutive weeks, the BSE Sensex fell 2.6 percent in the last five trading sessions, as a surprise repo rate hike by the Reserve Bank of India (RBI) on Sept. 20 dampened investor confidence and battered banking shares.

Rate-sensitive sectors were hurt — the banking index and the realty index lost over 7 percent in the week. YES Bank fell 14.5 percent, SBI lost 6 percent while shares of DLF slumped 13 percent.

While analysts expected the new RBI chief Raghuram Rajan to hold rates last week, expectations for monetary policy have suddenly shifted towards further tightening after the rate hike, a recent Reuters poll showed.

Bharti Airtel, NTPC top Sensex losers this week

By Sankalp Phartiyal and Ankush Arora

The BSE Sensex recovered on Thursday and Friday after the index lost around 700 points in the first three trading sessions of the week. However, the index still ended down 0.4 percent as a weak rupee, concerns over foreign flows and uncertainty over the end of the U.S. Fed’s stimulus plan kept investors on the edge.

As a worsening current account deficit and inflation loomed large, the rupee hit fresh record lows below 65 per dollar in the week ending Aug. 23. However, gold prices and bonds rallied.

Fitch Ratings has warned Asia’s third-largest economy of a downgrade if the government fails to soothe tensions in the financial market. JP Morgan and HSBC downgraded Indian shares to ‘neutral’.

Tracking Sensex: L&T top loser this week

By Aditya Kalra and Sankalp Phartiyal

The Sensex lost 2 percent and the Nifty slipped 2.3 percent in a tough week for stocks as Indian markets remained cautious ahead of the Reserve Bank of India (RBI) policy review on July 30.

The benchmark Sensex, which ended in the red for three of five trading sessions, touched a 2-1/2 year high during the week as consumer goods shares surged.

The rupee continues to be in focus as it hit a five-week high on Friday. The RBI tightened liquidity further on Tuesday to support the rupee and the central bank is likely to hold rates at its policy review next week.

Tracking Sensex: Top five gainers, losers this week

The BSE Sensex ended above the 20,000 mark on Friday after gaining 2.6 percent in the last five trading sessions. The index has now risen for four straight weeks. Here are the top five Sensex gainers and losers of the week:

GAINERS

Tata Motors: The automaker’s stock surged 8.15 percent in the week ending May 10, making it the best Sensex performer. Though the stock is still flat in 2013, it has gained nearly 15 percent since April. However, Ambareesh Baliga of Edelweiss Financial Services advises caution: “Tata Motors’ overdependence on Jaguar Land Rover (JLR) to negate the Indian underperformance makes it a risky investment at this juncture especially in view of lower margins at JLR”

Hindalco: Shares of India’s largest aluminium producer surged 8 percent this week. The stock extended gains throughout the week after rising 3.5 percent on Monday, on expectations of better realizations after copper prices rose more than 6 percent last Friday.

God and the central banker

Can central bankers play god to the markets? India’s central bank chief Duvvuri Subbarao does not believe so. In doing so, the Reserve Bank of India governor, a physics student, has taken refuge in quantum mechanics.

Subbarao takes the example of Einstein, who could not reconcile to the probabilistic nature of quantum mechanics all through his life.

Einstein famously said – “God does not play dice”. Less known perhaps is the retort of his friend and mentor Niels Bohr who said – “Albert, stop telling God what he can or cannot do”.

Can India’s love for cricket move stock markets?

India's Pragyan Ojha (R), Vangipurappu Laxman (rear, obscured) and Laxman's runner Suresh Raina celebrate India's victory over Australia on the fifth day of their first test cricket match in Mohali October 5, 2010.  REUTERS/Andrew Caballero-Reynolds
It’s widely acknowledged that cricket is something of a religion in India but could it be a market-mover too?

According to research by two Australian economists, India’s performance in one-day cricket matches can have a significant impact on the fortunes of the country’s stock market, the Indian Express reports.

Moreover, the researchers concluded that a win — expected by the millions of die-hard fans — has no impact on market returns but a loss “generates a significant downward movement in the stock market.”

Surviving as a woman in urban India

As I stood waiting for an auto rickshaw near India Gate in New Delhi last December, three big cars slowed down within a quarter of an hour to check me out. They waited for a few minutes and then drove away without anyone getting out.Many of my friends have experienced much the same thing — especially in India’s capital, a woman walking in the street is too often seen as fair game if a man isn’t with her.When I came home, I checked myself in the mirror to see what it was about my appearance that caught their eye.Bespectacled, with no make-up, dressed in loose fitting jeans and a baggy sweater, I could not figure out why. I asked my husband, “Who do I look like?”He laughed and said, “In Delhi you just have to be a woman, how you look doesn’t matter”.I have been traveling by myself on Delhi’s public transport since my college days. Bus conductors have tried to brush against my fingers while giving me a ticket, and well-dressed, middle-aged men have whispered in my ear to ask for my phone number.These experiences have changed the way I behave on the streets of a city I otherwise love. I avoid looking auto rickshaw drivers in the eye just in case they get the wrong idea and I’m always on my guard against gropers while walking, especially in markets.I avoid driving alone after eight-thirty to avoid male drivers following me, or worse. A media colleague working at one of India’s national TV channels was killed last year while driving by herself late at night. At the time, the chief minister of Delhi, Sheila Dikshit, said the girl should not have been so adventurous as to travel at three in the morning. She later said her remark had been blown out of proportion.A friend told me she complained to police when someone tried to snatch her bag in the market. Instead of investigating the case, the duty officer started questioning her about just what exactly she thought she was doing out at eight-thirty in the evening.When I look back at the families I knew growing up, I can begin to see why some men seem to think the way they do. As an only child, I had a pampered upbringing. But when I was invited to other families for lunch or dinner, if the dining room was too small to fit all the guests, the men would always be served first and given the best portion of the food.If a family could not afford to send all their children to private schools, it was invariably the girls who gave way and went to a government school instead. One of my friends, when he was a teenage boy, could go on dates without having to explain himself. But all hell would break loose if his sister had a similar adventure.When the friend of mine was looking for a suitable husband, her parents introduced her to a lot of people. She told me about one conversation she remembers: the first thing the man asked her was, “do you smoke, do you drink?”When she asked why, he said “you can’t take such girls to your mother.” He himself did enjoy a tipple, and needless to say she didn’t marry him.ALSO READ: Domestic abuse plagues India’s upper crust

Less profit is not loss

The times they are a changin’, and indeed they have. For better or for worse, I am not sure, but what has changed is the way we look at making money from money.

Call it what you may — credit crisis, crisis of confidence, financial tsunami, meltdown — erosion of wealth is never good news. And rattled markets often lead to political turmoil and even shift in power.

So what is happening in the markets, economy, and banks; well, with anything to do with the art and science of making money?

  •