Tuesday, 31 July 2012

Morning Summary- Market Synopsis- 31 July, 2012

Good Morning Everyone,
The major Indian indices gave a gap-up opening in early morning session, however they have slipped down a little from the highs. The Sensex is currently trading near the level of 17140 i.e., down by nearly 3 points and the Nifty is trading near the level of 5200 i.e., down by nearly 1 point. This has led the midcap and the small-cap counters to trade flat. On the sectoral front, the indices are trading mixed. Healthcare and FMCG indices are leading the list of gainers with gains of over half a percentage point each while Auto and Capital goods indices are leading the list of losers with losses of a little less than half a percentage point each. Further, the market breadth is neutral.

The Trap Called Guaranteed Return

Many financial companies issue bonds and investment schemes luring investors with a bait called guaranteed return. There is no such thing called ‘guaranteed return’ in the equity market.

SIX MUST KNOWS ABOUT GUARANTEED NAV

i. No instrument that invests in equities can guarantee returns.

ii. The Securities and Exchange Board of India does not allow even mutual funds to guarantee returns.

iii. The highest NAV is not the same as the highest level of market during the policy's tenure.

iv. There is no minimum return guaranteed by the policies.

v. The insurance companies do not explain how they manage to deliver the guaranteed returns without incurring losses.

vi. There are more transparent equity instruments, such as mutual funds, which offer exposure to stocks.

News Hour- RBI paints gloomy picture, cuts GDP forecast to 6.5% in FY13

MUMBAI: Reserve Bank of India painted a gloomy picture of the country's economy on Monday, citing both a sluggish growth outlook and persistent inflation, a day before it is expected to hold interest rates steady for the second time in two months. 

The Reserve Bank of India also maintained pressure on the deficit-strapped government to cut subsidies and invest more to stimulate growth. 

"The near-term outlook on inflation continues to be marked by a number of upside risks, despite the significant slowdown in growth," the Reserve Bank of India said in its quarterly report on macroeconomic and monetary developments. 

"The outlook for growth looks weak and substantially affected by global headwinds, inflation, and policy uncertainty," it said. 

An RBI survey of economists forecast the Indian economy will grow at 6.5 per cent in the fiscal year that began on April 1, from the 7.2 per cent forecast in a survey three months ago. 

Headline wholesale price index inflation remained above 7 per cent in June, with the consumer price index sticky at 10 per cent even as growth slowed to a nine year low of 5.3 per cent in the March quarter in Asia's third-largest economy. 

On Monday, the RBI indicated it had little room to maneuver. "Fiscal and monetary space to stimulate the economy remain limited in the presence of an already large fiscal deficit and persistent inflation," the report said. 

A Reuters poll last week showed 19 of 20 economists do not expect the RBI to bring down its key repo rate from its current 8 per cent after a steeper-than-expected 50 basis point cut in April. 

The RBI kept rates on hold in June, explaining it had "frontloaded" rate cutting in April and arguing that high interest rates were not the key reason for slowing growth. 

Hopes among investors that the RBI might ease rates on Tuesday have been eroded by a rise in food prices, caused by weaker-than-normal summer monsoon rains, as well as receding expectations that the government will soon cut subsidies on diesel, a key driver of its fiscal deficit. 

"Fiscal space needs to be created by curtailing subsidies and significantly boosting government capital expenditures to provide an investment stimulus to the economy," the RBI said. 

It said the government should clear infrastructure bottlenecks and remove constraints on foreign direct investment in order to bolster the investment climate. India has been considering easing foreign investment rules in the supermarket and airline sectors. 

India's fiscal deficit for the year that ended in March was 5.76 per cent of GDP, and many economists say its aim to trim that to 5.1 per cent in the current fiscal year looks optimistic. 

(Source: economictimes.indiatimes.com)

Market Heatmap- 30th july, 2012

The Indian markets closed the day with gains of over 1.8%. Sensex closed with an addition of 305 points at 17144 while Nifty ended the day at 5200 adding 100 points. There was optimism on the street that central banks from India and Europe are trying to take steps to tackle problems in their regions. Sectorally, all the sectoral indices closed with gains of over one percent. Power , Realty and Capital Goods rallied by over three percent. The market breadth was positive and two stocks were seen advancing against every single decline.Find out more at :http://www.facebook.com/bmawealth?sk=app_206541889369118

Commodity Market Update (Gold perf. chart)

Precious metals are trading mixed with positive bias, CMX Gold futures are likely to test its intraday resistance around $1630 while on other hand Silver listed on CMX may trade higher to $28.30, Base metals may remain mixed in a broad range as traders are very much unclear about the US and Europe economic health, Market traders will be looking for the Wednesday’s FOMC statement and Thursday’s ECB press conference to find some proper clue regarding the top economies. On Energy complex Crude oil prices may move in an indecision range of $88.5 to $91.5 and any breakout above or below the range may lead further price movement. We expect the gaining prices in Natural Gas may cue short opportunity as it’s seems difficult for prices to breach the resistance of Rs.175.00.

BMA Gyaan- BLUE CHIP COMPANY


BMA Words of Wisdom by Michael Jordan


Monday, 30 July 2012

Never Risk What You Can't Afford to Lose

Risk is an inherent part of investing. Generally, investors must take greater risks to achieve greater returns. Those who do not tolerate risk very well have a relatively smaller chance of making high earnings than do those with a higher tolerance for risk. But one thing should be kept in mind that one should not risk the money which he can’t afford to lose.

i. Always have an adequate emergency fund of at least 3-6 months.

ii. Do not invest in anything you don’t understand.

iii. Diversify your investments among asset classes, strategies, and timelines.

Morning Summary- Market Synopsis- 28 July, 2012

The Indian markets gained by nearly 1% in early trade following positive global cues. Sensex was up by 181 points at 17020 while Nifty was trading up by 52 points at 5152. All the sectoral indices were trading in the green. Banking, Capital Goods and Realty were leading the list of gainers with over 1.5% gains. Among Nifty stocks, GAIL and Bank of Baroda will report their first quarter earnings today. The market breadth is positive and nine stocks are seen advancing against every four declines.
(Pic source: beta.bseindia.com)

Sunday, 29 July 2012

Invest some money in liquid stocks as well


Highly liquid stocks are stocks that may be exchanged for cash on a very short notice. They are typically associated with stocks that are traded in high frequencies and high volumes. As a result, such types of investment are ideal for those who are interested in speculative trading, and may also offer some advantages during investment portfolio creation. It is very important that you put some of your investment in liquid stocks so that in case of an emergency you could avail cash easily by trading the liquid stocks.

i. You can decide to trade in your own time frame:
A major benefit of trading in a liquid market is that the most liquid market, foreign exchange, is open 24 hours a day except for weekends. You can decide to trade in your own time frame, after work, before you go to work or even at work.

ii. More trading opportunities:
Another benefit from trading in liquid markets is volatility. When a price fluctuates as it does in a liquid market more trading opportunities are available. If you buy an asset and its price doesn’t move there is little or no opportunity to make a profit.

"Live without Limits" - Life of Nick Vujicic

Nick Vujicic (born December 4, 1982) is a preacher, a motivational speaker and the director of Life Without Limbs, an organization for the physically disabled. He regularly gives speeches across subject of disability and hope.
Early life 
The first-born child in his devout Serbian Christian family, Vujicic was born in Melbourne, Australia with the rare Tetra-amelia disorder: limbless, missing both arms at shoulder level, and legless but with two small feet, one of which has two toes. Initially, his parents were devastated. Vujicic was otherwise healthy.
Growing up
His life was filled with difficulties and hardships. One was being prohibited by Australian law from attending a mainstream school because of his physical disability, even though he was not mentally impaired. During his schooling, the laws were changed, and Vujicic was one of the first disabled students to be integrated into a mainstream school. He learned to write using the two toes on his left "foot", and a special device that slid onto his big toe which he uses to grip. He also learned to use a computer and type using the "heel and toe" method (as demonstrated in his speeches), throw tennis balls, answer the phone, shave and get himself a glass of water (also demonstrated in speeches).

Epiphany
Being bullied at his school, Vujicic grew extremely depressed, and by the age of 10, started contemplating suicide. After begging God to grow arms and legs, Nick eventually began to realize that his accomplishments were inspirational to many, and began to thank God for being alive. A key turning point in his life was when his mother showed him a newspaper article about a man dealing with a severe disability. This led him to realize he wasn't the only one with major struggles. When he was seventeen, he started to give talks at his prayer group, and eventually started his non-profit organization, Life Without Limbs.

Career
Nick graduated from college at the age of 21 with a double major in Accounting and Financial Planning. He began his travels as a motivational speaker, focusing on the topics that today's teenagers face. He also speaks in the corporate sector, although his aim is to become an international inspirational speaker, in both Christian and non-Christian venues. He regularly travels internationally to speak to Christian congregations, schools, and corporate meetings. He has spoken to over two million people so far, in twelve countries on four continents (Africa, Asia, Australia, and North America).
 

By the age of 25, Nick hoped to become financially independent. He wishes to promote his words through television shows such as well as by writing books. His first book, planned for completion by the end of 2009, is to be called No Arms, No Legs, No Worries!.
His motivational DVD, Life's Greater Purpose, is available on the Life Without Limbs website. Most of the DVD was filmed in 2005, featuring a brief documentary about his home life, and how he does regular things without limbs. The second part of the DVD was filmed at his local church in Brisbane, and was one of his first professional motivational speeches. His motivational speeches can be seen on the Premiere Speakers Bureau Website. Vujicic currently lives in California.
His secular DVD "No Arms, No Legs, No Worries" is available online through his corporate motivational speaking company "Attitude Is Altitude".
Vujicic's first worldwide television interview, featured on 20/20 (ABC) with Bob Cummings was aired on March 28, 2008. 

Saturday, 28 July 2012

Margin of Safety – The Key to Value Investing

A principle of investing in which an investor only purchases securities when the market price is significantly below its intrinsic value. In other words, when market price is significantly below your estimation of the intrinsic value, the difference is the margin of safety. This difference allows an investment to be made with minimal downside risk.

Why is margin of safety so important ?

i. Being wrong is part of the investing process. Intrinsic value estimate calculated by a person would be different from the value calculated by another. Errors may creep in the calculations. So, it’s more like an insurance policy that helps prevent us from overpaying—it mitigates the damage caused by over-optimistic estimates.

ii. Any estimates, at best, are imprecise; at worst, they are completely wrong. Let’s assume that your intrinsic value calculations were 100% right. Still, what about future uncertainties? The future is uncertain. It’s a fact. You need to provide a margin for this uncertainty you face. Nobody is an exception to this. All the analysts and experts in this world make mistakes and they face uncertainty. Hence margin of safety is important.

News Hour- ICICI Bank Q1 net up 36.3% at Rs 1,820 crore, beats forecast

MUMBAI: ICICI Bank, country's top private lender, posted on Friday a 36.3 per cent jump in quarterly profit, its strongest growth in more than a year, helped by robust loan growth, high fee income and better asset quality.

ICICI said it made a net profit of Rs 1815 crore ($325.5 million) in the fiscal first quarter ended June compared with Rs 1332 crore a year earlier. Analysts, on average, had expected profit of Rs 174 crore, according to Thomson Reuters I/B/E/S.

The strong results vindicate its low-risk strategy, as India's economy slows. The bank was dealt a severe blow by the global financial crisis as its bold bets on consumer loans soured but has subsequently cleaned up its books.

ICICI Bank expects to sustain the current level of net interest margin and sees an improvement in asset quality of the bank, Chief Executive Officer Chanda Kochhar said on Friday.

The results also show that private banks are better placed for profit growth in the current environment than government-owned banks, which account for 70 per cent of the market in India but whose lending decisions are not always driven by commercial considerations.

State-run Canara Bank missed street estimates in its latest quarterly earnings while No.2 state lender Punjab National Bank also disappointed with a spurt in bad loans.

But smaller private lenders HDFC BankAxis Bank andYes Bank all recently reported strong profit growth.

Government-run State Bank of India, the country's No.1 lender which controls about a quarter of the nation's loans and deposits, is yet to report.

High interest rates to rein in racing inflation and government's slow pace of implementing reforms have put the brakes on India's economy, which grew 8-9 per cent between 2005 and 2008.

The International Monetary Fund has sharply downgraded growth estimates for India to 6.1 per cent this fiscal year and 6.5 per cent in the next.

ICICI's net non-performing loans as percentage of total loans dropped to 0.71 per cent from 1.04 per cent. Net interest income, or the difference of interest earned and interest expended, rose about a third to Rs 319 crore.

ICICI shares were up 3.09 per cent at 0700 GMT. They have risen about a third since the start of the year, outperforming the 28 per cent growth in the BSE banking index and a 10 percent growth in the broader market during the same period.

(Source:economictimes.indiatimes.com)

Market Heatmap- 26 July, 2012

Market Heatmap, 
The main Indian stock indices started the day on a strong note and the momentum was seen going forward till almost the later part of the session. However towards the end, renewed wave of selling pressure was observed in the broader indices. Amongst all the ups and downs, the Sensex finally managed to close at the level of 16839.19 i.e., up by 199.37 points and the Nifty closed at the level of 5099.85 i.e., up by 56.85 points. However, the midcap and the small-cap counters closed negative by nearly a percentage point each. On the sectoral front, the indices closed mixed. Metal index closed as the major gainer with gains of over two percentage points while Realty, Capital Goods and PSU indices closed as the major losers with losses of over half a percentage point each. Further, the market breadth closed weak as only four stocks were seen advancing for every seven declines.Find out morehttp://www.facebook.com/bmawealth/app_206541889369118

Commodity Market Update (Copper perf)

Precious Metals are trading in a range with positive bias, Gold at international exchange is at $1620 an ounce up by 0.30% since morning while Silver is trading at $27.58, higher by half a percent from its yesterday’s settlement, prices are trading well above its support level and are likely to trade higher in the coming days. Gold is expected to hit $1650 while Silver may test its resistance around $29. Crude Oil prices are also likely to trade higher with a target of $93, on other hand Natural Gas may post some corrective movement from the current level. Base Metals are likely to trade mixed, as the metals traders waiting for some clear signal regarding the health of major economies.

BMA Gyaan

What are the 5 stocks that you think will shine during the Olympic Season?

BMA Words of Wisdom by Leonardo Da Vinci


Friday, 27 July 2012

Morning Summary- Market Synopsis- 27 July, 2012

Good Morning Everyone,
As anticipated, the Indian indices gave a gap-up opening in the early morning trade, based on the overseas cues. The Sensex is currently trading near the level of 16840 i.e., up by nearly 200 points and the Nifty is trading near the level of 5105 i.e., up by nearly 65 points. This has led the midcap and the small-cap counters to trade positive by nearly half a percentage point. On the sectoral front, except for Healthcare index, all the other indices are trading in green. Bank and Metal indices are leading the list of gainers with gains of over one and a half percentage points each. Further, the market breadth is positive as only five stocks are seen advancing for every one decline.

Macroeconomics And Share Market

Increasing attention is being paid to the relationship between share prices and the macroeconomic variables by both economists and finance specialists. In the present-day scenario, where there is an increasing integration of the financial markets and implementation of various stock market reforms, the activities in the stock markets and their relationships with the macro economy have assumed significant importance.

i. Money supply:
Money is a collection of liquid assets that is generally accepted as a medium of exchange and for repayment of debt. In that role, it serves to economize on the use of
scarce resources devoted to exchange, expands resources for production, facilitates trade, promotes specialization, and contributes to a society's welfare


ii. Inflation:
Inflation is a state in the economy of a country, when there is a price rise of goods as well as services. To meet the required price rise, individuals have to shell out more than is presumed. With increase in inflation, every sector of the economy is affected. Ranging from unemployment, interest rates, exchange rates, investment, stock markets, there is an aftermath of inflation in every sector. Inflation is bound to impact all sectors, either directly or indirectly. Inflation and stock market have a very close association. If there is inflation, stock markets are the worst affected.

iii. Employment rate:
The employment rate is one of the economic indicators that economists examine to help understand the state of the economy. The employment rate shows a country’s ability to put its population to work and thereby generate income for its citizens. Countries with higher employment rates are likely to have higher standards of living, other things being equal.

iv. Exchange rate:
Exchange rate movements frequently focus on changes in credit market
conditions, reflected by changes in interest rate differentials across countries, and changes in the monetary policies of central banks. The profit-maximizing investors in an efficient market will ensure that all the relevant information currently known about changes in macroeconomic variables are fully reflected in current stock prices, so that investors will not be able to earn abnormal profit through prediction of the future stock
market movements.

News Hour- Sensex closes at 6-week low despite gains in Asian

MUMBAI: The markets dropped to their lowest close since early June despite broad gains in Asian shares as lenders were hit by expectations the Reserve Bank of India will keep interest rates on hold next week, while earnings disappointment dented ITC and BHEL.

The RBI is expected to hold the repo rate steady at its review on Tuesday, a Reuters poll showed, keeping pressure on the government to reduce the fiscal deficit and take steps to remove bottlenecks that are driving up food prices.

However, investors fear the government will hold off on widely anticipated fuel subsidy and retail reforms because of renewed opposition from party and coalition allies, which extended recent falls in state-run oil stocks on Thursday.

Market sentiment was also hit after provisional data showed foreign investors sold a net Rs 372 crore ($66.23 million) of shares on Wednesday, marking a second day of net sales after strong buying earlier this month.

"RBI would maintain status quo on rates, but market would only be a tad disappointed because it's well understood that action is expected and should come from New Delhi," said Phani Sekhar, Fund Manager of portfolio management services at Angel Broking.

The 30-share BSE index fell 1.22 per cent to 16,639.82 points, marking its lowest close since June 6. The 50-share NSE index fell 1.3 per cent to 5,043.00 points. The losses came despite gains in Asian shares, with the MSCI Asia-Pacific ex-Japan index rising 0.6 per cent.

The expiry of derivatives at the end of the session kept trading volatile, especially towards the end of the session. Banks led decliners, with brokers citing heavily selling from foreign investors. Of 20 economists polled by Reuters, 19 expect the RBI to keep the repo rate on hold.

Analysts also don't expect the central bank to deliver a cut in the cash reserve ratio, or the amount of funds that lenders must keep with the RBI, which would have had a more direct benefit to the sector. Private lenderHDFC Bank fell 1.6 per cent, while State Bank of India fell 2.5 per cent.

( Source: economictimes.indiatimes.com)

Market Heatmap- 25 July, 2012

Market Heatmap,
The markets saw a rangebound session for most part of the day before seeing huge sell off in the last hours. The fall may be attributed to the expiry of the July F&O series. Sensex shed over 200 points to close at 16640 and the Nifty lost over 65 points closing at 5043. On the sectoral front, all the 13 indices on BSE closed in the negative. Realty, Capital Goods, PSU and Banks tumbled over 1.5% each. The market breadth was weak and one stock was seen advancing against every three declines. Find out morehttp://www.facebook.com/bmawealth/app_206541889369118

Commodity Market Update (Natural Gas)

Precious Metals are trading slightly lower on CMX with Gold losing 3.0 to trade at 1605.80 while Silver is down 7 cents to trade at 27.39 since morning. Gold prices are facing a small resistance at 1610 above which prices should rally strongly to test 1630-1640 this week while resistance comes into play for Silver at 27.55 above which the outlook turns bullish. Base Metals are trading in red on LME and we find Copper still trading within a range of 7500-7375 and we don’t expect prices to post much of a movement unless prices break above or below this range. Crude Oil prices broke below the range support at 87.70 last evening but failed to remain low and we find it trading back in the range at 88.81, prices may rally higher if it breaks above resistance at 89.13. Natural Gas is trading with a negative bias and we may see it decline today in the evening session.

Key Data to Watch : Core Durable and Durable Goods Mom, Unemployment Claims, Pending Home Sales, Natural Gas Storage

BMA Gyaan- How Do Futures Contracts Work?

BMA Words of Wisdom by "CHANAKYA"


Morning Summary- Market Synopsis- 26 July, 2012

Good Morning Everyone,
The markets are trading flat with a negative bias on the settlement day of the July F&O series. The Sensex was at 16833, down 13 points while the Nifty was at 5104, down 5 points from the previous close. Among sectoral indices, the Capital Goods Index was down by over one percent with Realty and PSU following the list of declines. The Healthcare Index on the other hand was positive by close to half a percentage point. The market breadth was weak and four stocks were seen advancing against every nine declines.

(Pic source: bseindia.com)

Thursday, 26 July 2012

It Pays To Stay Out Of Market Sometimes

One of the things that every trader must learn is when to stay out of markets. This is one of the keys that you must master if you want to become a successful trader. You have to be alert because it is easy and dangerous to get caught up in the excitement of trading.
The emotions you feel being an active part of the market dynamics can hurt your account if you are not able of stay out of the market in dangerous times.

i. Market Timing Tool:
The market has no mercy on the inexperienced traders who cannot swim in troubled waters. If you do not have a tool to give you warning signs that the market situation has changed, it will be very difficult for you to stay off the market when the situation requires. The more accurate this tool, the greater the percentage of winning trades that you are able to achieve in your trading. You must develop your own methods or rely on what others are willing to share with you, but above all do not trade in the stock market without a market timing tool to help you stay out of the market when bad times come.

ii. Trading Method:
Your trading method should tell you what conditions must be met in order to open a trade and what conditions are needed to close a trade. There is no place for emotions in the market. Follow a set of objective and well-tested rules to let the money grow in your account. With a trading method in which a trade must meet certain conditions before they can be opened, you will be able to stay out of assets that do not show enough strength. With rules that force you to close the trades when they start to lose money, you will go out off the market before suffering significant damage in your account.

iii. Understand the Market Behavior:
The Market Timing tools and the Trading Method will help you to understand the market behavior. One should abide by rules to succeed. You should understand the market to exit from the market in times of crisis. Else, you will not know when the storm comes until it's too late.

News Hour- Petrol, diesel prices up in 7 states after adjustment of taxes

NEW DELHI: Petrol and diesel prices were today hiked in seven states like West Bengal and Maharasthra and that of domestic LPG in six states as state-owned oil firms recalibrated rates to reflect changes in local levies.

The exercise also resulted in petrol and diesel prices being reduced in 11 states like Karnataka, Goa, Gujarat and Odisha from today. Besides, LPG prices were reduced in 12 states including Gujarat, Tamil Nadu, West Bengal and Odisha.

While there will no change in price of petrol in Delhi, Kolkata would see an increase of Rs 2.52 a litre to Rs 76.13 per liter. Petrol in Mumbai will cost Rs 75.14 from today as against Rs 74.23 per litre till yesterday. But in Chennai, rates have been cut by Rs 0.97 per litre to Rs 72.19.

The changes in prices of petrol are over and above the Rs 0.70 per litre hike that was effected from July 24.

Diesel price in Delhi would remain unchanged at Rs 41.29 per litre but it would be raised by Rs 0.92 per litre to Rs 44.66 in Kolkata and by Rs 0.89 to Rs 45.28 a litre in Mumbai. But in Chennai, rates have been cut by a marginal 12 paisa to Rs 43.83 a litre.

This follows state-run fuel retailers recalibrating surcharge calculations to align with changes made in local levies like entry tax on crude oil, surcharge on sales tax and CST/purchase tax on inter-company sale, by state governments.

Domestic LPG price has been hiked by Rs 19.43 per 14.2-kg cylinder in Assam, by Rs 9.16 in Bihar and Rs 8.72 per bottle in Maharashtra.

LPG will cost Rs 9 more at Rs 423 in Mumbai but there will be no change in rates in Delhi where it is sold at Rs 399.26 per bottle.In Kolkata prices have come down by Rs 4 to Rs 401 and in Chennai by Rs 7 to Rs 386.50

But the rates of domestic cooking gas have been cut by Rs 10.18 per cylinder in Gujarat, by Rs 7.01 in Tamil Nadu, Rs 3.86 in West Bengal and Rs 4.15 in Odisha. It costs Rs 405 in Kolkata and Rs 393.50 in Chennai.

(Source:economictimes.indiatimes.com)

Market Heatmap- 25 July, 2012

Market Heatmap,
The market started on a weak note. A sudden bout of selling pressure was observed towards the earlier part of the trading session, however the market managed to recover towards the later part of the day and ended the day on a decent note. The Sensex closed at the level of 16846.05 i.e., down by 72.03 points and the Nifty closed at the level of 5109.25 i.e., down by 18.6 points. The midcap and the small-cap counters closed negative by over half a percentage point each. On the sectoral front, except for FMCG, IT and Healthcare indices, all the other indices closed in red. Metal index closed as the major loser with losses of over two percentage points. Further, the market breadth closed weak as only one stock was seen advancing for every two declines.Find out more at :http://www.facebook.com/bmawealth?sk=app_206541889369118

Comodity Market Update (Crude perf. chart)


Gold on COMEX is trading slightly higher today, settling above its prior resistance of $1580 which add fresh bullishness in gold futures, prices are likely to test its resistance around $1610 whileon domestic market the rupee against dollar is also supportive for the gaining prices which may take prices around 29850 levels in the coming session. Silver prices may also remain positive following gold moves. Base metals are trading mixed since morning, traders will be waiting for the New Home Sales data to be released by Census bureau, later in the evening. Crude oil prices are clutched in a narrow range as the market participants will be following the US Crude Oil Inventories release before taking any position while Natural Gas is expected to remain positive for the day.

Data to Watch:
US New Home Sales
US Crude Oil Inventories

BMA Words of Wisdom by Richard Branson


Congratulations to Sri Pranab Mukherjee


Wednesday, 25 July 2012

Morning Summary- Market Synopsis- 25 July, 2012

The key Indian equity benchmarks started the day on a negative bias. Concerns about the fragile fiscal conditions of Spain and Greece, coupled with worries over slowdown in China are weighing on the sentiment across Asian markets. On the domestic front, doubts have increased over the Government's ability to launch important reforms amid stiff resistance from various UPA allies and Opposition parties. The Sensex is currently trading near the level of 16810 i.e., down by nearly 105 points and the Nifty is trading near the level of 5100 i.e., down by nearly 30 points. This has led the midcap and the small-cap counters to trade negative by nearly half a percentage point. On the sectoral front, all the indices are trading in red. Realty, Consumer Durables, Metal and Capital Goods indices are leading the list of losers with losses of over a percentage point each. Further, the market breadth is weak as only one stock is seen advancing for every two declines.
(Pic source-bseindia.com)

Know When To Sell Your Stock


Knowing when to sell a stock or equity is one of the hardest things about trading. Many traders understand picking up a stock for a bargain, when the price is low, for example, after a pullback or at fire sale prices. The other side of the coin, though, is when to sell. The natural and classic appeal of a buy and hold strategy helps the relatively unsophisticated investor to profit from keeping stocks in a portfolio, but this common method doesn't really give guidance on when to sell a stock or what is an acceptable sale price. Nobody really knows where a stock price might turn at any particular future time. However, there are some ways through which traders can know when to sell a stock, and do so decisively.
 
i. Make yield goals:
Traders who have a specific idea of how much gain they want will have a kind of prearranged idea of when to cash in gains from a stock. This is one way of deciding beforehand on when the stock should be sold.

ii. Consider profit taking:
Generally, experts recommend annual or periodic turnover in a buy and hold strategy. The idea is that, over time, the investor who has perhaps a dozen stocks cashes in the ones that have had explosive growth over a year and reinvests in cheap stocks for yet another big gain down the road. However, one should invest in the cheap stock only if the long term prospects of the stock looks promising.

iii. Avoid selling short or selling at a temporary loss:
Some traders sell stocks when they lose value due to weakness in the market, or experience something catastrophic like bankruptcy. However, if the stock is fundamentally strong, one should not panic and sell the stock at minor loss. If the market stabilizes, the good stocks have a high probability to rebound strongly to yield good returns.

iv. Sell in calm waters:
At times, due to adhoc trading activity, it becomes difficult for buy and sell orders to go through. Hanging orders can be problematic and jeopardize some of the stock's value. Thus, one should avoid selling stocks under such circumstances.

v. Know the results of selling when buyback is imminent:
Those who practice quick buys and sells on the same stocks often churn the portfolio and lose significant money to commissions. Also, due to complicated income tax rules, one might end up paying more tax on short term trades (shares bought and sold within a year) as compared to long term investment. This may increase the cost of trading and distort the plan.

News Hour-State-run banks to review investments in subsidiaries & joint ventures

NEW DELHI: Finance Ministry has directed state-run banks to review their investments in JVs or subsidiaries to devise strategy for optimal capital utilisation. 

The ministry feels that given the large capital requirement, banks would a well thought out plan. 

"Banks have been told to make an assessment of the capital requirements considering the Basel III requirements," said a finance ministry official. The capital regulation norms based on Basel-III standards will start rolling out from January 2013. 

Banks will have to seek approval from their boards on their capitalisation plans. This plan should also include recoveries against loss assets and profitability as per the memorandum of understanding with the government. 

Financial services secretary DK Mittal had earlier said that the public sector banks would require about 3.5 lakh crore in the next 10 years. The government is also reviewing its plans to convert its perpetual bonds and preference shares in state-run banks into common equity. 

The new prudential norms under Basel-III will restrict Tier-I capital to common equity and retained earnings. Banks have also been asked to improve their low-cost savings and current deposit or (CASA), employee branch ratio and profit per employee. 

They have been further directed to put 80% of their total staff in branches and only 20% in head offices. Banks have to also identify and close down loss making delivery channels to improve profitability.

(Source-economictimes.indiatimes.com)

Market Heatmap- 24 July, 2012

The frontline Indian equity benchmarks closed the trading session with modest gains. The day started on a flattish note and the same was observed all through-out the day. Finally, the Sensex closed at the level of 16918.08 i.e., up by 40.73 points and the Nifty closed at the level of 5128.2 i.e., up by 10.25 points. This led the midcap and the small-cap counters to close positive. On the sectoral front, the indices closed mixed. FMCG and Consumer Durables indices closed as the major gainers with gains of over a percentage point each while Capital Goods indices closed as the major loser with losses of over a percentage point. Further, the market breadth closed neutral..Find out more at :http://www.facebook.com/bmawealth?sk=app_206541889369118

Comodity Market Update (SILVER PERF CHART)

Gold on CMX is trading slightly lower in a tight range of $10 at $1583 with negative bias, while Silver is trading lower by half a percent at $26.92 and are likely to extend its falling momentum later in the evening, Base metals are trading in red, On LME 3-month copper may test its intraday support around $7375 below which prices can fall further to a level of $7300. On MCX Crude oil prices are likely to trade mixed, with a strong support of Rs.4950 and resistance of Rs.5050. Natural Gas prices may post some intraday correction but we will suggest buying at a lower price rather than considering risky shorts, prices are expected to move higher to a level of Rs.195 in this week.

BMA Gyaan- ACCRUED BENEFITS


One should not rely on technical analysis alone while trading


Fundamental analysis is a method used to determine the value of a stock by analyzing the financial data that is 'fundamental' to the company. That means that fundamental analysis takes into consideration only those variables that are directly related to the company itself, such as its earnings, its dividends, and its sales. Fundamental analysis does not look at the overall state of the market nor does it include behavioral variables in its methodology. It focuses exclusively on the company's business in order to determine whether or not the stock should be bought or sold. Thus, one should not rely on technical analysis alone while trading in stocks.

i. Trade could be risky:
Fundamental analysis usually does not give us specific entry and exit points, so the trades can be pretty risky. It is very difficult to find a method of translating all of the different information into specific entry and exit points for a particular trading strategy.

ii. It is easy to be confused:
There is a lot of information which is why it is easy to be confused. Because of this, there are therefore many traders who use some fundamental analysis to understand unexpected movements of the prices and to know the forces which move them, but they use technical analysis to decide when to enter and exit the trades.

Tuesday, 24 July 2012

Morning Summary- Market Synopsis- 24 July, 2012


As anticipated, the frontline Indian equity benchmarks advanced modestly in early minutes of trade, as market participants snap up beaten down scrips following yesterday's global selloff. However, the gains are limited at the moment amid lingering worries over the eurozone debt crisis and the government's inability to push through pending reforms. The Sensex is currently trading near the level of 16910 i.e., up by nearly 35 points and the Nifty is trading near the level of 5130 i.e., up by nearly 15 points. This has led the midcap and the small-cap counters to trade positive. On the sectoral front, the indices are trading mixed. FMCG index is leading the list of gainers with gains of over a percentage point each while Capital goods index is leading the list of losers with losses of little less than half a percentage point. Further, the market breadth is almost flat as only six stocks are seen advancing for every five declines.
(Pic source-beta.bseindia.com)

BMA Words of Wisdom by Stephen Hawking


News Hour-Sensex plunges 1.6% on profit booking, risk aversion

MUMBAI: The Sensex fell 1.6 per cent on Monday, marking its biggest percentage fall since mid-May, asinvestors booked profits in recently outperforming sectors such as banks after global risk aversion hammered Asian shares. 

Investors in India are facing the prospect of a double whammy, as the euro zone debt crisis looks set to continue given growing worries Spain will need a sovereign bailout, while the global economy continues to show signs of weakness. 

At home, investors are starting to grow concerned the government may not be able to deliver substantial policy reforms after last week's presidential elections, threatening to undo the strong gains in Indian stocks seen last month. 

Retail stocks such as Pantaloon slumped on Monday following media reports some government coalition members are opposing allowing foreign direct investment into multi-brand outlets. 

"In my view, time is up, and now nothing concrete can be expected from this government for a long time," said Vijay Kedia, director at private wealth management firm Kedia Securities. 

"India now needs fast and constant changes in policy in tandem with global changing scenario, which this government will not be able to implement till next election," he added, referring to general elections in 2014. 

The Sensex ended at 16,877.35, down 281.09 points or 1.64 per cent. It touched a high of 17,047.73 and a low of 16,849.28 in trade today. 

The 50-share NSE Nifty closed at 5,117.95, down 87.15 points or 1.67 per cent. It touched a high of 5,164.20 and a low of 5,108.10 in trade today. 

The Nifty slipped for a second straight day and hit its lowest level since June 26 on the back of weak global cues and on concerns that the government might find it difficult to carry ahead with economic reforms following resistance to FDI in retail from the Samajwadi Party. 

According to analysts, the market is likely to remain rangebound with a negative bias in the short term and key trigger for an upmove would be reforms initiation from the government. 

"Indian markets lost about 1.7 per cent on concerns that Spain might become the fourth euro zone member to need a full international bailout after a second region Murcia (after Valentia) indicated that they might need government help. There were also concerns that, there may be resistance to FDI in retail. This may mean that, the government may face further roadblocks to economic reform agenda," said Dipen Shah, Head of PCG (Private Client Group) Research at Kotak Securities. 

Market Heatmap- 23 July, 2012

The F&O expiry week started off on a very negative note, with the major indices closing almost near the day’s low. Today’s decline could be attributed to a sell-off across global equity markets. Markets gave a gap-down opening, tracking weakness in the Asian markets amid concern about Spain’s worsening fiscal health and fresh trouble for Greece. All-round selling in scrips across sectors dragged the market down. The Sensex closed at the level of 16877.35 i.e., down by 281.09 points and the Nifty closed at the level of 5117.3 i.e., down by 87.15 points. This led the midcap and the small-cap counters to close negative by over a percentage point each. On the sectoral front, all the indices closed in red. IT, Metal index closed as the major loser with losses of over three percentage points. Further, the market breadth closed negative as only three stocks were seen advancing for every eight declines.Find out more at :http://www.facebook.com/bmawealth?sk=app_206541889369118 

Comodity Market Update

Precious Metals are trading sharply lower on CMX today with Gold losing $12
or 0.75% at $1571.10 while Silver is down almost 1.5% since morning. Having
broken below key support levels, the trend for the evening is likely to
remain on the downside. Base Metals are sharply down on LME with Copper
losing 2.5% and Nickel down 2% whereas on MCX, prices have had limited
downsides due to the rupee which has depreciated by 58 paise or 1.05%
against the dollar. Oil prices are also down heavily with Crude traded on
NYMEX losing almost 3% or $2.5 to trade at $89.30 while Natural Gas is down
over half a percent since morning, $89.0 is a strong support for prices
which is likely to hold today paving way for further advances from here but
a breach below it would see prices fall to $85.0 this week. We maintain a
positive outlook on Natural Gas prices.

No Major Economic Releases.

BMA Gyaan- ZERO COUPON BOND


BMA Words of Wisdom by Henry Ford