BSE SMALL & MIDCAP INDICES OUTPERFORM SENSEX

Buoyed by robust stock market sentiment, the small-cap and mid-cap indices of the BSE have rallied by up to 56 per cent, outperforming the larger index -- Sensex -- this fiscal. The small-cap index of the BSE has given a return of 55.86 per cent, followed by mid-cap index with 40.29 per cent gain. On the other hand, gain in the blue-chip index Sensex has been at 24.11 per cent from April 1 till date, an analysis of the three indices showed. The Sensex touched its all-time high of 27,969.82 yesterday. The mid-cap index touched its one-year peak of 10,068.63 on September 16 and the small-cap index hit its 52-week high of 11,352.01 on the same day. Experts said when markets perform well, smaller stocks make big gains than the front-lines. But during the times of uncertainty, greater losses are seen in mid and small-cap scrips. Analysts said bullish investor sentiment following a new government at the Centre and robust foreign fund inflows have been fuelling rally in the domestic equity markets. Since the beginning of this year, overseas investors have infused a net amount of Rs 82,266 crore (USD 13.7 billion) into the equities, while they invested a net of Rs 1.36 lakh crore into the debt market (USD 22.5 billion) taking the total to Rs 2.18 lakh crore (USD 36 billion). Retail investors are major participants in mid-cap and small-cap stocks and their activity in this segment has been upbeat over the past few months. Market players say smaller stocks are generally bought by local investors, while overseas investors focus on blue-chip shares. The mid-cap index tracks companies with a market value that is on an average one-fifth of blue-chips or large firms. Small-cap firms are almost a tenth of that.

MODI DEBUT IN MOST POWERFUL LIST

Prime Minister Narendra Modi today made his debut among the world's most powerful people, ranked 15th on the Forbes list topped by Russian President Vladimir Putin who pipped his US counterpart Barack Obama for a second year in a row. The list of 72 most powerful people in the world also included the names of Reliance Industries Chairman Mukesh Ambani at 36th, ArcelorMittal Chairman and CEO Lakshmi Mittal at 57th and Microsoft's Indian-born CEO Satya Nadella at 64th. On Modi, Forbes said "India's newest rock star doesn't hail from Bollywood. He is the newly elected Prime Minister who sailed into office in May with a landslide victory, ushering the Bharatiya Janata Party (BJP) into power after decades of control by the Gandhi dynasty." Forbes described him as a "Hindu nationalist" and refereed to the 2002 Gujarat riots when he was the state's Chief Minister. "Modi is credited with massive reconstruction projects in his home state of Gujarat. His administration promises to bring economic rejuvenation to other beleaguered parts of India. The world is as impressed as the citizens of India: So far he's toured the US and China and met with his Southeast Asian neighbours," the magazine said. This year there are 12 newcomers on the list, including Modi and Egypt President Abdel el-Sisi. Alibiba founder and China's richest man -- Jack Ma also makes a first appearance on the list after his record-breaking USD 25 billion initial public offering in September, as does terror group Islamic State's chief Abu Bakr al-Baghdadi. A notable omission from the list is Congress Party President Sonia Gandhi, who was the highest ranked Indian last year at 21. The next Indian after Modi on the list is Ambani at 36th. Forbes said Ambani has business ventures in petrochemicals, manufacturing, oil and gas production, and now wireless sectors, "the sum of which have landed him as the richest person in India for eight years running." It noted Reliance's USD 655 million acquisition of media outfit Network18. In October, Modi inaugurated Ambani's Reliance Foundation's new hospital in Mumbai, "ending rumours about Ambani's waning clout in New Delhi," it said. This is the second year in a row that Putin carries the crown. Obama had previously been on the top of the list for every year with the exception of 2010, when Hu Jintao, the former political and military leader of China, was ranked 1. The top five remain the same as 2013 —- Chinese President Xi Jinping ranked third, Pope Francis at No. 4 and the world's most powerful woman German Chancellor Angela Merkel ranked fifth.

BIG DAY SENSEX...CROSS 28K

The benchmark Sensex today conquered the 28,000 mark for the first time as markets hit new highs of the fourth day on expectations of more reforms by the Modi government and a rate cut by the RBI. The BSE barometer, however, settled a tad lower but still a new closing peak of 27,915.88, a gain of 55.50 points of 0.20 per cent. The 30-share index resumed higher at 27,907.19 and rose further to a high of 28,010.39 before ending at 27,915.88. Markets were enthused after Finance Minister Arun Jaitley today promised reforms in labour, land acquisition and insurance laws and expressed readiness to look at privatisation of some loss-making public sector companies. The index surpassed its previous record high of 27,969.82 hit on November 3. Its previous closing peak was 27,865.83 (October 31). Similarly, the CNX 50-share Nifty firmed up by 14.15 points, or 0.17 per cent, to all-time closing high of 8,338.30. "Markets consolidated post the recent rally in the markets, which has come about on the back of renewed optimism on fiscal reforms, sharp correction in crude prices, improved growth in US, liquidity easing by Japan and diminished possibilities of an immediate increase in US interest rates," Dipen Shah, Head- Private Client Group Research, Kotak Securities. Strong foreign capital inflows coupled with strong European cues mainly boosted the domestic market sentiment, even as services sector activity in India stagnated during October amid weaker growth of new orders an per a HSBC survey. Leading global crude oil producer Saudi Arabia yesterday slashed its export prices for the US market. "The fall in crude oil prices will have a positive impact on, among other things, inflation....it will embolden the RBI to cut rates," said HDFC Securities in a note. The market sentiment got a fillip after data showed Foreign Portfolio Investors on Monday bought shares worth a net Rs 1,413.34 crore. Most Asian stocks ended mixed following weak economic data from China. Key benchmark indices in China, Taiwan, Hong Kong and South Korea fell by 0.19 per cent to 0.63 per cent while indices in Singapore and Japan rose by 0.18 per cent to 0.44 per cent. Both exchanges, BSE and NSE will remain close tomorrow on account of Gurunanak Jayanti.

NIFTY OUTLOOK FOR 5 & REVIEW

SECOND HALF BETTER

Nifty                               8324  +2

Nifty traded in a narrow range and closed flat for the day. After a huge upmove last week, market appears to be consolidating or preparing for the next move. Short term trend continues to remain positive  and stoploss  may be  raised to 8175.  Nifty spot is expected to encounter resistance at 8365,, 8400 and find support at 8280, 8240 for Wednesday. 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 be recover in the Second half of the day. 

MARKET FLAT

Mild profit-booking after four days of consecutive gains pulled the benchmark Sensex today down by about five points to end at 27,860.38 after hitting record high for the third session in a row. However, NSE barometer Nifty ended at new record close of 8,324.15, a marginal gain of 1.95 points, or 0.02 per cent, after clocking fresh life high of 8,350.60. Trading sentiment was by and large tepid as participants preferred to stay sidelines ahead of trading holidays. Among 30 Sensex components, 18 stocks led by GAIL, CIL, ITC, NTPC, ONGC and BHEL ended down while 12 others were up. The Sensex resumed higher at 27,943.04 and firmed up further to an all-time high of 27,969.82 on initial strong buying in view of good foreign capital inflows. However, it declined afterwards to 27,785.40 before ending at 27,860.38, showing a marginal loss of 5.45 points or 0.02 per cent. On Friday, it had zoomed to intra-day record high of 27,894.32 and ended at record close of 27,865.83. On last Thursday, it surged to previous life high of 27,390.60. In four days ending October 31, it ran up by over 1,100 points. 

QATAR AIRWAYS DISCOUNT OFFER

Gulf airline Qatar Airways today rolled out a limited period promotional fares scheme, offering up to 25 per cent discount to its customers including in India to destinations across Europe, Africa, Asia Pacific, the Middle East and the Americas. The week-long offer comes into effect from today and will continue till November 10 with a travel period window of six months, Qatar Airways said in a release. The discount of up to 25 per cent is being offered for return travel on Qatar Airways in all classes for travel originating from India, it said. "This exciting offer provides our passengers travelling on leisure or business trips, an opportunity to visit more than 140 destinations worldwide on our rapidly expanding global network. "We look forward to seeing them take advantage of these incredibly special fares over the next few days," Qatar Airways vice president for the Indian sub-continent Ihab Sorial said. Qatar Airways offers flights from 12 cities in India via its hub in Doha to global destinations such as Barcelona, Chicago, Dallas, Houston, London, Miami, New York, Paris, Philadelphia, Rome, Washington DC besides other destinations. The Doha-based airline operates across 145 business and leisure destinations spanning over the Middle East, Asia Pacific, Africa, North America and South America with a fleet of 139 aircraft.

WEEKLY ASTRO TECHNICAL GUIDE FOR NIFTY

Caution at Higher Levels….!!!

Planetary Position ::  During the current week Moon would be transiting  from Poorvabhadra in Aquarius  to Bharani in Aries.

Sun transits in Swathi and Visakha    in Libra.

Mercury   transits  in  Chitta   in   Virgo and Libra .

Venus transits in  Swathi and Visakha in Libra.

Mars  transits in   Moola and Poorvashadha constellation in Sagittarius .  

Saturn moves to Scorpio and transits in Visakha constellation and Cancer Navamsa.

Jupiter transits, in accelerated motion ,in Cancer in Aslesha constellation in   Aquarius and Pisces  navamsa ..

Nifty movement between Monday and Wednesday can be taken as the reference range for the next Three weeks and Nifty would be bullish  above the high of the range and bearish below the low of the range.

Volatile movements can be expected in the world markets on Tuesday and Wednesday.

( Special astro report for next week ( week beginning 10th November) can be had from this mail id on specific request)

Nifty Outlook for Next Week :: (03.11.2014 to 07.11.2014) …  

NIFTY :: 8322 (+308) (Time to Book Short term Profits….)

Nifty continued its smart rally for the Second week gaining about 4% due to global and domestic cues. FIIs have returned to the market in a big way. October month ended in style with a rise of about 600 points for Nifty in the last 10 trading sessions. BoJ’s improved stimulus coupled with easing of norms for FDI in construction have helped Nifty scale new high. As indices are at record new high, it is a moment of caution for traders. As inflation is set to fall further (with another Diesel rate cut), interest rate cut is a certainty and market seem to be discounting in advance. Market seem to be having best of both worlds ie., Reforms from Government and  falling crude prices .  Improved corporate performance too would come in soon which is being discounted by the markets. Despite these positive factors, market is fully priced and stock picking is the only way to perform in the market. Next Big event is Budget and big bang reforms can be expected in the buget. A path breaking budget can be expected.

Nifty is once again above all short term moving averages and  is infact at a new HIGH. However, in view of the over bought position, traders need to be vigilant and high degree of risk management is necessary.

20DMA, 50DMA, 100DMA and 200 DMA are placed at about 7955, 7985, 7815 and 7180 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 21.60, which is about 20% above the long term PE multiple.  Hence, further upside (  8500+ is possible  before next Budget). It is a record PE multiple in the recent times signaling a caution.   

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 7200 level and Medium term support is 7800. Short term support is at 8100 and Nifty would become weak only on a close below 8100.

Technical Levels ::

For the coming week, Nifty spot is expected to face

resistance at 8415,  8505, 8600 and find support at 8230, 8140, 8050.

Minor resistances may be found at 8430, 8510, 8560, 8640  and minor supports at 8215, 8135, 8085 and 8000.

For short term Nifty is bullish and would become bearish only if it closes below 8100 and could encounter resistance could encounter resistance around 8500 during the week.

Advice for Traders ::

Nifty’s uptrend continued for the Second week and caution is the need of the hour in view of the over bought zone. While long and Medium term is certainly bullish, caution is necessary for short term. Risk is more for short term traders compared to the potential reward. However, Nifty would become weak only on a close below 8100 which appears unlikely for the week. Further, in view of the truncated week (market operating on alternate days), flow of the market could be disturbed and gap up / gap down too would be possible in view global markets.

ULIPs BACK

As ULIPs or market-linked insurance products come back in vogue with huge volumes after taking a big hit in 2008 meltdown, regulators are keeping a close watch on reversal of trends as also to ensure that investors are not taken for a ride with such schemes. Before the meltdown of 2008, ULIPs were very popular, including through large-scale mis-selling, but a plunge in stock markets led to huge losses for investors as also for fund managers. As markets gain momentum, investors are again being lured into investing in ULIPs, but they may face the heat in case markets fall. Industry data shows that all companies, including LIC, selling purely traditional products have registered a decline in sales. On the other hand, ULIPs have been driving growth for some players, including some large insurers and those promoted or supported by banks. Expressing concerns over this trend, leading life insurer Reliance Life's CEO Anup Rau said this reversal of trend would hurt the industry and the regulator is already looking into the matter. "After the 2008 meltdown, almost all companies swore not to sell ULIP products and stick to long-term traditional products. "However, with markets showing healthy gains, this trend is in fact reversing. Unless the policies are bought with a long-term horizon, when the cycle the turns, we will see erosion in the AUM and a drop in persistency. This will also hurt the industry," Rau told PTI. Top executives of some other private insurers also expressed similar concerns. However, those with ULIPs accounting for a significant part of their portfolios said that these concerns are mis-placed and the industry has already learnt its lesson from 2008 meltdown. Asked whether the regulator needs to intervene so that there is no over-dependence on ULIPs, Rau said, "I think IRDA is already sensitive to this growing trend. "They have already defined guidelines and are monitoring these trends for appropriate actions."

Rau further said that the insurance sector regulator had introduced major changes in the ULIPs, sometime in 2010, making it more affordable for the investors. "From the regulatory point of view, that's the best it can do. Some of the changes included cap of charges which restricts the cost to customer, minimum lock-in for five years, ceiling on surrender charges, discontinuance fund concept, and capping the difference limit between charges in the five years. "All this has made ULIPs relatively safer but the choice of taking or not taking ULIP is with the customer." Rau said investors should first get adequate protection cover --- usually 8-10 times their annual earnings - followed by long-term savings options where ULIPs come in. "However, ULIPs get sold as short-term gain/investment products which pose a problem. For an insurer, the appropriate yardstick to measure the exposure to ULIPs should be the average vintage of the policies in the portfolio. "However, a major chunk of business share from ULIPs in an insurer's portfolio may not be good for customers," he added.

BANKS WAIT AND SEE TAKE ON ATM RESTRICTIONS

Even as RBI allowed banks to charge ATM transcations beyond five in metros, the lenders are yet to restrict the number of free withdrawals for their own customers at home automated teller machines.
Leading banks like SBI, ICICI Bank, HDFC Bank and Axis Bank have not yet announced any cap on free transactions.
The lenders are refraining from putting a cap as restriction on free ATM usage would increase footfall in branches, a senior official of a public sector bank said.
Rise in customer visit to bank branches for withdrawals or other non-financial purposes will increase cost which is much higher than Rs 20, the official added.
Some of the banks are weighing options so that they are able to absorb this and provide more number of free ATM transactions in a month, a senior official of a private bank said.
As per the RBI circular, banks are free to charge Rs 20 for transactions beyond five from November 1 but at the same time it said that banks are free provide more number of transactions to their customers if they desire so. Bank customers in six metros — Delhi, Mumbai, Chennai, Kolkata, Hyderabad and Bangalore — are allowed to withdraw money or carry out non-financial transactions like mini-statements at ATMs of banks, where they hold saving or current accounts, free of charge only five times a month, the RBI circular said. Every transaction beyond this threshold will be charged Rs 20 per use. Besides, the number of free transactions at ATMs of non-home banks has been cut to three times a month from five times. State Bank of India, which has about 43,000 ATMs, is yet to put a cap on free ATM transactions. The bank allows ATM withdrawals of up to Rs 40,000 daily on classic debit card. Leading private sector banks like ICICI Bank, HDFC Bank and Axis Bank have also not put restrictions on free ATM transactions yet. ICICI Bank, which has 11,739 ATMs, is offering unlimited number of free transactions for its own customers at home ATMs, as per its website. In case of non-home ATMs there is a cap of 5 financial transactions in a month.

Gen-NEXT's STOCK WEALTH SORE

As record stock market rally continues, the value of shares directly owned by next-generation business leaders at 20 major corporate houses has soared over 18 per cent to Rs 17,000 crore so far this year. This includes value of shares owned by the children of top executives and promoters of the listed blue-chips such as Infosys, Cipla, Sun Pharma and the Reliance groups, while excluding the family holdings and equity owned through other entities such as trusts.
Collectively, the value of their holdings has risen by Rs 2,600 crore (18.2 per cent), from about Rs 14,000 crore at the end of 2013.
Topping the charts, the children of Infosys founders saw the value of their combined shareholding soar by 14 per cent to Rs 12,200 crore in the first 10 months this year. The total value of their combined shareholding had soared by over 50 per cent to Rs 10,720 crore during 2013.
Among them, Akshata Murthy and Rohan Murty saw the value of their shares top the Rs 6,500 crore mark. Similarly, the value of shares allotted to former Infosys CEO Nandan Nilekani's children Nihar and Jahnavi rose to nearly Rs 1,350 crore, as an analysis of data available on the BSE.
The next-generation of other Infosys co-promoters like Meghana (Kris Gopalakrishnan), Divya & Deeksha (K Dinesh), Shruti and Shreyas (S D Shibulal) saw their holdings rise to Rs 245 crore, Rs 1,115 crore and Rs 2,978 crore respectively.
Value of holdings of Wipro Chairman Azim Premji's sons Rishad and Tariq, however, at Rs 53.6 crore saw marginal rise as shares of the IT major were flat from last year-end.
Among other notable winners, Aalok Shanghvi, son of Sun Pharma founder Dilip Shanghvi, and his sister Vidhi's combined kitty rode on the back of over 46 per cent uptick in the drug maker's stock price to touch about Rs 485 crore. Aalok is senior general manager of international business at the firm.
There has also been robust rise in wealth of children of Cipla's M K Hameid, Kamil and Samina as value of holdings soared by Rs 550 crore. In 2013, gains were marginal. Siblings Kamil, who is chief strategy officer of Cipla, and Samina hold shares worth about Rs 1,390 crore.
Sons of Wockhardt promoter Habil Khorakiwala -- Murtaza (Managing Director) and Huzaifa (Executive Director) -- saw 75 per cent rise in holdings at Rs 34 crore.

Country's richest man Mukesh Ambani's children saw a moderate rise in their portfolio. RIL stock rose about 14 per cent in 2014 after inching up 6 per cent in 2013. The combined value of RIL shares held by Isha, Akash and Anant Ambani topped Rs 680 crore mark at October-end. The 22 year-old US educated Isha and Akash were recently appointed directors on board of Reliance Industries' telecom and retail ventures. The market performance of Anil Ambani-led group firms was a mixed bag. Consequently, holdings of his children - Jaianmol and Jaianshul - stood at over Rs 30 crore. In a reversal of trends seen in 2013, value of shares of group's telecom arm Reliance Communications fell while financial services unit Reliance Cap and infrastructure firm R-Infra gained in 2014. Godrej scions -- Tanya, Pirojsha, Nisaba and Firoze -- saw value of holdings rise to Rs 1,045 crore compared to about Rs 960 crore via shares held in Godrej Industries and Godrej Consumer. Shares rose by 10-14 per cent in 10 months of 2014. O P Jindal group's next-gen leaders Tarini, Tanvi and Parth's holdings in JSPL, JSW Steel and JSW Energy saw total kitty rise to Rs 776 crore, compared to Rs 560 crore in 2013.

EQUITY FUNDS BUOYANT

Equity funds have continued their buoyant run in the quarter ended September 2014, riding on small and mid-cap stocks, according to Crisil data. Small and midcap funds were in the best performing category, with the Crisil-AMFI Small & Midcap Fund Performance Index delivering highest returns in all time frames ended September 30, 2014, a Crisil release said here today. The category delivered absolute returns of 7.74 per cent for the quarter, compared to the Crisil-AMFI Equity Fund Performance Index's 4.39 per cent and the CNX Nifty's 4.64 per cent. As on September 30 too, the category gave an impressive 50.07 per cent as the CNX Midcap Index and the CNX Small Cap Index delivered 41.47 per cent and 45.27 per cent, respectively, compared to the CNX Nifty's 26.35 per cent, the release said. Across equity categories, funds with higher exposure to small and mid-cap stocks fared better than their peers. For instance, Crisil Fund Rank 1s (top 10 percentile of all ranked schemes) of small and midcap category had 89 per cent exposure to small and mid-cap stocks compared with 79 per cent of Crisil Fund Rank 5 peers (bottom 10 per cent of all ranked schemes. Even in the diversified and large cap categories, exposure to small and midcap stocks in Crisil Fund Rank 1 funds of large cap and diversified category increased gradually from 15 to 22 per cent and 36 to 40 per cent respectively during the period between January 2014 and September 2014, the release said. At the fund house level, UTI Mutual Fund led the tally of top-ranked funds for the quarter with ten funds in Crisil Fund Rank 1, followed by Birla Sun Life Mutual Fund, ICICI Prudential Mutual Fund and Reliance Mutual Fund with five funds each, the release said. The latest Crisil MF Ranking covers close to 90 per cent of average assets under management of open ended schemes at the end of September 2014. Unlike most other ranking models, which are based purely on returns or net asset value (NAV), the ranking uses a combination of net asset value (NAV) and portfolio-based attributes for evaluation. This provides a single-point analysis of mutual funds, taking into consideration key parameters like risk-adjusted returns, asset concentration, liquidity, asset quality and asset size. The rankings also include categories that focus specifically on long-term consistency in performance. The ranks are assigned on a scale of 1 to 5, with Crisil Fund Rank 1 indicating 'very good performance'. In any peer group, the top 10 percentile of funds are ranked as Crisil Fund Rank 1 and the next 20 percentile as Crisil Fund Rank 2.