Nifty, Sensex may give up some gains - Weekly closing report

Nifty has to stay above 7,930 for the gains to continue

 We had mentioned in last week’s closing report that Nifty, Sensex are likely to move sideways and that the market lacked momentum. We had also mentioned that Nifty can decline, if it closes below 7,750. The indices moved sideways for most of week, as the markets were in a wait and watch mood for the US Federal Reserve to take its decision on interest rates. On Thursday, Ganesh Chathurthi (a holiday for Indian stock markets), US Federal Reserve decided to leave the interest rates unchanged and the fear of foreign institutional investors withdrawing partially from the Indian stock market was controlled. Immediately, on Friday, there was a rally in the Indian stock markets.
The summary of movements of indices over the week, Monday through Friday are given in the table below:
On Monday, the major indices in the Indian stock market were initially range-bound, but closed the day with gains. Hopes of a rate cut by the apex bank on the back of strong macro-economic data buoyed the Indian equities markets on Monday. The better-than-expected wholesale price index (WPI) and a modest factory output data cheered investors. The hopes of a healthy consumer price index (CPI) data, expected to be released later in the day, further supported the markets. Analysts cited healthy WPI data released on Monday and Friday's index of industrial production numbers (IIP) to be the positive triggers for the markets.
On Tuesday, market analysts felt that despite strong macro-economic data, investors remained cautious ahead of the upcoming decision on the US rate hike. Even the better-than-expected inflation and modest factory output data, which had cheered investors with hopes of a rate cut by the Reserve Bank of India, did not support buying in the markets. 
On Wednesday, the major indices in the Indian stock markets made a small gain. High interest rates in the US were expected to wean away foreign portfolio investors (FPIs) from India. It was also expected to dent business margins as access to capital from the US would become expensive. Foreign funds had already sold around $3 billion, mostly in Indian equities since August 2015. Analysts however, said a hike in US interest rates would show that the US Fed is confident of the US economy's ability to start generating growth and employment. This was expected to be beneficial for Indian exports to US.
On Thursday, a holiday for Indian stock markets, the US Federal Reserve decided to leave interest rates unchanged and it was a booster to emerging markets all over the world, which have been eager to bring in funds from foreign institutional investors.
On Friday, the markets rallied and the major indices closed with gains of around 1% over Wednesday’s closing values. However, the important indicator is that the market came off sharply from the day’s high. European markets had fallen sharply and US futures were trading sharply lower.
Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors for this week were:


'India can be far more successful!'

India can be far more successful and far more influential than it is today, mentioned Dr Raghuram Rajan, Governor, Reserve Bank of India (RBI)


India can be far more successful and far more influential than it is today, mentioned Dr Raghuram Rajan, Governor, Reserve Bank of India (RBI) while delivering his key note address at the fourth C K Prahalad Memorial Lecture organized by Ananta Aspen Centre and Confederation of Indian Industry (CII) in Mumbai. Dr Rajan further mentioned that in the difficult times, environment for growth has to be achieved in the right way by working hard towards recovery and aiming at sustainable growth.  While the monetary policy will be accommodative there is room to expand sustainable growth potential. By continuing with reforms that the government and regulators have announced a sustainable growth potential can be achieved.
Speaking about RBI’s key task to support growth he mentioned that it would focus on keeping the interest rates low in the near term as well as future to have a moderate interest rate regime to help borrowers as well as the savers. It will also focus on cleaning up the banking sector of the distressed assets, so that it can fund the growth agenda. He also suggested that India must resist special interest rates for targeted stimulus, long tax breaks, subventions, subsidies, directed credit, all of which historically rendered industry un-competitiveness with government over extended and country incapable of gaining its rightful position among nations.
Mentioning about what RBI is trying to do and what more it needs to do in improving the environment of the financial sector Dr Rajan, elaborated on four aspects like, need to foster competition and innovation; creating hospitable environment to those who don’t belong to the club; dealing with distress for improving structures and strengthening human capital in the financial sector. 
Rahul Bajaj, Chairman, Bajaj Auto Ltd, while delivering his welcome remarks mentioned that financial sector reforms should be a continuous process so that they are aligned and are future ready. He further elaborated that the role of reforms pertaining to financial sector should be to align rules and requirements among the multiple regulators so as to simplify; enable innovation and productivity in business for the benefit of customers and shareholders; stabilise the regulatory environment, create consistent and visible guidelines, and reduce risk amongst market participants and in the overall system in general and upgrade skills within the regulators through a healthy interaction and cross-pollination with private sector.


Education best way to fight poverty: Modi

Modi said every person wants his or her child to lead a life better than what they had led


More efforts are needed to eradicate poverty in the country and that education "is the best way to fight poverty", Prime Minister Narendra Modi said here on Friday.
"Our efforts to remove poverty over the years have not yielded the results we desired. The speed (of removing poverty) needs to improve," Modi said at a rally in Uttar Pradesh's Varansi city, also his parliamentary constituency.
He said every person wants his or her child to lead a life better than what they had led. 
"I urge all of you (in this gathering), whatever circumstances are, ensure that your children receive education. Education is the best (and even the least expensive) way to fight poverty," he said.



MG Warrier

1 year ago

Allow me to quote 2 paras from my article “Human development indicators: Need for a National Education Plan” posted at this site on October 17, 2012(Included as Chapter III.4 Literacy: A tool for Development in my 2014 book “Banking, Reforms & Development: Development Issues in 21st Century India”. I had submitted a copy of my book to PM in August 2014, which was acknowledged):
Ensuring universal education, which alone can bring about a change in the quality of governance also, must at this stage graduate into a massive movement supported by political will, whole-hearted participation from all households, legislatures, local bodies and educational institutions, failing which, the present effort also will remain a restatement of noble intentions with no specific ground level results.
*** ***
One is tempted to fear that there are some vested interests like an interest in keeping unskilled labour cheap and still worse, showing higher percentage of children passing out of schools and joining colleges (such statistics would better the country’s position in international assessments!) which keep the drop-out level before Standard X alarmingly high. The targets for Gross Enrolment Rates at secondary level can be achieved with ease if pass out percentage at primary level is low!

M G Warrier

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