Tuesday 15 September 2015

August trade deficit flat at $12.48 billion, exports fall to lowest in about 5 years.


The trade deficit for the month of August has come in almost flat at USD 12.48 billion against USD 12.81 billion month-on-month (MoM), even as imports dipped 9.95 percent to USD 33.74 billion versus USD 35.95 billion MoM. Merchandise 
exports plunged 20.7 per cent to $21.3 billion in August from $26.8 billion in the year-ago period, the ninth consecutive monthly decline and the steepest in the first five months of this financial year. In terms of a monthly year tally, exports are at multi-year lows. The fall resulted from a massive demand slowdown in global markets and an uncertain global economic environment, owing to a crisis in China.



The value of exports in August was the lowest in about five years. For April-August, exports from India stood at $111.1 billion, down 16.2 per cent compared with $132.5 billion in the year-ago period, according to data released by the commerce and industry ministry on Tuesday. Meanwhile, oil imports for the month declined significantly to come in at USD 7.36 billion against USD 9.49 billion MoM. Gold imports on the other hand surged to USD 4.96 billion against USD 2.97 billion in July. Non-oil imports remained largely unchanged at USD 26.39 billion against USD 26.46 billion MoM. Silver imports for the month stood at USD 363.41 million versus USD 277.77 million MoM. For the period between April and August, trade data came in at USD 57.52 billion versus USD 58.22 billion year-on-year, with imports coming in at USD 168.61 billion against USD 190.75 billion YoY and exports at USD 111.09 billion versus USD 132.53 billion during the same period last year. India wasn’t the only Asian country to see a steep fall in exports. A YES Bank note said exports from Korea declined 14.7 per cent in August, the most in six years, while those from China contracted 5.5 per cent.



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Monday 14 September 2015

Wholesale prices fall 4.95% in August 2015

India’s wholesale inflation remained in the negative terrain for the tenth straight month in August 2015 at (-) 4.95% in spite of a sharp spine in onion and pulse’s prices resulting in practical measures by the government to seize price rise.

The deepening of deflation in August could be explained by restrained global commodity and crude prices besides deflation in the core sector, a sign of weak demand in the economy. The descending prices of potato and other vegetables also contributed to the decline.

The wholesale price index fell 4.95% in August compared to a 4.05% decline in July, marking the tenth month of deflation, data released by the ministry of commerce and industry showed on Monday.

Food inflation, with over 14% weight in the index, remained in the deflationary zone for the second straight month at (-) 1.13% in August versus (-) 1.16% in the preceding month. Vegetables prices fell 21.21% in August versus 24.52% in July, marking the fifth straight month of deflation.

The price rise of onions zoomed up 65.29% in August from a year ago, compared to a negative 0.49% in July. Inflation in 
pulses rose to 36.4% during the month versus 35.75% in July. As pulse’s price shot up to Rs 155 per kg, the government has decided to import additional 5,000 tonnes of tur dal to make certain domestic supply. The government has also imported large amount of onions from Egypt and Afghanistan to enhance domestic availability.

The deflation in the core sector deepened during the month, suggestive of weak domestic demand. This may urge the RBI to cut rate for the fourth time in 2015 during the policy meet on September 29, 2015.
RBI has cut rates thrice by 25 basis points each this calendar year thus taking the repo rate to 7.25%, from 8%.

Manufactured products’ inflation essentially considered by RBI for policy decisions fell further to 1.92% versus 1.47% in July 2015. The average wholesale inflation in 2014-15 was 2.1% against 6.0% in 2013-14. The deflation in fuel intensified further in August to 16.5% from 12.81% in the previous month. Oil prices have fallen by over 50% in the last one year. Brent crude prices stood as $48.59 per barrel on Friday, 1.5% lower than the previous day.


Falling Oil Prices




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Thursday 3 September 2015

IMPORTANT DETERMINANTS OF THE INDIAN ECONOMY


 Some of the important factors and determinants of the economy, and the changes that have occurred during the last 2 years.


INFLATION – The WPI (Wholesale Price Index) Inflation has come down from 7.05 percent to a negative 4.05 percent. After changing the main gauge of inflation from WPI to CPI (Consumer Price Index), because CPI hurts the common man more, the CPI has come down from 9.80 percent to 3.78 percent in July 2015.



FOREX – The Foreign Exchange has increased from the past 2 years,  from $ 274 billion in Sept 2013 to $ 355 billion in August 2015, partly due to global energy prices falling.



INR – The Indian rupee is depreciating vis-a-vis the dollar, due to market forces of demand and supply, but the RBI Governor, Dr. Raghuram Rajan is not concerned. Instead he says this is health for the Indian Rupees.



CRUDE OIL – The Brent Crude Oil is currently trading at $46.09/bbl. 



CURRENT A/C – The Current Account deficit gap has decreased and the economy is moving towards the goal of a developed nation.  



NPA – The NPAs in the banks was and still remain a cause of concern for the RBI, the finance minister and the banks. The NPA has increased from `228321 crore in Sept 2013 to `320554 crore in June 2015.





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Caution: Islamic Investments strictly prohibits intraday trading and Derivative trading. Stocks should only be sold upon procuring the delivery.

Disclaimer: The recommendations made herein do not constitute an offer to sell or a solicitation to buy any of the securities mentioned. No representations can be made that the recommendations contained herein will be profitable or that they will not result in losses. Readers using the information contained herein are solely responsible for their actions. Information is obtained from sources deemed to be reliable but is not guaranteed as to accuracy and completeness. The above recommendations and Newsletters are based on the theory of Technical & Fundamental Analysis Combined. © Pragmatic Wealth Management Pvt. Ltd.












Wednesday 2 September 2015

DAILY REPORT – 2nd SEPTEMBER 2015






Market Brief – Continuing the losing streak, Sensex, today, closed at 25453.56, down by 242.88 points, and -0.95 percent, whereas Nifty closed at 7717, down by 68.85 points, -0.88 percent, despite a promising start in the early trade triggered by Government’s move to do away with MAT on Foreign Portfolio Investors (FPI).

The market sentiments turned negative, despite the positive trigger of MAT, on the back of weak China data and Global market cues. Globally, the Euro markets and the US markets are also trading lower by 469 points and 2 points respectively.
The BSE Smallcap index ended positive for the day, and closed at 10749.63, up by 16.25 points, and 0.15 percent. However, the BSE Midcap index gave a negative close of 10437.07, down by 86.76 points, and -0.82 percent.

The short and the intermediate trend for the markets still remain down, whereas the long term trend is still up. The Sensex has broken the support level of 26000, and is trading between 25500 and 26000. The Sensex will slip down more if it closes below the level of 25300. Nifty has broken the support level of 7880, and is trading between the range of 7700 and 7800. The Nifty may dive down more if it gives a close below 7670.

Investors are advised to remain cautious and stay invested in the market with a long term perspective, in the blue chip, low debt and good governed stocks.



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Caution: Islamic Investments strictly prohibits intraday trading and Derivative trading. Stocks should only be sold upon procuring the delivery.

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