Pragmatic Wealth Management Pvt. Ltd.: January 2016

Saturday, 23 January 2016

Market Brief – 25th Jan 2016.

The markets continued its downward journey and it got abetted on Thursday and Friday on the back of some stability in crude prices and Global markets, and it ended the week on flat note. The fundamentals look weak and jittery with World Bank downgrading the global GDP growth to 3.4% in 2016 and 3.6% in 2017, but there is some silver lining for Indian economy where the estimates were raised for 2016 at 7.3%, and 7.6% in 2017, well, it needs to be seen how it unfolds and the fundamentals play out. Geo-political fears, weak aggregate demand and awaited policy reforms by Indian Government will all keep the Indian markets under check. At best, one can expect a range bound trade until we see further deterioration or improvement in the underlying fundamentals. The Union Budget next month, too, will play a crucial role in giving the directions to the markets.

Technically, as mentioned in the last newsletter, 7200 on the Nifty is a very critical support and the Nifty for the moment has held this level, and gave a small bounce back on Friday. The supply of equities on higher levels, will keep the markets under check, 7500 to 7650 is the first important resistance area. One needs to see if market manages to close above 7650. If it does close above 7650, we may see some more upside to the market. However, failing to surpass these resistance levels and the undertone being bearish, hence, a close below 7200 would certainly witness a sharp sell-off and perhaps 6800 would be tested. The near term range for the market would be 7200 to 7650, and only a close above or below either sides would determine the trend going forward.

This is a very fragile market and usually occurs every 3-4 years, and according to our studies, this is a sharp correction within the Grand Bull Run. Though painful, but gives tremendous opportunities to long term investors. One need to be cautiously and stock specifically optimistic on the markets, and remain invested or invest in quality companies having good governance and growth. We once again reiterate that this is a good portfolio restructuring time.

Invest the Halal Way!!!

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PRAGMATIC WEALTH MANAGEMENT PVT. LTD.

Head Office:

102, 1st Floor, Topaz Society,

Dr. Nair Road, Agripada, Mumbai Central (E), Mumbai 400011

Tel: +91-8108178683

E-mail: contact@pragmaticwealth.net

Wednesday, 20 January 2016

Markets to settle, investors to go for India: Rajan

Reserve Bank Governor Raghuram Rajan on Wednesday sought to ease fears amid the stock market plunge and the rupee nearing its lowest-ever level, saying things will stabilise and people will look at stable emerging markets, including India. The rupee, Rajan said, has been "relatively strong" in the emerging-market currency basket, but India is affected by the "same kind of jitters" hitting other world markets. "My sense is that, at this point, if you are an emerging market, you focus on fundamentals, try and get inflation down, try and get your current account deficit down, keep your fiscal on target, do all the good things, and then people reward you," he said in Davos.

Investors "take the money off the table in a hurry when they are doing it everywhere, but then they come back". "My sense is that after the initial volatility, things will stabilise, people will try and look for the good, stable emerging markets. India is one of them. Our growth is pretty good, all the other indicators seem to be going well," he told CNBC. While the rupee on Wednesday hit 68.16 per dollar (the lowest since September 2013) before closing at 67.96 per dollar, stocks plunged around 650 points to crash below the 24,000-level on global growth worries before recovering and a sharp slide in oil prices before regaining some lost ground to settle 418 points lower.

On RBI's monetary policy stance next month, he said the rest of the world is facing a deflationary environment and "that will help India disinflate". "It's helped us quite a bit so far, you're right, the lower price of oil will help," he said. Rajan is confident that India is on target to meet January inflation target of below six per cent.

"Going forward, we have to disinflate a little more. So, at the meeting (on February 2), we will take all these factors into account and decide what the next step is, but broadly I would say we are on the right path," the central banker said. Asked if there was room to manoeuvre, he said global investors want to be convinced that India will stay the course and will disinflate because they prefer lower inflation.

"So, we need to, at points of volatility, reassure them that this is indeed what we intend to do," he said. "At the same time, you are right that the disinflationary environment around the world does create room, so we have to play these things against each other."

*source: Business Standard

Invest the Halal Way!!!

Click Here to go through our Weekly Newsletter

PRAGMATIC WEALTH MANAGEMENT PVT. LTD.

Head Office:

102, 1st Floor, Topaz Society,

Dr. Nair Road, Agripada, Mumbai Central (E), Mumbai 400011

Tel: +91-8108178683

E-mail: contact@pragmaticwealth.net

Monday, 18 January 2016

Market Brief – 18th January 2016

It was a pathetic week for the markets wherein the market internals became extremely weak and there was carnage in mid-cap and small cap companies. Although, the major indices, Nifty and Sensex, closed two percent lower for the week, the mid cap and the small cap closed almost ten percent lower. There was total despondency witnessed in the market, and total lack of confidence and fear, all this happened in the backdrop of global market meltdown, China in particular, falling crude oil prices (signifying the Global recession) and no positive news on Indian economic growth scenario. In fact there was a poor showing where IIP is concerned. The only solace market got was good corporate earnings reported by Infosys, BPCL and Reliance in anticipation of improved earnings, showed courage and leadership.

Going forward, unless there is a remarkable improvement in the macros and the micros, the markets will certainly be vulnerable to more sell-off. Where technical of the market goes, it looks extremely weak and down side seems very evitable. Initially it appears that Nifty would test an important level of 7220, that’s about 50 percent retrenchment from the lows of 2014 to the highs of 2015. If markets fail to hold this crucial level, then another leg of selling would take to sub 7000 levels. In the short term, the upside remains capped at 7700. Extreme volatile moves will be the rule of the game, in the near term.

One has to keep an eye on the earning season, companies showing improved sequential growth in terms of top line & bottom line will show a remarkable improvement in the stock prices and at the same time poor results will crush the stock prices further down. The year 2016, very apparently appears to be a volatile year and it would be a stock picker’s market. One needs to exercise caution and take courage to exit from under performing stocks and switch to better performing companies. This is a good portfolio restructuring time.

Invest the Halal Way!!!

Click Here to go through our Weekly Newsletter

PRAGMATIC WEALTH MANAGEMENT PVT. LTD.

Head Office:

102, 1st Floor, Topaz Society,

Dr. Nair Road, Agripada, Mumbai Central (E), Mumbai 400011

Tel: +91-8108178683

E-mail: contact@pragmaticwealth.net