SENSEX CROSS 27K MARK AGAIN

Indian markets today soared to over five-week highs with Sensex reclaiming 27,000-mark and Nifty inching closer to 8,100-level on the back of gains in metal and auto shares in line with a buoyant global trend ahead of US Federal Reserve's policy meeting outcome. Hectic short-coverings ahead of the expiry of domestic derivatives contract tomorrow also boosted the trading sentiments, brokers said, adding that hopes of further economic reforms, rising rate cut expectations and fall in international oil price also played a positive role. Shares from realty, metal, auto, IT, oil & gas and FMCG sectors were in good demand while some of the shares from pharma and banking segments attracted profit-booking. The BSE 30-share barometer resumed strong but declined to a low of 26,971.16 before bouncing back to settle at over five-week high of 27,098.17, a rise of 217.35 points or 0.81 per cent. Yesterday, Sensex had gained 127.92 points or 0.48 per cent. It has now spurted by 1,196.98 points, or 4.60 per cent, in seven out of last eight sessions. The broad-based 50-issue CNX Nifty of the NSE also flared up by 62.85 points, or 0.78 per cent, to end at 8,090.45. Both indices are at their highest closing peaks since September 22. Smart rise in Infosys, Tata Motors, RIL, ITC, TCS, Tata Steel, Hindalco, M&M, Maruti Suzuki, Sesa Sterlite, Bajaj Auto and Cipla mainly contributed to Sensex rise. "We expect a highly volatile session on Thursday. First, we shall be seeing participants reacting to the Fed meeting outcome in early trade followed by the F&O expiry," said Jayant Manglik, President-retail distribution, Religare Securities. All eyes are now set on the US Federal Reserve's meeting which is expected to end its bond-buying programme but reaffirm its willingness to wait before raising interest rates, experts said. In overseas markets, Asian stocks closed strong on rally on Wall Street yesterday on optimisim about earnings and economic data in the US.

INDIAN ONLINE MARKET TO CROSS Rs 88,000 cr

Indian online retail market is estimated to grow over 4-fold to touch USD 14.5 billion (over Rs 88,000 crore) by 2018 on account of rapid expansion of e-commerce in the country. According to research and consultancy firm RNCOS, the online retail market is projected to grow at a compound annual rate of 40-45 per cent during 2014-18. "The Indian online retail market has been striding leaps and bounds over the past few years on account of digital revolution. The trend is expected to continue as the online retail market in India is estimated to touch the mark of USD 14.5 billion by 2018," a report by RNCOS said. The current market size of online retail sector has been pegged at USD 3.5 billion (over Rs 21,000 crore), it added. As per the 'White paper on Indian Online Retail Industry: The War of Clicks', India is among the most swiftly emerging online retail market across Asia-Pacific region although the expanse of e-commerce is at a sprouting stage. "The major reasons for this growth will include the increasing penetration of mobile Internet, higher purchases of smartphones, need for ease of shopping, time convenience and higher mobility," the study paper said. Heavy discounts offered by online portals will also propel the market growth, it added. In terms of product segments, at present electronic gadgets claim the highest share followed by apparel and books. "But it is likely that few years down the line, apparel and accessories will take over the top slot from electronic gadgets. In addition to this, home decor and furnishing will mark an increase in its share," RNCOS said. The research firm said this increase will be primarily on account of growing acceptance of home grown apparel brands of online shopping portals and openness towards buying home decor and furniture online. "Better payment and return policies will further fuel the increase," it added. Some other factors helping the online retail industry seeing good growth include smartphones offering accessibility to online shopping, aspirations of tier II & III cities, women becoming more tech savvy, evolving perception around branded products, impulsive buying and logistical convenience. RNCOS, however, said there are certain challenges which are hindering the industrial growth such as absence of proper Internet connections in many rural areas. Moreover, some consumers are still sceptical about the security of online financial transactions, it added. "Despite these glitches and predicaments, the future of the Indian retail online retail industry looks robust. "There are more and more efforts from government and private players' end to meliorate the facility of logistics, increase the Internet penetration and facilitate better services for the end consumer," the report said.

FALLING OIL PRICES HURTING KUWAIT ECONOMY

Kuwait's ruler warned today that declines in the oil price were damaging the economy of the energy-rich Gulf state, urging lawmakers to "stop squandering resources" and to diversify revenues. "We are witnessing a new cycle of low oil prices as a result of economic and political factors that have hit the global economy and started to negatively impact our national economy," Sheikh Sabah al-Ahmad Al-Sabah said in a speech to open the new parliamentary term. The emir called on the government and parliament to "safeguard our oil and fiscal wealth". "You have the responsibility to stop squandering resources, rationalise spending and direct subsidies to reach those who need it... without impacting the standard of living," he said. He also called for stepping up plans to reduce Kuwait's dependence on oil revenues by diversifying the economy. "I have repeatedly called ... for establishing productive economic activities to create jobs for youth, diversify the resources of income of the country and reduce national economic dependence on oil," he said. Oil prices have lost more than a quarter of their value since June, hitting the state coffers of energy-dependent countries like Kuwait. Oil income accounts for about 94 per cent of Kuwaiti revenues. But the oil-rich emirate has piled up massive fiscal reserves of more than USD 500 billion during the past 15 years due to high oil prices. Earlier this month, Kuwait began reducing public subsidies, estimated at USD 18 billion, on diesel, kerosene and aviation fuel. It is considering similar measures for electricity, water and petrol. Public spending has risen more than three-fold in Kuwait over the past seven years, with the overwhelming majority of the increase going to wages and subsidies. The tiny emirate has a native population of 1.25 million and is also home to about 2.8 million foreigners.

20 KERALITES IN ARABIAN BUSINESS 100 LIST

As many as 20 entrepreneurs and professionals from Kerala have been named in the annual list of 100 powerful Indians in the Gulf countries with people from the southern state also bagging the top two positions. The 'Indian Power List', published by Arabian Business, a leading business magazine, has also picked as many as six Keralites among the top 20. Managing Director of the Lulu Group, Yusuff Ali MA, has retained his top position on the list for the fifth consecutive year, while Ravi Pillai, Chairman of RP Group of Companies, is ranked second for successfully building a global business network that employs over 80,000 people. PNC Menon, Chairman of Sobha Developers is ranked No 8. Sunil John, Chief Executive Officer of ASDA'A Burson-Marsteller, the region's leading Public Relations consultancy, has been ranked at 12th position, followed by KV Shamsudheen, Founder of Pravasi Bandhu Welfare Trust and Sunny Varkey, Founder & Chairman of GEMS Education. The business magazine selected the 100 powerful Indians in the Gulf Cooperation Council (GCC) countries from over 500 entrepreneurs and professionals. "In 1970 trade between India and the UAE was worth USD 80 million a year. By 2013, the figure had reached USD 44 billion. Thanks to the work of these 100 people featuring in this week's issue that number is only heading north," Anil Bhoyrul, Editorial Director of Arabian Business, said.

NIFTY OUTLOOK FOR 27 & REVIEW

CAUTION @ HIGHER LEVELS

Nifty                               7992  -22

Nifty opened higher and traded with negative bias thereafter to close with a loss of about 0.25% and below 8000 mark. However, the short term trend is positive and would become bearish only on a close below 7925.  Nifty spot is expected to encounter resistance at 8030,, 8070 and find support at 7950, 7915 for Tuesday. While Global cues  and  Funds flow  are expected to broadly guide the market movement, based on the present market position, market can be expected to display zigzag movements with alternate bouts of bullishness and bearishness. 

SENSEX RETREAT FROM 6 DAY RALLY

The benchmark Sensex today retreated from one-month highs and fell about 98 points to end at 26,752.90, logging its first drop in six sessions, on losses in bluechips like HUL, Tata Motors and RIL and caution ahead of the US Federal Reserve monetary policy meet. The NSE Nifty fell by about 23 points to end below the key 8,000-level as investors booked profits. Mixed Asian and weak European trends, after tepid German business confidence data, were also among factors that affected sentiments today. Shares of oil firms saw selling after Goldman Sachs slashed 2015 oil price target. Alongwith Oil & Gas, Realty, FMCG and Auto shares suffered the most while Consumer Durables, Capital Goods, Banking and Power ended in the green. The 30-share Sensex resumed firm on initial rise in Asian stocks but failed to cross 27K-mark, logging a high of 26,994.96. Late selling on bearish European opening pulled it down to settle at 26,752.90, recording a fall of 98.15 points or 0.37 per cent. The Sensex had gained 851.71 points, or 3.28 per cent, in the previous five sessions. The broader 50-issue CNX Nifty of the NSE fell back by 22.85 points, or 0.29 pe cent, to end at 7,991.70. The US Federal Open Market Committee will meet tomorrow, October 28, 2014, for two-day monetary policy review, expecting to end a long-running stimulus programme. Domestic investors preferred to book profits and decided to play safe ahead of expiry of derivatives on October 30, 2014, leading to fall in share prices, said brokers. Stocks of FMCG giant, Hindustan Unilever tumbled about 4.75 per cent after it forecast a softer demand environment. Shares of realty giant DLF slumped 7.84 per cent on concerns the company may face probe in Haryana land deals. Bucking the overall trend, stocks of companies involved in defence sector like BEML rallied 5 per cent after projects worth Rs 80,000 crore were cleared by the government. HMT counter surged nearly 20 per cent to touch its highest trading permissible limit for the day amid reports that the company may get another lease of life.

 

MF's EXPOSURE TO BANK STOCKS DECLINES

Mutual fund (MF) managers dropped their exposure in bank stocks to Rs 55,398 crore in September, after raising it for seven consecutive month. According to the latest data available with Securities and Exchange Board of India, MF investments in bank stocks as on September 30 declined to Rs 55,398 crore, accounting for 18.84 per cent of the total equity assets under management (AUMs) of Rs 2.94 lakh crore. In comparison, the MF industry's exposure to banking sector had reached to an all-time of Rs 56,625 crore in August this year. However, MFs had been raising their exposure to banking shares since January.
Software was the second most preferred sector with MFs, last month with an exposure of Rs 31,834 crore, followed by pharma (Rs 21,908 crore), auto (Rs 18,892 crore) and finance (Rs 16,358 crore).
Mutual funds are investment vehicles made up of a pool of funds collected from a large number of investors. MFs invest in stocks, bonds, money market instruments and similar assets.
According to market participants, MFs have been showing interest in banking stocks since the beginning of the year amid rising equity market and the current decline is mainly due to profit booking.
They believe that the ongoing market rally might see mutual fund assets getting diversified.
This year has seen a consistent growth in investment in banking stocks by equity fund managers and fund infusion has grown from Rs 30,339 crore in January to Rs 56,625 crore in August.
In percentage term, exposure has risen from 16.6 per cent to 20.10 per cent during the period.

WEEKLY ASTRO TECHNICAL GUIDE FOR NIFTY

FURTHER UPTREND….!!!

Planetary Position ::  During the current week Moon would be transiting  from Jyeshta in Scorpio to Sravana in Capricorn.

Sun transits in Swathi    in Libra.

Mercury in Direct motion  from 26^th October  transits  in Hastha and Chitta   in   Virgo .

Venus transits in  Swathi in Libra.

Mars  transits in   Moola constellation in Sagittarius .  

Saturn transits in Visakha constellation in Libra and in  Gemini Navamsa .  

Jupiter transits in Aslesha constellation in Cancer and in  Aquarius navamsa ..

As opposition between Sun/Venus and Uranus is over, market started recovering and can be expected to continue for this week and November 2^nd week can be expected to be quite volatile in view of certain unfavourable aspects.

Nifty Outlook for Next Week :: (27.10.2014 to 31.10.2014) …  

NIFTY :: 8034 (+234) (Bearishness  only below 7950….)

Nifty had taken a U turn after 4 weeks of fall and had gone up by 3% and had gone up all the trading days of the week. Last week before Diwali, sentiment was quite bullish. Nifty appears to have taken support  at 100 DMA and bounced back strongly.  This column has been mentioning about Diesel deregulation, Gas Pricing and Coal block reallocation and incidentally all the issues were addressed during the last week and the sentiment has become upbeat. Further, Budget exercise would pick up momentum and GST rollout, DTC and interest rate cut  would be the next priorities of the Government in the reform process. With the Two State Governments in BJP’s kitty, Centre has become more strong and more aggressive and path breaking reforms could unfold.

Nifty is once again above 50 DMA having taken support from about 100DMA. It is once again above key averages and could be on its way up once again and would become weak only if it closes below 7950.

20DMA, 50DMA, 100DMA and 200 DMA are placed at about 7920, 7940, 7775 and 7135 respectively and would

act as supports / resistances.

Based on the present Government’s agenda, Infra  and Power sectors could come out of their problems

soon . Stocks of promoters with proven record may be preferred in these sectors.

Investors need to accumulate quality stocks while traders need to be ever vigilant

Nifty continues to be above 200 DMA and 50 DMA too is above 200 DMA (Golden Cross) suggesting that the

long term bullish trend is intact.   Nifty is quoting at a PE of about 20.65, which is about 17% above the long term PE multiple.  Hence, further upside (  8500+ is possible  before next Budget)  

in view of the  stable and performing Government  at the centre as earnings would go up because

of favourable atmosphere .  

Market is usually ahead of fundamentals and fundamentals need to catch up with the present valuations which could take some time .

.

Strong long term support would be around 7150

level and Medium term support is 7700.

Technical Levels ::

For the coming week, Nifty spot is expected to face

resistance at 8105,  8195, 8285 and find support at 7925, 7835, 7750.

Minor resistances may be found at 8070, 8110, 8135, 8175  and minor supports at 7960, 7920, 7895 and 7850.

For short term Nifty is bullish and would become bearish only if it closes below 7950 and could encounter resistance could encounter resistance around 8175 during the week.

Advice for Traders ::

Sentiment improved dramatically on the eve of Diwali and Nifty gained about 3% for the week. 100 DMA had lent strong support for Nifty. As Nifty trading at around higher levels for the week, further uptrend can be expected. In view of derivative expiry, stock specific action is most likely and bullish stocks would become further bullish and bearish stock could become further bearish.  

TATA's PHILONTHROPY EXPLORED

The values at the heart of the Tata Group as well as the role played in its development by the philanthropic trusts that own two-thirds of the company are explored in a new book that is a brief history of the Tatas. How did Tata transform itself from a family-owned venture to the position it is today in an array of unrelated businesses? What is the 'Tata Way', which has earned it much admiration and respect? These are among several aspects that the book "The Greatest Company in the World?: The Story of Tata" by Peter Casey looks into. It charts the contribution of every Tata chairman - from Jamsetji Tata, who set up the company in 1868, to Ratan Tata and Cyrus Mistry in transforming the company into one of the most professionally-managed enterprises in the world. As founder and Executive Chairman of Claddagh Resources, Casey decided to write the book initially to help his recruiters and executive search consultants have a better understanding of Tata Consultancy Services (TCS), which over 14 years, had become his company’s biggest client. "It was supposed to just be a short 15-page summary, but the more I started studying TCS and Tata, the more captivated I got and the project developed a life of its own," he says. According to the writer, while other successful capitalists and captains of industry started companies to create profit and, thereby, wealth, Jamsetji Tata planted the seeds of philanthropic trusts, which now own 66 per cent of the Tata Group. "In harmony with his religion, Tata's company would exist to finance and initiate projects to improve the lives of the people of India," he says. "So, Jamsetji Tata became not only a catalyst for sweeping change in his vast homeland, but, in the process, conceptualised an entirely new way of doing business as well as philanthropy. What he began has changed the lives of billions, as the company he founded continues to work for the betterment of society," he says. In the words of Jamsetji, "We think we started on sound and straightforward business principles, considering the interests of the shareholders our own, and the health and welfare of the employees, the sure foundation of our success." Today, the Tata Group employs nearly half a million people, and earns revenues of USD 100 billion. It reported a profit of USD 6.23 billion in 2011-12, and controls assets valued at USD 77.7 billion. "The philanthropic trusts control a majority of the Tata holding company, Tata Sons. The Tata family is a very small shareholder. Yet, the owners are only one of four stakeholders Tata sets out to serve. In addition to the owners (which include shareholders) are employees, customers, and society itself," the book, published by Penguin, says. "The guiding principle for everyone at Tata is sharing the wealth. With Tata reporting annual profits in 2012 of USD 6.23 billion, this means that a very large amount of money is invested back into the economy every year just from this one source," it says. The members of the Tata family have established a set of philanthropic trusts to which the majority of the family’s personal wealth has been dedicated and bequeathed. Like their father, Dorabji Tata and Ratan Tata also donated the majority of their personal wealth to trusts they established. The book also talks about Jamsetji Tata's successor Dorabji Tata's passion for sports and how he advocated India's participation in the Olympics as early as 1919, much before the nation had established its own Olympic committee.

TARGET 50 IN EASE OF DOING BUSINESS

The government is aiming to improve India's ranking in ease of doing business index to 50th position in the next two years from the current 134th. The Commerce and Industry Ministry has already taken several measures and has proposed series of steps, including drastically reducing the time for registration of business to one day, single registration of all labour laws and cut in number of taxes to improve ease of doing business in India. "Aim is to improve the ranking to 50th position in two years from 134th at present. Different government departments have already started consultation and deliberations on steps to improve India's ranking," sources said. They added that meetings would continue to remove all the barriers and simplify the cumbersome procedures related to approvals and clearance mechanism for business activities. According to a World Bank report, India has slipped three positions to 134th spot in the latest 'ease of doing business' list, which is topped by Singapore. The Department of Industrial Policy and Promotion (DIPP), has identified sectors and specific reforms that are urgently required to substantially improve India's ranking in ease of doing business. The department has listed as many as 46 action points for different central government ministries and state governments for improving the business climate. For Corporate Affairs Ministry, it has suggested that the time taken in registration of business from existing 27 days be reduced to only one day as in Canada and New Zealand. It has also called for doing away with the requirement of company seal and removal of minimum paid up capital for starting a business. It has suggested introduction of Bankruptcy Law, Unified Insolvency Code, speedy constitution of benches under National Company Law Tribunal and fixing of a definite and predictable timeframe for rehabilitation and liquidation process. Similarly, it has recommended reduction in number of taxes and permitting online payment of taxes; simplification of complex tax processes; expediting implementation of Direct Tax Code, Goods and Services tax besides abolition of minimum alternate tax for SEZ developers and units. Further, it has called for a uniform policy and procedure for all states for a single window clearance along with combined application form and single registration for VAT and other state taxes. The DIPP has also proposed timelines to implement these initiatives, aimed at attracting investments as part of the Prime Minister Narendra Modi's 'Make In India' campaign. During the last three years, India received an average of USD 30 billion annual foreign direct investment. India needs huge investments to give a boost to its manufacturing sector and to create million of jobs.

IS SAMVAT 2071 BULLISH ONE...

Indian stock markets are likely to remain bullish during the current Hindu calendar year (Samvat 2071) and investors would continue to reap rich gains, say experts. This year has been euphoric for markets. Apart from the last one month or so, overseas investors have been buying heavily.

"Now that markets have been acquiring higher peaks, we can see retail investors coming back gradually. We are likely to witness a rise in retail flow into the market this year. That will be healthy for the market as so far Indian market is totally dependent on the FII money," said S K Goel, Director, Bonanza Portfolio Ltd.
"Expect the market to remain bullish from this Samvat to the next but volatility is likely to continue. In this rally so far, IT, pharma, auto consumer, banking had been the leaders and we expect these sectors to remain bullish.
"Cement and infra would do well in the coming year considering the fact that Modi government's focus has been on building new cities," he added.
The Sensex gained 5,590.42 points, or 26.37 per cent, in the entire Samvat 2070.
Analysts said that currently we are in a bull-market and stocks will remain as best asset-class in Samvat 2071, provided global markets remain stable.
BJP's win in two state elections (Maharashtra and Haryana) has raised expectations of additional reforms, they said. Experts said markets have given a thumbs up to this win as now the new government would find it much easier to pass reform bills in the Rajya Sabha. "With quick policy decision making and reforms clearances, we expect the new government to maintain and build higher confidence for FII investors," an expert said. With stable macros and policy push by the Modi government Indian markets should be able to continue doing good. Reforms at the Centre are the key for the next leg of rally, say analysts.
"This Samvat year would be positive for markets as macroeconomic data have been positive and there are expectation that slew of reforms would greet investors during this period," said Alex Matthews, Geojit BNP, Research Head.
Some tension at the borders can impact the market if they worsen from where they are today, he added.