Sensex, Nifty hold gains: Thursday closing report
Watch out for close below the day’s low for a minor bout of weakness 
With most of the Asian indices moving higher on the back of positive news from US and the efforts by the China's central bank to bring in money into the banking system for the first time in nine weeks, the Indian indices too edged higher marginally after again hitting another new high.
Both BSE 30-share Sensex and NSE 50-share Nifty witnessed a highly volatile session on Thursday. Sensex opened at 22,729 while Nifty opened at 6,803. Sensex moved between 22,644 and 22792.49 and closed at 22,715 (up 13 points or 0.06%). The Nifty moved between 6,777 and 6,819 and closed at 6,796 (up 0.20 points). The NSE recorded a huge volume of 119.24 crore shares, one of the highest ever.
NTPC was in news for settling dues of two Coal India subsidiaries, bringing an end to a tussle over quality of fuel the state-run miner was providing. NTPC dues have now come down to about Rs2,000 crore. Earlier, the finance ministry had advised both the companies to arrive at a price based on the average quality of coal supplied by Coal India's subsidiaries. The miner had initially rejected the proposal, saying it would violate the terms of the contract signed with NTPC, but later agreed after executives of the two companies met. NTPC was among the top three gainers in Sensex 30 stocks.
The Adani Group companies were the major outperformers today. Adani group is known for its proximity to Gujarat Chief Minister and Bharatiya Janata Party's (BJP) prime ministerial candidate Narendra Modi. Investors are betting that the BJP led National Democratic Alliance (NDA) will be able to form the next government at the centre with support from some regional parties after Lok Sabha elections which conclude in mid-May this year. Adani Enterprises rose 23.15% to close at Rs470.25, Adani Ports rose 5.68% to close at Rs193.65 while Adani Power rose 1.35% to close at Rs56.50 on the BSE.
US indices closed Wednesday in the green. The published rate forecasts of the current 16 Fed policymakers, known as the "dots" charts, suggested the federal funds rate would end 2016 at 2.25%, a half percentage point above Fed officials' projections in December. In minutes of the March 18-19 meeting published on Wednesday, several of the meeting's participants said the charts "overstated the shift in the projections," suggesting the Fed is not as eager to tighten policy as the dots had seemed to suggest. The minutes also showed that officials wanted to emphasize that the official policy statement, and not the dots charts, give a better indication of the likely path of rates. After its March meeting, the Fed said in a statement that it would wait a "considerable time" following the end of its bond-buying program before finally raising interest rates.
Except for Jakarta Composite (3.16%) and Straits Times (0.16%) all the other Asian indices closed in the green. Hang Seng (1.51%) was the top gainer.
European indices were trading in the green while US Futures were trading marginally lower.


SEBI to issue guidelines for crowd-funding

SEBI chief Sinha also expressed concerned over the decline in capital raising activities as Rs60,000 crore worth of approvals and intentions to raise money have either been allowed to lapse or withdrawn during the past three years

Market regulator Securities and Exchange Board of India (SEBI) is planning to issue guidelines for crowd-funding to encourage young entrepreneurs to raise capital from the market.

Speaking at an investors' conference in Mumbai, SEBI chairman UK Sinha said, “We are coming out with guidelines on crowd-funding soon, because we want to encourage young entrepreneurs to raise capital. Our aim is to help young people raise capital very smoothly.”

Crowd-funding typically involves young entrepreneurs and small groups of people raising funds for their ventures through various online platforms involving individuals as well as organisations.

Of late, such platforms are also being used for launching products that promise certain financial returns to the contributors.

While it is still in a nascent stage in India, compared to large markets like the US, China and the UK, the trend is catching up fast especially in the wake of emergence of social media as a key platform for such activities.

International Organisation of Securities Commission (IOSC), a body of market regulators across the world including SEBI, recently called for greater regulatory checks on ‘crowd-funding’ investment products to avoid any potential systemic risks in future.

Sinha also said that he is concerned about the decline in capital raising activities as Rs60,000 crore worth of approvals and intentions to raise money have either been allowed to lapse or withdrawn in the last three years.

“Several companies filed draft red herring prospectus with SEBI to raise capital. But they either withdrew or allowed it to be lapsed, Sinha said.

Sinha complimented BSE for achieving $1 billion market capitalisation of companies listed on its SME platform. SEBI’s initiative for IPO without listing received good response and within six months of issuing guidelines, three companies got listed on BSE’s institutional trading Platform, he said.

“This will allow qualified institutional bidders, private equity, venture capital good opportunity, so I expect that once this platform also succeeds, venture capital and private equity will find better to start getting their companies shifted here,” he said.


Decisive outcome required for further upside in Indian economy

According to Morgan Stanley, Indian market's move relative to emerging markets will continue to occur before the elections rather than after it unless there is a material positive surprise in the outcome

The world is about to witness the biggest election in history, which could herald a sea change for India’s economy that has struggled with stagflationary-type conditions over the past few years. "We believe that the outcome of the general elections will be key in determining the pace of reforms. A strong and stable government could accelerate this process, leading to a sustainable improvement in gross domestic product (GDP) growth," says Morgan Stanley in a research note.

According to the report, Indian equity market is pricing in a decisive election outcome and the beginning of a new growth cycle in its aftermath. It said, "India’s current market rally is in line with emerging market (EM) countries’ historical trend of pre-election performance, based on our study of 25 major EM elections since 2000. This has caused the market to be overbought within EM on our key technical measures. Yet, MSCI India’s 1-year forward P/E relative to MSCI EM is currently at a 42% premium, slightly above its 10-year historical average".

The pre-poll surveys are suggesting that India's next government will likely be a narrow Bharatiya Janata Party (BJP) coalition, with the National Democratic Alliance (NDA) winning 230-240 seats headed by the party's Prime Ministerial candidate Narendra Modi.

According to Morgan Stanley, external funding and bank reforms are key for the Indian credit view. "If the election produced a strong political majority, we think credit spreads would likely tighten on the potential for improving BoP, SOE bank recapitalization and a more stable sovereign ratings outlook. From the currency market’s standpoint, the post-election reaction in Indian rupee would come from the impact on the capital account, where foreigners’ flows in equities would be the dominant driver for the currency," it added.

If the election result is decisive, utilities, SOE banks, energy, industrials and materials could gain the most.



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