The big market downtrend and inflation slowdown!

Delivering surprises are but humdrum affairs for both the indices of the Indian bourses. A positive sentiment pervaded across the Indian market when the sensex crossed the 20,000 mark. And then, it declined 2.14 percent to end at 19,691.67 today. The Nifty exhibited a similar downtrend, falling 2.08 percent to end at 5,980.45.

The biggest loser was ITC Ltd. that slumped by 5.2 percent on profit booking. Amid other major losers is TCS, falling by 2.6 percent on continued apprehension about a US immigration bill. It was indeed a panicky situation for investors and stock brokers alike.

Meanwhile, another breaking market news is CPI data or India's annual consumer price inflation slowing to 9.39 percent for the second straight month in April. While food prices mounted an annual 10.61 percent in April against 10.61 percent in March, consumer prices went up 10.39 percent in March. Inflation recorded in April eased to 5.50 percent, its lowest level since November 2009.

Significant plunge for Sensex and Infosys today!

Indices of the Indian bourses slumping and gaining are humdrum affairs. But when the plunge happens significantly, concerns are raised. The Sensex slumped to its lowest close in seven months following Infosys q4 results beating market estimates. Revenue guidance provided by the country’s second largest IT service provider failed to meet expectations with lower-than-expected revenue. It recorded a 3.4 percent rise in quarterly profit, achieving Rs 40,352 crore against a projected Rs 40,746 crore in revenues besides not achieving the 10 percent projected target.

While Sensex provisionally plunged 300 points to 1.7 percent at 18,242.56, Infosys Ltd NSE shares fell 22.1 percent. It was only during the last two sessions that the index gained 316 points. Though consumer price inflation data and industrial production exhibited better-than-expected figures yet market sentiments were hurt. For sensex, the fall was the biggest since September 13; for Infosys, it was the biggest plunge since April 4, 2003.

The Rising Inflation Phenomenon!

It is no big surprise for inflation to go high. India February inflation data well justifies the fact. The Feb WPI (main inflation indicator) went up to an annual 6.84 percent, which is higher by 0.30 percent of what analysts estimated. It was 6.62 percent in January. Non-food inflation slowed to 3.8 percent during the same period. February Inflation data report surged the otherwise falling India Stock market.

To add to this economic disadvantage is incessant weakness in economic activities. The situation has generated hopes amongst analysts about a possible rate cut by the RBI by at least 25 basis points in the meeting scheduled on Tuesday, March 19.

It was in January that the RBI had cut its key lending rate by 25 basis points after a gap of 9 months. A rate cut would only help handling the crisis. With the govt all geared up to reduce the country’s fiscal deficit, more RBI rate cuts are probable in the forthcoming months.

Nifty and Sensex showed improvement after the Feb WPI report came and the main contributors were banking stocks!

Sensex and Nifty Performance in the New Year

It is the beginning of a New Year and investors have great hopes from the year 2013. A positive market upbeat prevailed with both the indices of the Indian bourses, i.e. the Sensex and nifty trending for the third day at a stretch. Thanks to hopes of a rate cut by the RBI later this month plus better than expected quarterly earnings, and US ‘fiscal cliff’ negotiations (problems getting postponed, not solved) benefiting global markets.

As projected by market analysts, the year 2013 would no wonder be full of surprises. The year 2012 saw a 25.7 percent gain in the benchmark index. It is to wait and watch! And you never know what the markets have in store. Amid volatility if the sensex and Nifty are trending today, a downtrend is certain soon. Unless government measures are implemented and interest rates paraphernalia be resolved by the central bank, economical growth would be a far fetched affair.

Sensex Hits 19K mark - Thanks to Government Reforms!

Market analysts and investors are all cheers; thanks to the rising sensex and nifty at a hypersonic pace. It is all because of implementation of reforms that has seen the sensex and nifty recovering fast. If such an uptrend pace prevails, in no time will markets regain the highest points ever gained months ago. Hopes of additional fiscal and economic reforms by the government have set the ball rolling.

 

To add to the upbeat market trend is the rupee hitting the five and half month high. This is again a result of possible announcement by the government of reforms measures. Opening the pension sector to foreign investors and raising cap on foreign direct investment in insurance firms are the boosting factors. These bills are all set to be approved by the Cabinet. And once they are approved, further rise of the rupee, sensex, and the nifty is expected. Hope to see some more reforms introduced in the near future by the government to revive the falling economy of India Inc.

Biggest stock market rise since July 2011

It is a big surprise for investors of the Indian stock market with both the indices of the Indian bourses exhibiting the highest figures since July 2011 besides gaining for the eighth consecutive session. While nifty advanced 142 points to 5,578, sensex rose 443 points to close at 18,464.27 (September 14).

Several factors triggered the rise, the immediate effect being generated by the diesel price hike by the UPA government. Another major contributor was the monetary stimulus (new asset purchase program) of the Federal Reserve; its decision to launch a third round of quantitative easing (Q3) not only boosted Indian market sentiments but also worldwide.

Besides, to curb inflation, the Reserve Bank is expected to leave interest rates on hold. Due to deficient monsoon, food prices rose high this year, which further added to the inflation of 7.55 percent in August 2012.    

Amongst the biggest gainers in blue chip stocks were Reliance Industries and ICICI Bank.