As dust settles on election results, investors now keenly wait for the formation of new government structure, which PM elect Narendra Modi has indicated would be small and compact. Investors are all excited and the sentiment on the street is quite bullish – midcap gained more than 10% this week, largely due to strong performance from domestics. Also, see this chart.
Modi will take the oath of PM office on Monday along with his cabinet (hopefully) and we may see return of Arun Shourie to mainstream politics. He was widely known for his portfolio of disinvestment minister – when he ushered in slashing govt stakes from key companies in a bid to make them less bureaucratic, less corrupt and more competitive and efficient.
There are huge expectations with new govt, which has won this election on the agenda of development and reforms. A Reuters report cited this week that finance ministry is working on a proposal to cut welfare spending and reining in fiscal deficit to 3.8-3.9% of GDP in its first budget – hopefully will be presented in July. In my view, it is a prudent step – not only it will make govt. more fiscally responsible, it will also have a long-term impact on inflation.
Sensex ended this week up by 2.4% while Nifty was up by 2.3% and Midcap up by 10.2%
Monday - Sensex up by 1.0%, Nifty up by 0.8%, Midcap up by 4.4%
Markets continued their journey upwards, with Sensex and Nifty on their record-breaking spree. The domestics remained the central attraction to investors and sustained their rally. Gains were capped with exporters such as IT majors and pharma falling as rupee strengthened against the dollar.
Tuesday - Sensex up by 0.1%, Nifty up by 0.2%, Midcap up by 1.0%
Strong performance by domestics and midcaps continued as cabinet formation days draws nearer.
Wednesday - Sensex down by 0.3%, Nifty down by 0.3%, Midcap up by 0.7%
Finally, benchmark indices took some breather as blue chips such as L&T retreated from recent strong gains a day after foreign investors turned net sellers for the first time in about a month.
Thursday - Sensex up by 0.3%, Nifty up by 0.3%, Midcap up by 1.7%
Expectations that Coal India might get split into smaller companies, led to a rally in the stock. The Nifty closed at a record high as investors resumed buying stocks of companies expected to benefit from an economic recovery. Titan surged after RBI allowed banks to provide gold loans to jewellery makers.
Friday - Sensex up by 1.3%, Nifty up by 1.2%, Midcap up by 2.0%
Markets rallied after SBI surged 10% after reporting decline in bad loans indicating worse may be over for banking sector in terms of asset quality. There was some rally in power stocks in expectations of reform measure from incoming government.
Sunday, May 25, 2014
India vs.The Rest
Reuters recently reported that India is the best performing market in Asia-Pac in 2014. See the link to the story here. Let's see how we are faring in comparison to our developed and emerging market peers.
Hat tip: The Reformed Broker
Click on the chart for bigger version.
Hat tip: The Reformed Broker
Click on the chart for bigger version.
Douglas Adams on our Reactions to Technology Over Time
Reminds me of a quote from Stewart Brand, editor of Whole Earth Catalog - "Once a new technology rolls over you, if you’re not part of the stream roller, you’re part of the road."
Hat tip: Farnam Street
Hat tip: Farnam Street
Sunday, May 18, 2014
Weekly Market Commentary - May 12, 2014 - May 16, 2014
This week there was only one thing that moved the markets: Modi wave. This chart below will tells us the performance of domestic stories vis-à-vis external ones since Narendra Modi was declared PM candidate from BJP. Nifty has surged 23% with domestics gaining 38% vs 9% gain in externals since that fateful day in September 2013.
Sensex ended this week up by 4.9% while Nifty was up by 5.0% and Midcap up by 5.8%
Monday - Sensex up by 2.4%, Nifty up by 2.3%, Midcap up by 1.0%
Markets continued to roll over as exit polls results indicated strong performance of BJP led coalition. Rally in stocks with domestic story speaks about the confidence in BJP led govt to revive investment climate. Rupee also hits its one-month high against the dollar as FIIs consolidated their position in expectation of a strong rally on the result day Friday.
Tuesday - Sensex up by 1.4%, Nifty up by 1.3%, Midcap up by 2.1%
BSE Sensex soared and touched its lifetime high of 24,068.94 as euphoria over expected BJP govt win continued. Domestic growth oriented stocks such as BHEL and ONGC rallied 10% and 4% respectively. Bank Nifty hit its record high.
Wednesday - Sensex down by 0.2%, Nifty flat, Midcap up by 1.6%
Market took a breather after rallying in three consecutive sessions as investors resort to book some profits ahead of result announcement on Friday. There was a brief rally in PSU banks after RBI appointed committee proposed that govt should divest its stake below 50%.
Thursday - Sensex up by 0.4%, Nifty up by 0.2%, Midcap down by 1.0%
Market saw some bullish momentum as investors took position ahead of result announcement day. Market is widely expecting NDA to get majority tomorrow and any tally less than 240 may spark some sell-off.
Friday - Sensex up by 0.9%, Nifty up by 1.1%, Midcap up by 2.1%
BSE Sensex and Nifty surged to record highs of 25,375.63 and 7,563.50 respectively as BJP delivered its best ever performance and recorded a win on 282 seats alone. As trends became clear, rupee also rallied against the dollar and touched its 11-month high. Sensex had a wild day with a swing of more than 1,500 points between high and low.
Monday - Sensex up by 2.4%, Nifty up by 2.3%, Midcap up by 1.0%
Markets continued to roll over as exit polls results indicated strong performance of BJP led coalition. Rally in stocks with domestic story speaks about the confidence in BJP led govt to revive investment climate. Rupee also hits its one-month high against the dollar as FIIs consolidated their position in expectation of a strong rally on the result day Friday.
Tuesday - Sensex up by 1.4%, Nifty up by 1.3%, Midcap up by 2.1%
BSE Sensex soared and touched its lifetime high of 24,068.94 as euphoria over expected BJP govt win continued. Domestic growth oriented stocks such as BHEL and ONGC rallied 10% and 4% respectively. Bank Nifty hit its record high.
Wednesday - Sensex down by 0.2%, Nifty flat, Midcap up by 1.6%
Market took a breather after rallying in three consecutive sessions as investors resort to book some profits ahead of result announcement on Friday. There was a brief rally in PSU banks after RBI appointed committee proposed that govt should divest its stake below 50%.
Thursday - Sensex up by 0.4%, Nifty up by 0.2%, Midcap down by 1.0%
Market saw some bullish momentum as investors took position ahead of result announcement day. Market is widely expecting NDA to get majority tomorrow and any tally less than 240 may spark some sell-off.
Friday - Sensex up by 0.9%, Nifty up by 1.1%, Midcap up by 2.1%
BSE Sensex and Nifty surged to record highs of 25,375.63 and 7,563.50 respectively as BJP delivered its best ever performance and recorded a win on 282 seats alone. As trends became clear, rupee also rallied against the dollar and touched its 11-month high. Sensex had a wild day with a swing of more than 1,500 points between high and low.
Sunday, May 11, 2014
Weekly Market Commentary - May 5, 2014 - May 9, 2014
And Sensex does it again. Indian markets driven by huge expectations from the coming (hopefully) BJP govt got a major spurt when PM candidate Narendra Modi declared on prime time that his party will form the most stable and strong govt in Indian history after Rajiv Gandhi. You can watch the full interview here. Any party to get a clean majority needs to score atleast 272 seats in general elections. Many exit polls and election survey predicts that there are chances that BJP (or current form of NDA) will do better than that.
A stable and decisive govt at the centre will certainly raise hopes of Indian investors, as trillions of rupees worth of projects are gathering dust in various govt departments waiting for approvals. Any govt formation that will expedite project approvals, unshackle the invested capital and get new (or better) jobs for our aspiring citizens is certainly welcome by public and businesses alike.
Sensex ended this week up by 2.6% while Nifty was up by 2.4% and Midcap up by 1.6%
Monday - Sensex up by 0.2%, Nifty slightly up by 0.1%, Midcap flat
Markets recovered a little after continuously falling over past five sessions. Sentiment although remains bearish as regional shares falls on news that China's April PMI has contracted for fourth consecutive month.
Tuesday - Sensex up by 0.3%, Nifty up by 0.2%, Midcap up by 0.2%
Investors showed some confidence in Indian stocks as key benchmark indices rose to touch its week high. HSBC PMI index showed some improvement (48.5 in Apr vs. 47.5 in Mar) but still languished below 50 mark indicating contraction, not growth, keeping hopes of expansion in hiring activities at bay.
Wednesday - Sensex down by 0.8%, Nifty down by 0.9%, Midcap down by 0.2%
Sensex and Nifty plunged due to heavy selling in IT counters amid weak global cues and rupee hitting a month high against US dollar. Investors are keeping an eye on US Fed testimony in congress related to continuous decline in value of USD while continuously hoping that tensions in Ukraine do not escalate into a full-fledged war.
Thursday - Sensex up by 0.1%, Nifty up by 0.1%, Midcap down by 0.2%
Investors continued to stay cautious as Indian general elections entered its last phase. BSE Sensex and Nifty recovered slightly from their recent lows as investors picked up some of the battered stocks. Indian market also got some sentiment uplift from dovish comments by US Fed Chair and upbeat Chinese trade data that suggested some signs of recovery in the world's second-largest economy.
Friday - Sensex up by 2.9%, Nifty up by 3.0%, Midcap up by 1.9%
Sensex and Nifty surprised all watchers as indices soared to touch their all time highs amidst weak trading sentiment ahead of election results. BJP’s PM candidate Narendra Modi’s interview previous night – where he declared that his party is getting clear majority probably lifted the mood of investors. Investors bought stocks in droves as country nears the closing of more bitterly contested general elections in its history on Monday.
A stable and decisive govt at the centre will certainly raise hopes of Indian investors, as trillions of rupees worth of projects are gathering dust in various govt departments waiting for approvals. Any govt formation that will expedite project approvals, unshackle the invested capital and get new (or better) jobs for our aspiring citizens is certainly welcome by public and businesses alike.
Sensex ended this week up by 2.6% while Nifty was up by 2.4% and Midcap up by 1.6%
Monday - Sensex up by 0.2%, Nifty slightly up by 0.1%, Midcap flat
Markets recovered a little after continuously falling over past five sessions. Sentiment although remains bearish as regional shares falls on news that China's April PMI has contracted for fourth consecutive month.
Tuesday - Sensex up by 0.3%, Nifty up by 0.2%, Midcap up by 0.2%
Investors showed some confidence in Indian stocks as key benchmark indices rose to touch its week high. HSBC PMI index showed some improvement (48.5 in Apr vs. 47.5 in Mar) but still languished below 50 mark indicating contraction, not growth, keeping hopes of expansion in hiring activities at bay.
Wednesday - Sensex down by 0.8%, Nifty down by 0.9%, Midcap down by 0.2%
Sensex and Nifty plunged due to heavy selling in IT counters amid weak global cues and rupee hitting a month high against US dollar. Investors are keeping an eye on US Fed testimony in congress related to continuous decline in value of USD while continuously hoping that tensions in Ukraine do not escalate into a full-fledged war.
Thursday - Sensex up by 0.1%, Nifty up by 0.1%, Midcap down by 0.2%
Investors continued to stay cautious as Indian general elections entered its last phase. BSE Sensex and Nifty recovered slightly from their recent lows as investors picked up some of the battered stocks. Indian market also got some sentiment uplift from dovish comments by US Fed Chair and upbeat Chinese trade data that suggested some signs of recovery in the world's second-largest economy.
Friday - Sensex up by 2.9%, Nifty up by 3.0%, Midcap up by 1.9%
Sensex and Nifty surprised all watchers as indices soared to touch their all time highs amidst weak trading sentiment ahead of election results. BJP’s PM candidate Narendra Modi’s interview previous night – where he declared that his party is getting clear majority probably lifted the mood of investors. Investors bought stocks in droves as country nears the closing of more bitterly contested general elections in its history on Monday.
Monday, May 5, 2014
Weekly Market Commentary - Apr 28, 2014 - May 2, 2014
This one should be a quick one. Electricity woes made a big comeback in Ghaziabad. And we had two days of trying to conserve as much (power) we can – by stressing our invertor as little as possible. So, I had to delay my writing of this commentary and now I am doing it from my office so I should make this one quick.
All eyes are on results of general election to be announced on May 16. Market in short term will continue to be swayed by earnings results, inflation and other official economic stats released by govt – unless ofcourse Ukraine crisis turn into a major one. US has already put its economic (powerhouse) machine in motion – building pressure on Russia by way of sanctions. Let’s hope it does not escalate into something bigger and dangerous.
Sensex and Nifty ended this week down by 1.3% while Midcap was down by 0.8%
Monday - Sensex slightly down by 0.2%, Nifty down by 0.3%, Midcap up by 0.7%
Cautious sentiment prevailed in the market as ongoing results season till date has shown increase in topline growth but decline in operating margins. Add to the mix the uncertainty of election outcome and you get a heady cocktail of increasing volatility. Investors also remained wary ahead of the U.S. Federal Reserve's two-day meet starting Tuesday, coming at a time of continued tensions between Russia and the West over Ukraine.
Tuesday – Sensex and Nifty down by 0.7%, Midcap down by 0.6%
Key benchmark indices closed lower as investors continued to book profits. Slowdown in capital inflows and MET forecast of below average rainfall continues to weigh on investors’ mind.
Wednesday - Sensex down by 0.2%, Nifty down by 0.3%, Midcap down by 1.3%
No change in sentiment visible on the street. Continues to be weighed down by global cues (read Ukraine crisis) and domestic uncertainties related to earnings season and elections.
Thursday – Markets closed on Maharashtra Day
Friday - Sensex slightly down by 0.1%, Nifty flat, Midcap up by 0.5%
Sensex and Nifty both continued their falling trend as profit booking increases and indices failed to attract fresh buying. All eyes are on outcome of general elections now.
All eyes are on results of general election to be announced on May 16. Market in short term will continue to be swayed by earnings results, inflation and other official economic stats released by govt – unless ofcourse Ukraine crisis turn into a major one. US has already put its economic (powerhouse) machine in motion – building pressure on Russia by way of sanctions. Let’s hope it does not escalate into something bigger and dangerous.
Sensex and Nifty ended this week down by 1.3% while Midcap was down by 0.8%
Monday - Sensex slightly down by 0.2%, Nifty down by 0.3%, Midcap up by 0.7%
Cautious sentiment prevailed in the market as ongoing results season till date has shown increase in topline growth but decline in operating margins. Add to the mix the uncertainty of election outcome and you get a heady cocktail of increasing volatility. Investors also remained wary ahead of the U.S. Federal Reserve's two-day meet starting Tuesday, coming at a time of continued tensions between Russia and the West over Ukraine.
Tuesday – Sensex and Nifty down by 0.7%, Midcap down by 0.6%
Key benchmark indices closed lower as investors continued to book profits. Slowdown in capital inflows and MET forecast of below average rainfall continues to weigh on investors’ mind.
Wednesday - Sensex down by 0.2%, Nifty down by 0.3%, Midcap down by 1.3%
No change in sentiment visible on the street. Continues to be weighed down by global cues (read Ukraine crisis) and domestic uncertainties related to earnings season and elections.
Thursday – Markets closed on Maharashtra Day
Friday - Sensex slightly down by 0.1%, Nifty flat, Midcap up by 0.5%
Sensex and Nifty both continued their falling trend as profit booking increases and indices failed to attract fresh buying. All eyes are on outcome of general elections now.
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