INTELLECTUAL TRADING

Nifty Market Cap (Rs bn) 31,526  FF Market Cap (Rs bn) 27,135  The Nifty 50 is well-diversified 50 stock index accurately reflecting overall market conditions. The reward-to-risk ratio of Nifty 50 is higher than other leading indices, making it a more attractive portfolio hence offering similar returns, but at lesser risk. Index is reviewed on a half-yearly basis and a four weeks prior notice is given to market before making changes to the index set. As per the Index Methodology, We have identified the contenders to be included in the index as well as those which are likely to be excluded from index.

Last week , Indian stock markets witnessed buying interest. For the week, both the BSE Sensex and the NSE Nifty were up 2.6%. The Nifty opened on Monday with a gap up of 90 points and added some more gains by days' end. Much of the weekly gains were registered on Monday while the markets traded in range for rest of the days. Now it seems the index could face resistance near the upper edge of the channel as it is moving to and fro those levels just as it did in April and June. So one will have to wait and watch for further trend developments. If the index manages to close below  8508  levels then the index can drift to the levels of  8405-8317

There was a six per cent crash immediately after the referendum but prices have since recovered. Base metal prices are also up. Zinc has risen by roughly 30 per cent since January. A rise in base metal prices may be a sign of some sort of revival in global demand. Stabilising fuel prices after Brexit could also mean that traders don't expect a reduction in global fuel demand.  On the other hand, gold prices are up sharply, by 25 per cent. Gold has outperformed most non-precious metals. Bull runs in the yellow metal are generally tied to fears regarding inflation expectations and currency collapses. Gold prices tend to have an inverse relationship to growth. When GDP growth is up, gold prices are usually down. Gold put on a spurt after the referendum so the fear factor has built up.         The crypto-currency Bitcoin is also up by 25 per cent since January. Trading in Bitcoin has been largely driven by Chinese speculators who are using Bitcoin as a means of c...

GST is the biggest tax reform in decades. Currently indirect tax regime in India has different types of taxes like service, excise, VAT, entertainment, octroi etc. levied by central, state and local authorities. Proposed GST (Goods and Service tax) will subsume different types of indirect taxes and there will be one single tax rates on all transactions. There are 3 main channels through which GST is expected to benefit certain sectors: Lowering of Effective tax rate: Sectors where current tax burden is very high and is expected to come down under GST Benefits to organized players in large unorganized sectors: Organized players are expected to gain market share in the sectors with presence of large unorganized segment. This is because under GST, small unorganized players will not enjoy exemption benefits levelling the playing field between large and small players. Cost savings on logistics and transportation operations: Under GST all different types of state taxes will be eliminat...

Nifty Weekly Performance (June 20, 2016 – June 25, 2016) Indian indices witnessed buying interest. For the week, the BSE Sensex was up 2.83%, while the NSE Nifty was up 2.96%.  The index put up a staggering 240 points during the week despite the Brexit woes. The index has shrugged off the worries and headed higher, rallying consistently all five days of the week.  Not right time to invest for  long-term investors           Nifty is now just above the range resistance of 8,300. Nifty is forming higher tops and lower bottoms since last 3 months. Despite Nifty is forming higher tops the RSI has failed to keep with it on both daily and 75 min charts. As now bulls have upper hand now , but now we can not under-estimate the power of bears either.          Right now, the Nifty is trading at a P/E of 22.5. That is historically a level of low returns or negative returns.  The returns for an investor who enters wh...

BREXIT camp wins; UK becomes first country to leave EU BREXIT, which was looking quite eminent has finally taken place. As at 10.15 am (IST) it only required 3.7 lacs to win. With less than an hour left for the outcome, things are very clear, British leaves the European Union. The leave camp has got 51.8 per cent vote. UK has become the first country to leave the European Union. BREXIT, was  a political goal that has been pursued by various individuals, advocacy groups, and political parties since the United Kingdom (UK) joined the precursor of the European Union (EU) in 1973. Withdrawal from the European Union is a right of EU member states under Article 50 of the Treaty on European Union. Article 50 of the Treaty on European Union provides that: "Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements." Article 50 was inserted by the Lisbon Treaty in 2007, before which the treaties were silent on the possibility ...

The stocks which could witness a significant movement on June 24 are Advanta Limited; Omax Auto Limited; Aditya Birla Fashion and Retail Limited; Tata Motors Limited /Tata Steel Limited; Coal India Limited. a) Advanta: Advanta, the R&D company for hybrid seeds has informed BSE that the Gujarat High Court has approved its amalgamation with UPL Limited, the manufacturer of crop protection chemicals. Advanta is the transferor, while UPL is transferee. b) Omax Auto: Omax Auto, the maker of auto and non-auto components has bagged an order for supply of railway parts from Indian Railways worth Rs 90-100 crores. The stock is likely to trade in green in the coming session. c) Aditya Birla Fashion and Retail (ABFRL): ABFRL, known for its Pantaloons brand signs exclusive deal with British brand Izabel London to grow its international presence. Both the companies specialise in women’s wear. d) Tata Motors/Tata Steel: Both the companies will be reactive of the Brexit result to be rel...

High dividend payouts are reliable only if they are accompanied by high or stable returns on equity     A high dividend payout (dividend as per cent  of net profits) is generally seen as an  attribute of a mature company. It means that  the company retains less for its growth and pays out  most of its earnings. A high payout in a single year could be frequently seen but only established and  mature companies can sustain it on a long-term  basis. Established companies don’t need much  capital expenditure for future growth and hence  prefer to distribute high dividends to their  investors. If you are thinking of investing in some  company due to its high dividend payout, you must,  however, see not just the payout but also historical return on equity.           A high dividend payout keeps the return on  equity relatively high if margins remain intact.  This is simple mathematics. Whe...

If you want to survive in a bureaucracy, any bureaucracy, it is important that you market your bosses well.  It is important that you say things that your bosses like.  It is important that you repeat things that your bosses have been saying and like to believe in.  It is important that you laugh at the jokes that your bosses crack-even the ones you do not understand.  It is important that you do not have an opinion of your own. And if you do, it is better if you keep your mouth shut.  Because if you don't, chances are that you might be asked to leave very soon.  That is one of the unwritten rules of India's democracy.  The Congress excelled at it for close to the six decades that it governed the country. And the Bhartiya Janata Party has just continued where the Congress left.  Raghuram Rajan, the twenty-third governor of the Reserve Bank of India (RBI), probably did not understand this.  As a consequence, he won't be gett...

Nifty weekly performance (June 13, 2016 – June 17, 2016)  Indian indices witnessed volatility and booked marginal losses on the back of global economic concerns. For the entire week, the BSE Sensex was down 0.04%, while the NSE Nifty was unchanged.The index traded on an extremely volatile note throughout the week. It opened with a gap down on Monday and recovered most of the losses by Wednesday and finally ended the week with nominal losses. The index is currently trading in a very small range of 150 points from 8,050 to 8,200. One expect range bound action with high volatility in this eventful week. Nifty Prediction for Week (June 20, 2016 – June 25, 2016): Support for the index lies in the zone of 8000 from where the index has broken out from the triple top formation. If the index manages to close below these levels then the index can drift to the levels of 7800 where 200 Daily SMA is lying. Resistance for the index lies in the zone of 8280 to 8340 where the index ha...