Markets are trading at dangerous territory, given Left parties have taken off support from the Govt, the equation now at the Parliament is even more alarming. UPA +including SP - Left - BSP = 281 - which is +9 from majority. However, 7 SP MPs might not participate, so the line becomes even thinner.
If Govt is unable to click majority the markets could tank down to 3200-3400 levels for Nifty. So be careful while you invest anything!
Cheers,
hi Vivek,
i agree with you...
but as a matter of opinion I'd like you to see this article also...
i think tthis is possible in the near future...:D
I guess Swami himself has contradicted his assumptions in a more recent article, in this week's Sunday Times.
andy_jaan SaysI guess Swami himself has contradicted his assumptions in a more recent article, in this week's Sunday Times.
yeah Andy,
you are right...but he has given the reason for the same...and that too in an admitting way...:D
see the article...
KOnqeuer can i kall us KV
r u sure markets can crash to 10k if maj is not proved?
anyways by when the govt will have to prove maj ??????????:boat:
LoL! I used that "KV" nick a lot, during IIT days, I had a strong addiction for age of empires in those days, however, this nick at PG is a derivative of that short name :)
If you see FTSE, DAX and CAC right now, all the european markets are trading at -2.50% average loss. Given these markets are far mature than our emerging indices, something big is turning up for sure, which is similar to what happened to us early this year when, Indian markets were rising and US markets were declining every day, there were analysts on various channels which have some belief on non-correlation theory, which didnt happened eventually.
At present, we have fallen ~41-43% from all-time-highs, which makes our market far cheaper than other emerging and mature markets. The country is the fourth most expensive market in Asia with a PE ratio of the Sensex at 13.86, despite being the second fastest growing economy in the region. It lags only behind China (21.26), Japan (16.38 ) and Indonesia (14.72). Compared with the US too, Indian markets are cheaper. The S&P; 500 INDEX has PE ratio of 21.22 and Dow Jones has around 14.29.
There are two stories going hand-in-hand, one of which has strong reasons to show more downside for Indian markets, and other directs to upside, given we are far cheaper than other marekets if you consider valuations.
LoL! I used that "KV" nick a lot, during IIT days, I had a strong addiction for age of empires in those days, however, this nick at PG is a derivative of that short name :)
If you see FTSE, DAX and CAC right now, all the european markets are trading at -2.50% average loss. Given these markets are far mature than our emerging indices, something big is turning up for sure, which is similar to what happened to us early this year when, Indian markets were rising and US markets were declining every day, there were analysts on various channels which have some belief on non-correlation theory, which didnt happened eventually.
At present, we have fallen ~41-43% from all-time-highs, which makes our market far cheaper than other emerging and mature markets. The country is the fourth most expensive market in Asia with a PE ratio of the Sensex at 13.86, despite being the second fastest growing economy in the region. It lags only behind China (21.26), Japan (16.38 ) and Indonesia (14.72). Compared with the US too, Indian markets are cheaper. The S&P; 500 INDEX has PE ratio of 21.22 and Dow Jones has around 14.29.
There are two stories going hand-in-hand, one of which has strong reasons to show more downside for Indian markets, and other directs to upside, given we are far cheaper than other marekets if you consider valuations.
Dude,
Quick points:
+ I dont see market falling more than 10% from where it stands today. My logic is that the day when left pulled the plug out from the govt the market went up. See anyways we have election early next year. So even if the govt falls then the election might happen few months before the schedule.
+ I feel the govt will prove the majority and will go for the N-Deal. I see this a major boost for the eco. If i have to pick between the Deal and early election, will pick the Deal.
+ I dont believe in PE and all too much. My logic is that if Sensex went till 21K few months back I m sure that after few months it will regain that level.
+ I havent seen any major eco decisions by the govt in last 4 years (no privatization, N-Deal, Indo-Iran pipeline etcs). So I feel the market was indifferent with the government. So even it falls who cares. Not that we are in between any major eco reforms
Thanks
SK
So I feel the market was indifferent with the government. So even it falls who cares. Not that we are in between any major eco reforms
Thanks
SK
in my opinion it does matter if the govt falls or if there is any political instability in the economy
elections > increased govt spending > increased fiscal deficit > increase in money supply > further surge in inflation > RBI hikes interest rates/crr > capital spending gets hurt > growth derails > mkts enter slump
Dude,
Quick points:
+ I dont see market falling more than 10% from where it stands today. My logic is that the day when left pulled the plug out from the govt the market went up. See anyways we have election early next year. So even if the govt falls then the election might happen few months before the schedule.
The reason behind the rally day before was not that the Left pulled the plug, it was PM's strong willing-ness for nuclear deal, there are so many power and energy companies which will get substaintial benefit from it. ONGC is one big example.
As far as elections are considered, if Govt fails to prove majority in coming session, it will be a sorry stage for India, at these heated inflation levels, we will be facing election expenditure, which will be far expensive for Indian economy - this is a very big factor, you cant discount this.
+ I feel the govt will prove the majority and will go for the N-Deal. I see this a major boost for the eco. If i have to pick between the Deal and early election, will pick the Deal.
This is quite paradoxical, one hand you are taking Nuclear deal and other hand you have elections, there will be no deal if the Govt fails to pass the bill in parliament - remember India is still a democratic nation :)
+ I dont believe in PE and all too much. My logic is that if Sensex went till 21K few months back I m sure that after few months it will regain that level.
Why do you think market got a bounce back from 3,850 levels ? Had there been no connection with PE and markets, there had been no bounce back. You cant imagine big FII's and hedge fund managers make their traders on the terminals watching markets all the time. The strategy for each market is designed on techincals and PE multiple for any capital market is among the important factors, you cant neglect that.
+ I havent seen any major eco decisions by the govt in last 4 years (no privatization, N-Deal, Indo-Iran pipeline etcs). So I feel the market was indifferent with the government. So even it falls who cares. Not that we are in between any major eco reforms
Thanks
SK
Markets for any country have a strong correlation with the Fiscal and Monetary policy on which Govt has a big say! Economic decisions are very crucial, economic growth projections and Inflation numbers are inversely correlated, and mind you policies do have an impact on markets.
hi puys,
recently read on moneycontrol that DLF has set the price for buyback as Rs. 600/share...
i have 100 of them allotted at IPO price...
plz guide me on what is buy back and how can i avail it...
as many experts say that the realty market is not good...
although i can hold it for a longer term but i am in dilemma...
hi puys,
recently read on moneycontrol that DLF has set the price for buyback as Rs. 600/share...
i have 100 of them allotted at IPO price...
plz guide me on what is buy back and how can i avail it...
as many experts say that the realty market is not good...
although i can hold it for a longer term but i am in dilemma...
As the readers know, buyback refers to buying of outstanding shares by a company which in turn reduces the number of shares available in the market (public). This buy back offer may be called by the management because of following reasons:
- Promoters think that the current market price (CMP) of the share does not justify the fundamentals of the company and the share at CMP is undervalued. So they announce the buy back thus giving positive signal to the investors that all is well with the company fundamentals and that the share should command higher valuations.
- Tax benefits are also a reason for buyback as dividends are taxed at higher rate than capital gains, so companies prefer buyback to reward their investors instead of distributing cash.
- If a company has good amount of unused cash and the management feels that there is no other good opportunity in the market other than their own company, they may put the cash towards buying back their own shares so that investors may be rewarded.
- Buy back also improves the ratios such as ROA, ROE, P/E as outstanding shares (Equity) and Assets (Cash) get reduced.
- Buyback also helps to increase promoter's stake so that predators can be put at bay.
The company is looking at a buy-back because the current share price does not reflect the intrinsic value of the shares, Ramesh Sanka, group chief financial officer, said. Point 1
This (buy-back) is being done to take care of shareholders interest by announcing the right price for the shares, he said. It is also a strategic move of sharing returns with investors. Point 2 & 3
The company is planning to buy a maximum of 22 million equity shares, which constitutes 1.1 per cent to 1.29 per cent of the total equity base of the company. After the buy-back, the promoters' shareholding in the company will go up to 89.3 per cent from 88.1 per cent.
So in that case, not all your holdings will be taken in buyback. I mean suppose out of 100 shares, say 10 will be taken in buyback depending upon number of applications they receive. So price should hover around 480-530. (Arbitrage opportunities might also arise) But that does not gurantee that it will not fall. (Reliance Infrastructure is an example where the share price continued to plunge)
Other companies on Buy back are Godrej Industries, SRF.
Cheers!
;)
in my opinion it does matter if the govt falls or if there is any political instability in the economy
elections > increased govt spending > increased fiscal deficit > increase in money supply > further surge in inflation > RBI hikes interest rates/crr > capital spending gets hurt > growth derails > mkts enter slump
Hey,I completely agree with this. But when an election cost around 500 crs. I think India can live with this. I ment that if govt falls it will puch back eco reforms by 6 months. Which is the time for the new govt to start working. ThanksSK
shalabhkumar SaysHey,I completely agree with this. But when an election cost around 500 crs. I think India can live with this. I ment that if govt falls it will puch back eco reforms by 6 months. Which is the time for the new govt to start working. ThanksSK
You just under-estimated election expenditure by huge margin, election expenditure should be around 3,200 Cr for Election commission (assuming Inflation stays below 10.0%), this is excluding the political parties expenditure, which however, no party discloses.
At current situation, elections will take Indian economy to see further downside, no one wants election at this stage, may be next year, when the Inflation dust gets settled.
The figures for April were revised downwards. That is a cause for concern. So does this mean that if the May figures are also revised, the actual numbers would be lower, more sharply?
Inflation is growing at the fastest pace while industrial production is growing at the slowest pace. There are undoubtedly some tough times ahead for India Inc. Rising interest rates, soaring inflation, cut down in buying by the Indian consumers, will all leave a further telling effect on the bottomlines of the Indian companies. Auto companies are seriously contemplating cutting down production. Rising costs, if it does not come down soon, might start impacting expansions and other greenfield projects, leading to further slowdown. The Govt is taking all measures to reduce prices, as that is a priority right now but this is surely causing the economic growth to slowdown.
Caution may prevail on the bourses in the near term as, along with the economic factors, the country is now going through political uncertainty too. All would now depend on the first quarter results and more importantly on whether, the government will be able to win confidence vote in the parliament.
Cheers!!
Inflation is growing at the fastest pace while industrial production is growing at the slowest pace. There are undoubtedly some tough times ahead for India Inc. Rising interest rates, soaring inflation, cut down in buying by the Indian consumers, will all leave a further telling effect on the bottomlines of the Indian companies. Auto companies are seriously contemplating cutting down production. Rising costs, if it does not come down soon, might start impacting expansions and other greenfield projects, leading to further slowdown. The Govt is taking all measures to reduce prices, as that is a priority right now but this is surely causing the economic growth to slowdown.
Caution may prevail on the bourses in the near term as, along with the economic factors, the country is now going through political uncertainty too. All would now depend on the first quarter results and more importantly on whether, the government will be able to win confidence vote in the parliament.
Cheers!!
can anybody suggest me some sites regarding info and tips to invest in stock markets
are there any sites where we can do virtual trading ??
please suggest me ..
Yes, after a choppy session last week, markets being extremly volatile, tomorrow will be a session to watch out. Next week is important since many results will be popping up. Most importantly
- US Consumer data,
- UK's inflation numbers,
- Bank of Japan's Interest rate decision
- US's big blue chips Q2 numbers and guidance
- RBI's meeting ahead next week
- UPA's stake in Parliament starting discussion on Thursday
- TCS, Wipro, Satyam, and Major banks will be annoucing Q1 results and guidance
Crude heated back to $145 levels and Friday's meltown at Dow, NASDAQ and S&P; index will surely create pressure on Nifty and Indian capital markets. I believe one should not go long, in current situation. Think before you invest tomorrow.
Cheers,
- P.S. Lightning awaiting for your suggestion as well 😃 Thanks,
Puys ,
It seems that bad news continue pouring in Indian Business Scenario. Acc. to a report S & P is looking to cut indian credit rating if the credit woes continue.
Refer to the article..
Moneycontrol India :: News :: S&P; threatens to cut ratings if credit woes continue :: :: Economy :: Standard & Poors,Takahira Ogawa,Standard's and Poor
It had to be expected sooner than later. Our fiscal deficit is getting out of control. This article is good. Very comprehensive
The Hindu Business Line : India's worsening fiscal imbalance
Sensex has dipped to 12,612, down 717 points!
There's this article at Rediff "The Sensex story: From 1K to 18K"
The Sensex story: From 1K to 18K
Sensex had crossed 13K for the first time on October 30, 2006.
What a time, this! 
Sensex has dipped to 12,612, down 717 points!
There's this article at Rediff "The Sensex story: From 1K to 18K"
The Sensex story: From 1K to 18K
Sensex had crossed 13K for the first time on October 30, 2006.
What a time, this! :rolleyes:
Even worst could be on its way, I was listening to Jim Rogers interview yesterday, he was very bearish on South Asian markets. The reason being US debt has doubled to $5 trillion now, and in coming years if 2 or 3 financial institutions file Chapter 11 {restructuring or bankruptcy}, the US will be no state to bail out them.
Today two things will have some impact on markets, one is UK's employment data later in the day, and secondly Germany's inflation data. In last six months Global equity markets have lost $11 trillion, which is 11 times our GDP and even more.
ne mkt predictions for the coming week?????
I think some volatility is going to be expected in front of the vote.
If govt wins a great time for markets as long pending sectoral reforms could be introduced bringing more insurance funds and pension funds in the longer term. Also, economic growth will be higher if reforms are introduced
If it loses then expect no reforms, inflation to remain higher leading to rate hike again( which I think the market has already discounted).
We probably go to elections in 6 months leading to poor fire fighting ability against inflation, with Mayawati playing a major decisive factor in the future outcome. The negatives weigh down too heavily on the Market than what the positive holds on the upside!
personally, I don't trust Ms Mayawati on the economic front and am hoping that the govt stays in power only till the next election.
I think some volatility is going to be expected in front of the vote.
If govt wins a great time for markets as long pending sectoral reforms could be introduced bringing more insurance funds and pension funds in the longer term. Also, economic growth will be higher if reforms are introduced
If it loses then expect no reforms, inflation to remain higher leading to rate hike again( which I think the market has already discounted).
I would say, even if the Govt stays and wins the vote of confidence on the floor, the chances of bringing those reforms are very bleak, given that govt might not go again on floor to pass the insurance bill, before elections. The situation is already very tight and congress is betting on few independent candidates.
I am pretty sure that once the govt wins the vote of confidence, few of coalition partners might not sustain longer with the ruling UPA, there will be elections in six states before the general election next year, which will surely make UPA even more weak on political stand.