Stocks
Nifty, Sensex in bull grip – Thursday closing report
We had mentioned in Wednesday’s closing report that Nifty, Sensex might be headed higher. The major indices of the Indian stock markets rallied on Thursday and closed with gains of around 0.60% over Wednesday’s close. The trends of the major indices in the course of Thursday’s trading are given in the table below:
 
 
The Indian equity markets on Thursday closed at new highs in almost a year, riding on short covering and expectations of a major economic legislation getting parliament's approval. On a closing basis, the wider 51-scrip Nifty of the National Stock Exchange (NSE) touched a new 52-week high. The 30-scrip sensitive index (Sensex) of the BSE also reached its highest closing levels in 11 months. Healthy buying was witnessed in consumer durables, automobiles and FMCG (fast moving consumer goods) stocks. On the NSE, there were 818 advances, 638 declines and 62 unchanged. The BSE market breadth was slightly tilted in favour of the bulls -- with 1,486 advances and 1,164 declines.
 
The government is carefully considering the suggestions made by the trade and industry on the Goods and Services Tax (GST) Bill, a top CBEC official said here on Thursday. "We have been receiving a large number of representations from trade and industry. This is a very healthy exercise and all these suggestions and views will go into making an ideal GST," Mahender Singh, Director General (GST), Central Board of Excise and Customs (CBEC), said. He was speaking at a national conference on draft GST law organised by Associated Chambers of Commerce and Industry of India (Assocham). "It (suggestions on GST) is considered, discussed and various aspects are taken into consideration and once the final decision is taken then that will be incorporated in the final GST law," Mahender Singh said. He said some sections of the trade and industry have apprehensions that their views may not be taken into consideration. It is understandable, he said, for people to have such apprehensions in a large country with a wide variety of trade practices. 
 
Banking operations will be impacted across the country on Friday with around 10 lakh bankers of 40 private and state-run banks striking work in protest against the central government's banking policies, a union leader said on Thursday. "The strike is on. We are not aware of any case filed by the banks or the Indian Banks Association (IBA) to restrain the nine unions of UFBU (United Forum of Bank Unions) from striking," C.H. Venkatachalam, General Secretary of the All India Bank Employees Association said. Earlier this month, major bank unions deferred a two-day strike call for July 12 and 13 following a restraint order by the Delhi High Court. The unions in the banking sector had given the strike call protesting against the merger of the five associate banks of the State Bank of India (SBI) with SBI and the privatisation of IDBI Bank. The union is opposed to the government's decision to merge the State Bank of Bikaner and Jaipur (SBBJ), State Bank of Travancore (SBT), State Bank of Patiala (SBP), State Bank of Mysore (SBM) and State Bank of Hyderabad (SBH) with the SBI. "The strike will involve employees and officers of public sector banks, old generation private banks and foreign banks with a total of more than 80,000 branches," he said. According to him, the banks may be filling up the automatic teller machines (ATM) numbering around 200,000 in the country to facilitate cash withdrawals. "We wanted to strike when Parliament is in session. Though the strike is on a Friday, the next day is a full working day for the banks. There will be no bunching of holidays," he said. Venkatachalam said the strike was against the unwarranted banking reform measures. The Bank Nifty closed at 19,076.55, up 0.29%.
 
US Federal Reserve on Wednesday kept federal funds rate unchanged, reiterating that it continues to closely monitor inflation indicators and global economic and financial developments. "Near-term risks to the economic outlook have diminished," said the Fed in a statement after concluding two-day monetary policy meeting. This new expression might indicate that conditions are getting more favourable for further interest rate hikes in the future. Fed officials gave more upbeat description of the economy. There was some increase in labour utilisation in recent months, pointing to a healthy labour market despite the slowdown in April and May. Household spending have grown "strongly." Inflation continues to run below the Fed's 2% target, a major concern for Fed officials. But they expected inflation to rise to the target over the medium term as the transitory effects of past declines in energy and import prices dissipate and the labour market strengthens further. The policy to keep interest rates unchanged is good news for emerging markets like India, as it attracts foreign institutional investors.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 

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Bank strike to hit operations on Friday
Banking operations will be impacted across the country on Friday with around 10 lakh bankers of 40 private and state-run banks striking work in protest against the central government's banking policies, a union leader said on Thursday.
 
"The strike is on. We are not aware of any case filed by the banks or the Indian Banks Association (IBA) to restrain the nine unions of UFBU (United Forum of Bank Unions) from striking," C.H. Venkatachalam, General Secretary of the All India Bank Employees Association (AIBEA), told IANS.
 
Earlier this month, major bank unions deferred a two-day strike call for July 12 and 13 following a restraint order by the Delhi High Court.
 
The unions in the banking sector had given the strike call protesting against the merger of the five associate banks of the State Bank of India (SBI) with SBI and the privatisation of IDBI Bank.
 
The union is opposed to the government's decision to merge the State Bank of Bikaner and Jaipur (SBBJ), State Bank of Travancore (SBT), State Bank of Patiala (SBP), State Bank of Mysore (SBM) and State Bank of Hyderabad (SBH) with the SBI.
 
"The strike will involve employees and officers of public sector banks, old generation private banks and foreign banks with a total of more than 80,000 branches," he said.
 
According to him, the banks may be filling up the automatic teller machines (ATM) numbering around 200,000 in the country to facilitate cash withdrawals.
 
"We wanted to strike when Parliament is in session. Though the strike is on a Friday, the next day is a full working day for the banks. There will be no bunching of holidays," he said.
 
Venkatachalam said the strike was against the unwarranted banking reform measures.
 
The nine constituent units of UFBU are: AIBEA, AIBOC, NCBE, AIBOA, BEFI, INBEF, INBOC, NOBW and NOBO.
 
According to Venkatachalam, unmindful of the adverse implications, the government was pursuing the reform measures in the banking sector like inadequate infusion of capital in public sector banks which will result in reduction of government's equity capital and create compulsion for higher extent of private capital leading to privatisation of banks.
 
He said the unions also opposed the decision to privatise IDBI Bank by reducing the government capital to less than 49 per cent, proposals of consolidation for public sector banks but expansion for private sector banks, giving licences to corporate houses to start banks, ineffective steps to recover the bulging bad loans in the banks, and rather showering concessions to the defaulters and others.
 
"We demand that willful and deliberate defaulters should be declared as criminal offenders and punished," he said.
 
Venkatachalam said the total bank loans wilfully defaulted by borrowers was Rs 58,792 crore.
 
He said the total quantum of bad loans of the government owned banks stood at Rs 539,995 crore as on March 31, 2016.
 
"But the government and the RBI (Reserve Bank of India) are not taking tough measures to recover the bad loans. Even the (defaulters') names are not being published," he said.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Equity MF folios continue to rise as the market moves higher
Retail investors continue to flock to equity mutual fund schemes. According to CRISIL Research, equity-oriented mutual funds constitute 76% of the total retail portfolio. As the Nifty went up by 7% over the past quarter, retail equity folios too, increased for the seventh quarter in a row. As many as 0.58 million equity-oriented mutual fund folios were added in the June quarter, taking the total tally of equity folios to a high of 35.4 million. Balanced schemes, with higher orientation towards equity, too continued to ride the equity wave. The category added 109 thousand retail folios in the June quarter to push the total to 2.45 million.
 
High net-worth individuals (HNIs) added 105 thousand folios in the June quarter. AMFI identifies HNIs as those investing Rs5 lakh or more. HNIs preferred to invest mostly in equity, debt and balanced funds. Though equity funds dominated the segment with 49% share (9.31 lakh folios), debt fund folios have increased in the past four quarters. The debt category added 42,000 folios to stand at 0.73 million folios in the latest quarter against 26,000 folios added in the previous quarter. The equity category added as many as 36,000 HNI folios, while the balanced scheme category added 18,000 folios.
 
Just a little of over 53.20% of retail AUM stayed in equity mutual schemes for more than two years, albeit higher than 52.94% in the preceding quarter. Of the Rs2.45 lakh crore of retail investments in equity-oriented mutual fund schemes, Rs1.30 lakh crore was held for over 24 months. In comparison, about 26.48% of HNI AUM stayed invested in equity mutual funds for more than two years, higher than 23.96% in the previous quarter.
 
The total number of mutual fund folios touched 4.89 crore as on 30 June 2016, as per data from the Association of Mutual Funds in India (AMFI). As many as 1.3 million folios were added in the June quarter, up 2.65% sequentially. Retail folios constitute as much as 95% of total mutual fund folios. In the June quarter, 114 thousand folios were added, as compared to 170 thousand folios in the March quarter. Retail folios touched a six-year high of 46 million.
 
Meanwhile, the liquid retail category added 0.19 million folios to touch a record high of 0.47 million. The debt category added 0.27 million retail folios in the latest quarter compared with 0.33 million added in the preceding quarter. Moving towards the 50 million milestone mutual funds added 12.61 lakh folios, up 2.65% sequentially, in the June quarter to take the tally to a record high of 4.89 crore, according to the data disclosed by the Association of Mutual Funds in India (AMFI). 
 
Corporates continued to dominate mutual fund assets under management (AUM) with 46% share in the June quarter against 47% in the March quarter. HNIs were the second biggest contributor with 28% share. The retail segment’s share was steady at 22%.
 

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COMMENTS

nagaraju lanka

6 months ago

i want to have your advice on my investments.and i am retiring in 10 months.how to contact you online .please let me know about your online information for such advise

Ramesh Poapt

7 months ago

Lack of alternative saving/ investment avenues, incentives for T15 cities, Govt/media's aggressive 'posative' views of the economy did the trick. If proper asset allocation not in place, future will not be as bright as it seems today. The party may go on for quite sometime though....on account of great global liquidity flood. rally in mid/smallcapsmay suggest that we are in the last lag of the bull cycle, which may go on further...

Suketu Shah

7 months ago

The no of folios is only high as they never remove folios of people who have died or not invested in mfunds for 5 yrs or more.

Natraj Jayaraman

7 months ago

There's a tendency to invest more in equities as valuations rise and become progressively more expensive even as actual earnings remain a hit-or-miss. Rarely anyone in the retail segment buys when the market is at the bottom when valuations are relatively cheap. The herd mentality prevails either way. So I wonder how much of this money flow into equities is akin to buying at the top of a bull market cycle.

Rahul Pande

7 months ago

Do the investors have any choice.With FDs and postal investments being unremunarative and real estate and chit funds cheating investors.Stock market is not lay investors cup of tea.At least mutual fund houses are their saviours.

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