Stock Market Update

Market Volatility to Continue This Week

Continuing on the trend last week, expect a volatile week this time around too due to expiry of derivatives contracts on Thursday. Investors will also be watching for global cues and the developments in the PNB fraud case. The last few weeks of correction in Indian markets has resulted in massive losses, especially for retail investors who were chasing momentum in mid and small-caps. There seems to be a pattern of distribution where frontline indices are holding steady within a band while the mid and small-caps continue to correct heavily. However, this should provide a good opportunity for an entry in the near future.

Last week saw Nifty trading in a range between 10,450 and 10,600, and the Bank Nifty index being dragged down by the Rs 11,000 crore Punjab National Bank fraud case. The rupee ended at 64.21 against the dollar, compared to 64.39 last week. FIIs were net sellers to the tune of 28.5 billion rupees ($44 million) while DIIs were net buyers to the tune of 23.7 billion rupees.

The highlight of the week was the bank fraud case involving jeweller Nirav Modi. The case may have a wider impact on the banking sector given the possibility that other jewellers could have exploited the letter of credit and bank guarantee facilities to fund their business operations. A pertinent point to note here is that the quantum of fraud is so huge that the likely recapitalisation amount that PNB is supposed to receive (54.7 billion rupees) from the government may be completely wiped off.

On the macro front, CPI inflation for January eased to 5.07 per cent, compared to a 17-month high of 5.21 per cent in December. Factory ouput continued to record strong growth for a second straight month at 7.1 per cent in December. IIP growth is expected to trend higher in January as commercial vehicle sales have expanded by 36.6 per cent. The positive contribution of cement, diesel and even two wheelers augurs well for growth recovery, especially for the rural economy.

Merchandise exports increased 9.1 per cent to $24.38 billion in January compared to a year ago, while imports surged 26 per cent to $40.68 billion. Trade deficit jumped 64.6 per cent to $16.30 billion in January.

With the results season almost over, all the focus will continue to remain on the global cues. Last week, the Dow Jones increased by 4.5 per cent and recovered 50 per cent of its recent losses. Hence, once the domestic concerns settle, Indian indices are likely to take part in global rally.

Posted by Digamber 

Market Volatility

Volatility to continue for some time led by global factors

Domestic equities markets have gone through nearly 10 % correction in the past week riding on the back of several factors – following global markets fall and domestic events (Union Budget, Long Term Capital Gains tax etc. Hardening of bond yields globally is one of the key factors driving the market correction. In the Indian context too Bond yields have increased from 6.3% in July 2017 to 7.6% now.

Many stocks which were quoted at higher valuations have been moderated and present an investment opportunity. Overall the economic outlook is favourable and a further consolidation in corporate earnings will give investors a decent earning opportunity.

There is consumption recovery – both urban and rural, savings as well as structural changes like GST which should boost economic sentiments.

Other factor that will play out are the on-going quarterly results season and crude oil price fluctuations, combined with the direction of foreign fund flows and the rupee's movement against the US dollar. All these will also impact investors’ decision to enter the market in one way or the other. Thus equities market this week will focus on earnings, macro-data and, of course, global cues.

If the global markets remain volatile, it might spill over to Indian markets. FPIs (Foreign Portfolio Investors) have been net sellers; hence support from DIIs (Domestic Institutional Investors) remains important in event of global volatility.

Barring today’s (Monday’s) rise in indices, in the past few weeks, a massive sell-off in the global markets has pulled the Indian equity indices deep into the red. Since February 1, 2018, the Bombay Stock Exchange (BSE) Sensex has shed around 1,900 points and the National Stock Exchange (NSE) Nifty50 over 500 points. Market regulator is of the view that Indian stock market volatility may continue for some more time due to global factors. However SEBI feels that there is no cause of worry in terms of volatility, as the country has a robust risk-management system and that there is no issue in terms safety of contracts or enforcement of contracts.

Apart from global cues, the on-going quarterly results season assumes significance as major firms like GAIL, Indian Hotels, DLF, Fortis Healthcare, GMR Infra, Welspun India, Idea Cellular, Jet Airways, Nestle India and Sun Pharma are expected to announce their quarterly results in the this week. The current earnings season is likely to provide strong signs of revival in corporate earnings, underlining the long-term growth prospects.

Besides the Q3 results, investors will keep a close watch on the upcoming macro-economic data points such as the Index of Industrial Production (IIP), Consumer Price Index (CPI), Wholesale Price Index (WPI) and Balance of Trade figures. The Central Statistics Office (CSO) is slated to release the macro-economic data points of IIP and CPI on February 12.

Technically Nifty has immediate supports at 10,276 points and any pull-back rallies could find resistance at 10,703 points.

Success Story : Bank Nifty was good buying on 25180 Level on 06.02.2018. Chart was telling us oversold zone as from last 2 session world market crashed heavily, bears were very strong  as we seen reversal we grabbed the opportunity by taking risk of Rs. 300 with 900 point rewards.
Finally our target achieved and got Profit of 36k Per lot Within hours. This is possible only if we keep patience.

Success Story Nifty bank

Success Story !  On 19th Jan 2018 we spotted an opportunity of   Nifty bank @ price 26634  on our strategy of support and resistance today 5th Feb 2018 we book profit @ price 26200  the return on our investment was 1.66% i. e Rs. 17760 with in the time span of 17 Days. So by using this strategy one can get return on their investments in a short period.

Sucess Story Nifty

Success Story ! On 25th Jan 2018 we spotted an opportunity to short   Nifty @ price 11062  on our strategy of support and resistance today 5th Feb 2018 we book profit @ price 10690  the return on our investment was 3.46% i. e Rs. 27750 with in the time span of 10 Days. So by using this strategy one can get return on their investments in a short period....

UNION BUDGET 2018 HIGHLIGHTS

The Budget 2018 is farmer friendly, common citizen friendly, business environment-friendly and will add to ‘ease of living’ and ‘ease of doing business. The Budget 2018 has many new announcements of interests. A year ahead of 2019 General Elections, the Budget emphatically targets farmers and citizens living in rural areas. It had also had new announcements for students, teachers, middle-class citizens, workers in MSME sectors etc. The PM, Narendra Modi has termed the Budget as “development-friendly” and one that will strengthen the vision of a ‘New India’ by 2022. 

The following are the key highlights of this year’s Budget

1. Increase the custom duty on mobiles from 15% to 20% and on some other mobile parts to 15%, and some parts of TVs to 15%.

2. Increase the health and education cess to 4%

3. Tax long-term capital gains exceeding Rs 1 lakh in listed stock at 10%.

4. Rs 50,000 additional benefit to senior citizens for investment in mediclaim

5. A standard deduction of additional Rs 40,000 for salaried employees. This move will benefit 2.5 crore taxpayers

6. No changes in the structure of income tax for individuals

7. Benefit of the reduced corporate rate of 25% for companies with reported turnover of up to Rs 250 crore.

8. 100% tax deduction for the first five years to companies registered as farmer producer companies with a turnover of Rs. 100 crore and above.

9. Emoluments of President, Vice President and Governor being revised: Rs 5 lakh; 4 lakh; Rs 3.5 lakh per month respectively.

10. Recapitalisation to enable PSU banks to lend Rs 5 lakh crore

11. The government will assign every enterprise in India a unique ID on the lines of Aadhaar.

12. Rs 5.97 lakh crore allocated for infrastructure spending in India.

13. 5 lakh WiFi hotspots to be set up in rural areas to provide easy Internet access.

14. Redevelopment of 600 major railway stations has been taken up; Mumbai transport system is being expanded; suburban network of 160 km planned for Bengaluru...

15. The government proposes to revamp the system of sanctioning of loans to SMEs. The information required for sanctioning the loan will be linked with GSTN and all required information can be fetched from GSTN Portal. It will help to grant the loans quickly and will help in reducing processing time.

16. UDAN will connect 56 unserved airports in India.

17. An institute is coming up at Vadodara to train people for the bullet train programme.

18. AMRUT programme will focus on water supply to all households in 500 cities. Water supply contracts for 494 projects worth 19,428 core awarded.

19. Rs 1,48,528 crore is the capital expenditure for the Indian Railways for 2018-19... All trains to be progressively provided with WiFi, CCTV and other state-of-the-art amenities.

20. Bharatmala project approved for better road connectivity at Rs 5.35 lakh crore.

21. Proposal to develop 10 prominent tourist destinations as Iconic tourism destinations.

22. Women’s contribution reduced to 8.33% towards PF in the first 3 years for new EPF accounts... The government will contribute 12% of EPF contribution for new employees in all sectors for the next three years.

23. 70 lakh farming jobs have been created this year, shows an independent study.

24. Rs 3 lakh crore allocated for PM MUDRA Yojana.

25. The government is slowly but steadily progressing towards universal health coverage.
26. Announce allocation of Rs. 56,619 crore for SC welfare and Rs. 39,135 crore for ST welfare

28. Mass formalization of MSME sector is happening after demonetization and GST.

29. Total 187 projects sanctioned under the Namami Gange programme.

30. 24 new government medical colleges and hospitals to be set up by upgrading existing district hospitals.

31. Rs 600 crore for nutritional support to TB patients.

32. One medical college per every three constituency.

33. Have decided to take healthcare protection to a new aspirational level. Launching a flagship National Health Protection Scheme to cover 10 crore poor and vulnerable families, benefiting approximately 50 crore. Providing Rs 5 lakh per family per year for medical reimbursement, under National Health Protection Scheme. This will be world’s largest health protection scheme.

34. Rs 1200 crore for the flagship programme in health wellness centres.

35. Eighteen new schools of planning and architecure will be set up. Proposed railway university in Vodadara.

36. Eklavya schools to be started for Scheduled Tribe population... Scheme for revitalizing school infrastructure, with an allocation of 1 lakh crore rupees over four years. Called RISE - Revitalizing Infrastructure in School Education.

37. Integrated B.Ed programme to be initiated for teachers, to improve quality of teachers.

38. Technology will be the biggest driver in improving education.

39. Rs 14.34 lakh crore to be spent for providing livelihood to rural India through infrastructure building.

40. Loans to self help groups will increase to Rs 75,000 crore by March 2019.

41. Housing for all 2022, all poor people have a house to live in. 51 lakhs ryral houses and 37 lakhs urban houses under increased capital allocation in FY 2018-19

42. In the next financial year, target to construction of two crore toilets.

43. Removal of crop residue to be subsidised in order to tackle the problem of pollution due to burning of crop residue:

44. Ujwala will give 8 crore women new LPG connections.

45. Special scheme to address air pollution in Delhi-NCR region.

46. Credit for agricultural activities is up from Rs 10 lakh crore to Rs 11 lakh crore .

47. Fishery and aquaculture and animal husbandry funds with a total corpus of Rs 10,000 crore.

48. Agri-Market Development Fund with a corpus of Rs 2000 crore to be set up for developing agricultural markets.

49. Restructured National Bamboo Mission to be launched with an allocation of Rs 1290 crore to promote bamboo sector in a holistic manner.

50. Grameen Agricultural Market (GRAM) will provide farmers a means to sell directly to buyers.

51. Rs 500 crore announced for Operation Green.

52. Allocation to food processing ministry is being doubled from Rs 715 crore to Rs 1400 crore.

53. Cluster-model approach to be adopted for agricultural production.
54. The focus is on low-cost farming, higher MSP. Emphasis is on generating farm and non-farm employment for farmers.

55. 470 APMCs have been connected to ENAM network, the rest to be connected by March 2018... Agri-Market Development Fund with a corpus of 2000 crore to be set up for developing agricultural markets

58. The government will ensure payment of full MSP even if farmers sell below MSP.

59. The Minimum Support Price of all crops shall be increased to at least 1.5 times that of the production cost.

60. Government to ensure that services and benefits reach people directly. The direct benefit transfer in India is the biggest such exercise in the world.

61. Maximum governance, minimum government has ensured India has climbed 62 places in the ease of doing business. The aim now is working toward easing of living in India

SUCCESS STORY OF EICHER MOTORS

 On 25th Jan 2018 we spotted an opportunity of  EICHER MOTORS @ price 26208.05  on our strategy of support and resistance today 2nd Feb 2018 we book profit @ price 28100  the return on our investment was 7.22% with in the time span of 9days. So by using this strategy one can get return on their investments in a short period.

People confused when uncertinity happen.

                                 Budget  Highlight 

Immediate update on direct tax changes from the budget speech -
1. Real estate – double taxation in respect of immovable property. No adjustment where 5% difference is there.

2. MSME – Corporate tax rate 25% to companies having T/o under Rs. 250 crore in FY 2016-17. Revenue foregone Rs. 7000 crore FY 18-19. 

3. Salaried tax payers – No changes in structure. Salaried taxpayer – standard deduction of Rs. 40,000/- in lieu of transport and reimbursement of medical expenses.
4. Senior citizens – exemption of interest income from FD / RD increased to Rs. 50,000. No TDS u/s 194A for this. Health insurance deduction from Rs. 30,000 to Rs. 50,000. 

5. Rs. 1,00,000/- deduction u/s 80DDB for critical illnesses for senior and very senior citizens

6. Payment exceeding Rs. 10,000 in cash disallowed for Trusts. Non-deduction of TDS would be disallowed @ 30%

7. LTCG tax – Tax LTCG exceeding Rs. 1,00,000/- @ 10% w/o indexation. All gains upto 31.1.18 grand fathered. STCG normal 15%. Tax on distributed income by EOF @ 15%. 

8. Increase cess by 1%. Total cess @ 4% health and education cess

9. E assessment – to be expanded