SENSEX 100000 BY 2020

The BSE benchmark Sensex can possibly touch 1,00,000-mark in the next six years if the infrastructure cycle is revived quickly by the new government and the corporate earnings grow by 20-25 per cent, claimed a report by Karvy Stock Broking. The 30-share Sensex is hovering around 25,000 mark at present. The stock markets have witnessed strong rallies, mainly fuelled by expectations from the Narendra Modi-led BJP government. According to the report, if the infrastructure cycle revives quickly, the earnings growth revival will be faster with even 25 per cent compounded annual growth rate (CAGR) looking possible. "A multiple rerating is also possible as cost of equity goes down in the next few years with the decrease in risk free rate. An earnings growth between 20-25 per cent and multiple rerating from 15x to 16-17x in the next few years can lead to a 25 per cent compounding of Sensex returns, which will take it to 100,000 levels by calendar year 2020!," it said. The key index breached the crucial 25,000-mark for the first time ever on May 16 when election results gave a clear mandate to BJP. The bellwether index yesterday closed at all-time high of 24,858.59 points. FIIs have reaffirmed their commitment towards Indian equities with more than USD 20 billion invested in 2013. "We see 2014 bringing a new bull cycle into existence. A strong export sector, revival in investment activity, continued recovery in US and a stable euro area are significant positives for equity markets. With domestic macro-economic data also on the mend, we are aggressive buyers of Indian equity," it said. For the current fiscal, it expects a Sensex earning per share (EPS) growth of around 15 per cent. "Despite so many negatives plaguing the economy, corrective measures by the new government can quickly revive growth. From an equity market stand-point, macro-economic revival in India will open opportunities to make strong returns in the next few years," it said. The report projects a GDP growth of 6 per cent in 2014-15 and economy is expected to see a revival of growth and earnings cycle. Citing past instances, the report said, the Dow experienced its most spectacular rise in history in 1980s. From a meager 777 on August 12, 1982, the index grows more than 1,500 per cent to close at 11,722.98 by January 14, 2000. There is no reason that India can’t see a prolonged economic growth cycle with low inflation, it said, adding, the prolonged economic growth can create similar equity market returns in India as seen in United States in 1980s.

ONLINE RAILWAY BOOKINGS 13.25 MILLION

Online railway ticket bookings grew over three-fold (rpt) three-fold to reach 13.25 million and air ticket bookings also doubled to 1.78 million in April 2014, indicating that people are increasingly adopting the digital medium for travel planning. In the same period last year, railway ticket bookings stood at 4 million whereas air ticket bookings were 0.78 million, Internet and Mobile Association of India (IAMAI) and IMRB said in their monthly tracker. "The online booking of railway tickets increased from 4 million in April 2013 to 13.25 million in April 2014 registering a year-on-year growth of 231 per cent. The air tickets booked online in April 2014 were 1.78 million compared to 0.78 million in corresponding month last year registering 110 per cent growth," it said. The monthly tracker also found number of resume uploads have gone up to 3.27 million in April 2014 as compared to 1.06 million in April 2013, registering a growth of 208 per cent.
IAMAI said the monthly Internet tracker is based on Web audience measurement (WAM) data captured from various relevant sites, and encapsulates online usage for e-tailing, online travel and vertical classifieds.
According to the data captured from major e-tailing sites in the monthly tracker, online visit to branded apparels and footwear segments have increased by 127 per cent and 83 per cent respectively, when compared to the numbers of corresponding month last year. It further indicates 61.28 million people accessed various e-tailing sites and there were 2601.51 million page views in the category.

NIFTY OUTLOOK FOR 5th & REVIEW

ZIGZAG MOVEMENTS

Nifty closed with minor loss but closed above 7400 mark and broader market was quite bullish indicating strong and upbeat sentiment. Further,  Nifty could face strong resistance around 7500 and get support too around 7200 mark..  While Global cues, Quarterly results   and  Funds flow  are expected to broadly guide the market movement, based on the present market position, market can be expected to witness zigzag movements and closing session could be crucial .

Nifty                               7402    - 14

Review for Wednesday :: Index Flat…  Broader Market Buoyant … !!!

Nifty closed with minor loss while broader market was quite buoyant with Advance Decline ratio at 3:1. Buying interest was seen in mid cap counters as they are expected to outperform large caps. 28 of Nifty stocks ended in the red. PSU Bank, Metal, Realty, Media, Auto and Infra  indices gained while IT, Energy, Pharma and FMCG indices ended in the red.   Reliance , HDFC amd ITC dragged down Nifty by more than 20 points while Hind Unilever and L&T contributed about 10 points to contain the loss.

NMDC, IDFC, Hinalco, PNB    remained major gainers  among Nifty stocks while HCL Tech, TCS, ONGC, Bharti, Kotak Bank  remained   losers.

 

IB Real estate, Crompton Greaves, Union Bank, Syndicate Bank  remained major  gainers  among F&O stocks while Shriram Transport, IDEA, HCL Tech, GMR Infra,    declined among F&O stocks.

NIFTY OUTLOOK FOR 4th & REVIEW

CAUTION AT HIGHER LEVELS

Nifty gained for the Second day and closed above 7400 mark , highest ever close. However, Nifty could face strong resistance around 7500 and get support too around 7200 mark..  While Global cues, Quarterly results   and  Funds flow  are expected to broadly guide the market movement, based on the present market position, market can be expected to face resistance at higher levels (in the forenoon) and could drift lower on  profit booking .

  

Nifty                               7416   +53

Review for Tuesday :: Market Positive despite a non event RBI Policy   !!!

Market gained for the Second day of the week as Energy, Metal stocks lead gains. RBI maintained status quo in respect of interest rates but lowered SLR by 0.50%, infusing liquidity into the system. 31 of Nifty stocks gained  and broader market too was quite positive  with Advance Decline ratio at about 1.4:::1.  Metal, Realty, Energy, Media  indices gained while FMCG, Pharma, PSU Bank indices ended in the red.  ONGC, HDFC, Reliance and Tata Steel   contributed about 30 points to Nifty’s gain. .

Tata Steel, SSLT, Coal India, DLF, Grasim   remained major gainers  among Nifty stocks while Dr Reddy, HCL Tech, Indusind Bank, GAIL, Kotak Bank  remained   losers.

 

IB Real estate, Tata Steel, Havells, Adani Ports. Hind Zinc      remained major  gainers  among F&O stocks while Just Dial, Allahabad Bank, HCL Tech, Orient Bank, Dr Reddy   declined among F&O stocks.

RBI KEEPS POLICY RATES UNCHANGED

Committed to keep inflation under check, RBI Governor Raghuram Rajan today left key rates unchanged and unlocked about Rs 40,000 crore of funds by reducing the amount of deposits banks are required to park in government securities. This is the second time in a row that interest rates have been left unchanged amid demands for moderation to spur growth. The repo rate, at which the Reserve Bank of India lends to banks, has been retained at 8 per cent, while the statutory liquidity ratio (SLR) for banks has been cut by 0.5 per cent to 22.5 per cent with effect from June 14. The cash reserve ratio for banks has been kept unchanged at 4 per cent. "At this juncture, it is appropriate to leave the policy rate unchanged, and to allow the disinflationary effects of rate increases undertaken during September 2013-January 2014 to mitigate inflationary pressures in the economy," Rajan said while unveiling the Second Bi-Monthly Monetary Policy Statement for 2014-15. Consumer price index (CPI) inflation, excluding food and fuel, has moderated gradually since September 2013 although it is still elevated, he said. Rajan, who has increased the repo rate thrice since September, said no more tightening would be warranted if the economy stays on a disinflationary course. He added that the RBI may also consider a cut if the disinflation process is faster than anticipated. Rajan reiterated the RBI's commitment to its target of getting CPI inflation, which accelerated to 8.59 per cent in April, down to 8 per cent by January 2015 and 6 per cent by the year after. On growth, Rajan maintained the RBI's median estimate of GDP expansion coming in at 5.5 per cent for this financial year.

The stance to be adopted by the Reserve Bank was keenly awaited, especially after the formation of a government perceived to be pro-growth at the Centre. The RBI Governor met Finance Minister Arun Jaitley the day he took charge at North Block and also called on Prime Minister Narendra Modi before the release of data that showed the economy expanded 4.7 per cent in FY14 compared with 4.5 per cent in FY13. However, the persistence of inflation, especially on the food front, was one of the factors considered detrimental for the RBI in being accommodative in its stance. Fears of inadequate monsoon rains due to the El Nino factor may only add to price pressures in the future. Rajan also announced a reduction in liquidity provided under the export credit refinance facility to 32 per cent of eligible export credit outstanding from 50 per cent earlier. However, it introduced a special term repo facility of 0.25 per cent of net demand and time liabilities to compensate fully for the reduction in access to liquidity under export credit refinance with immediate effect.

NOW INDIANS CAN INVEST UPTO $ 1.20 LAKH OVERSEAS

Encouraged by an improvement in the forex market, the Reserve Bank today raised the annual overseas investment ceiling for individuals to USD 125,000 from USD 75,000. "In view of the recent stability in the foreign exchange market, it has been decided to enhance the eligible limit to USD 125,000 without end-use restrictions except for prohibited foreign exchange transactions such as margin trading, lottery and the like," the Reserve Bank of India said in its Second Bi-Monthly Monetary Policy Statement. The RBI had in August last year reduced the ceiling from USD 200,000 to USD 75,000 per person in a financial year under the Liberalised Remittance Scheme (LRS) in view of the worsening current account deficit and a volatile rupee. The LRS allows residents to acquire and hold shares, debt instruments or other assets outside India without prior approval of the RBI. In the monetary policy, the RBI also permitted all residents and non-residents, except citizens of Pakistan and Bangladesh, to carry up to Rs 25,000 in Indian currency notes while leaving the country. This has been done with a "view to facilitating travel requirements" of non-residents visiting India, the RBI said. Currently, non-residents visiting India are not allowed to take out any Indian currency while leaving the country. The current limit for carrying domestic currency notes for Indians travelling overseas is Rs 10,000. India's current account deficit narrowed to 1.7 per cent of GDP in 2013-14 from a record USD 88.2 billion, or 4.8 per cent of GDP, in 2012-13. The monetary policy review document said that robust inflows of portfolio investment, supported by foreign direct investment and external commercial borrowings, kept external financing conditions comfortable and helped add to reserves.

INDAI SLIPPED TO 7th SPOT IN FDI CONFIDENCE

India has slipped to its lowest position in over a decade in the foreign direct investment confidence index, which has been topped by the United States for the second year in a row, a study has showed. The survey of 300 global executives by global consulting firm A T Kearney found that the US was ranked top destination in the world for foreign direct investment. India was ranked second for three years in 2005, 2007 and 2012 and was placed on the third spot in 2010. India attracted USD 25.5 billion in FDI inflows in 2012, down from USD 31.6 billion in 2011, according to 2014 A T Kearney Foreign Direct Investment Confidence Index released on Monday. This is the lowest ranking for India since 2001. The US moved to the top position last year displacing China as Washington made progress towards sustainable and steady economic growth. "The cooling-off in investor sentiment we foresaw last year appears to have taken shape, with a two-place drop from 5th to 7th — its lowest rank since 2001," the report said. In 2013, the then ruling UPA government raised limits on FDI in telecommunications, asset reconstruction, credit information, aviation, and defence production, the report said adding that foreign investment in oil refining and single-brand retail, currently capped at 49 per cent, will now be granted automatic approval. AirAsia India, a joint venture between Malaysian budget airline AirAsia and Indian conglomerate Tata Sons, has been given the nod by Foreign Investment Promotion Board. The initial investment of USD 50 million makes AirAsia the first foreign airline to set up a subsidiary in India. German luxury tableware brand Villeroy & Boch has established a joint venture with marketer Genesis Luxury, opening its first store in Mumbai and planning to grow to 16 stores in the next five years. This partnership comes after two years of struggling to clear administrative hurdles and acquire real estate without a local partner, the report said. "In a long-awaited decision reached in late 2012, the Indian government permitted partial foreign ownership of supermarkets and department stores, a major step for the country's highly underdeveloped retail market," it said. "Until late 2013, however, no foreign companies moved to enter, daunted by complex requirements, including one for 30 per cent content from small and medium-sized Indian enterprises," the report added. 
"In December 2013, though, Tesco, Britain's biggest retailer, announced that it was seeking permission to take a 50 per cent stake worth USD 110 million in Trent Hypermarket, an arm of Tata. This move came soon after Walmart ended its wholesale joint venture with the country's conglomerate Bharti to operate 20 stores in India, citing the local product requirement as the critical stumbling block," the report said. A T Kearney said the US tops the index for the second year in a row, demonstrating sustained investor confidence in the strength of its ongoing economic recovery. "In addition to being the most likely destination for FDI, no other country has experienced as profound a change in the expectations of the business leaders we surveyed. A full 49 per cent of respondents — compared to 39 per cent in 2013 and 23 per cent in 2007 — indicated that their outlook for the United States is significantly more positive now than it was two years ago," it said. White House Press Secretary Jay Carney said : "Not only did the US extend its lead, but the improvements over the past two years have been profound. And the US continues to show greater positive momentum than any other country." "And today's survey shows, once again, that the rest of the world overwhelmingly wants to make it in America," Carney said. 

MINIMUM PENSION Rs.1000/- WILL BE IMPLEMENTED FROM THIS MONTH

A minimum pension of Rs 1,000 a month under a scheme run by retirement fund body EPFO will be a reality this week, a development that will benefit 28 lakh pensioners, who get less than this amount at present. As per a proposal, pensioners were to get the benefit with effect from April 1 this year. The government will have to provide an additional amount of around Rs 1,217 crore to ensure a minimum pension of Rs 1,000, starting 2014-15. "The previous government's decision to ensure a minimum monthly pension of Rs 1,000 to subscribers of Employees' Pension Scheme-95 (EPS-95) will be implemented this week as elections got over now. The Labour Ministry will notify it some time this week," an official source told PTI. According to the source, the Ministry will also notify the decision of the EPFO trustees to enhance the wage ceiling for covering organised sector workers under EPFO ambit to Rs 15,000 per month from existing Rs 6,500. Another decision to reduce administrative charges paid by employers to EPFO will also be notified.
The decisions could not be implemented earlier because the model code of conduct came into force after the general election dates were announced on March 5.
The decision to provide the entitlement under EPS-95 run by the Employees' Provident Fund Organisation (EPFO) was taken by the Union Cabinet in its meeting held on February 28.
After the Cabinet approval, the decision to provide this entitlement was to be notified by the Labour Ministry, but for the model of code of conduct.
This will immediately benefit about 28 lakh pensioners, including 5 lakh widows. In all, there are 44 lakh pensioners under the EPFO scheme
The EPFO's apex decision making body the Central Board of Trustees (CBT) met on February 5 and decided to amend the EPS-95 scheme for the purpose.

SENSEX SURGE 467 POINTS

The BSE benchmark Sensex today surged by 467 points, the biggest gain in the past three weeks, taking cues from strong global trends, a day before the RBI's monetary policy review which is widely expected to hold rates. Brokers also attributed the rally to slight improvement in HSBC Indian Manufacturing Purchasing Managers' Index (PMI), a measure of factory production, in May. "The bullish undertone in Indian equities has continued as markets have been rising in anticipation that the present government has the wherewithal to turn around the sagging economy," said Sanjeev Zarbade, Vice President, Private Client Group Research, Kotak Securities. Overlooking the GDP data released on last Friday, the 30-share BSE barometer resumed the day strong and soared further to finish one week high of 24,684.85, a rise of 467.51 points or 1.93 per cent from its previous close.
The 50-issue NSE Nifty flared up by 132.55 points or 1.83 per cent to end at 7,362.50.
Construction and engineering giant L&T was the top Sensex gainer at 6.23 per cent after the company announced better-than-expected Q4 results last week-end. Among BSE sectoral indices, consumer goods flared up by 4.93 per cent, Oil&Gas by 2.85 per cent, power 2.38 per cent, metal 1.86 per cent and realty 1.43 per cent. Banking stocks notched up smart gains ahead of the Reserve BanK of India's (RBI) monetary policy review tomorrow. "Initially, buoyancy on global front provided the needed push and some support also came in from reports that FIIs bought shares worth a net Rs 2,977.62 crore on May 30, 2014, as per provisional data from the stock exchanges," said Jayant Manglik, President, Retail Distribution, Religare Securities. Globally, Asian stocks advanced today after a gauge of China's manufacturing expanded at the fastest pace this year. Key benchmark indices in Japan, Singapore and South Korea closed in the green, while China, Hong Kong and Taiwan markets were closed today for a holiday. Jignesh Chaudhary, Head of Research, Veracity Broking Services, said: "Local equities traded strong with the help of some blue-chip companies like L&T and SBI gained on hopes that the RBI may start cutting rates sooner than expected and some hint will be given this week."

NON SUBSIDISED LPG CYLINDER PRICE CUT BY Rs23.50

Jet fuel prices have been cut by 1.8 per cent and rates of non-subsidised cooking gas (LPG) by Rs 23.50 per cylinder after the rupee's appreciation lowered import costs. The price of jet fuel, also known as aviation turbine fuel (ATF), at Delhi was cut by Rs 1,285.89 per kilolitre, or 1.81 per cent, to Rs 69,747.98 per kl, according to Indian Oil Corp, the nation's largest fuel retailer. This is the third reduction in jet fuel rates since April. Declining international oil prices and the strengthening of the rupee against the US dollar have made imports cheaper. In Mumbai, jet fuel costs Rs 71,940.36 per kl as against Rs 73,306.89 per kl previously, IOC said. The rates vary because of differences in local sales tax or VAT. Jet fuel constitutes over 40 per cent of an airline's operating costs and the price cut will ease the financial burden of cash-strapped carriers. No immediate comments were available from airlines on the impact of the price cut on passenger fares. Separately, the price of non-subsidised LPG, which customers buy after using up their quota of 12 subsidised cylinders, was cut by Rs 23.50 per cylinder, the fifth straight reduction in rates since February. Each non-subsidised 14.2-kg cooking gas cylinder will now cost Rs 905, down from Rs 928.50, in Delhi. The rates were cut on February 1 by Rs 107 -- from Rs 1,241 per cylinder to Rs 1,134, by Rs 53.5 per cylinder in March to Rs 1,080.50, by Rs 100 to Rs 980.50 in April and by Rs 52 last month. A subsidised LPG cylinder in Delhi costs Rs 414. Non-domestic LPG rates were increased by a steep Rs 220 per cylinder at the beginning of the year but have now been cut in line with softening international rates. IOC said losses on LPG have come down to Rs 432.71 per subsidised cylinder from Rs 449.14 in the previous month. The loss was Rs 762.50 in January. The three fuel retailers -- IOC, Hindustan Petroleum Corp and Bharat Petroleum Corp -- revise jet fuel and non-subsidised LPG prices on the first of every month, based on the average international prices in the preceding month.