1)Despite challenges, Indian equity market among best performers in FY19

On sectoral basis, the banks, energy and IT sector outperformed with a growth
of 25 per cent.

IANS|

Mar 31, 2019, 12.20 PM IST

MUMBAI: Despite several challenges including the NBFCs-triggered liquidity crisis as

well as global trade tensions and high crude oil prices, the Indian equities market
emerged as one of the best performers globally in 2018-19.

"The Indian indices -- S&P BSE Sensex and NSE Nifty50 -- both have outperformed
major world indices in 2018-19," HDFC Securities' Retail Research Head Deepak Jasani
told IANS.

The BSE Sensex rose nearly 17 per cent during in the financial year 2019, ..

"The Indian indices -- S&P BSE Sensex and NSE Nifty50 -- both have outperformed
major world indices in 2018-19," HDFC Securities' Retail Research Head Deepak Jasani
told IAN

The BSE Sensex rose nearly 17 per cent during in the financial year 2019, while the
Nifty50 on the National Stock Exchange increased by 15 per cent during same period.
For both the indices, this was the highest growth in any fiscal since FY 2009-10.

However, the gains were capped as crude oil prices rose and fears over a tariff war-
induced global slowdown grew.

On March 29, the last trading day of FY 2018-19, Sensex rose 127 points to close at
38,672.91 and the Nifty50 settled at 11,623.90 points, higher by 53.90 points from its
previous close.

On sectoral basis, the banks, energy and IT sector outperformed with a growth of 25 per
cent followed by FMCG at 16 per cent and Pharma at 12 per cent. While the laggards
were led by media at -24 per cent, auto -23 per cent and telecom -22 per cent.

"Despite a volatile year due to US-China trade tensions, liquidity crisis and NBFCs,
India-Pakistan border tension, the Nifty50 rallied by 14.9 per cent and BSE Sensex was
higher by 16.9 per cent in FY19," said Shivendra Foujdar, Founder and Managing
Partner, Avighna Trades.
The year was marked by several issues starting from high crude oil prices, rupee
faltering to new record lows, liquidity crisis in the non-banking financial companies
(NBFC), US-China trade tensions, delay in Brexit breakthrough among others.

Amar Pandit, founder of HappynessFactory.in a wealth-tech platform said that the

market witnessed a correction in September-October after the NBFC crisis came to light
as IL&FS defaulted in September.

He noted that recapitalisation of state-run banks which were under stress was a major
boost for the markets.

Along with recapitalisation of PSBs, eventual easing of liquidity concerns, and a

sustained rise in foreign fund inflows also supported the market, according to
analysts.Expectations of the incumbent government coming back to power further
boosted the investor sentiments.

Increase in interest rates globally, however, was major concern for the Indian market
cited Mustafa Nadeem of Epic Research."The important factor that changed the overall
scenario in FY19 was the rising interest rates in global markets specifically that by the
Federal Reserve," Nadeem said.

"Hence the liquidity that was there available easily was being sucked out and capital
outflow was seen. So it was a year more of consolidation."

The inflow of domestic funds however made up for it, analysts said. Foujdar said: "Even
when Nifty was seen losing the benchmark of 10,000 points, the DIIs flow kept
supporting the market making Bank Nifty and IT rose close to 25 per cent during the just
concluded fiscal," he said.
Nifty50 and the Sensex even fared better than major global indices, Nasdaq (9.53 per
cent), S&P 500 (7.33 per cent), analysts said.

According to Vinod Nair, Head of Research, Geojit Financial Services: "The NPA
problem has reduced from 11.5 per cent in March 2018 to 10.8 per cent in September
2018, which is further expected to decline to 10.3 per cent in March 2019."

"This process is ongoing and will provide a real effect on the humongous size of stuck
project in India, which will result in a restart of private spending in the coming years. In a
nutshell, the domestic economy is likely to improve in FY20 compared to the FY19."

2) India's stock market is 7th biggest in the world with m-cap of $2.1 trn

Samie Modak - December 22, 2018 23:39 IST

India’s ranking has improved two notches in the league table of the world’s biggest
stock markets. Currently, India ranks seventh with a market cap of $2.1 trillion.
At the end of 2017, India was at the ninth position despite its market cap being $2.4
trillion. The domestic market has seen an erosion of $308 billion in investor wealth this
year.

While the Sensex is up 5 per cent on a year-to-date basis, a near 10 per cent
depreciation in the rupee against the dollar and a correction in the broader market have
led to the drop.

However, Germany and Canada have seen a sharper 18 per cent decline and currently
rank below India. All the countries in the top 10 have seen a decline in market value.

3) Five key factors that are likely to impact Indian equity markets in 2019
Swati Verma | December 21, 2018 11:01 IST

Calendar year 2018 (CY18) turned out to be an eventful year that saw the S&P BSE
Sensex and the Nifty50 react to the rise in oil prices, fall in rupee, rate hikes, trade war
fears, FII outflows, worsening macros (twin deficits – fiscal and current), confusion over
long-term capital gains tax among the Budget proposals and the IL&FS crisis.

On a year-to-date (YTD) basis, the S&P BSE Sensex and the Nifty50 have gained nearly
7per cent and 4 per cent, respectively. Analysts expect calendar year 2019 (CY19) to be
equally volatile for the markets with a host of global and domestic factors impacting the
sentiment.

Here is a quick look at the factors that will play a key role in how
the markets shape up in the next year.

Crude oil prices

Movement of crude oil prices will be one of the key determinants of the direction of
financial markets. It was a tale of two extremes for the oil prices during the year gone-by.
Threat of sanctions on Iran by the US and a possible cut by the OPEC saw Brent oil
prices oscillate in the range of $50 - $85 a barrel during the year.

Analysts say the decline in oil prices could extend and take the prices to as low
as $42 a barrel. This, they say, is on account of the markets shifting from being an
oversupply zone to a balanced one after OPEC’s decision to cut output by 1.2 million
barrels. “The medium-term bias still continues to remain negative as long as below $54-
55 range and the current decline could extend towards $44-42 levels,” wrote analysts at
Motilal Oswal in a recent report.

Rupee

The domestic currency came under heavy pressure during the year and slipped 10 per
cent in CY18 owing to a spurt in crude oil prices, strengthening of US dollar and selling
by foreign portfolio investors (FPIs). According to reports, FPIs have already withdrawn
nearly Rs 1 trillion so far in 2018.

“Key risks to the rupee comes from the government turning more populist ahead of the
2019 general elections which could worsen domestic fundamentals and a sharper-than-
expected domestic growth slowdown triggering equity outflows from the country,” said
Pritam Kumar Patnaik, head, Reliance Commodities.

General Elections

After facing a setback in the recently-concluded state assembly elections, it would be

interesting to see how the markets react to the outcome of the general elections
scheduled for May 2019. Most analysts believe that elections, at best, can trigger a
knee-jerk reaction in the markets. The long-term trajectory, however, will not be
impacted whatever the outcome is.

Credit Suisse in its recent report says: “General elections, going back two decades, have
had no visible impact on market direction. But the upcoming elections in Apr-May 2019
should keep noise levels high. Further, agriculture is likely to remain a source of distress
for 200 million workers for several years: this can cause political churn and also policy
experimentation (so more uncertainty).”

Economic indicators

Health of the economy as measured by inflation, trade data, fiscal and current account
deficits (CAD) and gross domestic product (GDP) numbers will also be key elements
that the markets will keep a tab on. Going forward, analysts say trade deficit could
moderate further if the recent decline in oil prices sustains. “Export growth is likely to
face headwinds in an environment of slowing global growth and escalating trade wars.
We expect the CAD to average 2.6 per cent of GDP in fiscal 2019, compared with 1.9
per cent of GDP in fiscal 2018, said a CRISIL report.

Other Global Cues

On the global front, investors will track the Brexit deal. The United Kingdom (UK) is
expected to leave the European Union (EU) on March 29. Though the event does not
impact India directly, it may, however, have a bearing on the global financial markets.
That apart, trade war tensions, global growth, policies of global central banks such as
the US Federal Reserve (US Fed), Bank of Japan, European Central Bank (ECB) and
the Reserve Bank of India (RBI) will play a key role.

4) An Introduction to the Indian Stock Market

BY MANOJ SINGH - May 17, 2019

Mark Twain once divided the world into two kinds of people: those who have
seen the famous Indian monument, the Taj Mahal, and those who haven't.
The same could be said about investors.
There are two kinds of investors: those who know about the investment
opportunities in India and those who don't. India may look like a small dot to
someone in the U.S., but upon closer inspection, you will find the same things
you would expect from any promising market.

Here we'll provide an overview of the Indian stock market and how interested
investors can gain exposure.

The BSE and NSE

Most of the trading in the Indian stock market takes place on its two stock
exchanges: the Bombay Stock Exchange (BSE) and the National Stock
Exchange (NSE). The BSE has been in existence since 1875. The NSE, on
the other hand, was founded in 1992 and started trading in 1994. However,
both exchanges follow the same trading mechanism, trading hours, settlement
process, etc. At the last count, the BSE had more than 5,000 listed firms,
whereas the rival NSE had about 1,600. Out of all the listed firms on the BSE,
only about 500 firms constitute more than 90% of its market capitalization; the
rest of the crowd consists of highly illiquid shares.

Almost all the significant firms of India are listed on both the exchanges. NSE
enjoys a dominant share in spot trading, with about 70% of the market share,
as of 2009, and almost a complete monopoly in derivatives trading, with about
a 98% share in this market, also as of 2009. Both exchanges compete for the
order flow that leads to reduced costs, market efficiency, and innovation. The
presence of arbitrageurs keeps the prices on the two stock exchanges within a
very tight range.

Trading Mechanism
Trading at both the exchanges takes place through an open electronic limit
order book in which order matching is done by the trading computer. There
are no market makers or specialists and the entire process is order-driven,
which means that market orders placed by investors are automatically
matched with the best limit orders. As a result, buyers and sellers remain
anonymous. The advantage of an order-driven market is that it brings
more transparency by displaying all buy and sell orders in the trading system.
However, in the absence of market makers, there is no guarantee that orders
will be executed.

All orders in the trading system need to be placed through brokers, many of
which provide an online trading facility to retail customers. Institutional
investors can also take advantage of the direct market access (DMA) option in
which they use trading terminals provided by brokers for placing orders
directly into the stock market trading system.

Settlement and Trading Hours

Equity spot markets follow a T+2 rolling settlement. This means that any trade
taking place on Monday gets settled by Wednesday. All trading on stock
exchanges takes place between 9:55 am and 3:30 pm, Indian Standard Time
(+ 5.5 hours GMT), Monday through Friday. Delivery of shares must be made
in dematerialized form, and each exchange has its own clearing house, which
assumes all settlement risk by serving as a central counterparty.

Market Indexes
The two prominent Indian market indexes are Sensex and Nifty. Sensex is the
oldest market index for equities; it includes shares of 30 firms listed on the
BSE, which represent about 45% of the index's free-float market capitalization.
It was created in 1986 and provides time series data from April 1979, onward.

Another index is the Standard and Poor's CNX Nifty; it includes 50 shares
listed on the NSE, which represent about 62% of its free-float market
capitalization. It was created in 1996 and provides time series data from July
1990, onward.

(To learn more about Indian stock exchanges, please go

to http://www.bseindia.com/ and http://www.nse-india.com/.)

Market Regulation
The overall responsibility of development, regulation, and supervision of the
stock market rests with the Securities and Exchange Board of India (SEBI),
which was formed in 1992 as an independent authority. Since then, SEBI has
consistently tried to lay down market rules in line with the best market
practices. It enjoys vast powers of imposing penalties on market participants,
in case of a breach.

(For more insight, see http://www.sebi.gov.in/.)

Who Can Invest In India?

India started permitting outside investments only in the 1990s. Foreign
investments are classified into two categories: foreign direct investment (FDI)
and foreign portfolio investment (FPI). All investments in which an investor
takes part in the day-to-day management and operations of the company are
treated as FDI, whereas investments in shares without any control over
management and operations are treated as FPI.

For making portfolio investment in India, one should be registered either as

a foreign institutional investor (FII) or as one of the sub-accounts of one of the
registered FIIs. Both registrations are granted by the market regulator, SEBI.
Foreign institutional investors mainly consist of mutual funds, pension funds,
endowments, sovereign wealth funds, insurance companies, banks, and asset
management companies. At present, India does not allow foreign individuals
to invest directly in its stock market. However, high-net-worth individuals
(those with a net worth of at least US$50 million) can be registered as sub-
accounts of an FII.
Foreign institutional investors and their sub-accounts can invest directly into
any of the stocks listed on any of the stock exchanges. Most portfolio
investments consist of investment in securities in the primary and secondary
markets, including shares, debentures, and warrants of companies listed or to
be listed on a recognized stock exchange in India. FIIs can also invest
in unlisted securities outside stock exchanges, subject to the approval of the
price by the Reserve Bank of India. Finally, they can invest in units of mutual
funds and derivatives traded on any stock exchange.

An FII registered as a debt-only FII can invest 100% of its investment into debt
instruments. Other FIIs must invest a minimum of 70% of their investments in
equity. The balance of 30% can be invested in debt. FIIs must use special
non-resident rupee bank accounts, in order to move money in and out of India.
The balances held in such an account can be fully repatriated.

Restrictions and Investment Ceilings

The government of India prescribes the FDI limit and different ceilings have
been prescribed for different sectors. Over a period of time, the government
has been progressively increasing the ceilings. FDI ceilings mostly fall in the
range of 26-100%.

By default, the maximum limit for portfolio investment in a particular listed firm
is decided by the FDI limit prescribed for the sector to which the firm belongs.
However, there are two additional restrictions on portfolio investment. First,
the aggregate limit of investment by all FIIs, inclusive of their sub-accounts in
any particular firm, has been fixed at 24% of the paid-up capital. However, the
same can be raised up to the sector cap, with the approval of the company's
boards and shareholders.

Secondly, investment by any single FII in any particular firm should not
exceed 10% of the paid-up capital of the company. Regulations permit a
separate 10% ceiling on investment for each of the sub-accounts of an FII, in
any particular firm. However, in the case of foreign corporations or individuals
investing as a sub-account, the same ceiling is only 5%. Regulations also
impose limits for investment in equity-based derivatives trading on stock
exchanges.

(For current restrictions and investment ceilings go to https://rbi.org.in/)

Investments for Foreign Entities

Foreign entities and individuals can gain exposure to Indian stocks through
institutional investors. Many India-focused mutual funds are becoming popular
among retail investors. Investments could also be made through some of
the offshore instruments, like participatory notes (PNs) and
depositary receipts, such as American depositary receipts (ADRs), global
depositary receipts (GDRs), and exchange-traded funds (ETFs)
and exchange-traded notes (ETNs).
As per Indian regulations, participatory notes representing underlying Indian
stocks can be issued offshore by FIIs, only to regulated entities. However,
even small investors can invest in American depositary receipts representing
the underlying stocks of some of the well-known Indian firms, listed on
the New York Stock Exchange and Nasdaq. ADRs are denominated in dollars
and subject to the regulations of the U.S. Securities and Exchange
Commission (SEC). Likewise, global depositary receipts are listed on
European stock exchanges. However, many promising Indian firms are not yet
using ADRs or GDRs to access offshore investors.

Retail investors also have the option of investing in ETFs and ETNs, based on
Indian stocks. India ETFs mostly make investments in indexes made up of
Indian stocks. Most of the stocks included in the index are the ones already
listed on NYSE and Nasdaq. As of 2009, the two most prominent ETFs based
on Indian stocks are the Wisdom-Tree India Earnings Fund (EPI) and
the PowerShares India Portfolio Fund (PIN). The most prominent ETN is the
MSCI India Index Exchange Traded Note (INP). Both ETFs and ETNs provide
a good investment opportunity for outside investors.

The Bottom Line

Emerging markets like India, are fast becoming engines for future growth.
Currently, only a very low percentage of the household savings of Indians are
invested in the domestic stock market, but with GDP growing at 7%-8%
annually and a stable financial market, we might see more money joining the
race. Maybe it's the right time for outside investors to seriously think about
joining the India bandwagon.

5) NSE barred from accessing securities market for 6 months

Colocation refers to traders being able to place servers in close proximity.

By
Reena Zachariah May 01, 2019, 03.57 PM IST

MUMBAI: The Securities and Exchange Board of India (Sebi) directed the
National Stock Exchange (NSE) to pay Rs 687 crore and barred it from
accessing the securities market for six months following investigations into the
colocation of servers that gave an unfair advantage to some traders.
The regulator also banned former NSE chief executives Ravi Narain and
Chitra Ramkrishna from associating with any listed company or stock
exchange for five years for their alleged role in the matter.
The regulator said high-profile academic Ajay Shah was also prohibited from
associating in any manner with any stock exchange, depository, market
intermediary or listed company for two years. It also barred stock broker OPG
Securities and its directors Sanjay Gupta and Sangeeta Gupta from accessing
the securities market for five years.
The case dates back to 2015, when a whistleblower wrote a letter to Sebi
alleging that NSE, India's largest stock exchange, gave preferential access to
a few high-frequency traders and brokers to the exchange's trading platform.
Sebi named the complainant as Ken Fong.
Colocation refers to traders being able to place servers in close proximity to
those of an exchange, thus giving them a time advantage that translates into
massive profits.

Along with interest, the penalty on NSE will likely add up to over Rs 1,000
crore. NSE's reserves and surplus as on March 2018 was Rs 7,225 crore.
Narain and Ramkrishna also have to return a fourth of their NSE salary for
FY2011-13 and FY14, in that order, corresponding to the years in which they
were in charge. All the money will go to Sebi's Investor Protection and
Education Fund (IPEF).

Ravi Varanasi, head of business development, and Suprabhat Lala, assistant

vice president, have been barred from holding any position with any stock
exchange for three and two years, respectively.
"I find that it is established beyond doubt that NSE has not exercised the
requisite due diligence while putting in place the TBT (tick-by-tick)
architecture," Sebi whole-time member G Mahalingam said in his 104-page
order. "The same created a trading environment in which the information
dissemination was asymmetric, which cannot be considered fair and
equitable."
Narain and Ramkrishna held the post of managing director and chief
executive officer (MD & CEO) of NSE in succession.
"Having held the senior-most management position in the NSE and being in
charge of the affairs of the conduct of the stock exchange business, they
cannot limit their roles to the non-technology issues of the exchange," Sebi
said. "The MD and CEO of a stock exchange cannot abdicate his/ her
responsibility by citing limited knowledge in certain spheres of the business
activities."
The regulator dropped allegations of fraudulent and unfair trade practices that
it had levelled against the exchange and its employees.
Responding to ET’s queries on the development, NSE CEO Vikram Limaye
said: "We will take appropriate legal advice on all these matters and then we
will take appropriate action."
On the exchange’s IPO plans he said: "They have said that we cannot access
the markets for six months. The IPO can't happen for six months, but after that
obviously the implication of this order is that they will not hold up the IPO. So it
is something that we will look into now that we have a final order. Till this point
in time, we have a letter from the Sebi that says that we cannot file a DRHP till
this matter is resolved."
Sebi passed five separate orders on the colocation case against the NSE,
OPG Securities, Ajay Shah, Sampark Infotainment and NSE’s corporate
governance on Tuesday.
NSE allegedly did not have defined policies and procedures with regard to
secondary server access, and the guidelines were not issued as a circular.

The regulator’s main allegation against NSE was that its tick-by-tick system
was prone to manipulation, which compromised market fairness and integrity.
It allegedly failed to put in place a ‘randomiser’ that have helped avoid misuse.
Sebi also said that NSE failed to implement a load balancer, which put
members who were on more crowded ports at a disadvantage and provided
an unfair advantage to those on less crowded ones.
"However, when a data-sharing agreement purely meant for research
purposes assumes the colour of a commercial agreement, thereby providing
privileged access to confidential and exclusive trade data of the exchange to a
select few persons who clandestinely exploit the said data for their commercial
gains, it leads to serious issues leading to compromise on market integrity,"
the regulator said.

6) Don't see much value in Indian stocks right now: Marc Faber

Puneet Wadhwa | New Delhi - April 10, 2019 01:38 IST

With the frontline Indian benchmark indices trading near all-time highs ahead of
the general elections that begin later this week, Marc Faber, Editor and Publisher of
“The Gloom, Boom & Doom Report” tells Puneet Wadhwa that the Indian stock
market is relatively expensive, especially the index (large-cap) stocks. Foreign investors,
he says, would like to Narendra Modi get re-elected. Edited excerpts:

What is your view on India as an investment destination ahead of the general

elections?

I think Prime Minister Narendra Modi will be re-elected. Economy-wise, that will be
favourable. As an investor, I feel Modi has done well during his tenure. That said, some
mistakes have happened like the demonetisation / cash ban. Though Modi implemented
it, it may originally not have been his idea and someone may have suggested it to him.
As a foreigner who has been visiting India since 1973, I have to say in the last few years,
there is a visible improvement in the Indian infrastructure and attitude of people, who
have become much more commercial. We foreigners would like to see him get re-
elected.

What if he doesn’t come back to power? Will you view India differently then?

Well, there may then be a different kind of quibbling in Congress and investment
decisions may get postponed. If he is re-elected and has a relatively strong mandate,
things will be viewed differently. Foreigners look at stability in stock market, bond and
foreign exchange market before taking an investment call. How the political scenario
plays out is a different ball-game. We have seen this in the United States (US). There
are a lot of things going on behind the scenes, which we don’t know about.

How do you view India’s macro-economic situation?

We have to look at India relative to the rest of the world. There is practically no growth in
Europe and Japan. Though the US economy is growing modestly, there is a huge build-
up in government debt that is nearing $1 trillion a year. The US and Chinese economies
are likely to slow going ahead. India, on the other hand, is a big economy where some
sectors are growing and some are contracting. If I have to choose between India and the
US for investment, I will definitely invest in India. That said, the Indian stock market is
relatively expensive, especially the index (large-cap) stocks. There are
companies, Nestle for instance, which are trading at a very high valuation. I don’t see
much value in Indian stocks right now. Over the long term, however, India is an
interesting story, provide there is peace and the whole world does not collapse.

Will you invest in Indian equities if Modi comes back to power?

I am not too interested at present in Indian equities. As I said, the stocks are quite
expensive. India is a big country and I am sure there are some mid-or small companies
that can grow rapidly over time. So, if you look at the larger picture, the high price-to-
earnings may be justified, but overall the index per se is not very attractive.

What do you expect from the new government in terms of policy action over the
next five years?

The largest footprint of the Modi government has been infrastructure spending, which I
think is very important. This is one thing the new government must carry out. If re-
elected, Modi will carry this out more smoothly and speedily. The other parties, however,
have been talking about increasing the minimum wage. Is this measure going to be
helpful, and if so, who will pay for it? Who knows!

Globally, which markets are you investing in now?

I always prefer a diversified portfolio and look at which markets are inexpensive. As
compared to the rest of the world, the US markets seem expensive. What strikes me is
that the news has been very negative about Europe as well.

Globally, we have over $10 trillion worth of bonds that have a negative yield. So, if there
is a negative yield on the 10-year bond and one can find a company that is growing
reasonably well, pays a dividend of 5 per cent, then such a company’s stock is more
attractive than the bonds. However, some insurance companies and pension funds do
buy bonds with negative interest rate.

This is the first time in my life that I own European stocks in my portfolio. I have owned
them now for almost two – three years now. Another reason to hold them are the large
oil companies in Europe – Total, Royal Dutch Shell, British Petroleum and ENI in Italy. I
am not in love with these companies, but it is okay to hold them in my portfolio. The
dividend yield from these stocks is around 5 per cent, which is good. I also hold
insurance companies in Europe, which also have a dividend yield of 4 – 5 per cent. I
also own REITS (Real Estate Investment Trusts) in Singapore, which also have a yield
of around 6 per cent.

Can the US head into a recession over the next 12 – 18 months?

I believe the next move by the US Federal Reserve (US Fed) will be to lower rates. If
that happens, the Singapore REITS will still do okay. The US economic growth has been
decelerating. Home sales are still far below their 2007 levels; consumption is not very
strong and car sales are down. Real estate market in the US, Canada and Australia is
weakening. In some cases, real estate prices are down nearly 10 per cent.

In India, too, I understand the real estate market has been relatively weak. The biggest
investment of most households is in the property market. While the stock market
indicators suggest that all is well with the economy, the strong bond markets suggest
otherwise.

Though the US economy can slip into recession, there is a political aspect to it as well.
Donald Trump is determined to get re-elected in 2020. He will do whatever it takes to get
back to power. And for that, he needs to have a relatively good economy. Therefore,
the US Fed may print money going ahead.

How big a threat is Brexit to the stability in global financial markets?

Brexit is an irrelevant issue. British economy is very small in the context of the world
economy, especially the industrial production. Brexit or no Brexit, it doesn’t matter to the
world. What matters is the huge global debt we have, the outlook for global interest rates
and how the inflation will play out. As of now, there is very little inflation in the system.

Oil prices are nearing $70 a barrel again. How high can we go from here?

Since we have a problem in Libya, oil prices could continue to go up in the near term.
The hardliners in the US would like to have a war with Iran. This again is a political
issue. Economically speaking, the oil prices would rather come down simply because the
global economy is weakening. Also, oil conservation of oil and alternate energy sources
have increased over time. Ideally, oil prices should trade between $40 – 60 a barrel.

7) MARKET LIVE: Indices at day's low; Sensex down 500 pts, Nifty tests 11,450

SI Reporter - September 25, 2019 13:46 IST

Indian equity markets turned volatile in the afternoon deals on Wednesday, taking cues from
Asian peers.

Asian stocks fell on Wednesday after US lawmakers called for an impeachment inquiry into
President Donald Trump, increasing the prospects of prolonged political uncertainty in the world’s
largest economy.

The benchmark S&P BSE Sensex declined nearly 500 points, or 1.3 per cent, to rule
at 38,594 level. On NSE, the broader Nifty50, too, slipped below 11,550 mark to trade at 11,445,
down 143 points or 1.24 per cent.

Sectorally, all the indices, except IT index, were trading in the red. Nifty PSU bank index dipped
the most, down nearly 2 per cent, followed by Nifty auto, bank and financial services indices,
down in the range of 1.3 - 1.5per cent.

In the broader market, the S&P BSE Mid-cap dipped 1.34 per cent, while the S&P BSE Small-
cap declined 0.82 per cent.
BUZZING STOCKS

Shares of IndiaMART InterMESH continued their dream run at the bourses and hit a new high on
the BSE on Wednesday in an otherwise weak market. The shares now trade at more than double
the value of its issue price. The stock of India's largest online business-to-business marketplace
was trading 6 per cent higher at Rs 1,971, extending its previous day’s 10 per cent rally on the
BSE.

Shares of Balrampur Chini Mills (BCML) were trading at nearly two-year high of Rs 174, up 3 per
cent, on the BSE on Wednesday on expectations of improved operating performance. In
comparison, the S&P BSE Sensex was down 1 per cent or 389 points at 11:00 am.

8) India’s Trump-Style Tax Cut Won’t Fix the Economy

Corporate tax cuts are good news for the equity market, but don’t address the issues
that have left India with its slowest growth in years

By Mike Bird - Sept. 23, 2019 6:35 am ET

Indian Prime Minister Narendra Modi and President Trump took to the stage together in Texas on
Sunday. At home, Mr. Modi’s finance ministry is taking a leaf out of the Trump playbook with a
headline-grabbing tax cut for companies.

The move could goose the Indian equity market, but won’t begin to remedy what ails the broader
economy.
India taxes companies far too highly. At 48.3%, its total corporate income-tax rate was the
highest among 74 countries ranked by the Organization for Economic Cooperation and
Development in 2018.
Burdened in BharatIndia's taxes on businesses are some of thehighest in the world.Corporate
income-tax rate, selectedcountriesSource: OECD
IndiaFranceBrazilSouth AfricaChinaJapanU.S.RussiaU.K.0%1020304050
The Indian government on Friday proposed reducing the headline corporate tax rate to 22% from
30%, effective from the start of the current tax year in April. The cut is likely to boost the earnings
growth of companies in the MSCI India index by around 6 percentage points this calendar year
and next, according to Goldman Sachs analysts. The sectors that will benefit the most are raw
materials, financials and industrials, which currently have the highest effective tax rates.
Foreign funds have pared down their holdings of Indian shares since 2014-15, when a burst of
optimism about reform drove portfolio managers into the country’s stock market. The tax cut
provides an opportunity for them to rebuild their allocations, but caution is warranted.
Indian stocks aren’t cheap. Even before rising around 8% on Friday and Monday, the country’s
equities fetched more than 18 times expected earnings over the next year, expensive by
historical standards.
And the upside for the broader economy is more limited than it is for corporate earnings. Growth
slipped to just 5% in the last quarter compared with a year earlier, the lowest of Mr. Modi’s
tenure. The country’s expansion has been squeezed by a successful crackdown on nonbank
financing and an uncomfortably large pile of bad debts.
Attempts to make land easier to acquire, and staff to hire and fire, have proved unpopular and hit
roadblocks. The implementation of a nationwide Goods and Services Tax to replace a web of
varied state-level charges was beset by glitches. Amid such problems, the government seems to
have lost what zeal it had for the kind of big-ticket reforms needed to unlock India’s growth
potential in the longer term.
The finance ministry last week asked banks not to designate loans to micro- to medium-size
businesses as nonperforming assets, even when they have been in arrears for 90 days, until
March 2020. The country’s nonperforming loan ratio has dipped from its 2018 high of almost
11%, but at around 9%, it remains too high for comfort. Banks were also asked to organize loan
melas—public gatherings between customers and banks to encourage more lending.
There is no point in India cracking down on shadow banking only to encourage regular banks to
rack up problem loans.
Investors should enjoy the tax cut. But without fresh reform impetus, and paired with some
uncomfortable signs of backpedaling on private-sector debt, it won’t shift the needle very far
when it comes to India’s growth trajectory.

9) India’s stock market skyrockets the most in 10 years

after surprise tax cut
BY FRED IMBERT - F RI , S E P 20 201 9 – 11 :39 AM

Indian stocks surged overnight Friday after the country’s government announced a big cut to
India’s corporate tax rate.

The India S&P BSE Sensex index jumped 5.3% to notch its biggest one-day gain since May 5,
2009. That day, the index soared 17.3%. The U.S.-listed iShares MSCI India ETF (INDA) gained
about 5.3%, its best day since Sept. 4, 2013, when it popped 5.5%.

Corporations in India will now be taxed at an effective rate of 25.17%, Indian Finance Minister
Nirmala Sitharaman said Friday. That’s down from an effective tax rate of 30%.

The lower corporate tax rate comes as the Indian government tries to reignite India’s economy.
India’s GDP growth rate has fallen for six straight quarters through the first half of 2019. At the
end of the first quarter of 2018, the Indian economy was growing at an 8.1% rate. That growth
rate has since fallen to 5% through the second quarter of this year.

“It was becoming evident that counter-cyclical policy responses may need to become more
aggressive, but expectations were centered on monetary policy to do the heavy lifting,” Kaushik
Das, chief economist at Deutsche Bank, said in a note. “Very few expected any fiscal
stimulus.”
“This is a big bang reform, for which corporate India has been waiting a long time and we expect
it will raise the animal spirits in the economy,” Das said.

Indian stocks have lagged the broader emerging markets this year. The Sensex is up 5.4% in
2019, while the iShares MSCI Emerging Markets ETF (EEM) has gained about 7% in that time.
“The tax cuts will undoubtedly boost sentiment, and that is likely to have a growth-enhancing
impact,” Sajjid Chinoy, chief India economist at J.P. Morgan, wrote in a note. “However, how
much investment firms will undertake in response to the tax cut remains to be seen, especially
given weak demand conditions.”

— CNBC’s Michael Bloom contributed to this report.

Correction: This article has been updated to reflect Reuters’ correction on the new effective tax rate for
Indian companies.

9) Global Investors Rethink India Stocks on Historic Tax

Boost
Bloomberg - September 24, 2019, 6:23 AM GMT+5:30

India’s Prime Minister Narendra Modi’s $20 billion tax-cut stimulus might
just be enough to entice global investors to at least retain, if not increase,
their holdings in the nation’s equities.

Just as foreign funds started unwinding the $45 billion investment they
made in India’s stock market over the past six years, Modi’s administration
on Friday unexpectedly slashed the corporate tax rate on domestic
companies to 22% from 30% to boost slowing economic growth and aid
company earnings. The S&P BSE Sensex Index swung between gains and
losses on Tuesday, after climbing 8.3% in the previous two sessions.

Overseas investors bought $461 million worth of shares over the last two
days, with purchases on Tuesday the highest in two months. Still, the $5
billion of local stocks they sold this quarter through Sept. 19 would be the
biggest quarterly outflow since 1999, according to data compiled by
Bloomberg.

“The tax cut can improve investor sentiment given the selling by foreigners
in the past few months and high cash positions in domestic funds,”
Prashant Bhayani, chief investment officer for Asia at BNP Paribas Wealth
Management, wrote in a note on Monday. “We would accumulate positions
in India over time and look to build an allocation,” his note added.
United Overseas Bank Ltd.’s private banking arm’s Chief Investment
Officer Teng Hwee Neo has turned “more positive on Indian equities
following India’s corporate tax cuts,” he said. “The tax cuts could stimulate
more corporate investments into India,“ he added.

Fund managers in BNP Paribas SA’s asset management arm and Australia-
based Northcape Capital Ltd. have also reaffirmed a positive stance toward
Indian equities, while brokers including Goldman Sachs Group Inc., Morgan
Stanley and UBS Group AG have raised their targets for the key stock gauges
after the government slashed the tax rate.
Analysts have wasted no time boosting earnings estimates for India’s key
stock index after the surprise announcement on Friday. Estimates for the
gauge have jumped more than 9% since then, according to data compiled by
Bloomberg.
To be sure, Nick Payne, head of global emerging markets at Merian Global
Investors (U.K.) Ltd. said that “the test in the coming months will be to see
if corporates share some of the profitability boost into the economy in the
form of greater investment or price cuts on products to stimulate demand.”

Payne expects the government to follow up tax cuts with “further

stimulative measures,“ especially ones that will improve the ease of doing
business and reduce corruption in Asia’s third-biggest economy.

Investors are also awaiting the outcome of the upcoming high-level U.S.-
China trade talks and the Indian government’s second-half borrowing plan
due later in the day.

Pictet Asset Management Ltd., which is raising its exposure to India stocks,
expects other foreign funds to do the same, said Prashant Kothari, London-
based portfolio manager at the firm.

BNP Paribas Wealth’s Bhayani said that the tax break is the first significant
policy initiative since Modi’s re-election and the country’s stock valuations
have become attractive after a recent sell-off.

Tax cuts will help to “put a floor after the recent sell-off in equity markets,”
Bhayani said.

10) 5 graphs show why the $220-bn Indian stock market

rally may be overheating
Bloomberg - March 25, 2019 09:55 IST

Just a few weeks ago, Indian stocks suffered from their worst run of losses in almost
eight years, diverging from their broader Asian and emerging-market peers. Election
uncertainty, rising oil prices and tensions over Kashmir were blamed.

Fast forward to now and the S&P BSE Sensex Index has rebounded 8 percent, with the
once-stacked wall of worry taking second place in investors’ minds. The gauge has gone
from being one of the worst in Asia last month to the best, as the market has regained
almost $220 billion since a low in February. Foreign investors came flooding back, with
more than $3.8 billion of inflows in March alone -- set to be the most in two years.

Is this too fast too soon? Perhaps. After an eight-day rally -- its longest winning streak
since July -- the Sensex slipped 0.6 percent on Friday.
“While some of the domestic/global uncertainties may have abated, one still needs to be
watchful,” Citigroup Inc. analyst Surendra Goyal wrote in a report published March 20.
An index by the firm that tracks sentiment suggests a neutral stance, the note said.

The upcoming elections have also kept some at bay. The world’s biggest democracy is
about to begin six weeks of voting that will decide whether Prime Minister Narendra Modi
wins a second term, with the final results due on May 23.

“We have to wait until the election is over,” said JPMorgan Asset Management Chief
Market Strategist Tai Hui at a press briefing in Hong Kong on March 21. “The election
results can swing the market quite violently. I’m quite happy to sacrifice a little bit and
move into India when the results are out.”

Here’s why some market watchers are skeptical in the short term:

The market has been in overbought territory for the past eight days, signaling the gains
might have come too quickly to hold. The last time the Sensex hit such levels last
August, it plunged some 14 percent in less than two months.
Another sign that the nation’s equity surge could be reaching its tipping point is that the

index is now around 5 percent above its 50-day moving average. The last two times the
divergence reached such levels -- in the summer and at the beginning of last year -- the
market slumped.

Greed dominates India’s stock market now more than any time since 2009, according to
a Bloomberg indicator. The so-called fear-greed index on the weekly chart for the
Sensex shows pessimism has turned into bullishness in less than half a year. Extremes
in both trading impulses rarely last long, and this exuberance may give traders reason
for caution.
Indian equities aren’t cheap. Despite the weakness earlier this year, they’re still trading
above their five-year average. Relative to emerging-market peers, their valuation is more
than 50 percent higher.

But, maybe, in the longer term, there’s something to get bullish about:

Fundamentals of corporate India are improving. Analysts’ average profit estimate for
Sensex companies in the next year has jumped to a record high -- not just in rupee
terms, but also in U.S. dollars. When volatility driven by politics settles, the earnings
picture may provide support for gains in the Indian market.
11) Nifty is a mirage! 75% of NSE stocks below 200 DMAs.
What does it mean?
By Rahul Oberoi

, ETMarkets.com|
Jun 21, 2019, 04.45 PM IST

While the domestic equity market is looking intact optically at the benchmark level, a selloff below the surface has
nudged 75 per cent of the NSE-listed stocks below their 200-day moving averages; meaning they have entered a
bearish phase.

The 50-share Nifty is up over 7 per cent this year at 11,691 till June 19, while Nifty Midcap100 and Nifty
Smallcap250 indices have declined up to 5 per cent in the same period.

On Friday, as much as 42 per cent of Nifty components traded below their 200-day moving averages (DMAs).
The list included Britannia IndustriesNSE -1.96 %, CiplaNSE -3.22 %, Eicher Motors, Gail India, Hindalco, Hero
MotoCorp, Indiabulls Housing Finance, ITC, YES Bank, Tech Mahindra, Tata Steel and Tata Motors.

On Friday, as much as 42 per cent of Nifty components traded below their 200-day moving averages (DMAs).
The list included Britannia IndustriesNSE -1.96 %, CiplaNSE -3.22 %, Eicher Motors, Gail India, Hindalco, Hero
MotoCorp, Indiabulls Housing Finance, ITC, YES Bank, Tech Mahindra, Tata Steel and Tata Motors.

“A stock trading below 200 DMA means it is in the corrective zone. The benchmark index looks well placed
currently, but individual stocks have been beaten down badly. Ideally, one should focus on stocks that are
sustaining above their 50-DMAs,” said Vaishali Parekh, Senior Technical Analyst at Prabhudas Lilladher.

“I do not see Nifty going down below 11,550,” she said, adding that market participants can consider pharma and
capital goods stocks at this point.

Even in the Nifty500 pack, 60 per cent or 300 stocks are trading below 200-DMAs in clear signs of selling
pressure across sectors.
Stocks trading below this crucial support line included 3M India, ACC, Adani Green, Avenue Supermarts, Bank of
Baroda, Deepak Fertilisers, Crisil, Cochin Shipyard, ICICI Securities, Jaiprakash Associates, Jain Irrigation,
among others.

Moving averages (MA) are a tool for analysing trend in a stock or an index. They provide useful information on
support and resistance levels.

Usually, a trader or investor uses three major MAs, that of 50, 100 and 200 days. When a stock trades above all
the DMAs, it is considered a continuous uptrend.

During corrective moves, stocks often come off their highs and slip below moving averages. Shallow corrections
see stocks test 50-DMAs or 100-DMAs, while serious corrections may cause a stock slip below 200-DMA.
The 200-day average, also known as a long-term moving average, acts as a crucial support for an index or a
stock, while the 100-day average reflects a six-month timeframe and the 50-day average measures a quarter.
The 20-day average measures a month and 10-day average two weeks.

On Thursday, stocks like Wipro, Voltas, UPL, Va Tech Wabag, Symphony, Sunteck Realty, SRF and Sonata
Software traded above their 200-DMA, while SAIL, Sterling Tools, Tata Chemicals, Tata Motors, Videocon
Indust ..
Around 300 stocks, including Aarti Industries, DCM Shriram, BPCL, Bata India, Info Edge, Infosys, Inox Leisure,
HDFC, Redington and PNC Infratech, were above all the three DMAs, signalling a bullish trend.

“Available data clearly shows the market has begun a sideways secondary trend after a long primary uptrend. In
the secondary phase, the market first consolidates and takes a fresh call either on the upside or downside
depending on the technical setup at that point of time. PSE and infrastructure stocks, including L&T and NCC,
should remain resilient in the coming days,” said Milan Vaishnav, Technical Analyst, Gemstone Equity Research
and Advisory.

Sameet Chavan, Chief Analyst for Technicals and Derivatives at Angel Broking, said the primary uptrend is
expected to resume soon.

“However till then traders are advised to keep positions light and avoid bottom fishing in stocks that have run into
the abyss through this volatile period,” Chavan said.