Economic indicators, corporate earnings will drive the market this week
The market is likely to see a positive opening on the back of positive global cues and ahead of the April-June corporate earnings seasons, which kicks off this week. However, key economic indicators will also be instrumental in giving direction to the market.
On the global front, Wall Street witnessed a positive close on Friday, making it the best weekly closing in the year. The Dow gained 59.04 points (0.58%) to 10,198.03. The S&P 500 gained 7.71 points (0.72%) to 1,077.96. The Nasdaq gained 21.05 points (0.97%) to 2,196.45. All major indices rallied around 5% for the week.
Markets in Asia have opened in the positive zone this morning. Key indices like the Shanghai Composite, Hang Seng, Nikkei 225 and Straits Times are trading with gains in the range of 0.31% to 0.48%. The SGX Nifty is trading 16 points higher at 5,369 (0.30%).
Back home, investors will keenly watch the Index of Industrial Production (IIP) data to be announced later in the day. IIP for the month of April grew 17.6% as against 13.5% in previous month led by growth across all the sectors. However, while the data for May is expected to be marginally lower, it will be in double digits though, indicating that the economic recovery is on track.
Besides, the wholesale price based (WPI) inflation for June will be announced by the government on 14th July. The inflation figures are expected to touch 11% following a hike in fuel prices by the Centre late last month.
The first quarterly corporate earnings seasons kicks off this week, with IT strongman Infosys will announce its results on Tuesday (13th July). Estimates indicate that the numbers would be slightly lower. On the whole, the earnings are expected to be in line with market expectations.
Street vendors across Mumbai are selling 32GB and 64GB USB flash drives dirt cheap. Are these flash drives genuine and do they have the capacity claimed in the package?
Lately, there has been an upsurge in the number of vendors selling 32GB and 64GB USB flash/pen drives near railway stations in Mumbai. Since they sell it for as low as Rs150 to Rs300, many a time, people, including IT professionals, tend to buy it. However, most of these pen drives are fake. Genuine, standard and branded 2GB flash drives cost Rs300, 4GB Rs400 while 16GB flash drives are available for over Rs1,400.
There are two points, you must consider before even thinking about buying a pen/flash drive from a street vendor. One, why would anyone sell it for such a low price, and what about its warranty? Second, it is not easy to test the quality and capacity of these products, especially when you're in a crowded street. Here are some points to identify these fake USB flash drives.
1. Mostly, the fake USB flash drives on sale in Mumbai are supposed to be manufactured by JetFlash. However, JetFlash has a separate mechanism to label its flash drives according to its size. Genuine flash drives from JetFlash is marked with different colours (see the image). In the accompanying image, the USB flash drive with 1GB capacity is marked with a light blue strip while the 2GB drive is marked in orange. Similarly, 4GB, 8GB and 16GB flash drives are marked in green, violet and pink, respectively. The fake flash drives sold near railway stations often carry a green strip, meaning their real capacity is 4GB and not 32GB or 64GB, as mentioned by the vendor.
2. When buyers complain about flash memory items not being usable at their advertised capacity or about dubious information, these street vendors are very good at conning buyers into believing the items sold were faulty or defective. This is not the case.
3. When someone plugs a fake USB flash drive into a PC or laptop, he often discovers that its capacity is not what is claimed by the vendor or found on the packaging. These flash memory chips are digitally altered using low-level formatting tools, mostly in FAT16 format. This was the disk format used by Microsoft for its Windows 95 and earlier versions. What's shocking is that FAT16 does not even support more than 2GB, while the fake USB flash drive shows '32GB' or '64GB' on the package.
4. How can one test the genuineness as well as the actual capacity of a fake flash drive. There is a small software available, called H2testw (http://translate.google.ca/translate?hl=en&sl=de&u=http://www.heise.de/software/download/h2testw/50539
&sa=X&oi=translate&resnum=2&ct=result&prev=/search%3Fq%3DH2testw%26hl%3Den%26sa%3DG ). The software comes in a zipped format. You need to unzip the files and run the program. There is no need to install it on your PC or laptop. H2testw does a write and verify test on the selected drive and provides the results in a simple-to-understand text file. For a fake 64GB USB flash drive, the software displays the following message: 'The media is likely to be defective'
3.8 GByte OK (8084847 sectors)
58.6 GByte DATA LOST (122921617 sectors)
Details:710.5 KByte overwritten (1421 sectors)
7.6 MByte slightly changed (< 8 bit/sector, 15630 sectors)
58.6 byte corrupted (122904566 sectors)
710.5 KByte aliased memory (1421 sectors)
First error at offset: 0x000000003cef8470
H2testw version 1.3
Writing speed: 9.24 MByte/s
Reading speed: 10.8 MByte/s
The '3.8 Gbyte OK' message means that the capacity of this fake USB flash drive is 4GB. The second line (58.6 GByte DATA LOST) tells you about the claimed capacity that does not exist on the drive. This means that the fake 64GB flash drive has a capacity of only 4GB.
We hope this article helps in identifying fake USB flash drives. It is always a better option to buy such products from a reputed vendor who provides a bill of receipt.
Markets are headed higher but buy only on declines
Another fortnight is over and the short-term top of 15th April has not been scaled as yet. But is a trend change at hand? Two weeks ago, I had suggested that “if the US goes down by 10%-15%, India will not stand tall; it will go down too, quite sharply as we have repeatedly seen. The US market seems to be headed down again at the time of writing.” However, the Indian outperformance continued.
The US market and the Chinese market did go down last fortnight but the Indian market hardly budged. Indeed, it has traded in a very tight range over the past three weeks and is now about to head higher. The Sensex had hit a high of 17,919 on 21st June. It hit a low of 17,373 on 30th June and closed this week at 17,833. Investments by foreign institutional investors have been robust; although, as the market has headed higher, their net investments have come down to modest levels.
Last fortnight, we had said that the Indian market was reaching a high of its very short-term cycle. The market immediately declined and then stabilised. A new short-term global rally has started and the market is headed higher. There is a likelihood that the short-term high would now be around 18,300 on the Sensex. If it crosses that, we are in for a major extended rally driven by global liquidity that would defy all logic. On the downside, the lines on the sand for the bulls to defend are at 17,300 and then 16,500 on the Sensex.
One of the reasons for the market heading higher is that the global markets have stabilised now after the savage fall of May and June. The Chinese market had declined 26% and the US market by 16%. Their recent stability has boosted all markets around the world. But note that neither of these two major markets (US and China) is back on a long-term uptrend. They may decline again in a month and a fresh, more serious, downturn will start in India as well. We are sticking to our view that the Indian market is, ultimately, not insulated from the rest of the world.
The trend of global markets will depend on where the US economy and markets are headed. Here is an important indicator. According to The Economic Cycle Research Institute, a New York-based independent forecasting group, which has a very good record of forecasting business cycles, economic growth fell to the lowest since July 2009, indicating that the economy will continue to slow. Its Weekly Leading Index fell to 121.5, the lowest level since July 24, 2009 (120.3).
We expect that after a brief rally that is currently under way, global markets would swoon. Hence, to participate in the current upmove, buy the declines, not the momentum and run for the exit fast.
Beginning this issue, we are putting out only medium-term and long-term forecasts. Short-term forecasts will be available in our daily market coverage on our website. This is because the market has been highly volatile in shorter-time horizon and, by the time you receive the magazine, a short-term trend change would have already happened.