Market Indices Trading Low

Market indices of India are trading low in the market as retail investors are closing profits on selling their position before the monthly expiry dated tomorrow in the derivative dealings. Corporates are reporting unexpectedly lower profits which triggered high sales of positions in the market during the week of July.

Nifty and Sensex opened flat on Wednesday morning as Tuesday night flew off peacefully without any big global cues shaking the markets. Nifty opened red at 7,746 lowered by three points whereas Sensex was green hiked by 14 points valued at 26005.

Further, in the morning trade both the indices of fell down marking red pointers. Nifty lost 7.55 points testing the limits at 7,741.15 points, BSE Sensex dropped steeply by 25.85 points as sellers infused in the market using their positional advantages bringing sensex to 25,965.38 points.

Cumulative reports by market investors and researchers said that markets are looking at further falls in the market as stocks of India are losing benchmarks in global markets as well.

Asian stocks are running the bulls becoming star players in the world markets for the fourth-day in a row. Asian country's benchmark indices broke six-year records expanding gains before US central monetary authority updated the markets. European markets, overshadowed Asian markets, rising above Russian stocks.

BSE segmented indices reflected biggest dip in capital goods as the index shed 4.22 percent in a day. Other major contributors in the red zone included metals falling by 0.63 percent, health care services slipped 0.19 percent and auto segment dropped by 0.17 percent.

Oil, Gas and Consumer Durables topped in the green list of BSE Sensex climbing up by 0.87 percent and 0.99 percent respectively. FMCG and TECk jumped up by 0.52 percent each supporting the falling index.

Top gainers in Sensex listed ITC, Bharti Airtel, ONGC, GAIL and Hero Motocorp and SSLT, Tata Power, L&T, Tata Steel and Tata Motors topped the laggards list on Wednesday.

Economical compilations showed an improvement in customer sentiments in the American markets though, the home loans experienced the same slow flow hampering its growth.

The Federal Reserve raised speculations that it might interfere in bond dealings and entering the bond-buying program again.

US is going to publish its second quarter growth report today amid government is preparing the labor report hiked by more than 231,000 jobs in the month of July.

Highlighting in the Asian Trade, Nikkei 225 climbed 31 points, i.e. 0.2 percent standing firm at 15,649. Hong Kong's benchmark index HSI flew 185.16 points, i.e. by 0.75 percent stopped at 24,825.69.

Spice Jet takes over Third spot from Air India

Spice Jet expanded its market reach inflating its to 19 percent crossing over the third largest airline, Air India closing at 18.5 percent in the first quarter report of the current financial year. IndiGo stood as the star player holding 31.6 percent of the market.

Spice Jet ranks among the most affordable carriers in India. The airline is moving forward with aim to increase its market coverage resulting in higher profits and expansion of the business.

Data complied in the beginning of FY 2014-15 shows budget carrier's extension and Air India's compression over the same period of time. In the month of June, Spice Jet explored variants in the market offering high discounts formulating lower air fares which attracted budget concerned customers to switch over to the best deals available.

Spice Jet flew off racing for the third place in the market winning over the customers of Air India, the national carrier. While analyzing the trend, Spice Jet set a goal to overpower market coverage of Air India, as the charts show in the month of March 14 over February 14.  

Directorate General of Civil Aviation (DGCA) disclosed, SpiceJet's market share hiked 1.1 percent on monthly basis from 17.9 percent in May to 19 percent in June, walking over the record of Air India, which reported market share closing at 18.5 percent. IndiGo headed the Indian skies leading with 31.6 percent market share under its grip during the last month. Jet Airways along with Jet Lite faced major issues with a steep decline in its market share to 19.6% in June from 21% in May.

One one hand shares of renowned airlines, i.e. IndiGo and Air India sank hitting marginal lows, small-scale airline GoAir stood apart hiking its share in the aviation sector, along with the budget carrier amid rise in market share to 10.1 percent in June over 9.8 percent in May. GoAir set a new benchmark as it resulted a double-digit growth for the first time since it commenced flying in the sky of India.

Considering the load handled by the airlines, GoAir lead the market reporting 81.5 percent traffic in its air route, Spice Jet seconded at the position recording 81.4 percent loaded airlines in June. IndiGo's air load fell from 82 percent in May to 79.1 percent in June.

With increasing competition in the aviation skyline, airlines are offering regular discounts and memberships to retain their customers. Analysts stated, "As per our computations, airlines offered around 15 to 16 flash sales to bump up their loads."

Jet Airways, in which Abu-Dhabi based Etihad Airways holds 24 percent ownership, announced their merging plans in the previous week to grow their operations in the Indian markets. 

Airline major Jet is giving a special fare offer as following its strategic alliance stating "last week fare is having an introductory discount off at flat 20 percent to 50 percent on regular fares on the joint network of the two airlines covering more than 135 destinations worldwide."

The joint special fare has a travel validity effective September 1, 2014 till June 15, 2015, for flights within India and from September 1 till November 30, 2014 for flights to international destinations.



Indian Rupee to stick at 60/$ in the coming decade

The currency of India is standing firm at the exchange rate of 60 Rupees per 1 dollar as per the records of recent months. Last year, with the falling economy and unstable reforms of the government brought the value of Rupee closing at 69 rupees in exchange of a dollar in August last year. 

The new Modi-led government changed the scenario of markets in the past few months boosting the market indices, i.e. NSE Nifty and S&P BSE Sensex and appreciating the value of INR to 60 rupees per dollar. Indian economy fell magnanimously during the last year, therefore the recovery reforms are acting up quickly promoting hastened growth. The good news about positive balance of payment overview, business friendly structural reforms and rapid growth are raising hopes of investors.

Forex investors are looking forward to growth in the value of rupee. Other investors inspired from the growing trend in the markets, outperforming companies in the first quarter are hoping to secure higher profits with increased value of INR.

"Investments in the India determined to climb will most probably jump up to $1.9 trillion from $600 billion in the coming decade," an American multinational financial services provider said. 

In reports of the coming decade, gross domestic product (GDP) is rising with an average growth of 2.5 percentile in the year 2024, starting at 1.5 percent as reported now. Current Account Deficit predictions are painting trend at 2.5 percent of GDP over the coming next 10 years.

Financial analysts at the American service provider said, "Foreign direct investment (FDI) is the major player pushing up the one of the worlds fastest growing economy's currency." These are the supporting factors of the economy which are appreciating the value of Rupee.

The other side of the coin holds strong with the central bank of India pressurizing the currency to stick low. According to the world-renowned research and financial corp. of America, Reserve Bank of India (RBI) will continue purchasing dollars over the coming years safeguarding rupee from external volatility, such as unexpected hike in oil prices or splurging interest rates in the US. After INR rises stably, India will receive the benefit of having a sponge back to support its prevailing rates in the events of external shocks. 

"The country's import cover depreciated much after the global financial crisis, and RBI needs to build up $100-150 billion of reserves to bring back the import support crossing 12 times... Similarly, India's external coverage ratio at 2.26 times is far behind the average set at 4 times for EM economies, forcing the country to work on increasing its forex reserves," an economist explained.

Growing inflation is one of the biggest challenges for rupee as it has a direct effect on the purchasing power of the country. Countries with steeply growing inflation, like India are depreciating their currency exchange rates to fight the growing prices but it does not solve the root problem.

"Assuming that US CPI inflation levels to its target of 2 per cent and India follows a dis-inflationary passage in the coming years, the inflation differential compared to US is going to stand 30-35 per cent decline in the purchasing power parity fair value for the Indian currency, our computation over the minimal value estimated over a decade points out a 75-85 range," an investment bank said.


Small caps of BSE shed 2.17%

The benchmark indices of India, Nifty and Sensex hit an all time lowest intra-day level in the noon trade on Friday. The steep fall in the European stocks caused the indices to slip down settling at the lowest point.

S&P BSE Sensex, narrowed 212.50 points, i.e. falling 0.81 percent, 240.82 points away from the intra-day jump and added 4.49 points up from the lowest record of the day.

The market pulse was beating low, as two losers showed up at the rate of one gainer in the BSE record. BSE Mid-Cap index and small cap slumped at 1.68 percent and 2.17 percent respectively.

Wipro shares slugged 4.8 percent after the company published Q1 revenue lower than predictions. Trades in realty drowned the statistics. Tata Sponge Iron prized at its record high rates. Shriram Transport Finance Company drowned after the company disappointed investors with weak quarterly profits. LIC Housing Finance sank with its lowered first quarter results.

At 1300 IST, S&P BSE Sensex traded at 26,059.35, lowered by 212.50 points or 0.81 percent. The index shed 216.99 points hitting the lowest point breaking last bumper record of July 23 at 26,054.86. Sensex recorded intra-day high climbing 28.32 points at 26,300.17 in morning trade. On BSE, in approximate figures 1,909 shares bellowed and 754 shares grew.

CNX Nifty dropped by 0.84 percent equals to 65.4 points to 7,765.20. Nifty hit the lowest point last set on July 23 at 7,763.10 on Friday. Index recorded the intra-day high at 7,840.95 an all time high record setter.

BSE Mid-Cap index fell 156.29 points or 1.68 percent resulting at 9,137.17. BSE Small-Cap index drowned 222.23 points or 2.17 percent ending at 10,007.10. Both these indices performed lower than expectations weakening market sentiments in the Sensex. BSE turnover computed at 1300 hours IST stood at Rs 2186 crore.

30-share Sensex pack with major companies analytics said, "21 stocks frowned lower while the others pushed up a little."

Hindalco Industries slipped 3.19 percent, Tata Motors slugged 2.54 percent and Sesa Sterlite slumped 2.97 percent major losers in the Sensex pack.


Bharat Heavy Electricals Limited (Bhel), country's largest power equipment manufacturer, fell 5.44 percent to Rs 223.50, with the stock promoting intra-day low bells. The stock performance recorded volatility. Scrip showed the trading at Rs 237.70 high and lowest at Rs 223.05 on the closing day of the week.

Gold continues to fall

Gold season seemed off as the lowering physical consumption of the commodity dragged the prices down to the lowest level recorded in a week. On the other hand, equity trading hiked as more and more investors followed the positive market sentiment.

Immediate delivery Gold shed 0.6 percent costing $1,296.36 an ounce. The trading price set lowest fortnight record, breaking last record of  $1,297.86 set on 16 July 2014 in Singapore.

The yellow metal is after the the weekly drop trend after three days of withdrawal from the market. Analysts predicted, "Gold is planning to fall back in the cycle after the turn around in May."

Predictions of Federal Reserve's decreasing the trigger points in the precious metal trader pulled MCX Bullion down by 28 percent in the previous fiscal year.

Facebook Inc. outperformed in the market yesterday crossing analytical estimates. The S&P 500 index climbed setting a new record on Wednesday. 

The combined data presented higher consumption in China over the previous largest gold consumer India. According to latest records, consumption in China dropped 19 percent in the first quarter of FY 2014-15. Second largest German Bank quoted, "Indian demand is set up at no rising point as restrictions continue to block imports and hence Gold cannot expect any gains in pricing from the country."

“Increasing investments in the U.S. equities continues to challenge gold, amid safe-haven's support with increased buying,” a commodity researcher working in renowned Australian bank said.

Goldman Sachs Group Inc. restated a call option at the yellow metal gold slipping to $1,050 by the end of 2014 amid the U.S. economy's fast recovery, analysts said. The bank hiked the long-term citation by 13 percent to supporting a cost level of $1,200 in 2014-dollar terms (the marginal cost).

Gold revived 8 percent recently in various parts of Ukraine and the Middle East with easing tensions of geopolitical tensions. The price did not to climbed as expected after a pro-Russian separatists shot down two Ukrainian fighter jets in the same eastern region, where earlier Malaysian Air passenger jet shot on July 17, the government said.

Gold with delivery in December slugged 0.6 percent to $1,298.40 an ounce in New York, reporting the lowest level since July 16, prior trading at $1,300.10. t The largest bullion-backed exchange-traded product, SPDR Gold Trust holdings climbed again today following the rise yesterday, data on its website showed.

Immediate delivery Silver downgraded 0.5 percent to $20.8065 an ounce. Spot platinum fell 0.3 percent to $1,477.25 an ounce, and palladium dropped 0.2 percent to $869.75 an ounce.