Monthly Archives: September 2014

MARKETS: Still Wait & Watch!

Markets are at a crucial stage where all major indicators are at their support levels. Future direction from here depends on how economic and political developments take place on global and domestic fronts.

Brief technical review of major asset classes-

  • Gold is approaching 27000, and if it sustains above this level, it may rise further to 27700.
  • USD-INR has given a breakout on charts above 61.5 and may touch 63.50.
  • Nifty is above its immediate support of 7940, a breach of which may take it to near 7785 (with intermediate support at 7850), a crucial support level. After making a lower low last week, Nifty is now in a minor downtrend.

RECOMMENDATION:

We recommend a wait and watch strategy before taking any investment decision.

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Filed under Commodity News, Currency Update, Equity Market, Finance, World News

Foreign portfolio investors (FPIs) had acquired $16.7 billion!

  1. Foreign portfolio investors (FPIs) had acquired an additional $16.7 billion worth of bonds in the country during 2014, after netting for sales. This near-eight-month record compares with net sales of bonds totaling $8 billion in 2013 and net purchases of $6.6 billion in 2012.
  2. With RBI governor Raghuram Rajan’s main focus now on containing inflation, bond dealers do not see any immediate cut in key policy rates which could have directly brought down the benchmark yield on the 10-year government securities from the current level of about 8.50%.
  3. Bond market players expect that given strong demand for gilts form FIIs, the government may now increase the $25-billion limit and bring down the limit for corporate bonds. If that happens as more FIIs rush to buy gilts, prices will rise and yields will soften.

Market Outlook

The Indian rupee appreciated over 6% in the beginning of 2014 due to huge foreign investment in the country’s debt and equity market. This rally was led on the hopes of a strong and stable government to revive the Indian economy. However the trend for the INR has reversed in last 2 months.

The risk factors for the Indian rupee include high inflation, Middle East crisis, low percentage of forex reserves/ external debt, and Fed tapering. The foreign investors have high expectations from the ruling government. If these expectations are not met, then the Indian rupee is likely to depreciate further.

FII report

Talk of volatility in the currency market and issues surrounding capital flows are back.

The Indian rupee depreciated over 3% against the US dollar between 2 July and 6 August. Although it has recovered some ground, foreign investors have been net sellers in August. Net selling in debt market by foreign investors in August has been to the tune of $709.17 million so far, while the net buying in equity market is only worth $166.55 million. In July, foreign investors invested $1.93 billion and $3.83 billion in equity and debt market, respectively.

Last year, Indian markets witnessed high volatility after the Fed indicated for the first time that it will reduce the quantum of asset purchase, popularly referred to as tapering. Foreign investors sold Indian assets (equity and debt) worth over $12.5 billion in three months to August.

Experts are of the view that markets may be subjected to volatility as the US central bank ends its asset purchase programme, but it will not be at the same scale as witnessed last year.

Indian rupee has witnessed some volatility and inflows from foreign investors in the equity markets have slowed, while the debt market has seen net selling in the current month. It is always difficult to prejudge the extent and timing of the way policy decisions will affect global financial markets and to what extent Indian markets will be affected. However, irrespective of the way things pan out in the global financial markets, investors in India will draw comfort from the fact that compared to last year, fundamentals have improved and the outlook on Indian markets is positive.

Source by:- http://www.rrfinance.com/reserch/pdf/other-pdf/Debt_Fortnightly.pdf

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Filed under Commodity News, Debt News, Finance, World News

GOLD – Don’t buy to invest because it is cheap!

We had mentioned in our research note dated 25th May 2014, that gold is bearish as long as it remains below 28800. If support of 25000 is broken, gold may fall to 18000 in the next two years. (Please click here to read)

We reiterate our views that gold is in long term bearish trend as long as it remains below 28800. It has its next support at 26000 and if that is broken, it will test its most important support at 24,000 which is a 38.2% Fibonacci level.Gold

A decisive breach of this support will indicate a major bearish fall. Gold can then tumble up to 18000 by year 2015 – 2016. Gold may be purchased on dips for jewellery but incremental investments of investible funds should be made in equity or debt for long term returns.

gold2Improving global economies and falling risk are taking away the investors from investing in this perceived safe asset.

Source by:- https://www.facebook.com/notes/rr-financial-consultants/gold-dont-buy-to-invest-because-it-is-cheap/837518252949341

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MARKETS: Expect a Big Chinese Investment Booster next week!

Chinese premier Xi Jinping’s visit to India next week will see several big announcements of investment in Indian industries. China, which has more than $4 trillion in foreign exchange reserves, plans to invest $500 billion overseas in the coming years. In the last 14 years, China has invested only about $0.4 billion in India, contributing just 0.18% to overall FDI inflows.

Highlights of expected investments are outlined below–

  • Investment areas include – bullet trains, industrial parks, twin city projects, energy sector, food security, culture, tourism, and film industry.
  • More than $7 billion in industrial parks in Maharashtra and Gujarat
  • MOU to develop India’s railway infrastructure
  • More than 20 Chinese companies will sign purchase agreements with Indian companies worth $650 million
  • Indian government wants China to reduce the trade deficit by allowing easier imports of IT, pharma and farm goods and manufacturing of hi-tech and electronic goods in India.
  • China has shown a renewed interest in winning road-building contracts. Road ministry feel India can harness Chinese capabilities to improve its infrastructure, including construction of high-quality highways, expressways etc.

Now with Japan announcing its plans to invest about USD 35 billion in the next five years in India, it will be interesting to see how China plans its investments.

This visit from 17th September next week should prove to be a big positive for the markets.

RECOMMENDATION:

Several midcap, small-cap, and infrastructure stocks have not appreciated, offering excellent opportunity to investors to enter at current levels. Some slow moving cyclical stocks may surprise the markets.

The markets still offer opportunities for medium to long term investors in Equity Mutual Funds.

Source By:- http://goo.gl/7J8EPL

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Filed under Currency Update, Debt News, Finance, World News

Why invest in SBI EQUITY ?

SBI Equity Opportunities Fund-Series 1 has following reason to invest:-

Macro indicators:

Improving macro indicators leading to better economic growth prospects and improved market sentiments.

New Government:

Stable government with clearly articulated policy framework and pro-growth approach will lead to enhanced economic activity in India.

Investment Themes:

Potential opportunities arising from structural trends like home improvement, e-commerce, imports substitution & manufacturing exports, defense, education etc.

SBI Equity Fund

Investment Management:

Robust stock selection process, tested in various market conditions has potential to identify growth stocks at reasonable valuations.

Market Opportunity:

Opportunities across market capitalization with bias towards mid and small caps to generate value for investors in next 3 years.

For more information please visit:- http://www.rrfinance.com/Maillers/sbi.html

Buy Online Mutual funds here :- http://www.rrfinance.in

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Filed under Commodity News, Currency Update, Debt News, Finance, World News

ECONOMY: Capital Formation at All Time High

Markets rise on expectations that economy will grow, and economy grows when industries invest more capital in their businesses (called Capital Formation) to increase capacity, to launch new products, or to diversify in other areas.

Gross Fixed Capital Formation in India increased to Rs.5356 Billion in the first quarter of 2014 from Rs 5037 Billion in the fourth quarter of 2013.This is an all-time high.

It is a strong indicator that industrialists are hopeful of acceleration of economic growth in India.India GFCFSource: Ministry of Statistics and Program Implementation (MOSPI).

RECOMMENDATION:

Several midcap, small-cap, and infrastructure stocks have not appreciated, offering excellent opportunity to investors to enter at current levels. Some slow moving cyclical stocks may surprise the markets.

The markets still offer opportunities for medium to long term investors in Equity Mutual Funds.

Resource By:- https://www.facebook.com/RRFinancialConsultants

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Filed under Finance, Q4 Results, World News

NIFTY: Bullish trend should Continue-8300 next Resistance

Technical View

Nifty this week crossed above 8000 which is 161.8% Fibonacci Level in addition to being a number with big psychological significance. Hence it is a crucial level and should prove to be a strong support. Above 8000, Nifty has a target of 8300.

Below 8000, it has strong support at 7850, 7730 and 7650. This trend will become bearish only if Nifty closes below 7568, its previous major low in August.

RECOMMENDATION:

Several midcap, small-cap, and infrastructure stocks have fallen sharply, offering excellent opportunity to investors to enter. Some slow moving cyclical stocks may surprise the markets.

The markets still offer opportunities for medium to long term investors in Equity Mutual Funds.

Click here to see our other Research reports or Visit:- https://www.linkedin.com/today/post/article/20140905093729-247646391-nifty-bullish-trend-should-continue-8300-next-resistance

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