Develop a third eye, see the real things only:
I really love one word of Brett N. Steenbarger that half of what we see in the market isn't real. Suppose you see the Nifty futures rise a full point in a short period of time on solid volume. Seeing the market rally, you jump aboard, only to have the entire move retrace.
What happened?
In a nutshell, that move you saw on the screen wasn't real. Yes, the index rose on buying, but what you didn't see on the screen was that the very same buyers of the index were selling the Nifty futures. Once the futures moved a full point higher, exceeding fair value, they then sold the futures against a basket of stocks in the index to bring the futures and cash back into line. The moves were real, in the sense that they genuinely cost traders money. They're not real, in the sense that buying or selling did not reveal bullish or bearish tendencies on the parts of large market participants. So you need to develop a third eye to see the real things in the market
Now what happened today? Dubai’s government said it hasn’t guaranteed the debt of Dubai World, the state-controlled holding company struggling with $59 billion in liabilities, and that creditors must help it restructure. Dubai shares tumbled and Abu Dhabi’s stock index today fell the most in at least eight years on the first trading day since the announcement.
What will be the effect on Indian market? We are entering December, a month of holidays. I hope you will want to play it safe in December. 100% sure if you just follow this site for Nifty and Bank Nifty you need not to see any other site for the same. Yesterday written in Nifty future above we will see clear run up till 5052 or more. Don't be astonished, dont waste time on finding the answer how I knew it beforehand, instead just check the charts once crossed 5018 today, it made a high of 5072.50. Written if stays above 8878 Bank Nifty future will zoom till 9013/9078 or even 9146. See it to believe it, Bank NF made a high of 9128 before crashing in the end. Is it any more a rocket science that the subscribers have made 600+ points in the last two Bank Nifty trades in the last 3 sessions alone?
Now what to expect tomorrow? Nifty future above 5008 is safe for bulls. Will again touch 5052/5067/5080 on the higher side. Important resistance exists at 5067 and support exists at 4937. Now if breaks 4937 and even breaks 4917, then??
Bank NF upside first hurdle 9013, if crosses with volume then will move till 9098/9125/9146. But if breaks 8878, then?? You need to subscribe to the Nifty pack, for full market hour guidance.
To get all updates in market hours, join me live in Nifty/Bank Nifty Future trading in my live trading room. See the Premium Services page for more details.
Nifty future important levels for Tuesday, 1st December:
R3 5149 R2 5111 R1 5067 PP 5029 S1 4985 S2 4946 S3 4902.
Bank Nifty future important levels for Tuesday, 1st December:
R3 9242 R2 9185 R1 9085 Pivot Point 9029 S1 8930 S2 8873 S3 8774.
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Fundamental Analysis is a conservative and non-speculative approach based on the “Fundamentals”. A fundamentalist is not swept by what is happening in Dalal street as he looks at a three dimensional analysis.
The Economy Analysis
The Industry Analysis
The Company Analysis
All the above three dimensions will have to be weighed together and not in exclusion of each other. In this section we would give you a brief glimpse of each of these factors for an easy digestion
1. The Economy Analysis
In the table below are some economic indicators and their possible impact on the stock market are given in a nut shell.
Economic indicators
1.GNP - Growth/Decline,
Impact on the stock-Favourable/Unfavourable
2.Price Conditions – Stable/Unstable
Impact on the stock- Favourable/Unfavourable
3.Economy - Boom/Recession
Impact on the stock-Favourable/Unfavourable
4.Housing Construction Activity - Increasing Activity/Decreasing Activity
Impact on the stock-Favourable/Unfavourable
5.Employment - Increase/Decrease
Impact on the stock - Favourable/Unfavourable
6.Accumulation of Inventories
Impact on the stock - Favourable under inflation/Unfavourable under Deflation
7.Personal Disposable Income - Increase/Decrease
Impact on the stock - Favourable/Unfavourable
8.Personal Savings
Impact on the stock - Favourable Under Inflation/Unfavourable under Deflation
9.Interest Rate- Low/High
Impact on the Stock - Favourable/Unfavourable
10.Balance of trade - Positive/Negative
Impact on the stock - Favourable/Unfavourable
11.Strength of the Rupee in Forex market - strong/Weak
Impact on the stock - Favourable/Unfavourable
12.Corporate Taxation (Direct & Indirect) - Low/High
Impact on the stock - Favourable/Unfavourable
2). The Industry Analysis
Every industry has to go through a life cycle with four distinct phases
i) Pioneering Stage
ii) Expansion (growth) Stage
iii) Stagnation (mature) Stage
iv) Decline Stage
These phases are dynamic for each industry. You as an investor is advised to invest in an industry that is either in a pioneering stage or in its expansion (growth) stage. Its advisable to quickly get out of industries which are in the stagnation stage prior to its lapse into the decline stage. The particular phase or stage of an industry can be determined in terms of sales, profitability and their growth rates amongst other factors.
3. The Company Analysis
There may be situations were the industry is very attractive but a few companies within it might not be doing all that well; similarly there may be one or two companies which may be doing exceedingly well while the rest of the companies in the industry might be in doldrums. You as an investor will have to consider both the financial and non-financial aspects so as to form a qualitative impression about a company. Some of the factors are
History of the company and line of business
Product portfolio’s strength
Market Share
Top Management
Intrinsic Values like Patents and trademarks held
Foreign Collaboration, its need and availability for future
Quality of competition in the market, present and future
Future business plans and projects
Tags – Like Blue Chips, Market Cap – low, medium and big caps
Level of trading of the company’s listed scripts
EPS, its growth and rating vis-à-vis other companies in the industry.
P/E ratio
Growth in sales, dividend and bottom line
The Economy Analysis
The Industry Analysis
The Company Analysis
All the above three dimensions will have to be weighed together and not in exclusion of each other. In this section we would give you a brief glimpse of each of these factors for an easy digestion
1. The Economy Analysis
In the table below are some economic indicators and their possible impact on the stock market are given in a nut shell.
Economic indicators
1.GNP - Growth/Decline,
Impact on the stock-Favourable/Unfavourable
2.Price Conditions – Stable/Unstable
Impact on the stock- Favourable/Unfavourable
3.Economy - Boom/Recession
Impact on the stock-Favourable/Unfavourable
4.Housing Construction Activity - Increasing Activity/Decreasing Activity
Impact on the stock-Favourable/Unfavourable
5.Employment - Increase/Decrease
Impact on the stock - Favourable/Unfavourable
6.Accumulation of Inventories
Impact on the stock - Favourable under inflation/Unfavourable under Deflation
7.Personal Disposable Income - Increase/Decrease
Impact on the stock - Favourable/Unfavourable
8.Personal Savings
Impact on the stock - Favourable Under Inflation/Unfavourable under Deflation
9.Interest Rate- Low/High
Impact on the Stock - Favourable/Unfavourable
10.Balance of trade - Positive/Negative
Impact on the stock - Favourable/Unfavourable
11.Strength of the Rupee in Forex market - strong/Weak
Impact on the stock - Favourable/Unfavourable
12.Corporate Taxation (Direct & Indirect) - Low/High
Impact on the stock - Favourable/Unfavourable
2). The Industry Analysis
Every industry has to go through a life cycle with four distinct phases
i) Pioneering Stage
ii) Expansion (growth) Stage
iii) Stagnation (mature) Stage
iv) Decline Stage
These phases are dynamic for each industry. You as an investor is advised to invest in an industry that is either in a pioneering stage or in its expansion (growth) stage. Its advisable to quickly get out of industries which are in the stagnation stage prior to its lapse into the decline stage. The particular phase or stage of an industry can be determined in terms of sales, profitability and their growth rates amongst other factors.
3. The Company Analysis
There may be situations were the industry is very attractive but a few companies within it might not be doing all that well; similarly there may be one or two companies which may be doing exceedingly well while the rest of the companies in the industry might be in doldrums. You as an investor will have to consider both the financial and non-financial aspects so as to form a qualitative impression about a company. Some of the factors are
History of the company and line of business
Product portfolio’s strength
Market Share
Top Management
Intrinsic Values like Patents and trademarks held
Foreign Collaboration, its need and availability for future
Quality of competition in the market, present and future
Future business plans and projects
Tags – Like Blue Chips, Market Cap – low, medium and big caps
Level of trading of the company’s listed scripts
EPS, its growth and rating vis-à-vis other companies in the industry.
P/E ratio
Growth in sales, dividend and bottom line
Best Stock Tips before you Buy Stocks
1. New products, services or leadership : If a company has a dynamic new product or service, or is capitalizing on new conditions in the economy, this can have a dramatic impact on the price of a stock.
2. Leading stock in a leading industry group : Nearly 50% of a stock’s price action is a result of its industry group’s performance. Focus on the top industry groups, and within those groups select stocks with the best price performance. Don’t buy laggards just because they look cheaper.
3. High-rated institutional sponsorship : You want at least a few of the better performing mutual funds owning the stock. They’re the ones who will drive the stock up on a sustained basis.
4. New Highs : Stocks that make new highs on increased volume tend to move higher. Outstanding stocks usually form a price consolidation pattern, and then go on to make their biggest gains when their price breaks above the pattern on unusually high volume.
5. Positive market : You can buy the best stocks out there, but if the general market is weak, most likely your stocks will be weak also. You need to study our “The market talks. Listen, to spot the best.” – Module 8 and learn how to interpret shifts in the market’s trend.
6. You should not buy on dips : This is a strategy that doesn’t give you a strong probability of making a profit. Remember a stock that has dipped 25% needs to rise 33% to recover the loss and a stock that has dipped 50% needs to double to get back to its old high.
2. Leading stock in a leading industry group : Nearly 50% of a stock’s price action is a result of its industry group’s performance. Focus on the top industry groups, and within those groups select stocks with the best price performance. Don’t buy laggards just because they look cheaper.
3. High-rated institutional sponsorship : You want at least a few of the better performing mutual funds owning the stock. They’re the ones who will drive the stock up on a sustained basis.
4. New Highs : Stocks that make new highs on increased volume tend to move higher. Outstanding stocks usually form a price consolidation pattern, and then go on to make their biggest gains when their price breaks above the pattern on unusually high volume.
5. Positive market : You can buy the best stocks out there, but if the general market is weak, most likely your stocks will be weak also. You need to study our “The market talks. Listen, to spot the best.” – Module 8 and learn how to interpret shifts in the market’s trend.
6. You should not buy on dips : This is a strategy that doesn’t give you a strong probability of making a profit. Remember a stock that has dipped 25% needs to rise 33% to recover the loss and a stock that has dipped 50% needs to double to get back to its old high.
Favourite Books Related to Stock Market
The following books related to stock market you “must read” for those investing or trading in the stock markets. These books contain valuable information which will help to minimize risk as well as increase returns.
Book Name – Author Name /Publisher
Intelligent Investor – Benjamin Graham
Elliott Wave Principle – Robert Prechter
Reminiscences of a Stock Operator – Edwin LeFevre
The Day Trader’s Bible – Richard D. Wyckoff
How To Think Like Benjamin Graham and Invest like Warren Buffett- Mcgraw-Hill
Drummond Geometry – Charles Drummond
Elliot Wave Theory for Short Term and Intraday Trading – Stephen Poser
Swing Trading – Oliver Velez
Entire “Rich Dad Poor Dad” Series – Robert T. Kiyosaki
Book Name – Author Name /Publisher
Intelligent Investor – Benjamin Graham
Elliott Wave Principle – Robert Prechter
Reminiscences of a Stock Operator – Edwin LeFevre
The Day Trader’s Bible – Richard D. Wyckoff
How To Think Like Benjamin Graham and Invest like Warren Buffett- Mcgraw-Hill
Drummond Geometry – Charles Drummond
Elliot Wave Theory for Short Term and Intraday Trading – Stephen Poser
Swing Trading – Oliver Velez
Entire “Rich Dad Poor Dad” Series – Robert T. Kiyosaki
|INDIAN STOCK MARKETS\Sensex off 95 points from the day's high
The key benchmark indices pared gains after hitting their highest level in more than a month. Concerns that a glut in share sales may soak available liquidity in the secondary market pulled the market off the higher level. The BSE 30-share Sensex was provisionally up 67.18 points or 0.39%, off close to 95 points from the day's high and up close to 70 points from the day's low. The Sensex and the 50-unit S&P CNX Nifty today, 25 November 2009, struck their highest levels in more than a month.
Index heavyweight Reliance Industries rose today after the firm reopened retail fuel outlets. Banking and FMCG stocks gained. But realty stocks fell. The market breadth turned weak, easing from a strong breadth in early trade.
The market recovered after falling into the red for a brief period in early trade. The market extended gains later. The market pared gains after hitting a one-month high in afternoon trade. Market pared gains from the day's high in mid-afternoon trade. The market may remain on Thursday, 26 November 2009, as traders roll over positions in the derivative segment from November 2009 series to December 2009 series ahead of the expiry of the near-month November 2009 contracts on Thursday.
Rollover in Nifty futures was about 54% at the end of Tuesday's (24 November 2009) trading. Rollover in Min Nifty futures was about 33%. The market wide rollover was about 48%. In individual stocks, Hindustan Unilever, Maruti Suzuki, Power Grid Corporation, Reliance Power and Bharat Heavy Electricals (Bhel), have witnessed high rollover
Concerns that a glut in share sales may suck liquidity from the secondary market pulled the market off the higher level. Morgan Stanley expects Indian firms to raise roughly $70 billion through share sales over the next three years, Morgan Stanley's India country head Narayan Ramachandran said at an investment summit on Wednesday, 25 November 2009. Stake sales in state-run firms will account for $10-$15 billion of that, Ramachandran said. The upcoming auction of third-generation mobile spectrum will also spur potentially billions of dollars in equity raising, although not necessarily from the public markets, he said.
Indian companies have raised about $18 billion in equity thus far this year to repay high-cost debt or to fund expansion plans. Last year, Indian firms raised $7.2 billion in equity.
Meanwhile, the finance ministry on Tuesday constituted a working group to suggest ways of rationalising existing regulations relating to foreign portfolio investments, in order to encourage foreign investment into the country. The group will review the legal and regulatory framework to simplify rules related to overseas investment in the form of foreign institutional investment (FII), foreign venture capital investment (FVCI), private equity and NRI investment, according to notification issued by the finance ministry
The panel will further study arrangements relating to use of participatory notes (PN) and suggest any changes required to increase transparency. The review of the way PNs are being used is to ensure appropriate know-your-client (KYC) norms are in place. This, however, is unlikely to lead to any fresh restrictions on PNs, reports suggest.
The committee, which will submit its report within four months, will identify challenges in meeting the financing needs of the lndian economy through the foreign investment. It will suggest specific short, medium and long term legal, regulatory and other policy changes.
The group will further revisit the role of transaction taxes. Capital market transactions are subject to Securities Transaction Tax (STT) and also a 15% short-term capital gains tax. There is debate in the policy establishment as to whether the STT should be continued and whether ordinary income and capital gains need to be taxed at different rates.
Meanwhile, trade minister Anand Sharma said on Wednesday that the government has no plan to further liberalise foreign investment in retail sector. India, currently, does not permit foreign direct investment (FDI) in multiple-brand retailers, restricting global firms like Wal-Mart Stores and Carrefour from selling directly to customers in the country. Foreign holding in single-branded retailers is capped at 51 %.
Banks need to buffer their capital base and upgrade risk management systems, the Reserve Bank of India (RBI) governor D Subbarao said on Wednesday. The government can absorb nearly $100 billion of dollars in capital inflows, nearly double what is expected this year, before it needs to take strong restrictive measures, C. Rangarajan, chairman of the Prime Minister's Economic Advisory Council said on Tuesday. Economic growth was picking up, and should hit 7 to 8% in the fiscal year starting March 2010, he said, adding the biggest worry over the next few months was rising inflation.
Rangarajan he expects inflation at around 6.5% at the end of the fiscal year. He said the the government needed to aim for 4% inflation or less to be compatible with other economies. Any initial curbs on capital inflows would be on speculative funds in sectors such as real estate and borrowing abroad to spend at home, he said. The first step was likely to be an increase in the cash reserve ratio for banks, rather than an increase in interest rates, he said. And while monetary policy could be changed, fiscal stimulus would remain in place this fiscal year.
Rangarajan said he expected growth of 7-8% in 2009/10, helped by the stimulus. But the government would have to rein in a widening fiscal deficit and withdraw some spending measures. He said he does believe that the process of fiscal consolidation must begin next year.
Brazil and Taiwan have taken steps to curb hot money inflows, and other governments are keeping a watchful eye on inflows, wary that they could fuel asset price bubbles. The IMF's chief economist on Monday warned of bubbles in emerging markets on uncontrolable capital movements, which was echoed by the Asian Development Bank on Tuesday.
Meanwhile, US President Barack Obama sought to reassure Prime Minister Manmohan Singh on Tuesday of his commitment to boosting US ties with India even as his administration has set India's rivals, China and Pakistan, as key priorities. Obama and Singh told a joint news conference they were committed to completing a 2005 civil nuclear agreement that would open up India's potential $150 billion market in power plants.
The United States and India will establish a new economic partnership which US Treasury Secretary Timothy Geithner will help formally launch in India early next year, the White House said on Tuesday. The new partnership aims to strengthen economic ties between the two nations and echoes the strategic economic dialogue Washington established with China in 2006.
European shares rose on Wednesday after losses in the previous session, as a revised US growth forecast for 2010 by the Federal Reserve boosted stocks, with miners featuring among the top gainers. The key benchmark indices in France, Germany and UK rose by between 0.68% to 0.83%.
The European Central Bank (ECB) has been able to prevent deflation in Europe due to its 'solid anchoring' of expectations on price stability, ECB President Jean-Claude Trichet said on Wednesday. Trichet also said that economic improvement has not been rapid, when considering unemployment data. The UK economy contracted slightly less than initially estimated in the third quarter, official figures showed Wednesday. Gross domestic product in the third quarter contracted 0.3% from the second quarter and was 5.1% weaker than in the third quarter of last year, the Office for National Statistics said.
Asian markets rose on Wednesday on expectations for stronger economic growth. The key benchmark indices in Hong Kong, China, Japan, Singapore, South Korea and Taiwan rose by between 0.34% to 2.07%. But, Indonesia's Jakarta Composite fell 0.42%.
Japan's exports fell at the slowest pace in a year in October 2009. Shipments abroad slid 23.2% from a year earlier in October, compared with a 30.6% decline in September, the Finance Ministry said today in Tokyo.
Bank of Japan Deputy Governor Hirohide Yamaguchi said on Wednesday that the world economy is recovering after a sharp downturn but has yet to fully emerge from the aftermath of the global financial crisis.
Index heavyweight Reliance Industries rose today after the firm reopened retail fuel outlets. Banking and FMCG stocks gained. But realty stocks fell. The market breadth turned weak, easing from a strong breadth in early trade.
The market recovered after falling into the red for a brief period in early trade. The market extended gains later. The market pared gains after hitting a one-month high in afternoon trade. Market pared gains from the day's high in mid-afternoon trade. The market may remain on Thursday, 26 November 2009, as traders roll over positions in the derivative segment from November 2009 series to December 2009 series ahead of the expiry of the near-month November 2009 contracts on Thursday.
Rollover in Nifty futures was about 54% at the end of Tuesday's (24 November 2009) trading. Rollover in Min Nifty futures was about 33%. The market wide rollover was about 48%. In individual stocks, Hindustan Unilever, Maruti Suzuki, Power Grid Corporation, Reliance Power and Bharat Heavy Electricals (Bhel), have witnessed high rollover
Concerns that a glut in share sales may suck liquidity from the secondary market pulled the market off the higher level. Morgan Stanley expects Indian firms to raise roughly $70 billion through share sales over the next three years, Morgan Stanley's India country head Narayan Ramachandran said at an investment summit on Wednesday, 25 November 2009. Stake sales in state-run firms will account for $10-$15 billion of that, Ramachandran said. The upcoming auction of third-generation mobile spectrum will also spur potentially billions of dollars in equity raising, although not necessarily from the public markets, he said.
Indian companies have raised about $18 billion in equity thus far this year to repay high-cost debt or to fund expansion plans. Last year, Indian firms raised $7.2 billion in equity.
Meanwhile, the finance ministry on Tuesday constituted a working group to suggest ways of rationalising existing regulations relating to foreign portfolio investments, in order to encourage foreign investment into the country. The group will review the legal and regulatory framework to simplify rules related to overseas investment in the form of foreign institutional investment (FII), foreign venture capital investment (FVCI), private equity and NRI investment, according to notification issued by the finance ministry
The panel will further study arrangements relating to use of participatory notes (PN) and suggest any changes required to increase transparency. The review of the way PNs are being used is to ensure appropriate know-your-client (KYC) norms are in place. This, however, is unlikely to lead to any fresh restrictions on PNs, reports suggest.
The committee, which will submit its report within four months, will identify challenges in meeting the financing needs of the lndian economy through the foreign investment. It will suggest specific short, medium and long term legal, regulatory and other policy changes.
The group will further revisit the role of transaction taxes. Capital market transactions are subject to Securities Transaction Tax (STT) and also a 15% short-term capital gains tax. There is debate in the policy establishment as to whether the STT should be continued and whether ordinary income and capital gains need to be taxed at different rates.
Meanwhile, trade minister Anand Sharma said on Wednesday that the government has no plan to further liberalise foreign investment in retail sector. India, currently, does not permit foreign direct investment (FDI) in multiple-brand retailers, restricting global firms like Wal-Mart Stores and Carrefour from selling directly to customers in the country. Foreign holding in single-branded retailers is capped at 51 %.
Banks need to buffer their capital base and upgrade risk management systems, the Reserve Bank of India (RBI) governor D Subbarao said on Wednesday. The government can absorb nearly $100 billion of dollars in capital inflows, nearly double what is expected this year, before it needs to take strong restrictive measures, C. Rangarajan, chairman of the Prime Minister's Economic Advisory Council said on Tuesday. Economic growth was picking up, and should hit 7 to 8% in the fiscal year starting March 2010, he said, adding the biggest worry over the next few months was rising inflation.
Rangarajan he expects inflation at around 6.5% at the end of the fiscal year. He said the the government needed to aim for 4% inflation or less to be compatible with other economies. Any initial curbs on capital inflows would be on speculative funds in sectors such as real estate and borrowing abroad to spend at home, he said. The first step was likely to be an increase in the cash reserve ratio for banks, rather than an increase in interest rates, he said. And while monetary policy could be changed, fiscal stimulus would remain in place this fiscal year.
Rangarajan said he expected growth of 7-8% in 2009/10, helped by the stimulus. But the government would have to rein in a widening fiscal deficit and withdraw some spending measures. He said he does believe that the process of fiscal consolidation must begin next year.
Brazil and Taiwan have taken steps to curb hot money inflows, and other governments are keeping a watchful eye on inflows, wary that they could fuel asset price bubbles. The IMF's chief economist on Monday warned of bubbles in emerging markets on uncontrolable capital movements, which was echoed by the Asian Development Bank on Tuesday.
Meanwhile, US President Barack Obama sought to reassure Prime Minister Manmohan Singh on Tuesday of his commitment to boosting US ties with India even as his administration has set India's rivals, China and Pakistan, as key priorities. Obama and Singh told a joint news conference they were committed to completing a 2005 civil nuclear agreement that would open up India's potential $150 billion market in power plants.
The United States and India will establish a new economic partnership which US Treasury Secretary Timothy Geithner will help formally launch in India early next year, the White House said on Tuesday. The new partnership aims to strengthen economic ties between the two nations and echoes the strategic economic dialogue Washington established with China in 2006.
European shares rose on Wednesday after losses in the previous session, as a revised US growth forecast for 2010 by the Federal Reserve boosted stocks, with miners featuring among the top gainers. The key benchmark indices in France, Germany and UK rose by between 0.68% to 0.83%.
The European Central Bank (ECB) has been able to prevent deflation in Europe due to its 'solid anchoring' of expectations on price stability, ECB President Jean-Claude Trichet said on Wednesday. Trichet also said that economic improvement has not been rapid, when considering unemployment data. The UK economy contracted slightly less than initially estimated in the third quarter, official figures showed Wednesday. Gross domestic product in the third quarter contracted 0.3% from the second quarter and was 5.1% weaker than in the third quarter of last year, the Office for National Statistics said.
Asian markets rose on Wednesday on expectations for stronger economic growth. The key benchmark indices in Hong Kong, China, Japan, Singapore, South Korea and Taiwan rose by between 0.34% to 2.07%. But, Indonesia's Jakarta Composite fell 0.42%.
Japan's exports fell at the slowest pace in a year in October 2009. Shipments abroad slid 23.2% from a year earlier in October, compared with a 30.6% decline in September, the Finance Ministry said today in Tokyo.
Bank of Japan Deputy Governor Hirohide Yamaguchi said on Wednesday that the world economy is recovering after a sharp downturn but has yet to fully emerge from the aftermath of the global financial crisis.
Trading in US index futures indicated Dow could gain 43 points at the opening bell on Wednesday, 25 November 2009.
US markets declined but ended off their lows on Tuesday after the Federal Reserve raised its forecast for 2010. Fed minutes indicated that Federal Reserve officials are confident the US economic recovery will be durable, but do not see employment or inflation picking up soon. The Dow was down 17.24 points, or 0.2%, to 10,433.71. The S&P 500 index slipped 0.59 points, or 0.1%, to 1,105.65, while the Nasdaq composite index fell 6.83 points, or 0.3%, to 2,169.18. Earlier, the Dow was down nearly 100 points after a report showed the economy grew less than expected in the third quarter and HP issued a cautious outlook.
In US economic news, Q3 GDP was revised to a 2.8% growth rate, lower than the initial reading of 3.5%. In other data, the conference board's gauge of consumer confidence rose to 49.5 in November 2009 from 48.7 in October 2009. And home prices improved for a fifth straight month in September 2009.
The Fed projected the economy will shrink 0.1% to 0.4% this year and grow by 2.5% to 3.3% in 2010. That compares to June's prediction of a contraction of 1% to 1.5% in 2009 and a gain of 2.1% to 3.3% next year.
Swift interest rate hikes aimed at containing inflation in product and asset prices could cause another downturn in the slowly recovering economies of the United States and Europe, the head of the World Bank Robert Zoellick said.
As per provisional figures, the BSE 30-share Sensex was up 67.18 points or 0.39% to 17198.26. The Sensex rose 159.40 points at the day's high of 17290.48, in afternoon trade, its highest since 20 October 2009. The Sensex fell 6.93 points at the day's low of 17,124.15 in early trade.
The S&P CNX Nifty was up 20.50 points or 0.4% to 5,111.05 as per provisional figures. It hit a high of 5,138, its highest since 20 October 2009.
BSE clocked a turnover of Rs 4742 crore, lower than Rs 4780.35 crore on Tuesday, 24 November 2009.
The market breadth, indicating the overall health of the market turned negative compared to strong breadth in early trade. On BSE, 1243 shares advanced as compared with 1513 that declined. A total of 76 shares remained unchanged.
From the 30 share Sensex pack, 16 rose and rest fell.
The BSE Mid-Cap index fell 0.1% and the BSE Small-cap index fell 0.12%
Energy major Reliance Industries (RIL) rose 0.78% to Rs 2193.10. But the stock came off the day's high of Rs 2225.90. RIL has reportedly reopened 900 gas stations, which were shut down when state-run oil marketing firms were selling heavily subsidised fuel. RIL has revived more than half its network of petrol pumps that were shut.
As per recent reports, the Securities and Exchange Board of India (Sebi) has asked Reliance Industries (RIL) why the company should not be barred from accessing the stock markets under rules governing fraudulent and unfair trade practices. The amendment (dated 8 October 2009) to the original show cause notice issued in April 2009 by the regulator's investigation department further asks why directions should not be issued to bar the company from buying, selling and dealing in any security, directly or indirectly. The notice was issued in the matter relating to alleged insider trading in the shares of the now-defunct Reliance Petroleum, which had since merged with RIL.
RIL on Sunday, 22 November 2009, said it has put a bid to acquire bankrupt chemicals maker LyondellBasell Industries. RIL said that it had submitted a preliminary non-binding offer to acquire, for cash, a controlling interest in Rotterdam, Netherlands-based LyondellBasell.
RIL also said it is "reviewing a number of global opportunities for growth in its core business," including LyondellBasell. The conglomerate said its offer is "preliminary and subject to customary conditions, including conduct of due diligence, documentation and receipt of creditor support."
Meanwhile, RIL plans an aggressive exploration campaign, investments in petrochemicals and overseas acquisitions as India's top company by market capitalisation prepares itself for the next phase of growth. The company will work towards attaining global scale for its conventional energy platform petrochemicals, refining and oil and gas exploration and invest in its new businesses such as retailing and alternative energy, chairman Mukesh Ambani said at the company's annual meeting of shareholders on 17 November 2009.
RIL has set 27 November 2009 as the record date for a liberal 1:1 bonus share issue.
Rate sensitive realty shares reversed early gains as the RBI, late last month, raised the provisioning requirements for loans to commercial real estate from 0.4% to 1% at a regular monetary policy review. Indiabulls Real Estate, DLF, Omaxe, Sobha Developers, fell by between 0.61% to 4.37%.
Unitech fell 2.06% on equity dilution worries following reports the company has sought approval from the Department of Industrial Policy and Planning and the Reserve Bank of India to raise $700 million through foreign currency convertible bonds.
The latest RBI move will result in increase in borrowing costs for realty firms which depend heavily on borrowing. In view of large increase in credit to the commercial real estate sector over the last one year and the extent of restructured advances in this sector, it would be prudent to build cushion against likely non-performing assets (NPAs), the central bank said in its quarterly policy review.
Meanwhile, the government reportedly is considering a proposal to do away with the three-year lock-in stipulation for repatriation of foreign investments in real estate projects, in a move to ease foreign direct investment norms in the real estate sector.
Bank shares rose on hopes for financial sector reforms. India's largest bank by net profit State Bank of India (SBI) rose 0.79%. State Bank of India said on 9 November 2009 said it had entered into an agreement with T. Rowe Price to sell a 6.5% holding each in UTI Asset Management Company and UTI Trustee Company. State Bank currently holds 25% in each of the companies and after the sale its holding would be reduced to 18.5%, it said in a statement.
SBI announced on 6 November 2009 it has revised downwards interest rates on deposits by 25-50 basis points for a few maturities effective from 9 November 2009.
India's second largest private sector bank by net profit HDFC Bank rose 1.46% even as its ADR fell 1.04% on Tuesday.
But, India's largest private sector bank by net profit ICICI Bank fell 0.68% as its ADR fell 2.67% on Tuesday. The bank said on Saturday 20 November 2009 it raised $750 million (about Rs 3,500 crore) through an overseas bond issue, at an yield of 5.5%.
India's largest dedicated home loan lender Housing Development Finance Corporation (HDFC) fell 0.19%. The lender announced on 13 November 2009 it has agreed to acquire approximately 41% in the fully diluted equity share capital of Credila Financial Services from DSP Merrill Lynch Capital.
Prime Minister Manmohan Singh said on 8 November 2009, financial reforms, such as building up a domestic bond market and expanding foreign investment in sectors like insurance, would be pushed forward.
Meanwhile, the Reserve Bank of India Deputy Governor Usha Thorat said on Monday 16 November 2009 the central bank will soon issue guidelines on provisioning for bad loans by banks
Banks and co-operatives have reportedly disbursed farm loans to the tune of Rs 1.38 lakh crore in the first half of 2009-10, meeting over 42% of the target set by the government for the whole financial year.
FMCG stocks rose on bargain hunting. ITC, Hindustan Unilever, Marico, and Nestle India rose by between 0.13% to 1.93%.
Infosys Technologies India's No. 2 software exporter by sales rose 0.33% after Chief Financial Officer V. Balakrishnan said today that the company is focused on small acquisitions to boost growth and does not expect pricing to improve in the near term. Pricing will likely remain stable until demand increases, he said.
Sugar shares rose on reports sugar mills in Uttar Pradesh have offered higher prices to growers, raising hopes that protesting farmers would start selling cane. Bajaj Hindustan, Balrampur Chini Mills, Shree Renuka Sugars rose by between 0.3% to 4.47%. Stormy protests by farmers had disrupted parliament last week and delayed cane crushing in the the state, which can further squeeze supplies in the world's biggest consumer of the sweetener.
Surana Telecom & Power gained 2.50% after the company's board approved demerger of solar business of the company into Surana Ventures.
JSW Steel rose 2.15% on reports the company may sell as much as 40% in its upcoming 10 million tonnes steel unit in West Bengal to its new Japanese partner JFE.
Southern Ispat & Energy was locked at 10% upper limit at Rs 34.90, after the company said its board will meet on 30 November 2009 to consider acquiring new mining assets and a steel plant. Other Stories 4 Tata Steel drops 3% in choppy market (24-Nov 15:48 Hrs IST)
4 Sugar shares slide in choppy market (23-Nov 15:50 Hrs IST)
4 Sensex regains 17,000 mark as RIL jumps (20-Nov 15:45 Hrs IST)
4 Market trims losses in late trade; breadth weak (19-Nov 15:50 Hrs IST)
4 RIL, L&T lead decline (18-Nov 15:42 Hrs IST)
4 L&T, bank stocks lead strong intraday rebound (17-Nov 15:46 Hrs IST)
4 Market surges as dollar weakens (16-Nov 15:50 Hrs IST)
4 Maruti, Hero Honda in top gear (13-Nov 15:51 Hrs IST)
4 Rate sensitive stocks lead decline (12-Nov 15:43 Hrs IST)
4 Nifty regains 5,000 mark (11-Nov 15:51 Hrs IST)
US markets declined but ended off their lows on Tuesday after the Federal Reserve raised its forecast for 2010. Fed minutes indicated that Federal Reserve officials are confident the US economic recovery will be durable, but do not see employment or inflation picking up soon. The Dow was down 17.24 points, or 0.2%, to 10,433.71. The S&P 500 index slipped 0.59 points, or 0.1%, to 1,105.65, while the Nasdaq composite index fell 6.83 points, or 0.3%, to 2,169.18. Earlier, the Dow was down nearly 100 points after a report showed the economy grew less than expected in the third quarter and HP issued a cautious outlook.
In US economic news, Q3 GDP was revised to a 2.8% growth rate, lower than the initial reading of 3.5%. In other data, the conference board's gauge of consumer confidence rose to 49.5 in November 2009 from 48.7 in October 2009. And home prices improved for a fifth straight month in September 2009.
The Fed projected the economy will shrink 0.1% to 0.4% this year and grow by 2.5% to 3.3% in 2010. That compares to June's prediction of a contraction of 1% to 1.5% in 2009 and a gain of 2.1% to 3.3% next year.
Swift interest rate hikes aimed at containing inflation in product and asset prices could cause another downturn in the slowly recovering economies of the United States and Europe, the head of the World Bank Robert Zoellick said.
As per provisional figures, the BSE 30-share Sensex was up 67.18 points or 0.39% to 17198.26. The Sensex rose 159.40 points at the day's high of 17290.48, in afternoon trade, its highest since 20 October 2009. The Sensex fell 6.93 points at the day's low of 17,124.15 in early trade.
The S&P CNX Nifty was up 20.50 points or 0.4% to 5,111.05 as per provisional figures. It hit a high of 5,138, its highest since 20 October 2009.
BSE clocked a turnover of Rs 4742 crore, lower than Rs 4780.35 crore on Tuesday, 24 November 2009.
The market breadth, indicating the overall health of the market turned negative compared to strong breadth in early trade. On BSE, 1243 shares advanced as compared with 1513 that declined. A total of 76 shares remained unchanged.
From the 30 share Sensex pack, 16 rose and rest fell.
The BSE Mid-Cap index fell 0.1% and the BSE Small-cap index fell 0.12%
Energy major Reliance Industries (RIL) rose 0.78% to Rs 2193.10. But the stock came off the day's high of Rs 2225.90. RIL has reportedly reopened 900 gas stations, which were shut down when state-run oil marketing firms were selling heavily subsidised fuel. RIL has revived more than half its network of petrol pumps that were shut.
As per recent reports, the Securities and Exchange Board of India (Sebi) has asked Reliance Industries (RIL) why the company should not be barred from accessing the stock markets under rules governing fraudulent and unfair trade practices. The amendment (dated 8 October 2009) to the original show cause notice issued in April 2009 by the regulator's investigation department further asks why directions should not be issued to bar the company from buying, selling and dealing in any security, directly or indirectly. The notice was issued in the matter relating to alleged insider trading in the shares of the now-defunct Reliance Petroleum, which had since merged with RIL.
RIL on Sunday, 22 November 2009, said it has put a bid to acquire bankrupt chemicals maker LyondellBasell Industries. RIL said that it had submitted a preliminary non-binding offer to acquire, for cash, a controlling interest in Rotterdam, Netherlands-based LyondellBasell.
RIL also said it is "reviewing a number of global opportunities for growth in its core business," including LyondellBasell. The conglomerate said its offer is "preliminary and subject to customary conditions, including conduct of due diligence, documentation and receipt of creditor support."
Meanwhile, RIL plans an aggressive exploration campaign, investments in petrochemicals and overseas acquisitions as India's top company by market capitalisation prepares itself for the next phase of growth. The company will work towards attaining global scale for its conventional energy platform petrochemicals, refining and oil and gas exploration and invest in its new businesses such as retailing and alternative energy, chairman Mukesh Ambani said at the company's annual meeting of shareholders on 17 November 2009.
RIL has set 27 November 2009 as the record date for a liberal 1:1 bonus share issue.
Rate sensitive realty shares reversed early gains as the RBI, late last month, raised the provisioning requirements for loans to commercial real estate from 0.4% to 1% at a regular monetary policy review. Indiabulls Real Estate, DLF, Omaxe, Sobha Developers, fell by between 0.61% to 4.37%.
Unitech fell 2.06% on equity dilution worries following reports the company has sought approval from the Department of Industrial Policy and Planning and the Reserve Bank of India to raise $700 million through foreign currency convertible bonds.
The latest RBI move will result in increase in borrowing costs for realty firms which depend heavily on borrowing. In view of large increase in credit to the commercial real estate sector over the last one year and the extent of restructured advances in this sector, it would be prudent to build cushion against likely non-performing assets (NPAs), the central bank said in its quarterly policy review.
Meanwhile, the government reportedly is considering a proposal to do away with the three-year lock-in stipulation for repatriation of foreign investments in real estate projects, in a move to ease foreign direct investment norms in the real estate sector.
Bank shares rose on hopes for financial sector reforms. India's largest bank by net profit State Bank of India (SBI) rose 0.79%. State Bank of India said on 9 November 2009 said it had entered into an agreement with T. Rowe Price to sell a 6.5% holding each in UTI Asset Management Company and UTI Trustee Company. State Bank currently holds 25% in each of the companies and after the sale its holding would be reduced to 18.5%, it said in a statement.
SBI announced on 6 November 2009 it has revised downwards interest rates on deposits by 25-50 basis points for a few maturities effective from 9 November 2009.
India's second largest private sector bank by net profit HDFC Bank rose 1.46% even as its ADR fell 1.04% on Tuesday.
But, India's largest private sector bank by net profit ICICI Bank fell 0.68% as its ADR fell 2.67% on Tuesday. The bank said on Saturday 20 November 2009 it raised $750 million (about Rs 3,500 crore) through an overseas bond issue, at an yield of 5.5%.
India's largest dedicated home loan lender Housing Development Finance Corporation (HDFC) fell 0.19%. The lender announced on 13 November 2009 it has agreed to acquire approximately 41% in the fully diluted equity share capital of Credila Financial Services from DSP Merrill Lynch Capital.
Prime Minister Manmohan Singh said on 8 November 2009, financial reforms, such as building up a domestic bond market and expanding foreign investment in sectors like insurance, would be pushed forward.
Meanwhile, the Reserve Bank of India Deputy Governor Usha Thorat said on Monday 16 November 2009 the central bank will soon issue guidelines on provisioning for bad loans by banks
Banks and co-operatives have reportedly disbursed farm loans to the tune of Rs 1.38 lakh crore in the first half of 2009-10, meeting over 42% of the target set by the government for the whole financial year.
FMCG stocks rose on bargain hunting. ITC, Hindustan Unilever, Marico, and Nestle India rose by between 0.13% to 1.93%.
Infosys Technologies India's No. 2 software exporter by sales rose 0.33% after Chief Financial Officer V. Balakrishnan said today that the company is focused on small acquisitions to boost growth and does not expect pricing to improve in the near term. Pricing will likely remain stable until demand increases, he said.
Sugar shares rose on reports sugar mills in Uttar Pradesh have offered higher prices to growers, raising hopes that protesting farmers would start selling cane. Bajaj Hindustan, Balrampur Chini Mills, Shree Renuka Sugars rose by between 0.3% to 4.47%. Stormy protests by farmers had disrupted parliament last week and delayed cane crushing in the the state, which can further squeeze supplies in the world's biggest consumer of the sweetener.
Surana Telecom & Power gained 2.50% after the company's board approved demerger of solar business of the company into Surana Ventures.
JSW Steel rose 2.15% on reports the company may sell as much as 40% in its upcoming 10 million tonnes steel unit in West Bengal to its new Japanese partner JFE.
Southern Ispat & Energy was locked at 10% upper limit at Rs 34.90, after the company said its board will meet on 30 November 2009 to consider acquiring new mining assets and a steel plant. Other Stories 4 Tata Steel drops 3% in choppy market (24-Nov 15:48 Hrs IST)
4 Sugar shares slide in choppy market (23-Nov 15:50 Hrs IST)
4 Sensex regains 17,000 mark as RIL jumps (20-Nov 15:45 Hrs IST)
4 Market trims losses in late trade; breadth weak (19-Nov 15:50 Hrs IST)
4 RIL, L&T lead decline (18-Nov 15:42 Hrs IST)
4 L&T, bank stocks lead strong intraday rebound (17-Nov 15:46 Hrs IST)
4 Market surges as dollar weakens (16-Nov 15:50 Hrs IST)
4 Maruti, Hero Honda in top gear (13-Nov 15:51 Hrs IST)
4 Rate sensitive stocks lead decline (12-Nov 15:43 Hrs IST)
4 Nifty regains 5,000 mark (11-Nov 15:51 Hrs IST)
What To Expect from Nifty and Bank Nifty For 25th November: (INDIAN STOCK EXCHANGE)
The first and most important rule of trading is - in bull markets, one is supposed to be long. This may sound obvious, but how many of us have sold the first rally in every bull market, saying that the market has moved too far, too fast. Thus, we've not enjoyed the profits that should have accrued to us for our initial bullish outlook, but have actually lost money while being short. In a bull market, one can only be long or on the sidelines. Remember, not having a position is a position.
When putting on a trade, enter it as if it has the potential to be the biggest trade of the year. Don't enter a trade until it has been well thought out, a campaign has been devised for adding to the trade, and contingency plans set for exiting the trade.
Be patient. If a trade is missed, wait for a correction to occur before putting the trade on. Be patient. Once a trade is put on, allow it time to develop and give it time to create the profits you expected.
The above mentioned golden rules are for each and every budding trader in the market who believes that they can survive by trading the market. Now some quick checks on what have I written in my last post Nifty And Bank Nifty Future - What To Expect On 24th November? about today.
Written to buy Nifty future only above 5130, the level has not come. Written below 5072 we will see 5050/5045 in intraday panic. Just see it to believe it Nifty future made exactly a low of 5050. About Bank NF written that below 9224 we will see 9169-9100 intraday. Its no miracle, that Bank NF crashed to intraday low of 9146. I hope, you now feel trading is not so tough business. 100% if you follow my levels, I feel you will believe in your trading capabilities, if not already doing so.
Now what to expect tomorrow? In Nifty future strong support exists at 5052/5044. Break below 5044 with volumes will take it to 5022/5008 in no time. Big hurdle exists at 5080-5085 which is proving real tough for the bulls. Above 5082 it will touch 5104. And once crosses 5104 decisively we can see continuous buying till 5132/5168.
In Bank NF above 9228 next hurdle is 9295/9350. Below 9175, support exists at 9146/9099/9065. But if either 9350 or 9065 gets broken, then?? 100% you need to subscribe to Nifty pack to get live market hour updates.
Nifty future important levels for Wednesday, 25th November:
R3 5164, R2 5136, R1 5105, Pivot Point 5077, S1 5046, S2 5018, S3 4987.
Bank Nifty future important levels for Wednesday, 25th November:
R3 9444, R2 9371, R1 9291, Pivot Point 9218, S1 9138, S2 9065, S3 8985.
DISCLAIMER: Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. we assumes no responsibility or liability from gains or losses incurred by the information herein contained.
