The World This Week March 04 - March 08 2013


Published on

Analysis of Market Trends this week.

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

The World This Week March 04 - March 08 2013

  1. 1. The World This Week Mar 04 – Mar 08, 2013
  2. 2. Equity View:Last week, we saw a big bounce back in the Indian equity markets with almost a 4% move in Nifty andSensex. The concerns about the budget which have been bothering the markets have been largelyaddressed. There were a lot of concerns about the FII taxation and the TRCs (Tax residency Certificates)for various entities operating out of Mauritius. Those have been adequately addressed by the FinanceMinister Mr. P. Chidambaram.As we have mentioned earlier, we believe that the budget was a non-event for the market and themarket seems to have shoved off budget and will now look forward to the global cues for the short termdirection. We also have the very important RBI policy on the 19th of this month. There is also anexpectation of further repo rate cuts; and we expect a 25 bps repo rate cut in this policy.In terms of key data points which will help the RBI take a call on further monetary easing, there will be IIPand WPI inflation numbers being released for last month. We expect WPI inflation to continue to bebelow 7% and more importantly - the core inflation to be around 4 – 4.5%. This will give RBI thenecessary cushion to go out and do further rate cuts. In terms of IIP data we’ve seen a muted industrialproduction output for last 8-9 months and we expect this month’s number to show a slight uptick. The 9months average is around 1 - 1.5% and we think that this month’s number can be closer to 2-2.5%.In terms of global markets, we saw Dow Jones Index crossing its lifetime high. The previous high of DowJones was in September 2007 which was 14,167 and it closed at 14,300 levels which is on back of thegrowing optimism about the revival in U.S economy. We have seen continuous improvement in the U.Seconomy in terms of jobs being added, unemployment rate coming down and also uptick in PMI both inmanufacturing and services.We believe that India would also participate in the global rally which has been unfolding for some timeand we maintain a positive stance on the markets. We believe that in the last 1-1.5 month’s correctionthere is a significant cool off in mid-cap stocks. The mid-cap index as a whole corrected almost 15% fromits peak and there are several stocks which corrected in the range of 15%, 20% and 25%. This correctionleaves a very good entry opportunity for most of these Mid-cap ideas.So one must recommend investors to go out and increase allocation to equities, specifically in the mid-cap segment.
  3. 3. News:DOMESTIC MACRO:  India is set to halt all crude imports from Iran because insurance companies in the country have said refineries processing the oil will no longer be covered due to Western sanctions, the head of refiner MRPL said on Friday.  So far this fiscal since April 6, banks advances grew around 9.2 percent, compared with 11.8 percent a year earlier, while deposit growth was also around 7.6 percent compared with 11.7 percent in the same period a year ago.GLOBAL MACROEURO  Las week, the 17-country blocs central bank discussed cutting interest rates, but decided to keep them on hold, citing positive economic survey indicators, which in turn suggest the ECB is ready to keep rates at 0.75 percent barring the economy taking another turn for the worse.  The euro zone may need higher inflation in countries like Germany and lower interest rates across the bloc to ensure a sustained economic recovery brings palpable benefits, the head of the IMF said on Friday.US  The unemployment rate in February fell to 7.7 percent, the lowest since December 2008 as more people found work and others gave up the hunt. In January 2013, the rate was 7.9%  President Barack Obama said he is looking for compromise in the coming months to end a two- year fight with Congress over how to reduce the deficit, promising Americans in his weekly radio address that he will try to find common ground with lawmakers.China  Chinese imports for February were surprisingly weak, falling 15.2 percent from a year earlier. Exports rose 21.8 percent in February from a year earlier.  China put its fast-growing consumer class at centre-stage as outgoing Premier Wen Jiabao set out a reform plan on Tuesday to spread the fruits of economic growth more evenly in the country of 1.3 billion.
  4. 4. Satadru Mitra Varun Goel Jharna Agarwal Abbas Naheed Kinjal Mehta DisclaimerThe information and views presented here are prepared by Karvy Private Wealth (a division of Karvy Stock BrokingLimited) or other Karvy Group companies. The information contained herein is based on our analysis and upon sourcesthat we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is forpersonal information and we are not responsible for any loss incurred based upon it.The investments discussed or recommended here may not be suitable for all investors. Investors must make their owninvestment decisions based on their specific investment objectives and financial position and using such independentadvice, as they believe necessary. While acting upon any information or analysis mentioned here, investors may pleasenote that neither Karvy nor any person connected with any associated companies of Karvy accepts any liability arisingfrom the use of this information and views mentioned here.The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above-mentioned companies from time to time. Every employee of Karvy and its associated companies are required to disclosetheir individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysisand investment recommendations are restricted in purchasing/selling of shares or other securities till such a time thisrecommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restrictedto place orders only through Karvy Stock Broking Ltd.The information given in this document on tax are for guidance only, and should not be construed as tax advice. Investorsare advised to consult their respective tax advisers to understand the specific tax incidence applicable to them. We alsoexpect significant changes in the tax laws once the new Direct Tax Code is in force – this could change the applicabilityand incidence of tax on investmentsKarvy Private Wealth (A division of Karvy Stock Broking Limited) operates from within India and is subject to Indianregulations.Karvy Stock Broking Ltd. is a SEBI registered stock broker, depository participant having its offices at:702, Hallmark Business plaza, Sant Dnyaneshwar Marg, Bandra (East), off Bandra Kurla Complex, Mumbai 400 051 .(Registered office Address: Karvy Stock Broking Limited, “KARVY HOUSE”, 46, Avenue 4, Street No.1, Banjara Hills,Hyderabad 500 034)SEBI registration No’s:”NSE(CM):INB230770138, NSE(F&O): INF230770138, BSE: INB010770130, BSE(F&O):INF010770131,NCDEX(00236, NSE(CDS):INE230770138, NSDL – SEBI Registration No: IN-DP-NSDL-247-2005, CSDL-SEBIRegistration No:IN-DP-CSDL-305-2005, PMS Registration No.: INP000001512”