Monday’s Market Preview: Flat-to-positive opening likely

The local market is likely to see a flat-to-positive opening today. Wall Street settled mixed on Friday as investors took a breather after the recent gains on good earnings reports. Markets in Asia were trading mostly higher in early trade today as Group of Twenty (G20) leaders asserted their willingness to calm the currency turmoil, which is hurting the global recovery. The SGX Nifty was up 18 points at 6,105 against its previous close of 6,087 on Friday.

Besides global cues, corporate earnings reports will also guide the Indian market today.

The Indian market ended flat in the week ended 22nd October, after a two-week losing streak. Global cues, quarterly earning figures and fund flows towards the mega Coal India Ltd (CIL) initial public offer (IPO) led to volatile trading throughout the week. The market settled in neutral territory with the Sensex logging gains of 40.81 points and the Nifty adding 3.40 points in the week.

The US market ended mixed on Friday as investors took a breather after the recent gains on good earnings reports. Marketmen waited for the outcome of the two-day G20 finance ministers meeting, which was due to be announced on Saturday. Meanwhile, an economist at Goldman Sachs on Sunday opined that Federal Reserve might purchase $2 trillion of assets to stimulate the US economy in its meeting on 3rd November.

The Dow fell by 14.01 points (0.13%) to 11,132. The S&P 500 added 2.82 points (0.24%) 1,183. The Nasdaq rose by 19.72 points (0.80%) 2,479.

Markets in Asia were mostly in the green after the G20 leaders stated that they would take steps to calm the currency turmoil. Despite any concrete plan, the statement increased investors’ risk appetite. On the other hand, Japan’s exports grew at the slowest pace this year in September, increasing pressure on the government to step up stimulus initiatives. Overseas shipments increased 14.4 percent from a year earlier, the finance ministry said in Tokyo today.

The Hang Seng was up 0.74%, Jakarta Composite was up 0.27%, KLSE Composite was up 0.21%, Straits Times was up 0.46%, Seoul Composite was up 0.45% and Taiwan Weighted gained 1.17%. The SGX Nifty was up 18 points at 6,105 against its previous close of 6,087 on Friday.

The deal to reform the International Monetary Fund (IMF) to give greater clout to developing nations like India and halt aggravation of the ongoing currency war was struck at the last moment at the conference of G-20 finance ministers and central bank governors in South Korea.

The uncertainty continued till the last minute and it was only in the wee hours of
Sunday that officials, after intensive overnight negotiations, managed to put together a communique that was acceptable to all 20 countries.

Till this (Saturday) morning, the situation was really uncertain. It was clinched in the meeting of G-7 and BRIC finance ministers," Indian finance minister Pranab Mukherjee told reporters.

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Moneylife Foundation holds seminar on personal finance, wills, nominations and transmission in Pune

Moneylife Foundation headed over to Pune to engage the attentive audience in another interactive discussion on issues ranging from credit worthiness and no-fear investing to wills and nominations

Pune, 23 October, 2010: To spread further the message of financial literacy and awareness, Moneylife Foundation had stepped out into the city of Pune in August, where we had received an overwhelming response from the audience. On popular demand from Pune's receptive audience, we headed to the city again today, this time engaging the eager public in an interactive discussion on issues ranging from credit worthiness and no-fear investing to wills and nominations.

In the first half of the seminar, Mr Debashis Basu, Editor of Moneylife and Ms Sucheta Dalal, Managing Editor of Moneylife held an interactive working session on finance titled 'How to be safe and smart with money'. Ms Dalal spoke on how to avoid losses by staying away from certain kinds of investments like chain marketing and pyramid schemes. She explained how these scamsters operate and advised investors to stay away from such frauds. She also spoke about the implications of credit card transactions and the implications of default and its impact on an individual's credit history and ability to borrow.

Mr Basu told people that investment does not have to be difficult and complicated if one was clear about the basic objectives, avoided obvious pitfalls and followed a sensible and consistent investment policy. "Many a times, investors are lured by fast and big returns and opt out for short-term investment. To avoid such risks, investors should think about the long-term and fix goals accordingly," said Mr Basu. He showed how one could keep things simple, avoid complications and make steady returns without becoming an expert on stock markets.

This workshop was followed by another interesting discussion by Aashish Somaiyaa, head - retail sales, ICICI Prudential Mutual Fund. Mr Somaiyaa elaborated on how to go about investing smartly in mutual funds, pointing out the intricacies in choosing the right mutual fund.

Thereafter, Jayesh Desai, senior associate with Singhi & Co engaged the audience on the issue of wills and nomination, bringing out the vastness of the issue and complications that could arise in the same. Mr Desai elaborated on what is a will, its importance and terminology; he explained the requirements of a will and types of wills, the need for a probate, the cost of a probate, how to make changes in the will and described crucial details involving documentation of nominations.

Everybody would want to ensure proper legacy for their loved ones. The way to do this is through a comprehensive will and by completing nominations and transmission formalities for one's movable and immovable properties. Getting a will right is crucial if disputes between heirs over legacy are to be avoided. A will could clear the way. Most of the questions that were raised by the participants related to their individual situations. Mr Desai addressed each question patiently, clearly explaining all important aspects.

Finally, Ch Vishwanath, general manager and head - legal & compliance, Karvy spoke to the audience on the burning issue of transmission of financial instruments.

Pictures of the event

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Weekly Market Report: The market may give up more gains

The Indian market ended flat in the week ended 22nd October, after a two-week losing streak. Global cues, quarterly earning figures and fund flows towards the mega Coal India Ltd (CIL) initial public offer (IPO) led to volatile trading throughout the week.

The market, which traded lower for a major part of the session on Monday, sprang a surprise at the fag end of day closing with marginal gains. The gains were short-lived as the indices were in and out of the red on quite a few occasions on the back of a highly choppy session, ending the day with cuts of nearly a percent on Tuesday. Sluggish global cues pulled the market down for the second day in a row on Wednesday. Participation by institutional investors in the secondary market was muted in the early part of the week on account of the CIL IPO.

Easing of global pressures helped the domestic market close with handsome gains on Thursday. Lower food inflation numbers and upbeat earnings data also supported the broad-based rally. Profit-taking made its appearance on the last trading day of the week. Investors preferred to stay on the sidelines as cautiousness prevailed ahead of the two-day Group of Twenty (G20) meeting being held in South Korea.

The market settled in neutral territory with the Sensex logging gains of 40.81 points and the Nifty adding 3.40 points in the week.

The top weekly gainers were TCS (up 9%), Reliance Industries (RIL), Cipla (up 4% each), Hero Honda (up 3%) and Reliance Communications (RCom) (up 2%). On the flip side, Sterlite Industries (down 6%), Wipro, HDFC (down 5% each), Jaiprakash Associates (down 4%) and Tata Steel (down 3%) were the key losers.

BSE Healthcare (HC) and BSE Oil & Gas (up 3% each) were the top sectoral performers during the week while BSE Metal (down 3%) and BSE Realty (down 2%) were the sectoral losers in the week.

Food inflation eased to 15.53% as of 9th October and the fall gave the Planning Commission a reason to forecast single-digit food inflation by December.

Food inflation declined 0.84 percentage points from 16.37% in the previous week.

Overall wholesale price index (WPI) based inflation for September rose to 8.62%, from 8.5% in the previous month, prompting analysts to project a 25 basis points increase in key policy rates in the Reserve Bank of India's (RBI) 2nd November policy review. The central bank has raised policy rates five times so far this year.

Robust demand from all classes of investors saw Coal India Ltd's (CIL) mega initial share sale offer being oversubscribed 15.20 times on the final day of the issue, generating bids worth Rs2,35,290 crore.

The IPO, which was open between 18th October and 21st October, garnered total demand for over 960.36 crore shares, as against 63.16 crore equities on offer as per data from the National Stock Exchange. This translated into total demand worth Rs2.35 lakh crore - the highest upfront payment for any IPO in the country.

India's foreign exchange reserves rose by $641 million to $296.43 billion on the back of a sizable jump in foreign currency assets, making it the fifth consecutive weekly rise in the kitty.

Foreign currency assets, a major component of the forex pie, shot up by $582 million to $268.68 billion for the week, according to Reserve Bank of India (RBI) data.

The country's largest lender State Bank of India (SBI) increased its base rate or the minimum lending rate for new borrowers by 10 basis points to 7.6%, a move that would make all kinds of advances, including corporate loans, costlier.

The bank has revised the base rate below which banks cannot offer loans, upwards by 10 basis points from 7.5% to 7.6%, effective from 21 October 2010. This is the first review of the base rate since it was introduced in July this year. As per RBI guidelines, banks have to review their base rate every quarter.
 

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