Sensex, Nifty highly oversold: Wednesday closing report

A close above 6,045 may take the Nifty upto 6,100

On Tuesday, we had mentioned that NSE Nifty may move sideways with an upwards bias that may take it to 6,100. On Wednesday, the index opened in the red, and after a range bound move up to 11.30 in the morning, Nifty tried to rally.


The BSE 30-share Sensex opened at 20,241 and Nifty opened at 6,004. The Sensex moved to the level of 20,076 from 20,289 while the Nifty hit a low of 5,962 and a high of 6,028. The Sensex closed at 20,261 (up 49 points or 0.24%) while Nifty closed at 6,022 (up 22 points or 0.36%). NSE recorded a volume of 54.31 core shares.


Except for FMCG (down 1.01%) and Media (down 0.36%) all the other indices on the NSE closed in the positive. The top five gainers were Metal (1.82%); Realty (1.74%); Auto (1.69%); IT (1.11%) and PSE (1.11%).


Of the 50 stocks on the Nifty, 33 ended in the green. The top five gainers were Ranbaxy (5.75%); Tata Steel (5.12%); DLF (2.76%); Tata Motors (2.65%) and M&M (2.61%). The top five losers were ITC (1.89%); Bhel (1.50%); PNB (1.22%); Maruti (0.84%) and HCL Technologies (0.78%).


Of the 1,488 companies on the NSE, 846 companies closed in the green, 561 companies in the red, while 81 closed flat.


Stock market was awaiting the survey on the performance of India's services sector for January 2014. The headline HSBC Services Business Activity Index increased from December's 46.7 to 48.3 in January, signaling a moderate rate of output contraction that was the weakest in the current seven-month sequence of decrease. Sector data highlighted Post & Telecommunication as the best performing in the services category. Conversely, Financial Intermediation suffered the sharpest declines.


Up from 48.1 in December to 49.6 in January, the seasonally adjusted HSBC India Composite Output Index indicated a seventh consecutive monthly drop in private sector activity. But, the rate of contraction was marginal and the weakest in that sequence, Markit Economics said. Whereas manufacturing production growth accelerated, output at services companies fell again.


Finance Minister P Chidambaram expressed doubt over passing any key legislation, except for the vote-on-account, during the current session of Parliament that began today. Besides interim budget, the government wants to pass the Telangana Bill as well as some anti-corruption legislation. The Finance Minister also assured that the red line for fiscal deficit drawn by him 18 months ago will not be breached.


US indices closed in the green on Tuesday. On 4 February 2014, two Federal Reserve district bank presidents signaled a decline in global stock markets which may not deter the Fed from further trimming bond buying. They both, Evans and Lacker, don't vote on policy this year. The next major event on the horizon is the labor report out of the US, with non-farm payrolls due on Friday, 7 February 2014.


Most of the Asian indices trading on Wednesday closed in the green. Nikkei 225 was the top gainer which rose 1.23% while Taiwan Weighted was the top loser which fell 2.34%.


European indices were showing mixed performance while US Futures were trading marginally lower. UK services unexpectedly slowed last month, as new business expansion fell to the least in eight months and wet weather hampered activity. A separate report showed services in the euro area grew at a slower pace than initially estimate.


Markit's euro zone Composite PMI, which gauges business activity, climbed to 52.9 in January from 52.1 the previous month. That was the highest final reading since June 2011.


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Indian households express cautious outlook for 2014, says study

According to the Principal Financial Well Being Index study, overall 77% of respondents in India feel that the prices of groceries, fuel and other household items will go up in next one year and affect their budgets seriously

Principal Retirement Advisors (India) has said that Indian households are concerned with rising fuel and food prices, inflation and unemployment for 2014. The Principal Financial Well Being Index study conducted by Principal Retirement Advisors along with Nielsen for the December quarter, covered perception and concerns of Indian households about their own financial well-being.

"Indian households are maintaining a cautious outlook as they approach 2014. But it is encouraging to see that a majority of them feel that they are in control of their financial situation and are making decent progress towards achieving their financial goals. The Principal Financial Well Being Index will provide unparalleled insights into how Indian households are managing personal money matters," said Rajan Ghotgalkar, Country Head - India, Principal Financial Group.

Here are some of the major findings of the study…

Perceptions & Concerns of Economy in general

  • 48% of Indian Households expect the economy to worsen in 2014. This pessimist view is exhibited more by the older population. 
  • Fuel prices (79%), food prices (69%), rising inflation (74%) and unemployment (69%) are seen as top concern areas for the economy in the next 1 year
  • Overall 77% respondents feel that the prices of groceries, fuel and other household items will go up in next one year. Respondents feel that increase in prices for Food & Beverages (72%) and transportation (69%) are likely to affect the budgets seriously
  • 78% respondents are concerned about rise in home loan interest rates in the next one year
  • 57% of overall respondents see rupee falling more vis-a-vis US dollar in next one year

Household Spending, Savings & Investments

  • More and more respondents exhibit attitude towards high consumption & spending on new items & luxuries. Most Households expect spending to increase across all expense categories
  • Buying a House/property (51%) & Children expenses (education & marriage) are the key big ticket expenses expected in 2014
  • 74% Households are satisfied with their current levels of savings. 67% Households say that their savings have stayed the same in past 1-2 years
  • 69% Households are satisfied with their current level of investments

Holiday Plan: 73% people say they are not planning a holiday in 2014. Out of remaining 27% who are planning a holiday in 2014, 60% will spend the same amount as last year

Festivity spending: 64% people say they will spend the same amount as last year in the upcoming festivities

Planning for Unexpected Expenses/ emergencies: To cope with unexpected expenses, Indians plan to cut down expenses on non-essential items (42%) and use money from Savings (38%). This indicates that people will have no specific preparation to cope up with emergencies.

Financial Priorities & Attitude towards finances: Overall respondents feel that they are in control of their financial situation (63%) and are making good progress (63%) towards their financial goals.

Availing services of Financial Advisors

  • Experience (47%) and Qualification (47%) are key attributes that people look for in an advisor. Almost 70% people consult financial advisors referred by their friend / family & co-workers.
  • Setting Financial Goals (51%), Tax Saving / planning (47%) are the top reasons for consulting a financial advisor. Retirement planning also figures prominently with 35% respondents consulting financial advisor for the same.
  • Overall 64% respondents feel more financially confident after availing services of Financial Advisor
  • 55% people cite knowledge (know enough on their own) as the foremost reason for not consulting a financial advisor. 51% of those not consulting a financial advisor are willing to pay fees for financial advice in future

Retirement planning attitude & perceptions

Staying happy & stress free (48%) and having enough savings (45%) are the main thoughts for post-retirement finances

Overall 52% people claim to have started investing for retirement when they were 26 – 30 years old. 76% plan to retire between 56-60 years of age. Buying a house (25%), children education (23%) & children marriage are the Top 3 aspirations post retirement

Employee benefits & satisfaction levels

  • 75% respondents feel that employee benefits are critical for employee retention / better performance
  • Disability Insurance, Financial Planning, are the top benefits with highest satisfaction levels


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