AS SAID, LAST WEEK NIFTY RECOVERED FROM THE RANGE OF 5200 ON POSITIVE GLOBAL CUES, HOWEVER THE POOR PERFORMANCE OF CONGRESS IN THE STATE ASSEMBLY ELECTIONS ESPECIALLY U.P. LED THE WEAK SENTIMENT WHICH CHECKED THE BOUNCE BACK IN THE MARKET. THE POSSIBILITY OF UNSTABLE POLITICAL SITUATION AT THE CENTER AND WEAKENING UPA TURNED THE SENTIMENTS MURKY AS IT MAY BE A GREAT HASSLE FOR THEM TO PASS THE VARIOUS IMPORTANT PENDING BILLS AND REFORM PROCESSES. ALSO IN AN IMPORTANT DEVELOPMENT, TO EASE THE LIQUIDITY SITUATION RBI SLASHED THE CRR BY 75bps, SIGNALLING THE CONCERN OVER THE ISSUE. THIS IS DONE IN TIME WHICH MAY PROVIDE A BIT RELIEF IN THE STOCK MARKET ALSO WHICH MAY BE FELT ON MONDAY. NIFTY MANAGED TO CLOSED AT 5333.55 & SENSEX AT 17503.24.
GOING FORWARD CAPITAL MARKET MAY REMAIN VOLATILE TILL RAIL BUDGET ON 14TH MARCH, RBI DECLARES IT MONETARY POLICY ON 15TH MARCH & UNION BUDGET IS ANNOUNCED ON 16TH MARCH. THE BUDGET REMAINS THE KEY TO THE MARKET AS THE FOLLOWING IMPORTANT ISSUES REMAIN TO BE WATCHED KEENLY BY THE MARKET MEN:
1.FISCAL CONSOLIDATION TO BE LAUNCHED: FISCAL CONSOLIDATION IS A STRATEGY WHICH IS TARGETED TO LOWERING THE SHORTFALLS OF THE GOVERNMENT & PILING UP OF THE DEBT. FISCAL CONSOLIDATION IS ONE OF THE TAXATION AND FINANCIAL MARKERS OF THE CENTRAL GOVERNMENT. IT IS CONSTANTLY UTILIZED TO LOWER THE FISCAL SHORTFALLS OF THE NATION. In the latest report of world bank on Friday, Indian Government is likely to miss the ambitious target for Fiscal Consolidation set in the 2011-12 budget of limiting Fiscal Deficit to 4.6% of the GDP by about 1% due to lower-than-expected revenues and increasing outlays on subsidies. The budget 2012-13 is expected to set the target a Fiscal Deficit Ratio of slightly below 5% of the GDP from likely 5.25%-5.6% in 2011-12. The key signals to spur growth could come from the reform of Direct Taxes, the implementation of long-delayed GST and the passage for the Land Acquisition and Mining Bills.
2. NEED POLICIES TO STABILIZE PETRO-PRODUCTS PRICES & CUT SUBSIDIES: Low domestic production of Crude, low lwgacy prices, government say on fuel pricing, absence of competition in petroleum marketing are the key issues to be addressed by the givenment and focus primarily in cutting down of the fuel subsidies, developing business, fiscal, regulatory and policy environment to bridge the gap of robust demand of energy and crude oil and bleak supply depending largely on imports. Drop tax on LNG, grant tax holiday to gas production, transparency in cross subsidy by upstream companies, etc.
3. EFFECTIVE MANAGEMENT OF SUPPLY SIDE ECONOMY: Food Inflation was as high as 22% in Feb 2010 and now on negative side as per the last week's figure. Monsoon was normal which resulted in these figures and overall inflation. To enhance the contribution of agriculture in GDP, its expected that in the Budget 2012-13, F.M. should focus on rationalisation of the different subsidies, decentralisation of handling of food grains to ensure food grain security, priority to increase areas under edible oils & oil seeds, dealing with the issues relating to procurement, marketing, cold chains & maintenance of buffer stocks and allocation of higher resources( triple to the current) for this sector among others especially agriculture infrastructure & agriculture research & development.
4. NEED TO BRING POLICY REFORMS: According to FICCI it needs Policy Reforms rather than Tax-Cuts. They are placing emphasis on policy reforms in areas like infrastructure, allocation of natural resources, education & health. The rate of taxes-both direct & indirect- are already very moderate and there is little scope for further reduction. Additionally the two main tax reforms through DTC & GST are on track to be implemented and and coming Budget should consider it on prime focus.
5. REMOVAL OR REDUCTION OF S.T.T & ANY CHANGES IN LONG TERM CAPITAL GAINS TAX: As expected by many in Stock Market, that Government may scrap the S.T.T may bring a short term cheer in the market for a moment but not a long term impact. However as heard in the street that any possibility of introduction of Long Term Capital Gains Tax may bring a devastating and cascading down effect and Markets may dis-like the move resulting in deep cut of 15%-20% fall in Indices. Hence keep close eye on this.
CONCLUDING TO THE ABOVE THE MARKET MEN(FIIs, DIIs, HNIs, ETC) WILL HAVE CLOSE EYE ON THESE FACTORS TO GAUGE THE OVERALL BUDGET AND GOVERNMENT'S ABILITY AND REALISTIC APPROACH TO REDUCE THE FISCAL DEFICIT. IF ITS REALISTIC THEN MARKETS WILL TAKE THUMBS-UP AND A PARTY WILL GO ON OPENING GATE FOR 5%-10% RALLY, ELSE MARKETS MAY CORRECT 5%-10%-15% ON ANY DIS-COMFORT ON FISCAL DEFICIT MANAGEMENT AND OTHER ISSUES LIKE CAPITAL GAINS TAX.
MY VIEW: ONE SHOULD HOLD ONLY 25% TO 35% IN EQUITIES AND HOLD REST IN CASH BEFORE BUDGET. THEN TAKE A CLEAR CALL ON MARKET AFTER THE BUDGET BLUE PRINT IS OUT...... IT MAY BE RISKY TO HOLD LEVERAGED OR FULLY INVESTED PORTFOLIO BEFORE BUDGET THIS TIME.
IN MY VIEW NIFTY MAY BE AROUND 5550-5600 BEFORE BUDGET, WHERE ONE SHOULD GET OUT OF THE MARKET AND SIT ON CASH OR HOLD 25% EQUITY & 75% CASH. THERE COULD BE A CORRECTION IN MARKET TAKING NIFTY TO 5000 LEVELS!!!!!!!!!!!
THIS DOES NOT MEAN THAT YOU COULD ENTER IN SHORTS. DON'T AND DON'T ENTER IN SHORTS EVEN IF THE CORRECTION IS TRIGGERED AS THERE WILL BE SHARP RISE/REVERSAL IF THE BUDGET COMES WITH SOME POSITIVES. HENCE DON'T SPECULATE BUT TRY TO INVEST IN GOOD STOCKS.........
IN THE SHORT TERM: NIFTY IS LIKELY TO MOVE IN THE RANGE OF 5150-5650. IF NIFTY MOVES ABOVE 5650(WHICH COULD HAPPEN ONLY IF BUDGET IS GOOD) THEN NIFTY COULD BE 5750 & 5920 IN EXTREME SHORT TERM. ON THE OTHER SIDE, IF NIFTY CLOSES BELOW 5150( WHICH COULD HAPPEN ONLY IF BUDGET IS POOR) THEN NIFTY COULD TEST 5050-4950 OE EVEN BELOW THAT IN EXTREME SHORT TERM.
IN THIS WEEK: SUPPORT FOR THE NIFTY IS AT 5270 & RESISTANCE AT 5420. HENCE THE NO TRADING ZONE FOR THE NIFTY IS 5270-5420.
BUY CALL OPTIONS(CE5400 & CE5500) IF NIFTY MOVES ABOVE 5420, KEEPING 5270 AS STOP-LOSS FOR THE TARGET OF 5510 & 5650.
BUY PUT OPTIONS(PE5300 & PE5200) IF NIFTY MOVES BELOW 5270, KEEPING 5420 AS STOP-LOSS FOR THE TARGET OF 5200-5150.
FOLLOWING STOCKS ARE GOOD FOR VALUE PICK, ANY TIME IF THE CORRECTION HAPPENS FOR HOLDING PERIOD OF 45-60 DAYS:
1. RALLIS(500355)-CMP 128.40: BUY FOR THE TARGET OF 150-160-180++++.
2. HDFC WARRANT(961682)-CMP 88.15: BUY FOR THE TARGET OF 110-120++++
3. THOMAS COOK(500413)-CMP 59.60: BUY FOR THE TARGET OF 70-75-80++++++.
4. BINANI IND(500059)-CMP 135.60: BUY FOR THE TARGET OF 170-200-210+++.
5. GUJRAT FLOURO: BUY FOR THE TARGET OF 560-600-680+++++.
6. STANDARD CHARTERED PLC(580001)-CMP 79.25: BUY FOR THE TARGET OF 90-100-110++++.
7. APTECH(532475)-CMP 91.25:BUY FOR THE TARGET OF 100-110++++.
ASTROLOGICALLY: Mercury getting retrograde on 12th March 2012 and direct on 5th April 2012, will very very unpredictable for the markets. Markets will show wild moves, which will not be easy to catch and trade. Initially it may bring a sharp fall, which may trigger any time, may be around or after budget (There are 90% chances) and then small corrective rallies could be seen from 23rd March to 29th March, then again a fall, however this period will not be very promising for traders. Hence its better to sit aside and wait for the settlement of March series and then buy after 4th Arpil 2012. However a value pick could be done in shares mentioned above. Mars getting direct after 15th April 2012, may bring sharp rally....
There are 30% chances that I may go wrong in above astrological analysis, use your own wisdom and consult your own adviser before taking decision on this basis.
Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.Nothing in this article is, or should be construed as, investment advice.
Disclaimer:
This is neither an offer nor a solicitation to purchase or sell securities. The information and views contained on this blog are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in, or have positions in the securities mentioned in their articles. Neither I (Vikas Srivastava) nor any of the contributors accepts any liability arising out of use of the above information/article. Reproduction in whole or in part without written permission is prohibited.
GOING FORWARD CAPITAL MARKET MAY REMAIN VOLATILE TILL RAIL BUDGET ON 14TH MARCH, RBI DECLARES IT MONETARY POLICY ON 15TH MARCH & UNION BUDGET IS ANNOUNCED ON 16TH MARCH. THE BUDGET REMAINS THE KEY TO THE MARKET AS THE FOLLOWING IMPORTANT ISSUES REMAIN TO BE WATCHED KEENLY BY THE MARKET MEN:
1.FISCAL CONSOLIDATION TO BE LAUNCHED: FISCAL CONSOLIDATION IS A STRATEGY WHICH IS TARGETED TO LOWERING THE SHORTFALLS OF THE GOVERNMENT & PILING UP OF THE DEBT. FISCAL CONSOLIDATION IS ONE OF THE TAXATION AND FINANCIAL MARKERS OF THE CENTRAL GOVERNMENT. IT IS CONSTANTLY UTILIZED TO LOWER THE FISCAL SHORTFALLS OF THE NATION. In the latest report of world bank on Friday, Indian Government is likely to miss the ambitious target for Fiscal Consolidation set in the 2011-12 budget of limiting Fiscal Deficit to 4.6% of the GDP by about 1% due to lower-than-expected revenues and increasing outlays on subsidies. The budget 2012-13 is expected to set the target a Fiscal Deficit Ratio of slightly below 5% of the GDP from likely 5.25%-5.6% in 2011-12. The key signals to spur growth could come from the reform of Direct Taxes, the implementation of long-delayed GST and the passage for the Land Acquisition and Mining Bills.
2. NEED POLICIES TO STABILIZE PETRO-PRODUCTS PRICES & CUT SUBSIDIES: Low domestic production of Crude, low lwgacy prices, government say on fuel pricing, absence of competition in petroleum marketing are the key issues to be addressed by the givenment and focus primarily in cutting down of the fuel subsidies, developing business, fiscal, regulatory and policy environment to bridge the gap of robust demand of energy and crude oil and bleak supply depending largely on imports. Drop tax on LNG, grant tax holiday to gas production, transparency in cross subsidy by upstream companies, etc.
3. EFFECTIVE MANAGEMENT OF SUPPLY SIDE ECONOMY: Food Inflation was as high as 22% in Feb 2010 and now on negative side as per the last week's figure. Monsoon was normal which resulted in these figures and overall inflation. To enhance the contribution of agriculture in GDP, its expected that in the Budget 2012-13, F.M. should focus on rationalisation of the different subsidies, decentralisation of handling of food grains to ensure food grain security, priority to increase areas under edible oils & oil seeds, dealing with the issues relating to procurement, marketing, cold chains & maintenance of buffer stocks and allocation of higher resources( triple to the current) for this sector among others especially agriculture infrastructure & agriculture research & development.
4. NEED TO BRING POLICY REFORMS: According to FICCI it needs Policy Reforms rather than Tax-Cuts. They are placing emphasis on policy reforms in areas like infrastructure, allocation of natural resources, education & health. The rate of taxes-both direct & indirect- are already very moderate and there is little scope for further reduction. Additionally the two main tax reforms through DTC & GST are on track to be implemented and and coming Budget should consider it on prime focus.
5. REMOVAL OR REDUCTION OF S.T.T & ANY CHANGES IN LONG TERM CAPITAL GAINS TAX: As expected by many in Stock Market, that Government may scrap the S.T.T may bring a short term cheer in the market for a moment but not a long term impact. However as heard in the street that any possibility of introduction of Long Term Capital Gains Tax may bring a devastating and cascading down effect and Markets may dis-like the move resulting in deep cut of 15%-20% fall in Indices. Hence keep close eye on this.
CONCLUDING TO THE ABOVE THE MARKET MEN(FIIs, DIIs, HNIs, ETC) WILL HAVE CLOSE EYE ON THESE FACTORS TO GAUGE THE OVERALL BUDGET AND GOVERNMENT'S ABILITY AND REALISTIC APPROACH TO REDUCE THE FISCAL DEFICIT. IF ITS REALISTIC THEN MARKETS WILL TAKE THUMBS-UP AND A PARTY WILL GO ON OPENING GATE FOR 5%-10% RALLY, ELSE MARKETS MAY CORRECT 5%-10%-15% ON ANY DIS-COMFORT ON FISCAL DEFICIT MANAGEMENT AND OTHER ISSUES LIKE CAPITAL GAINS TAX.
MY VIEW: ONE SHOULD HOLD ONLY 25% TO 35% IN EQUITIES AND HOLD REST IN CASH BEFORE BUDGET. THEN TAKE A CLEAR CALL ON MARKET AFTER THE BUDGET BLUE PRINT IS OUT...... IT MAY BE RISKY TO HOLD LEVERAGED OR FULLY INVESTED PORTFOLIO BEFORE BUDGET THIS TIME.
IN MY VIEW NIFTY MAY BE AROUND 5550-5600 BEFORE BUDGET, WHERE ONE SHOULD GET OUT OF THE MARKET AND SIT ON CASH OR HOLD 25% EQUITY & 75% CASH. THERE COULD BE A CORRECTION IN MARKET TAKING NIFTY TO 5000 LEVELS!!!!!!!!!!!
THIS DOES NOT MEAN THAT YOU COULD ENTER IN SHORTS. DON'T AND DON'T ENTER IN SHORTS EVEN IF THE CORRECTION IS TRIGGERED AS THERE WILL BE SHARP RISE/REVERSAL IF THE BUDGET COMES WITH SOME POSITIVES. HENCE DON'T SPECULATE BUT TRY TO INVEST IN GOOD STOCKS.........
IN THE SHORT TERM: NIFTY IS LIKELY TO MOVE IN THE RANGE OF 5150-5650. IF NIFTY MOVES ABOVE 5650(WHICH COULD HAPPEN ONLY IF BUDGET IS GOOD) THEN NIFTY COULD BE 5750 & 5920 IN EXTREME SHORT TERM. ON THE OTHER SIDE, IF NIFTY CLOSES BELOW 5150( WHICH COULD HAPPEN ONLY IF BUDGET IS POOR) THEN NIFTY COULD TEST 5050-4950 OE EVEN BELOW THAT IN EXTREME SHORT TERM.
IN THIS WEEK: SUPPORT FOR THE NIFTY IS AT 5270 & RESISTANCE AT 5420. HENCE THE NO TRADING ZONE FOR THE NIFTY IS 5270-5420.
BUY CALL OPTIONS(CE5400 & CE5500) IF NIFTY MOVES ABOVE 5420, KEEPING 5270 AS STOP-LOSS FOR THE TARGET OF 5510 & 5650.
BUY PUT OPTIONS(PE5300 & PE5200) IF NIFTY MOVES BELOW 5270, KEEPING 5420 AS STOP-LOSS FOR THE TARGET OF 5200-5150.
FOLLOWING STOCKS ARE GOOD FOR VALUE PICK, ANY TIME IF THE CORRECTION HAPPENS FOR HOLDING PERIOD OF 45-60 DAYS:
1. RALLIS(500355)-CMP 128.40: BUY FOR THE TARGET OF 150-160-180++++.
2. HDFC WARRANT(961682)-CMP 88.15: BUY FOR THE TARGET OF 110-120++++
3. THOMAS COOK(500413)-CMP 59.60: BUY FOR THE TARGET OF 70-75-80++++++.
4. BINANI IND(500059)-CMP 135.60: BUY FOR THE TARGET OF 170-200-210+++.
5. GUJRAT FLOURO: BUY FOR THE TARGET OF 560-600-680+++++.
6. STANDARD CHARTERED PLC(580001)-CMP 79.25: BUY FOR THE TARGET OF 90-100-110++++.
7. APTECH(532475)-CMP 91.25:BUY FOR THE TARGET OF 100-110++++.
ASTROLOGICALLY: Mercury getting retrograde on 12th March 2012 and direct on 5th April 2012, will very very unpredictable for the markets. Markets will show wild moves, which will not be easy to catch and trade. Initially it may bring a sharp fall, which may trigger any time, may be around or after budget (There are 90% chances) and then small corrective rallies could be seen from 23rd March to 29th March, then again a fall, however this period will not be very promising for traders. Hence its better to sit aside and wait for the settlement of March series and then buy after 4th Arpil 2012. However a value pick could be done in shares mentioned above. Mars getting direct after 15th April 2012, may bring sharp rally....
There are 30% chances that I may go wrong in above astrological analysis, use your own wisdom and consult your own adviser before taking decision on this basis.
Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.Nothing in this article is, or should be construed as, investment advice.
Disclaimer:
This is neither an offer nor a solicitation to purchase or sell securities. The information and views contained on this blog are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in, or have positions in the securities mentioned in their articles. Neither I (Vikas Srivastava) nor any of the contributors accepts any liability arising out of use of the above information/article. Reproduction in whole or in part without written permission is prohibited.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.