Knowledge plus series i 180513

KNOWLEDGE PLUSFor Wealth …..

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Last week at the Financial Markets!!!

• SENSEX rose by 203.50 (1.01%) points and closed at 20286.12 end of the week.

• (FIIs) were net buyers in equity segment leading to net inflow of Rs. 4467.90 Crore

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News Impact

• RBI’s investigation report pointed out at major banks named in the cobra post expose

• It creates negative sentiments towards banking sector

• India's April trade deficit rose to $17.8 billion on account of massive surge in imports of cheaper gold and silvers

• Government sees this growing trade imbalance as a major concern

• It would come out with considered steps to tackle growing trade deficit

• April WPI stood at 4.89% as against 5.96% in March, 2013

• It raises the possibility of further rate cut

• It may give boost to rate sensitive sectors

Last week at the Financial Markets!!!


Price Performance of Different Asset Class

Next Week in the Financial Markets….?


• Q4 results of the following companies will provide the next impact :

Venus Remedies, Apollo Hospitals, City Union Bank, Coal India, SREI Infra, PC Jewellers and Shriram City Union, Subex, Tech Mahindra, BHEL and Hindustan Copper

• Inter - Ministerial Committee (IMC) is likely to take a call on applications from the government companies for allocation of 17 coal blocks on May 23, 2013

Hot Topic of the Week

6 Things which may drive the stock market


1. Inflation moves into RBI’s comfort zone


SOURCE : WWW.TRADINGECONOMICS.COMAs inflation moves into RBI’s comfort zone, it

raises the expectations of rate cut in next monetary

meeting

2. Corporate Earnings

• In 4th quarter of FY13, earnings of sensex companies has been better than market estimates

• According to Bloomberg, only 2 out of 15 sensex companies has missed market expectations

• Corporate performance has been better than 3rd quarter of FY13• Due to softening in input prices, industry would see more margin

expansion in the coming quarters• Benefit of reduction in rate of interest may start reflecting in the

corporate performance in 2nd quarter of FY14


3. Normal Monsoon

• IMD has projected normal monsoon this year

• The projection for the season at 98 % of long period average of 89 cm with plus or minus 4% error

• This would benefit the agriculture sector which would increase the overall rural consumption

• This may again be useful in containing food inflation.


4. Weakening in Commodity Prices

• Crude, gold and other commodity prices are weakening

• There is a possibility of a shift of money flow from commodity markets to the equities, which are making new highs right now.


5. Global Monetary Easing

• The European Central Bank and the Bank of Japan are still depending on monetary easing to boost their economies out of recession.

• Weak economic data is enough to ensure continuity of these stimulus packages.

• This global monetary easing is helping India to finance its current-account deficit.


6. Election

• Indirect stimulus in form of election year would help the overall economy

• Rs. 1000 billion would be spent by the government and candidates for election

• Government may announce different benefits in the election year

• This will again push the liquidity in the economy



Research Desk

@VALUE PLUS - The Family Office

Office: (0265 -2324600,6629800)Email: [email protected]: www.valueplusinv.com

Economy & Finance

Knowledge plus series i 180513