morning thoughts...
We have beem saying of the range for the markets and the same pattern followed, which is likely to continue in the coming sessions.
Technically the markets cannot continue in a range and a big move is expected soon.
When the Sensex has been rallying because of the 'Modi' factor, it then makes sense to check ground reality and see if things are indeed moving around. One of the things that give an idea of this is whether investments have started picking up.
One such indicator has been the slack demand for earth moving equipment. This implies that the construction industry, one of the barometers of the Indian economy, has yet to take off. Indeed, sales of equipment to the industry fell by around 15% in 2013. And 2014 seems to be no different. This is reiterated by none other than Mr Anand Mahindra, MD of the Mahindra group. As per him, the company has seen little improvement in sales of its backhoe loaders and construction kit products.
One of the reasons for this has been high interest rates which has subdued demand and not exactly motivated companies to make capital investments. Capital investment, which accounts for around 35% of the economy, has barely grown since 2012-13. It did grow by 7% YoY in the June quarter, but was down 7.4% QoQ.
So, it is quite obvious that a lot of work still needs to be done at least on the reforms front for the growth of the economy to reach the next level.
2014 may very well be coming to an end but is has been a strong one for the Indian stock markets, which have emerged as one of the top performing indices in Asia.
The Modi wave no doubt has been a prime reason for the euphoria in the markets. There are high expectations that this government will unleash a spate of reforms that will bode well for the Indian economy and also help expand corporate earnings.
But this is not the only factor that has been a driver of the Indian markets. External events have also been playing a role and will continue to do so in the months ahead.
Indeed, liquidity has been flush in the global economy as central banks continue to pursue radical policies. The US Fed may well have ended its bond buying program but other bankers are not necessarily following suit. The Bank of Japan recently announced its intention of going in for another round of quantitative easing. And as Europe continues to struggle, the European Central Bank coming out with more expansionary policies cannot be ruled out. Infact, the same can be said of the US as well. Interest rates still continue to hover around zero. In this regard, the Fed has also been quite vague about hiking rates anytime soon.
Hence, with so much liquidity, foreign money will continue to make a beeline for Indian shores in search of better yields.
Given the environment both globally and back home, we will not be surprised if stock markets rally further in the months ahead.
But is that reason enough to invest in each and every stock? Now, determining the next level that the Sensex will reach is not something we believe in doing. What we do know is that every stock has an intrinsic value and investors should consider buying a stock only if it trades at a sufficient discount to the intrinsic value.
Coming to the commodity markets bullions , base metals energy remains weak.
Last days convert 15k into 30k option was Hpcl 560 pa - which rose from 8 to 25 (tripled)
Yesterday's calls sent
Double bumper Hexaware 220 ca - buy at cmp 4.85 sl 3.70 targets 10 - went 10.60
Fii Whirlpool - buy at cmp 562 sl 550 targets 625 - went 639
Bpcl - sell at cmp 749 sl 755 targets 730 - went 725
Cairn India - sell at cmp 270 sl 273 targets 260 - went 261.50
Nifty - sell at cmp 8420 sl 8438 targets 8375 - went 8350
Sail - buy at cmp 80 sl 79 targets 83 - hit sl
We have beem saying of the range for the markets and the same pattern followed, which is likely to continue in the coming sessions.
Technically the markets cannot continue in a range and a big move is expected soon.
When the Sensex has been rallying because of the 'Modi' factor, it then makes sense to check ground reality and see if things are indeed moving around. One of the things that give an idea of this is whether investments have started picking up.
One such indicator has been the slack demand for earth moving equipment. This implies that the construction industry, one of the barometers of the Indian economy, has yet to take off. Indeed, sales of equipment to the industry fell by around 15% in 2013. And 2014 seems to be no different. This is reiterated by none other than Mr Anand Mahindra, MD of the Mahindra group. As per him, the company has seen little improvement in sales of its backhoe loaders and construction kit products.
One of the reasons for this has been high interest rates which has subdued demand and not exactly motivated companies to make capital investments. Capital investment, which accounts for around 35% of the economy, has barely grown since 2012-13. It did grow by 7% YoY in the June quarter, but was down 7.4% QoQ.
So, it is quite obvious that a lot of work still needs to be done at least on the reforms front for the growth of the economy to reach the next level.
2014 may very well be coming to an end but is has been a strong one for the Indian stock markets, which have emerged as one of the top performing indices in Asia.
The Modi wave no doubt has been a prime reason for the euphoria in the markets. There are high expectations that this government will unleash a spate of reforms that will bode well for the Indian economy and also help expand corporate earnings.
But this is not the only factor that has been a driver of the Indian markets. External events have also been playing a role and will continue to do so in the months ahead.
Indeed, liquidity has been flush in the global economy as central banks continue to pursue radical policies. The US Fed may well have ended its bond buying program but other bankers are not necessarily following suit. The Bank of Japan recently announced its intention of going in for another round of quantitative easing. And as Europe continues to struggle, the European Central Bank coming out with more expansionary policies cannot be ruled out. Infact, the same can be said of the US as well. Interest rates still continue to hover around zero. In this regard, the Fed has also been quite vague about hiking rates anytime soon.
Hence, with so much liquidity, foreign money will continue to make a beeline for Indian shores in search of better yields.
Given the environment both globally and back home, we will not be surprised if stock markets rally further in the months ahead.
But is that reason enough to invest in each and every stock? Now, determining the next level that the Sensex will reach is not something we believe in doing. What we do know is that every stock has an intrinsic value and investors should consider buying a stock only if it trades at a sufficient discount to the intrinsic value.
Coming to the commodity markets bullions , base metals energy remains weak.
Last days convert 15k into 30k option was Hpcl 560 pa - which rose from 8 to 25 (tripled)
Yesterday's calls sent
Double bumper Hexaware 220 ca - buy at cmp 4.85 sl 3.70 targets 10 - went 10.60
Fii Whirlpool - buy at cmp 562 sl 550 targets 625 - went 639
Bpcl - sell at cmp 749 sl 755 targets 730 - went 725
Cairn India - sell at cmp 270 sl 273 targets 260 - went 261.50
Nifty - sell at cmp 8420 sl 8438 targets 8375 - went 8350
Sail - buy at cmp 80 sl 79 targets 83 - hit sl
