High time

There was a fall and then a rise for the Sensex and Nifty as retail and foreign investors gave them a boost

In the last week, for most days, the markets slipped but regain momentum even touching its all time high on the back of buying by both retail and foreign investors. The markets on Friday closed up around 1 per cent each. Going forward Nifty is likely to move up further towards 8550-8600 levels in the near term. Nifty has support at 8400 and 8304 levels.

Trade deficit
The country’s trade deficit for the October month narrowed sharply to $ 13.36 billion from $14.25 billion in the previous month. Imports fell to $ 39.45 billion from $ 43.15 billion in September and on yearly basis it rose 3.16 per cent. But on the annual basis, the trade deficit surged 26.1 per cent to $ 13.36 billion.

On the other end, the exports also fell to its lowest level since March 2014. They stood at $ 26.09 billion against $ 28.90 billion in the last month and on a yearly basis fell 5.04 per cent. Gold imports were seen rising to $ 4.18 billion from $ 3.75 billion in the previous month, whereas the oil imports fell to $ 12.36 billion against $ 14.50 billion on a monthly basis.

At the end of October, the exposure of the mutual fund companies in the IT sector have climbed to a fresh all time high which is also, the fifth consecutive rise in the MF industry’s exposure to the sector.

According to SEBI data, the MF investment in software stocks stood at Rs 32838 crore as on October 31, 2014 accounting for 10.43 per cent of their total equity assets under management of Rs 3.15 lakh crore.

The previous highest level was in September with an investment of Rs 31834 crore. The MF has highest exposure to the banking sector with nearly investment of Rs 63000 crore in October.

For the second quarter of the fiscal 2014-15, PTC India reported a 56 per cent growth in its net profit on the back of increased volumes of power traded on its platforms.

The net profit of the company during the September quarter stood at Rs 96 crore as against Rs 62 crore in the same quarter last year. The total revenues of the company was up 34 per cent to Rs 4212 crore against Rs 3140 crore in the same quarter last year.

New introductions
From the next week, NSE will introduce six companies in its futures and options segment. The companies include Engineers India, Strides Arcolab, Wockhardt, Amtek Auto, Bosch and Indiabulls Housing Finance, which may be available for trading with effect from November 28, 2014.

In September, NSE launched F&O contracts in stocks like SKS micro, TVS Motors, Eicher Motors, Motherson Sumi and Mindtree. For introduction in the derivative segment, the stock market wide position limit, which is the total number of contracts a trader may active at one time for a given underlying should be Rs 300 crore and the minimum order requirement for the stock should be Rs 10 lakh.

The news that the Japanese economy missed the GDP estimates made the markets to fell in the global front. In China, weak manufacturing PMI also added fire to the fuel. But the Japanese PM called an early election and postponed the plans to increase sales tax supported the markets. The comments from ECB president on raising the prospects of further stimulus for supporting the economy also added strength to the markets.

World happenings
On the global front, in the US markets, the major triggers for this week are Markit composite PMI flash, services PMI flash, consumer confidence, GDP price index, house price index, durable goods order, new home sales, initial and continuing jobless claims.

On the Japanese front, Bank of Japan’s monetary policy minutes, inflation data, retail sales, industrial production and construction orders are data to watch out. Apart from the banking sector IT stocks and Capital good sector stocks can also lend support to the market to a greater extent. In the Pharma sector, Cipla and Lupin are strong counters to move up.

Alex K Mathews is the author of Financial Services And Systems, as well as Option Trading: Bear Market Strategies published by Tata McGraw Hill. He is also the technical and derivatives research head of Geojit BNP Paribas Financial Services Ltd. The author may have a vested interest in investments he has recommended. Feel free to e-mail him at alex@geojit.com. Geojit BNP Paribas has membership in, and is listed on, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

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