Stocks
Nifty, Sensex on an uptrend – Weekly closing report
Nifty will head higher, if it stays above 7,700
 
We had mentioned in last week’s closing report that Nifty, Sensex were in no-man’s land and that the absence of any trigger – positive or negative – would keep Nifty drifting sideways. A favourable monsoon forecast sent India's benchmark equity indices soaring this week. The trends of major indices in the course of the week’s trading are given in the table below:
 
 
On Monday, the key indices of the Indian stock markets opened on a firm note, on the back of a rebound in global crude oil prices and positive Chinese markets. Recovery after last week's correction lifted prices and the major indices closed in the green. The BSE market breadth was tilted in favour of bulls -- with 1,471 advances and 1,113 declines.
 
On Monday, Finance Minister Jaitley said that the steel sector had started turning around as a result of the government measures to protect domestic supplies from imported cheap Chinese steel. "The steel sector was suffering from the cheap Chinese steel coming in at below cost prices so we raised the custom duty, imposed safeguard duty and we also imposed the minimum import price."
 
Upcoming quarterly results, along with global and domestic macro-economic data, were expected to guide the Indian equity markets during the week. Market observers had pointed out on Monday that investors' sentiments would be heavily influenced by foreign funds inflow, global crude oil prices and the rupee's movements.
 
On Tuesday, optimism in the Indian stock markets continued with the major indices making small gains over Monday’s close. The latest news to attract optimistic investors was the forecast for a favourable monsoon from the Indian Meteorological Department.
 
Ahead of the release of data on factory output and retail inflation, key Indian benchmark indices were trading higher on Tuesday. At the BSE, good buying was observed in auto, industrials and oil and gas sectors, while selling pressure was seen in metal sector; 26 shares were up and four were down -- three of them from the pharmaceuticals sector. Asian markets showed a somewhat mixed trend with Japanese benchmarks up and those in China trading lower.
 
The Coal India board approved “giving up of performance incentive for supply of higher grades of coal (G5 and above) in the Model Fuel Supply Agreement for power and non-power with immediate effect and to improve lifting of coal," the company said in regulatory filing to BSE. The miner said this decision was taken due to fall in international coal prices and improved supply by it. There is sluggishness in coal demand in general and higher grade of coal in particular, the company said. CIL shares closed at Rs274.45, down 2.28% on the BSE.
 
Bharti Airtel's recent acquisition of Aircel's 4G airwaves in eight circles for Rs3,500 crore through a spectrum trading deal was credit-positive, rating agency Moody's Investors Service report said on Tuesday. The company has rolled out 4G services in a total of 427 cities across 14 circles already, as it had secured a pan-India data enablement in the 2010, 2014 and 2015 auctions, through a combination of the 900Mhz, 1800Mhz and 2300Mhz bands. Bharti Airtel shares closed at Rs349.55, up 0.34% on the BSE.
 
Key Indian stock market indices soared on Wednesday morning, cheered by the official forecast that rains this monsoon season will be bountiful, as also on account of a rise in factory output after three months of contraction and a notable fall in retail inflation. Among the 30 Sensex stocks, the sole scrip that was in the red was GAIL India. This scrip was down at the NSE as well, along with Tata Consultancy Services. Significantly, each of the 19 sector-specific indices of the BSE was also ruling higher. The BSE market breadth was in favour of the bulls -- with 1,566 advances and 1,120 declines.
 
The India Meteorological Department (IMD) said that after two straight years of drought, India was likely to be showered with above-average rains during the upcoming monsoon season, with a probability of more than 94% precipitation. Then, after the closing bell, came the twin dose of positive news from the Central Statistics Office that India's factory output for February logged a growth of 2% after three straight months of decline, and annual retail inflation fell to 4.83% in March from 5.26% in February.
 
It was reported on Wednesday that the Supreme Court would examine if the Reserve Bank of India and the central government could take shelter behind the confidentiality clause in the RBI Act and other statutes for holding back names of loan defaulters and the total quantum of money in default. If bank recoveries of bad loans were to improve, the Bank Nifty could improve further.
 
Idea Cellular emerged as the biggest gainer of the mobile number portability (MNP) scheme in the last five years, Kotak Institutional Equities said on Wednesday in a five-year scorecard. Idea Cellular shares closed at Rs114.45, up 0.88% on the BSE.
 
Investors were headed for a long weekend with trading holidays on Thursday and Friday. Next week will be a busy one with a flurry of March quarter results due to be announced. Infosys is expected to be the first bluechip firm to come out with its results on April 15.

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Expect muted fourth quarter results
Will the market look beyond the poor fourth quarter results and keep rallying?
 
The stock market is on a bullish mode since it made a low on the budget day. Nifty and Sensex are up by 12.36% and 11.41%, respectively with more gains expected due to prospects of a good monsoon, improving industrial production, low inflation and low interest rates. However, earnings growth is still elusive. Indeed, Motilal Oswal Securities Ltd expects revenues of the companies under its coverage (excluding oil marketing companies) in Q4FY15-16 to grow at just 3% on a year-on-year (y-o-y) basis, while profit after tax (PAT) to decline by 5%. PAT margins are expected to decline by around 80 basis points to 11.1%. However, the brokerage says it expects earnings before interest, tax, depreciation and amortisation (EBITDA) margins to improve 80 basis points to around 25.3%. 
 
“FY15-16 has been a tough year due to challenging macro environment consisting of low commodity prices, high non-performing assets (NPA) provisioning and poor monsoons. Though earnings have been muted in FY15-16, they may look up in FY16-17, especially on the back of low base effect of the last year. Normal monsoons, recovery of commodity prices, clean-up of NPAs and transmission of interest rate cuts could act as key triggers for good corporate results in FY16-17. Market will look at these positives and ignore the poor March quarter results,” the report says.
 
Sales of Nifty companies (excluding Bharat Petroleum Corp Ltd -BPCL)) are expected to grow 3%, while PAT will rise by 3%. The report says, “If we were to exclude metals and oil, sales growth would be 7% and PAT at 5%. Though the growth in PAT of Nifty companies is muted, it is a small positive considering that it will grow after five consecutive quarters of decline. The low PAT growth is due to the influence of cyclicals. Auto and healthcare sectors are expected to lead the growth in PAT”. 
 
The share of defensives in PAT under MOSL coverage universe stands at a huge 39% based on its estimated numbers for Q4FY15-16. Defensives include sectors with relatively stable revenues, profits and cash flows such as fast moving consumer goods (FMCG), software and healthcare. Motilal Oswal expects domestic cyclicals to increase their share in PAT to 38% from 32% in the previous quarter (Q3FY-15). Sectors like banking, auto, capital goods, cement are among the sectors to be included in domestic cyclicals. 
 
Coming to different sectors, public sector banks (PSB's) and metals sector are expected to report losses. These losses would bring the aggregates down. 
 
In the auto industry, passenger vehicle sales have shown a decline in Q4FY15-16. However, commercial vehicles and two-wheelers have witnessed a good growth. It is expected to report robust growth in bottom line with PAT rising by an extraordinary 47%. 
 
In the capital goods sector, order intake will be flat or declining. Cement sector has benefited from demand recovery. In the FMCG space, volume pressure will be seen in some segments from Baba Ramdev promoted Patanjali products. 
 
Majority of the private banks are expected to show robust loan growth of more than 20%. PSBs will show high provisions and low growth in loans. Healthcare sector is expected to report a good quarter with more than 15% sales growth and a whopping 46% PAT growth. 
 
Motilal Oswal expects SKS Microfinance, Inox Wind, Alembic Pharma, Eicher Motors and Siti Cable to show more than 50% growth in revenue. Reliance Communication, Alembic Pharma and Torrent Pharma are among the companies to deliver high net profit growth. 
 
The benchmark index has done badly in FY15-16, declining by around 9% in the last fiscal year. The Sensex has delivered four consecutive quarters of negative returns. In US dollar terms, the performance of the benchmark index has been much worse at 15%, adding to foreign institutional investors' (FIIs) woes. The mid-cap index has marginally outperformed the large-cap index, falling by 2%. Media and cement sectors are the only two sectors to have delivered positive returns. However, they were up only marginally by 3%. Real estate, capital goods and PSB's have been the worst performing sectors, falling significantly by 26%. 

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COMMENTS

shadi katyal

10 months ago

why should it come as a surpirse exvept speeches and green grass on the near future we have not see nay development on any front but we keep showing our GDP at 7.5 5 the highest in the world but where are the true facts. This will not bring FDI so such twisting of figure will harm India.
Jaiotley promised many things but budget is a dud.
Almost 2 years of promiosed and yet no development.
This party is not interested in econmioc development but copntrolling the Parliement so it can wriote new constitution according to RSS agenda

uttamkumar dubey

10 months ago

Why motilal oswal is been shown as the reliable fund manager?
They all are crooks,and black listed against ppl please dont include them with you.

Make the Government Work for You: Use Act 21 of 2006
Disappointed by the inaction and apathy of government agencies? Shailesh Gandhi, the former central information commissioner, says the Act 21 of 2006 shows us a way out. Please join us in getting the government to act on it
 
That our government does not function for the benefit of the people always is a common refrain; it is a topic of discussion at every dinner table. But now citizens have a means. According to Shailesh Gandhi, a former central information commissioner, citizens have a great tool in hand, known as the Act 21 of 2006 to compel the unresponsive government to act. Its power is much more than that of the Right to Information (RTI) Act. Mr Gandhi says, “India belongs to each individual citizen. Thus, we ourselves are responsible to make our government work for us.” To do this, he speaks about an important tool designed for the common man, namely, The Maharashtra Government Servants Regulation of Transfers and Prevention of Delay in Discharge of Official Duties Act, or the Act 21 of 2006. This tongue twister of a statute is commonly known as the ‘Transfers and Delays Act of 2006’.
 
"Act 21 of 2006 has even more potential than RTI for getting better services, governance and accountability for citizens. Though an enforceable law, it has not served its purpose because of ignorance of the law and apathy by citizens and government servants," he says. 
 
If you find ourselves stymied not only by inaction but also the apathy of government agencies when our complaints fall on deaf ears, this Act shows us a way. It mandates that no action can be kept pending for more than three months, and if left unattended beyond that, a simple application with the complaint can be sent to the secretary of the concerned department; or when the relevant authority is a municipality, the municipal commissioner. Citizens don’t know this and neither do government officials. Those who have tried have been disappointed.
 
Moneylife Foundation has now decided to record the outcome of the trying to get better services under this Act. If citizens face non-compliance by government officials, we would like to record it in a systematic way. With a methodically documented data, we would then persuade the government to begin implementing the Act 21 of 2006. Here are the steps you need to follow to make your voice heard:
1. Read attached 'Note on Act 21 of 2006'.
2. Also read attached ‘Rules of Act 21 of 2006’
3. There are two stages of this process, first you filing an application, representation or complaint about your issue. After waiting for 90 days, you need to go to the second stage. In the first stage, you need to provide, date of filing, department and whether you have received any response. If and record on the website when you send one of the letters in the note. Mention the department and upload the actual word file. You will get a number. If you get a response within 60 days, please upload it. If you do not get any response, please report it against your number.
4. In the second stage you need to file a complaint using Act 21 of 2006 to the Secretary of the Department, where you have first filed your application. We have provided the format in which you can file the complaint on the response link below. In this stage, after waiting for 60 days, you need to come back and register your comment whether you received any response or not.
 
This is simple and you can the improvement in government accountability, which you desire. 
 
Here is the link to send your responses: http://goo.gl/forms/49j9QSw6HM 
 
 
 
The Act governs the transfers of government officials in Maharashtra. The Act specifies that the tenure of government servants will be three years and transfers will normally be made only in April and May of each year. It provides for reasons to be recorded if transfers happen otherwise. Mr Gandhi pointed out that under the Act, in case of any discrepancy, anyone can file an application against the action with the information commission.
 
Mr Gandhi also explained how the government’s resources are insufficient to govern a gigantic country like India. He emphasised that simple tools like the ‘Transfer and Delays Act’, if utilised, have a potential to change the system. An important first step is to exert pressure. He concluded by saying, “You can make this Act work. If you want your government to work, you will have to act.”

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COMMENTS

arvind.arya.in

3 months ago

Mr. Gandhi, Is it applicable beyond Maharashtra.?

manoharlalsharma

10 months ago

Information about Act-21 is seems very useful and with full knowledge of the act, we r thank ful to the organisation.

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