Tuesday 7 June 2016

Indian Equity Markets – The Weekly Report By Imtiaz Merchant



On the back of mixed news flows and the news flows likely to come next week, the Indian markets traded in a relatively smaller range and reduced volatility last week. It closed the week higher but with far too less a percentage as compared to the previous week. RBI policy, Global markets, crude prices, the much awaited monsoon and policy initiative by the government will determine the trend going forward. The current earning seasons ended relatively better with quite a lot of companies reporting results better than the expectations, hence the market held its head high to finish the week above 8200 first time since October 2015, signifying the inherent strength.


Technically, the market is poised for more upside in the near term but would face major resistance between 8340 and 8400 levels and until 8400 is surpassed on close basis the markets could remain in broad range and will be very stocks specific. On the lower side, supports for Nifty is available between 7900 and 8000 and so long as Nifty holds 7900 on close basis the markets will be in the favor of bulls therefore lower levels can be used for selective buying. In the best case scenario, if the markets manage to breakout 8400 it would certainly test the 8650 to 8800 level.



This is a very stock specific market thus investors should be prudent in selecting the stocks, and the most sensible way is to invest in companies that have least debts and good corporate governance. The portfolio as a whole should be well balanced with sectors and size like the auto, consumer good & services (discretionary & non discretionary), information technology and selected stocks from industrials & capital goods sector. One should also ensure that at least 50 to 60 percent of one's portfolio has large size companies in terms of value and it is wise not to invest more than 10 to 12 percentages in one stock of one's portfolio. This will ensure that the risk is well spread and the portfolio is more insulated from risk.

'Buying when others are selling despondently and selling when others are buying greedily requires great fortitude and wisdom, but would yield the highest reward'



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Monday 6 June 2016

RBI maintains status quo with interest rates

In line with analysts’ estimates, the Reserve Bank of India refrained from lowering policy rates in its second bi-monthly monetary policy meet on Tuesday. The central bank retained the repo or the repurchase rate at 6.50% on the back of higher food inflation and amid expectations of a rate action by the US Federal Reserve. Since the rate-easing cycle began in January 2015, the RBI has reduced policy rates by 150 basis points.

One basis point is one hundredth of a percentage point.

The Reserve Bank continued to maintain an accommodative stance and said if all goes well and there is a fall in food inflation, the RBI will be willing to lower rates further. 

Analysts expect the RBI Governor to lower rates on August 9, after getting a clearer picture on monsoon. With predictions of above normal rainfall, Rajan may also not have to worry about RBI’s FY17 growth guidance of 7.6%. India’s GDP grew at 7.9% in the fourth quarter of FY16 and full-year growth came in at 7.6%.

The move or the lack of it was largely expected with CPI, or consumer price inflation, coming in at a higher 5.4% in April from 4.8% in March, primarily on the back of food inflation. Wholesale price index, or WPI, too came in at 0.3% in April, after being in the negative territory for 17 consecutive months, though this may not have been a deciding factor for the RBI. 

Added to this, the market was expecting the US Federal Reserve to raise rates during its June 14-15 meeting. However, Friday’s weaker-than-expected jobs data (US) may result in Janet Yellen not raising rates until further indication that the US economy can remain or stay on track.

*source: Business Standard


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Ramzan 2016




Wednesday 1 June 2016

Here is a 10-point know-how on how much more you will pay:




1.    A 0.5 per cent "Krishi Kalyan" or farmer development cess will be levied on all services from today. This means that you will pay 15 per cent service tax rather than 14.5 per cent. So watching movies, dining out, travelling, making phones calls and buying insurance and property will be costlier. 
2.    Train tickets for AC class will also become costlier as the "Krishi Kalyan" cess will levied purchase of these. Service tax is not applied to non-AC class travel in trains. 
3.     Petrol prices have been hiked by Rs 2.58 a litre and diesel by Rs 2.26 as part of fortnightly revisions by oil marketing companies in the wake of increase in global oil rates.  After the price revision, petrol will cost Rs 65.60 per litre in Delhi and diesel Rs 53.93/litre. 
4.    The price of non-subsidized LPG cylinders has also been hiked by Rs 21 and will now cost Rs 548.50 in New Delhi after the price revision. 
5.   The price of aviation turbine fuel was today sharply hiked by 9.2 per cent. Jet fuel accounts for nearly half of the operating expenses of airlines in India and will impact ticket prices. 
6.     A luxury tax of 1 per cent will be levied from today on cars that cost over Rs 10 lakh. This extra tax will be collected by the seller of the car and will be applicable on the ex-showroom price. However, this extra payment can be set off against the total tax liability of the buyer.
7.    Payment in cash for goods and services worth more than Rs 2 lakh will attract a 1 per cent tax collected at source from today.  Finance Minister Arun Jaitley had in this year's Budget had imposed the tax to discourage high-value transactions in cash. 
8.   However, for cash purchase of gold jewellery, the limit of Rs 2 lakh will not apply. It stays at Rs 5 lakh. 
9.   For stock market traders, sale of options will also attract an increased securities transaction tax (STT) of 0.05 per cent. Earlier, the rate was 0.017 per cent.  Options are contracts that give the buyer the right, but not the obligation, to buy or sell a security or other financial asset at an agreed-upon price during a certain period of time.
10.  The Congress has slammed the government for the price hikes. "Everything is expensive now. Is this achhe din? The government has burdened the common people," said Congress spokesperson Randeep Surjewala.  

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