Nifty should target 7,800 and possibly higher
The S&P BSE Sensex and the NSE’s CNX Nifty put up a strong rally during the second half of Tuesday to end the trading session with gains. In our Monday market closing report, we mentioned that as long as Nifty does not break 7,650 level, an uptrend is likely. During today’s trade, Nifty breached this level in the afternoon session very briefly and then started a strong rally to close near its intra-day high. Nifty ended the day at 7,747 (up 63 points or 0.82%) while Sensex closed at 25,908 (up 185 points or 0.72%).
After a strong opening ahead of the Reserve Bank of India’s (RBI) bi-monthly monetary policy review, both Sensex and the Nifty were pulled down. The bearish sentiments set in after lower activity was reported in the services sector. Nifty, which opened at 7,706, went on to hit a high of 7,720 around noon, however, it was soon pulled down to a low of 7,638 before regaining strength to close near its intra-day high of 7,753.
The RBI maintained its stance on keeping key policy rates unchanged. The repo rate and cash reserve ratio (CRR) remain at 8% and 4%, respectively. Even though inflation declined significantly, RBI governor Dr Raghuram Rajan mentioned that “with some continuing uncertainty about the path of the monsoon, it would be premature to conclude that future food inflation, and its spill-over to broader inflation, can be discounted.” He also cited possibly higher oil prices stemming from geo-political concerns and exchange rate movement could adversely impact inflation.
He further mentioned, “The Reserve Bank will review existing liquidity arrangements and continue to monitor and manage liquidity to ensure adequate flow of credit to the productive sectors.” The RBI cut SLR by 50 basis points to 22% 'to enhance liquidity in the money and debt markets so that financial intermediation expands apace with a growing economy’.
India’s services sectors recorded the third consecutive month of expansion, even though activity was lower in July compared to June’s 17-month high. The HSBC Services Purchasing Managers' Index (PMI), compiled by Markit, fell to 52.2 in July from June's 17-month high of 54.4. A reading above 50 denotes expansion while below signals a contraction. Overall activity was below 50 for nearly a year but starting to expand again in May.
All sectors, except for infrastructure, closed Tuesday with a gain. NSE’s CNX Realty was up 2.77% followed by CNX Auto which was up by 1.96%. The Bank Nifty was up by 0.33% closely followed by the CNX FMCG index which was up 0.34%. The CNX Pharma index was 0.63% up in today’s trade. CNX Infra, the only loser, was down 0.12%.
Cement stocks were in demand. Cement companies have so far reported better-than-expected double-digit volume growth for the June quarter. Among the top five gainers on the Nifty, there were four cement stocks. UltraTech Cement (5.32%), ACC (4.71%), Ambuja Cement (4.21%), Grasim (3.98%) and Mahindra & Mahindra (3.76%) were the top gainers on the Nifty. Among the Nifty losers were BPCL (-1.07%), HCL Technology (-0.96%), Bharti Airtel (-0.77%), Hero MotoCorp (-0.57%) and United Spirits (-0.56%).
On the Nifty, 31 stocks rallied while 19 stocks closed in the red. Of the 3,043 scrips traded on the BSE, 1,778 advanced while 1,142 declined. Trading volume on the Nifty was higher at 860 million shares traded, compared to 728.6 million shares traded on Monday. On Monday, foreign investors registered a net inflow of over Rs373 crore from the Indian markets.
Bond yields spiked to three-week highs as the RBI cut banks SLR. The 10-year benchmark yield jumped 10 basis points to 8.60% on 6th August from a close of 8.50% on 5th August.
The central bank mentioned that it doesn't intend the rupee to depreciate as it has left the interest rates unchanged. Its primary concern, it said, was to deal with inflation. The rupee appreciated to 60.83 per dollar from its earlier close of 60.93 per dollar. Crude oil prices were up on fear of disruption in supply.
European stocks were trading higher, continuing to add on Monday’s gains. The euro zone’s services PMI came in at 54.2, up from 52.2 in June. Earlier in the day, most Asian indices declined as China's services sector growth fell to a record low. China’s services PMI fell to 50.0 in July from a 15-month high of 53.1 in June. US stocks had rallied on Monday, lifted by Portugal's decision to rescue Banco Espirito Santo and better earnings of US stocks. However, in the pre-market trading, US futures were trading sharply low.
According to the ratings agency, majority of banks maintained an SLR above 25% when the SLR was 23% as on 31 March 2014 and therefore, the actual impact may be limited to banks which are on the fringe of this ratio
The Reserve Bank of India (RBI), in its third bi-monthly credit policy review has reduced statutory liquidity ratio (SLR) of scheduled commercial banks by 50 basis points to 22% from 22.5% of their net demand and time liabilities (NDTL). However, according Credit Analysis & Research Ltd (CARE Ratings), the impact of SLR cut may be limited to banks, which are on the fringe of the ratio.
In a research note, the ratings agency, said, "...the current SLR of banks stands at 26.7% of NDTL as of 11 July 2014. It may also be noted that a sample of 39 banks taken (private and public), five banks maintained an SLR below 25% while remaining 34 banks maintained an SLR above 25% as on 31 March 2014 when the SLR was 23%. Therefore, the actual impact may be limited to banks which are on the fringe of this ratio."
The central bank also reduced the ceiling on bank holdings of SLR securities in the HTM category to 24% of NDTL from 9 August 2014 in order to enhance liquidity in the money and debt market. "This will have a positive though marginal impact on the liquidity conditions in the market as it will depend on how banks react to the same," CARE Ratings said.
The ratings agency said, it expects inflationary pressures to continue for the next two months owing to two important factors going ahead which need close monitoring before any further monetary action: uncertainty in monsoons and higher fuel prices due to adjustment to market prices. Going ahead, RBI is expected to keep a close watch on how inflation trajectory evolves in the months ahead. Inflation may not come down when the next policy is announced."
CARE Ratings said it sees no reduction in key policy rates over the next two months. "However, " it added, "a rate cut may be considered towards the end of the year depending on the kharif output in the months of October-November and how inflation behaves."
The essentials of western medicine could be clubbed with the best of other systems like Ayurveda, Homeopathy, Siddha, Unani, Acupuncture, and Herbal medicines to make sickness care less expensive, more useful and less dangerous
"Unless we put medical freedom into the Constitution, the time will come when medicine will organize into an undercover dictatorship to restrict the art of healing to one class of men and deny equal privileges to others; the Constitution of the Republic should make a Special privilege for medical freedoms as well as religious freedom." -Benjamin Rush, MD., a signer of the Declaration of Independence and personal physician to George Washington.
India is a very vast- almost like a continent- country with a little over 1.2 billion population. Majority of us are below the age of 30, but there is a growing population of the elderly and even the old elderly. We are biologically, culturally, racially, ethnically, environmentally and even in our food habits totally different from the white Europeans. As such the western model of what is believed to be scientific medicine does not fit in here. Even in the west their own system is felt to be outmoded for their present day needs.
(Amer. J.Med 2004; 116: 179)
Organ-based mechanistic reductionist model of the human physiology is found not to work in a holistic dynamic human body, which is nothing but the human mind (consciousness)-energy vibrations. Health is when the body cells, of which there are one hundred thousand trillion in all, are in sync. Disease is when they are out of sync.
Naturally, treatment is to reset the energy balance using various methods available in many systems of medicine all over the world. Unfortunately in the last century, money bags in the US joined hands to support only those medical colleges using their reductionist chemicals for treatment declared as “scientific” and the rest as unscientific, based on the Abraham Flexner report. Incidentally, Flexner was only a High School retired Head Master and knew nothing of medicine or science!
India’s major problem in health care is the poverty related malnutrition that not only kills young children of nutritional immune deficiency syndrome (NIDS) but saps the strength of the immune system in the majority of the poor adults as well making them vulnerable to many illnesses. Poverty also is a double edged sword in illness. Whereas it makes the poor more prone to illnesses, it takes away their daily wage earning capacity when they fall ill, thus pushing them further into the bottomless pit of want. If the government could work on a war footing to try and provide the following to all citizens, our sickness load almost vanishes with a few chronic illness left behind. They are:
Clean drinking water for all citizens
Illnesses need a new working classification, which makes it easier to identify and also to treat easily using the best in all medical care systems being practised in India. I had suggested such a system years ago published in peer reviewed journals. I shall condense it here for the government to take notice if they want.
• Emergency medicine………………………………………5%
• Minor illness syndromes…………………………………..35%
• Degenerative diseases……………………………………...10%
• Doctor-thinks-you-have a disease syndrome………………10%
• Patient –thinks-s/he-has-a-disease syndromes……………..10%
• Congenital diseases…………………………………………5%
• Incurable diseases like cancer etc…………………………..15%
• Psychological illnesses………………………………………5%
Today’s top heavy five-star hospital based western medicine spends almost three fourths of the money for emergency treatment of diseases most of which do not get “cured” anyway. We are only palliating making our intervention worse than his disease. We do need western medicine for emergency care of seriously ill patients but their proportion is very small in the whole picture. Top heavy western medicine must be confined to emergency care and corrective surgery alone. The large chunk of minor illness syndromes whose sheer numbers belie their benignity but they could all be managed with most of the alternate systems like, energy medicine using known and occult energies, Ayurveda and Homeopathy, Siddha, Unani, Acupuncture, and Herbal medicines. There are proven methods of treatment for degenerative diseases in some of the alternate medical systems.
A doctor thinks you have a disease syndrome and need no drug intervention but need advice to change the mode of living to a healthy life style avoiding smoking and alcohol, encouraging regular exercise, sensible diet, and to avoid negative thoughts. Patient thinks s/he has a diseases and need sensible psychotherapy and behavioural therapy. So also do some of the psychiatric diseases where western medicine pushes lorry loads of dangerous chemicals. The latter are now known to damage the brain to produce the new syndrome of dementia. (Dementia-a drug induced crime on mankind-book by Professor Grace Elizabeth Jackson)
India needs an integrated medical system education that takes the best in all systems after due authentication by hard scientific methods. We need a new curriculum and reorientation for teachers. The essentials of western medicine could be kept, which is to be clubbed with the best in other systems to make sickness care less expensive and more useful and less dangerous. The curse of western medicine today is the adverse drug reactions (ADRs), which are the leading cause of death in that system.
Doctors' training should stress on producing good, humane, empathetic healers who are very useful as we now know that the medicines and the interventions that we practice do not heal. It is the faith that the patient has in the system and his doctor that heals. Mind heals and reductionist chemical drugs only harm. (Genetics 2008; 179: 727 and Sci Transl Med 16 February 2011)
Medical education is crying for a change but that cannot come about in the present setting as all the vested interests have a stake in maintaining the status quo ante. We need some drastic changes right away. The idea of having more tertiary care centres spending tons of the tax payers’ money is a retrograde step. We need to close some such centres for the good of society as well. A fourteen country advanced nations study did reveal that where there are more doctors per capita and more specialists THERE IS LESS HEALTH AND MORE DEATH. The dangerous medical myth is that vaccines for every infectious disease will eradicate the disease. The recent rotavirus tragedy is one futile effort to prevent diarrhoeal diseases. Good childhood and pregnancy nutrition coupled with adequate rehydration therapy should control and eventually eliminate rotavirus diarrhoea. We should not fall prey to western propaganda even when the vaccine is locally manufactured.
Long term observational studies of human species running into twenty five, (MRFIT) seventy five, (Grant study) and ninety years (Termen study) have upturned the findings of scores of short term cross sectional randomised controlled trials to show that there are nothing called risk factors, but there are risks of precocious death. The last two studies showed that for man to live long and healthy, one needs a healthy life style consisting of:
• Happiness is love. Full Stop. Love all to live well.
• Improve social relations— spend time with friends to lose the “I” (illness) to get the “WE” (wellness)
• Increase levels of physical activity— go for a long walk.
• Help others and express gratitude to those who have helped you
• Take on new challenges to remain fresh and in-the-moment at any age!
• Age is only a chronological number.
• Some worry is good for longevity and good health.
In addition to all these, India has the great legacy of that all-powerful health tonic in Yoga, the ancient Indian wisdom. We could make it a part of primary educational physical activity. Coupled with meditation this could lay a good foundation for healthy living lessening the burden of sickness care in later life as well. Yoga has no religion attached to it and is being practised in churches as well. If one carefully mulls over the above details one wonders how our ancient sages had thought of all these centuries ago! I should be pleased to give more details should the need arise. I have in fact a ready module in place which we tried on a small scale with success. So, all that is written above is doable.
"At the end of times the merchants of the word will deceive the nations of the world through their Pharmacia." (Sorcery) - Rev 18:23
(Professor Dr BM Hegde, a Padma Bhushan awardee in 2010, is an MD, PhD, FRCP (London, Edinburgh, Glasgow & Dublin), FACC and FAMS. He is also Editor-in-Chief of the Journal of the Science of Healing Outcomes, chairman of the State Health Society's Expert Committee, Govt of Bihar, Patna. He is former Vice Chancellor of Manipal University at Mangalore and former professor for Cardiology of the Middlesex Hospital Medical School, University of London.)