INFLATION UNDER CHECK

When it comes to inflation, the year 2015 has shown that the macroeconomic datapoints may not always show the real picture and the cases in point relate to quite a few kitchen staples such as potato, onions and pulses.
For records, the Consumer Price Inflation has remained well under control hovering in the range of 3.66-5.4 per cent so far in 2014, while the industry chambers and some other experts are hopeful that it would keep below 6 per cent mark in the New Year -- a target set by the Reserve Bank.
However, the consumers saw an altogether different story in 2016 when they went to the shops to purchase some staple grocery and vegetable items for a good part of the year. While onion prices again brought tears to the eyes of consumers, prices of tur dal touched record high levels above Rs 200 a kilogram. Another dataset, the Wholesale Price Index (WPI) based inflation in fact stayed in the negative zone for the entire year, meaning the wholesale prices actually fell and there was no inflation at all. While it entered the negative zone in November 2014, the WPI inflation stood at (-)3.8 per cent in October 2015.
On the future datapoints, the industry chambers expect the prices to stabilise in the New Year although WPI may come back to the positive territory. "During 2016, prices are likely to stabilise as industries continue to operate below full capacity. With industrial prices no longer falling, WPI inflation is likely to rise to positive territory while CPI inflation will likely remain in a band of 5-5.5 per cent, CII Director General Chandrajit Banerjee said. "RBI's target of 6 per cent by January 2016 will be easily met. In fact, inflation is likely to moderate from current levels as measures are taken to moderate the prices of pulses which had shot up on account of deficient rains", he added. International crude oil prices, which plunged to historic lows on a supply glut during the year, helped India reduce its oil imports bill and consequently commodities' transport cost. RBI has however cautioned that while oil prices, barring geopolitical shocks, are expected to remain benign for a few more quarters, the uptick of CPI inflation excluding food and fuel for two months in succession warrants vigilance.

Industry body Ficci said India has been experiencing a phase of 'disinflation' given the plunge in crude oil prices and prices of other commodities and raw material and this trend is expected to continue over the near term. "At the same time, increase has been noted in prices of agricultural commodities like pulses, edible oil, for which the government is taking appropriate action. Thus, inflation in near term is likely to remain within the RBI target," Ficci said. Despite these favouring factors, India battled weather-related woes as the country saw two straight years of deficient monsoons in 2014 and 2015. Deficient rains during the July-September Monsoon this year is likely to impact the rabi or winter crops, which will be harvested by March-end, as adequate soil moisture is important for growth of winter crops such as wheat, mustard, oil-seeds besides some varieties of pulses. Almost 60 per cent of the crop in the country is rain- dependent, while the rest is well irrigated. "The common man will continue to pay lower prices on fuel and transportation, although further declines are unlikely. The behavior of food prices will be uncertain as supply shortages could lead to sporadic increases in the prices of specific items," CII's Banerjee said. According to an RBI expert group, global commodity prices continue to impart some disinflationary momentum, but there are some upside risks to inflation from internal factors such as negative monsoon shocks, binding supply side constraints, government consumption shocks due to Seventh Pay Commission Award. "Tax collections, both direct and indirect tax are an important source of revenue for the government that is utilised for various purposes... It is to be ensured that undue pressure is not put on the existing set of tax payers, which adversely impacts their savings and consumption," said Vikas Vasal, Partner–Tax, KPMG in India. "Any additional tax or levy especially on the indirect taxes like VAT or services tax impacts the ultimate consumer, as the burden of these taxes is generally passed on to the consumer," he added. Both Ficci and CII have suggested to the government to address the supply chain bottlenecks by beefing up the post-harvest handling and distribution infrastructure and making Public Distribution System (PDS) efficient. This year, the government and the RBI also signed a Monetary Policy Framework agreement with the objective maintaining price stability, commensurate with the objective of growth. As per the agreement, RBI would set the policy interest rates and would aim to bring inflation below 6 per cent by January 2016 and within a band of 4 per cent with (+/-) 2 percent for 2016-17 and all subsequent years.

M & A ACTIVITY @ IT's PEAK

The 2015 was a record year for global merger and acquisitions (M&A) as corporates announced deals worth USD 4.86 trillion and a significant portion of this came from Asia Pacific targeted deals, says a report. According to global deal tracking firm Dealogic, global M&A volume at USD 4.86 trillion in 2015 was the highest on record for any year, surpassing the previous record of USD 4.61 trillion in 2007. Moreover, this year's total is a good 33 per cent higher than the last year. In another first, the Asia Pacific targeted M&A broke the USD 1 trillion mark, reaching USD 1.16 trillion in 2015, and accounted for a record 24 per cent share of global M&A. Sectorwise, healthcare was the top ranked sector in 2015 with USD 708.7 billion, up 62 per cent from 2014 when deals worth USD 436.3 billion were announced. Technology was a close second with record high volume and activity (USD 697.4 billion by way of 9,038 deals), almost double 2014 volume (USD 326.1 billion). The four largest technology deals on record were all announced in 2015, led by Dell's USD 66 billion bid for EMC, announced on October 1. Meanwhile, Goldman Sachs (USD 1.76 trillion), Morgan Stanley (USD 1.49 trillion), JPMorgan (USD 1.48 trillion) and Bank of America Merrill Lynch (USD 1.12 trillion) all recorded their highest annual advisory volumes on record. All these firms surpassed their previous M&A records set in 2007, the report added.

RUPEE EXPERIENCE 5th ANNUAL FALL

Set for the fifth straight year of fall in 2015, the rupee seems to have found a new bottom after hovering between two extremes of being billed the world's worst as well as the best performing currency and the experts see the range of 65-70 as the new normal.
While the government announced a slew of steps and the Reserve Bank also intervened on a few occasions to support the forex market, a highly volatile trend continued to rule the exchange rates due to global headwinds through 2015, during which the Indian currency also hit a two-year low below Rs 67 mark against the US greenback.
It is expected to end the year between Rs 66-67 level, down more than five per cent from its 2014-closing level of Rs 63.03 to one US dollar. It closed at Rs 66.21 in its last trading session, while four days of trading are left in 2015.
The major factors triggering the downward move included a substantial fall in foreign portfolio investments as an uncertainty prevailed for almost entire year over the long-awaited rate high in the US and the slowdown in China, a major driver of global economic growth for last few years.
For most part of the year, rupee remained the worst performing currency globally, but a sharper fall in many other currencies may actually help the Indian currency end the year as among the relatively better performers.
Experts say rupee may actually end up as one of the 'best' performers among major currencies due to its much steeper yearly fall against the US dollar. Euro is down nearly 16 per cent, while Indonesian rupiah is being billed as the worst performer. Chinese yuan has also not done well.
The traders expect rupee to trade in the range of 65.50-70.00 against the US dollar in the year ahead.

Rupee's performance will largely depend on global risk sentiments and the domestic reform push, said Abhishek Goenka, CEO of IFA Global, which deals in forex and risk management.
The global risk sentiment would continue to be shaped by the Fed Policy, recovery in Chinese and Eurozone economy, he added.
The forex markets were largely dominated by the actions of central banks, including the US Federal Reserve, this year. While Fed has finally decided to end its protracted period of near zero interest rate policy, the rate hike of 25 basis points came at the fag end of the year and speculation is already abound about its next move.
Another major factor dominating the global markets during the year was the collapse of Chinese equity markets and slowdown in its economy. The Shanghai composite fell nearly 40 per cent within a span of few weeks trapping many retail investor and corporate profits began to shrink owing to poor global and domestic demand and oversupply.
The Indian rupee, which was being seen as stabilising in the range of 63-65 in the early part of the year, soon hit on a downward path after a devaluation of the Chinese Yuan by around 4 per cent sent the Asian currencies into a tailspin.
On the domestic front, the Reserve Bank initiated several steps to support the Indian currency. The RBI increased FPI investment limit in fixed income markets, allowed importers to raise trade credit in Indian rupee from overseas, allowed companies to raise rupee denominated debt overseas and also showed its intent to intervene in Exchange Traded Currency Derivatives (ETCD) segment.
The government too played its part by relaxing FDI caps in certain sectors, moving certain sectors to automatic route from approval route, improving indirect tax collections and initiating PSU stake sale, all of which failed to contain the fall in rupee.
FPI inflows tapered in 2015 as compared to the previous years, which became one of the biggest factors for the rupee depreciation.
Though India's trade deficit shrank as compared to the previous year, exports have contracted for 13 straight months. However, FDI flows have been relatively better.

TATA MOTORS AMONG TOP-50 IN GLOBAL R & D

Tata Motors has entered the top-50 league of the world's biggest companies in terms of their R&D investments, topped by German automaker Volskwagen. On the annual Industrial R&D Investment Scoreboard for 2015, prepared by European Commission, Volkswagen is followed by Samsung, Microsoft, Intel and Novartis in the top-five. Tata Motors has moved up from 104th position last year to 49th now and has also shown the largest increase in R&D (Research and Development) investments on the list. However, most of this R&D is at its UK subsidiary Jaguar Land Rover. In the expanded list of the world's 2,500 top R&D firms, there are a total of 26 Indian companies, as against 829 from the US, 360 from Japan, 301 from China, 114 from Taiwan, 80 from Switzerland and 27 each from Canada and Israel. There are 608 companies from the EU countries, including 136 from Germany, 135 from the UK, 86 from France, 42 from Sweden and 32 from Italy. India is overall placed at 15th position in terms of the number of companies on the list.
Among other Indian companies, Dr Reddy's Laboratories is ranked 404th, M&M is at 451st, Reliance Industries at 540th, Lupin at 624th, Sun Pharma at 669th, Cipla at 831st and Infosys at 884th. Other Indian firms on the list include ONGC, Tata Steel, Wockhardt, Cadila Healthcare, Bajaj Auto, Hindalco, BHEL, Piramal Enterprises, Wipro, Helios and Matheson, HCC, Ashok Leyland, Apollo Tyres, TCS, Suzlon Energy, TVS Motor, Force India, HCL Tech and Glenmark. While the top-five companies globally have retained their respective positions, Google has moved up to sixth place (from 9th), while Pfizer has moved to 10th (from 15th). Roche, Johnson and Johnson and Toyota are ranked 7th, 8th and 9th, respectively.

WEEKLY ASTRO TECHNICAL GUIDE FOR NIFTY

Bullish above 7855 ….. !!!        

Nifty Outlook for Week 21.12.2015 to 24.12.2015

NIFTY :: 7762 (+152)

Nifty traded with huge Bullishness till Thursday and fell on Friday and closed with a gain of about 2%.

Moon transits in Dhanishta 3 rd to Poorvabhadra 3 rd Pada between 16^th December (afternoon) and 18 th December and the  range of these days  (7737 to 7853) can be considered to be the reference range for the next Three weeks and market can be considered to be Bullish above the high and Bearish below the Low of this period’s range.  

20 DMA, 50DMA, 100DMA and 200 DMA are placed at about 7795, 7955, 8033 and 8250.  respectively and would act as  resistances. Nifty is trading  below all   the Moving Averages.

While Nifty continues to trade below   the  200 DMA and 50 DMA too is  below   200 DMA (Death  Cross) suggesting that the Long term Bearish  trend is   in    tact.

Technical Levels ::

Bullish above 7840 with resistance at  7815, 7890,7950

Bearish below 7690 with Supports at 7615, 7540, 7475.

Breakout level : 7850 ; Breakdown level : 7625

Advice for Traders ::

Nifty would have become Bullish  for Short term if it would have closed even with minor positive bias on Friday. Since GST Bill is not likely to be cleared  in this winter session, it  is likely to have negative impact on the sentiment and the economy. Further, Mid year economic review was not strong. If Nifty is likely to cross 7855, it would be Bullish and on the other hand, if it is likely to breach 7720, it would be Bearish.

Weekly Open level is very important for the entire week.
Long  positions may be considered  as long as it maintains above
the Last week’s Close.

Planetary Position

During the current week Moon would be transiting  from Aswini 3 rd  Pada    in Aries to Mrigasira 1 st Pada in Tarurs.

Sun transits in   Moola 2^nd   Pada in Sagittarius to Moola 3 rd  Pada  in Sagittarius.

Mercury transits in  Poorvashadha 3 rd in Sagittarius to Uttarashadha 1 st Pada in Sagittarius.

Venus transits in  in Visakha 2 nd    Pada  in Libra to Visakha 3 rd   Pada.

Mars transits in    Chitta 2 nd    Pada in Virgo to Chitta 3 rd   Pada in Libra.

Saturn  transits in   Anuradha constellation in Scropio sign in 4th  Pada  and in

Scorpio Navamsa .

Jupiter ,, transits in  Leo in  Uttara 1 st   Pada in  Sagittarius   Navamsa .  

Rahu and Ketu  continue their transit in Virgo and Pisces  respectively.

NEW DELHI TOPS LIST OF CITIES FOR SHOPPING

New Delhi has topped the list of Asia's top cities for shopping, offering a treasure trove of goods through its blend of charming traditional markets and glitzy shopping malls, according to a new survey. New Delhi has topped the list for the best shopping city in Asia, followed by Bangkok and Singapore, according to a survey by TripAdvisor. "Shopping in Asian cities can be a rich and colourful experience if you know exactly which spots to go to and how to maximise your dollar," TripAdvisor's Communications Director for Asia Pacific Janice Lee Fang said. Most cities feature top quality malls, where one can find their favourite designer shops, but there are also the night markets or street shops that sell beautiful handicraft and other local gems unique to the culture, she added. This ranking is based on the popularity of shopping activities in Asian cities and also includes highly-rated hotel recommendations, which are bookable on TripAdvisor, offering shoppers great value for their stay so they can save as much of their holiday budget. The rank of the best cities for shopping is based on the total of commercial activities for shopping, the number of commercial activities for shopping with a good score, the frequency of mention for the word shopping in the reviews relative to the destination and the average score of reviews that talk about shopping in all the languages applicable on TripAdvisor.com. Bangkok (Thailand) is second with its huge variety of shopping options for every lifestyle and budget, from the very high-end to street shopping, wholesale and weekend markets. Singapore, which ranked third in the list, is famous for its retail options across the city state, with a plethora of shopping malls that open till late. Other cities mentioned in the top 10 shopping destination are Beijing in China at the fourth place, followed by Hanoi in Vietnam, Tokyo in Japan, Seoul in South Korea, Kuala Lumpur in Malaysia, Kathmandu in Nepal and Jakarta in Indonesia.