Markets are on a roll though the pace has now reduced to inching forward.
The markets have been making new highs and the BSESENSEX gained 178.03 points or 0.64 per cent to close at 28,046.66 points.
Nifty gained 52.90 points or 0.63 per cent to close at 8,389.90 points.
The BSE100, BSE200 and BSE500 gained 0.70 per cent, 0.91 per cent and 0.95 per cent while BSEMIDCAP was up 1.55 per cent and BSESMALLCAP up 0.90 per cent. All in all, it was a week of gains even though the pace seems to be slowing.
Time to enjoy: Various stocks are performing well, which means good news for all. Pic/ Shadab Khan
The top sectoral gainer was BSEFMCG up 2.95 per cent followed by BSEAUTO 1.75 per cent and BSEREALTY 1.64 per cent. The losers were led by BSEOIL&GAS down 1.95 per cent and followed by BSEPSU 0.68 per cent and BSEPOWER 0.52 per cent.
In individual stocks, the top gainer was housing finance company LIC Housing Finance up 9.98 per cent followed by GAIL 6.79 per cent and Bank of Baroda 5.62 per cent. The losers were led Cipla down 6.47 per cent and then the three OMC’s (Oil Marketing Companies) IOC, BPCL and HPCL down 4.84 per cent, 3.04 per cent and 3.00 per cent, respectively.
These companies which have been rising fell when the government raised excise duty on petrol and diesel. Though this excise duty would not be passed through to consumers, it eventually will as the anticipated pump price cut over the weekend is unlikely to happen and get adjusted in the excise duty hike. The other direct benefit from this is fiscal deficit would reduce by the amount as excise duty would be collected by the government.
There is good news for India, internationally where the contentious food security and subsidies were the bone of contention at the WTO meet have been sorted out with an agreement signed with USA. The signing of this agreement paves the way for clearing the last hurdle on the WTO agreement about international custom duties.
The economic front also saw positive news as CPI (Consumer Inflation) has fallen to 5.52 per cent in October 2014 against 6.46 per cent. WPI or (Wholesale Inflation) has fallen to a five year low of 1.77 per cent against 2.38 per cent.
Fuel inflation is at a five year low while food inflation is at a 34 month low. September IIP was at 2.5 per cent which is also positive and far higher than the consensus estimates. These numbers will encourage the government and industry and put greater pressure on the RBI governor to cut interest rates when they meet for the monetary policy review on December 2.
FII’s have continued to be bullish and bought shares worth Rs 2,772 crores during the week while domestic institutions were sellers of Rs 670 crores. The Dow Jones continues to make new highs like the Nikkei (Japanese Index) and the Dow closed at 17,634.74 points a weekly gain of 60.86 points or 0.34 per cent. The Indian rupee was under pressure and lost 18 paisa or 0.11 per cent to close at Rs 61.72.
In the last eight trading sessions, the BSESENSEX has gained 181 points while Nifty has gained 67 points. This clearly shows that the markets are finding the going tough and need to consolidate. While the market is looking tired it still does not give any indications for going short. It however, makes imminent sense for investors to wait for the markets to correct.
The whole world is bullish on India and money is coming. In that flow of funds where 38 billion have come so far in this calendar year, are markets have rallied very strongly and are amongst the top performing markets. Optimism and hope fuelled with money are driving our markets and things are on the recovery path.
One thing which is now not being factored is that the risk reward ratio seems to be against the investor. Everyone wants a correction and is waiting to buy when that happens, but markets have their own way. When the correction does happen, the sentiment in the short term may be against investing.
I, strongly advice readers to take some money off the table and wait for corrections before re-investing. Enjoy the markets till then.
Arun Kejriwal is founder of the Mumbai-based advisory firm Kejriwal Research & Investment Services Pvt Ltd. Readers are invited to read more about these and other issues on his website http://ak57.in
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