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Sensex, Nifty may decline mid-week: Weekly closing report

Nifty will be in a downtrend if closes below 6,400

 

The Indian market broke the three weeks of positive closing. The BSE 30-share Sensex closed the week that ended on 14th March, at 21,809.80 (down 110 points or 0.50%), while the NSE’s 50-share Nifty closed at 6,504.20 (down 22 points or 0.34%) for the week.

 

On Monday, the uptrend on the benchmark paused on weak global data. The Nifty closed at its all time high of 6,537 (up 11 points or 0.16%). China’s exports in February fell 18.1% from a year earlier while the imports rose 10.1%, yielding a trade deficit of $23 billion ($25.4 billion) for the month versus a surplus of $32 billion in January and the inflation rate was 2% for February. On the other hand, Japan's economy expanded less than estimated in the fourth quarter and the current-account deficit widened to a record in January 2014.

 

On Tuesday, the market snapped the five days of upmove by closing in the negative. Nifty closed at 6,512 (down 25 points or 0.39%). The Indian government unveiled the trade data for February 2014. India's trade deficit narrowed to $8.13 billion in February 2014, from $14.12 billion in February 2013. Total imports declined 17.09% year-on-year in February 2014. Merchandise exports fell 3.67% year-on-year. The trade deficit for the 11-month period April 2013 to February 2014 narrowed to $128.08 billion, from $179.92 billion during the period from April 2012 to February 2013.

 

Against the negative closing of the US indices on Tuesday and the Asian indices on Wednesday, benchmarks back home managed to stay in the positive. Nifty closed at 6,517 (up 5 points or 0.08%) on Wednesday. In US, the Labor Department said that employers posted 3.9 million job openings in January, up 1.5% from December; however, the increase fell short of what the market was expecting.

 

The indices were pulled lower on Thursday on the negative performance of the software stocks. Infosys warned that its March quarter earnings will come at the lower end of guidance. However, the improved economic data (index of industrial production and inflation based on the consumer price index) helped reduce the weakness. Nifty closed at 6,493 (down 24 points or 0.37%).

 

Back home, the inflation based on the wholesale price index (WPI) eased to 4.68% in February 2014, lower-than-expected nine-month low. On the other hand, the weak economic data from China on Thursday made at least four investment banks lowering forecasts for China's 2014 economic expansion which affected market sentiments. Nifty closed at 6,504 (up 11 points or 0.17%).

 

The economy can grow an annual 5.2% in the quarter to end-March on higher farm output growth, the chairman of the Prime Minister's Economic Advisory Council said on Friday. C Rangarajan also said he foresees the economic growth to pick up to 5.5% to 6% in the fiscal year that begins on 1 April 2014.

 

For the week, among the other indices on the NSE, the top two performers were Realty (2%) and Infrastructure (1%) while the worst two performers were IT (6%) and Metal (4%).

 

Among the Nifty stocks, the top five stocks for the week were IDFC (9%); BPCL (6%); Kotak Mahindra Bank (6%); Hero MotoCorp (6%) and IndusInd Bank (5%) while the top five losers were Infosys (9%); Sesa Sterlite (8%); Tata Steel (8%); Hindalco Industries (8%) and Ranbaxy Laboratories (7%).

 

Of the 1,411 companies on the NSE, 578 companies closed in the green, 792 companies closed in the red while 41 companies closed flat.

 

Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors for this week were:

 

ML Top sector

 

ML Worst sector

 

Sugar

5%

Software & IT Services

-5%

Real Estate

3%

Steel

-5%

Con_EPC_Infra

3%

Non-Ferrous Metals

-5%

Chemicals

2%

Farm & Farm Inputs

-2%

Refineries

2%

Textiles

-2%

 

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The best way to invest in stocks & bonds

At a Moneylife event, where all the seats were booked, Debashis Basu, explained in detail all the things that a saver needs to know about how and when to invest in stocks and bonds

 

With the BSE Sensex near its all-time high, and with bonds yields currently above 8.50%, is it the right time to buy stocks and bonds? At a Moneylife event titled, ‘Get the Price, Value and Timing Right!’, Debashis Basu, editor and publisher of Moneylife, explained all that a saver needs to know about how and when to invest using a methodical approach.


In the first part of the session, Mr Basu captivated the audience by explaining how over the past few decades scientists have made stunning discoveries about the way the human mind decides about risks, rewards and chances of win or loss. “They have found that our brain is not consistent, efficient and a logical device we think it is,” he explained. He further elaborated on how these discoveries make us aware of our behavioural biases and become better investors.


As the markets were moving sideways for most past of the last three to four years, fund houses have been constantly pushing debt funds as safe products. However, as Moneylife has pointed out many times in the past and reemphasised in the section on when to buy bonds and bond funds, the returns from debt funds can be volatile and low. When comparing the returns to fixed deposits, debt funds may not always be a better option even post-tax. How the returns from debt can be better by having a sense of timing. Mr Basu explained how one could time their bond investments by analysing bond yields.


Many investors seek, and blindly follow, tips and advice that are freely available. Most do not follow the process or have the discipline to cross-check the facts and invest with conviction. An average investor has generally no clue about what he is buying or selling. In an exclusive session on stock, Mr Basu explained how to pick the right stocks at the right time and exit profitably. During the course of the session, he explained different valuation metrics, like the cash value dividend yield, enterprise value multiple, etc to pick stocks. By giving historical evidence, Mr Basu showed how investors could time their buying and selling using different metrics.


The session included a lively interaction where Mr Basu not only answered the query of participants but also gave them information on different books and websites which the participants could read up on and hone their investing skills. The participants were also given an exclusive preview of Moneylife’s path-breaking new service that will equip savers with a select list of products and timely information they need. The participants of this event also received an exclusive discount for subscribing to this new service.


Smart saving and smart investing is all about buying the right product at the right time. If you missed out on this event, not to worry, Moneylife will be conducting many more sessions such as this in future. Keep yourself updated on such events and new services, click here to become a Moneylife member.
 

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COMMENTS

pravsemilo

3 years ago

Can these sessions be made available online - paid if required? It is not feasible for non-Mumbai people to attend.

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