VantageTrade Eagle Eye: Markets bounced back on RBI announcement
For the second subsequent day, Nifty and Sensex were pulled down by weak global cues and growth concerns. The taxes proposed by finance minister in the Budget which can come into effect soon also undermined investors’ sentiment. The market closed negative on the day of March expiries. Nifty fell 16 points at 5,178.85 and Sensex finished the session at 17,058.61, down 63 points.
The market has lost around 5% in March expiry against the 16% gain in January and 18% gain in February expiry. Foreign institutional investors were net sellers of shares amounting to Rs148.06 crore on Wednesday while domestic institutional investors were net buyers of stocks totaling Rs73.03 crore.
Asian shares were trading lower on Friday as investors are observing European Union economic and financial affairs ministers meeting in Copenhagen. Japan's industrial production suddenly fell in February for the first time in three months in a sign foreign demand is slowing down. Japan's Nikkei 225 index was trading lower at 10,089.10 and Hong Kong's Hang Seng index was trading lower at 20,380.06, South Korea's Kospi index was trading lower at 2,011.50. China’s Shanghai index was trading slightly higher than previous close, at 2256.04.
US stocks closes mixed. The Dow Jones industrial average was up 19.61 points, or 0.15%, at 13,145.82. The Standard & Poor's 500 Index was off 2.26 points, or 0.16%, at 1,403.28. The Nasdaq Composite Index took off 9.85 points, or 0.31%, at 3,095.36.
Indian benchmarks started the first trading day of April series positive. Nifty was trading 27.75 point higher, at 5,208.60. Sensex opened at 17,117.41, 58.8 points higher. RBI surprised the investors today by announcing that it will buy RS 10,000 crore worth bonds via open market operations. It boosted the sentiment and at 12 am Nifty was trading 41 points higher and Sensex rose by 150 points. The Indian rupee reacted by appreciating by 23 paise to 51.17 a dollar. Investors will observe Coal India’s shares as the company refused to follow the instructions of the Prime Minister to commit fuel supply to power stations for 20 years by March 31.
Other Economic and Political News:
- February infra output up 6.8% yoy
- Indian GDP to grow at 7.5% in FY2013: Fitch
- Government will clarify stance on P-Notes taxation: Finance Minister
- Tata Motors hikes commercial vehicle prices by up to Rs.60,000
- Tata Motors to invest Rs.600cr on defense vehicles
- NTPC to halt expansion of gas-based projects
- Bharat Forge earmarks Rs.100cr to develop artillery gun
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Investment Idea: Look Beyond Gold
With gold breaching $1900 USD and making countless headlines, it is easy to lose perspective about the fundamentals of investing. Equity investments can seem almost quaint, and questions about what shares to buy are replaced with dreams of being the next King Midas.
Let’s get back to basics for a moment so we can get a clearer picture of why equities are a better option. Investment in gold can take several forms:
- Physical gold such as bullion or coins traded by dealers
- Gold certificates issued by banks
- Gold futures in commodity markets
- Gold stocks in mining companies
Equities do not have the physical allure or beauty of gold. Gold has an almost romantic quality to it that is only eclipsed by dealing in fine art. Equities are paper investments in companies, secured by an ownership interest. These shares of ownership are traded on stock exchanges.
Gold, while attractive during periods of inflation and deflation, has much poorer returns than equities when compared over the long-term. Worldwide, over the last 85 years, equities are up over 200 fold, while gold has returned less than six fold.
The other factor to consider is risk. Investment risk is measured by volatility. Equities have much smaller price swings than gold, and those swings take much longer to play out. These slower changes in price allow the equity investor time to act before large losses can occur. Gold, however, has violent swings in price that can wipe an investor out quickly.
Risk and return are the two pillars of investment analysis, and equities beat gold in both respects. When considering what shares to buy, it is important to educate yourself with well-founded stock market tips. In the end, education is your best investment.
VantageTrade Eagle Eye: Indian markets trade volatile ahead of F&O expiry
Unfavorable global cues, performance of the bourses around the world and selling pressure in sectors like consumer durables, realty and banking, that could be especially noticeable in the second half of the trade, drove the markets down. At the close, the Nifty fell by 48 points to 5,194.75 and the Sensex settled 136 points lower at 17,121.62. The rupee ended at 50.7750/7850 to the dollar. State Bank of India ended down 2.4% on the news that the bank raised deposit rates by 25-100 basis points.
Foreign institutional investors were net buyers of shares amounting to Rs42.99 crore on Tuesday, 28th March, while domestic institutional investors were net sellers of equities equal to Rs290.05 crore.
Markets in Asia began the session today mostly lower on fresh concerns about global economies conditions, especially USA’s and China’s. A report from Societe Generale SA indicated lower earnings growth in China, OECD Secretary-General Angel Gurría on Tuesday said that Europe’s debt problems remain challenging as it is deeply rooted. The data about new orders for U.S. durables was below investors’ expectations, it increased only modestly in February.
Japan's Nikkei 225 index was trading 0.9% lower at 10,090.62 and Hong Kong's Hang Seng index was trading lower at 20,651.12, down 1.1%. South Korea's Kospi index was trading 1.2% lower at 2005.45. China’s Shanghai index was trading at 2268, down 0.7%.
The US shares decreased as fall in oil and metal prices encouraged traders to sell. The Dow Jones industrial average fell 71.52 points, or 0.54 percent, to 13,126.21 at the close. The Standard & Poor's 500 Index slipped 6.98 points, or 0.49 percent, to 1,405.54. The Nasdaq Composite Index declined 15.39 points, or 0.49 percent, to 3,104.96.
Today Indian benchmarks opened lower than yesterday’s close following the global stock exchanges. The markets also remain volatile as traders close their positions ahead of F&O settlement date for March. The Nifty opened 48.8 points lower from yesterday’s close, at 5,145.95. Sensex dropped 81.77 points and opened at 17,039.85. At 11.40am Sensex was trading below the important psychological level of 17,000, at 16,985.61 and Nifty at 5,153.65.
The rupee fell early on Thursday weighted by weak economic data from the United States and China and demand for US dollars from oil companies. It was trading at 51.05/06 to the dollar. The crude oil prices fell to $105 a barrel as there’s a possible release of oil reserves by Western nations.
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