Financial Planning

Indian Benchmark index Sensex and Nifty remained volatile throughout the week, due to domestic and global news, with Sensex still holding 40k plus levels but Nifty lost 12k mark amid quarterly outcomes of companies and slowing factory output, CPI & WPI data.

FII remained net buyer in Indian stock market and infused Rs. 4425.37 crore in the cash segment, whereas DII’s chose to book profit.

We witnessed selling pressure on news that India’s industrial production shrank for the second consecutive month, i.e. 4.3% in September, compared to 1.4% in August. Also, there is a sharp uptick in CPI (consumer price index) to 4.62% in October from 3.99% in September month, which is above target price of RBI (i.e. 4%), with still a hope of small rate cut in the coming month.

Some companies registered positive earnings due to corporate tax rate cut, whereas some lost due to low demand in the economy. Stocks seen rallied are AU small finance bank, HDFC AMC, DLF, Bharti Airtel, ICICI Bank.

The Indian Benchmark index, Sensex recorded its all-time high i.e. 40,688 this week, and Nifty once again crossed the psychological mark of 12k in this week, due to supportive cues from domestic, as well as global markets.

On Friday, throughout the day market remained volatile, post afternoon we have seen profit booking after Moody’s downgrading India’s outlook to “Negative” from “Stable”, but FY20 outlook remains positive.

FII remained net buyer in Indian stock market, to the tune of Rs.2806 crore in cash segment, whereas DII’s opted for a profit booking.

FM Ms Nirmala Sitharaman’s announcement to boost the economy, Rs.25000 crore funding towards incomplete housing projects (govt. to invest 10000 in AIF, SBI & LIC to invest 15000), boosted sentiments in realty & cement sectors.

Stocks seen rallied are DLF, due to the announcement of funding in the realty sector, Infosys on not receiving any supporting evidence for whistle-blower complaints, and Varun-beverages on strong September quarter earnings.

The gloomy & uncertain market since the last few months has turned euphoric, bringing much-needed cheers to the market.

Even though there is buying with the big players, most of the indicators and data points are still below-par. The big players who generally lifts or starts the momentum, usually starts with a possible positive cues (coming soon); like income tax breather (to be announced) for individuals, some more corporate/ equity market sops (to be announced by the government) and above all, the international factors like the upcoming US & China meet in mid-Nov, towards easing of Trade-war further.

Stocks seen rallied are Tata Motors, SBI, Yes Bank, Infosys, TCS etc. Among this, Tata Motors and Yes bank have shown their vertical upward move, closing above 30%, key reason being, the capital infusion.

In terms of data points: Core Sector output shrinks 5.2%, touching fiscal deficit to 92.6%, the unemployment rate in October rose to 8.5% (highest in 3 years), and weakening auto numbers.

The one-hour trading session on the Diwali Day is considered as one of the auspicious trading days, to mark the beginning of the traditional Hindu accounting year, better known as “Samvat”. Stock-brokers across the country perform “Chopra Pooja”, by conducting a pooja of the new accounting book, before the start of the session.

This year, Muhurat Trading will be held on 27^th Oct 2019, from 6:15 pm to 7:15 pm.

Stock-brokers believe, that buying a small quantity of shares (as per individuals understanding) on this occasion, brings wealth & prosperity throughout the year. Also, these stocks purchased on this day, are to be held for long (many years).

Historically, the market has remained positive in these sessions, with low volumes.

As per ETMarkets.com survey, analysts are largely positive about Samvat 2076, with many expecting Nifty to top the 14,000 marks and Sensex at 46,000 level by next Samvat.

For the Week: Indian equity market remained volatile with anxiety on Assembly Election 2019 in Maharashtra and Haryana, and most important drivers the DII & the FII remains net sellers in the cash market. Quarterly earnings session of companies kept market volatile, with some gains and some losses.

Infosys went down by 15% on Tuesday (single day fall) since last 6 years, dragging nifty and Sensex down, after the whistle-blower complaint, stating manipulation in short term revenue statements against its top management.

We Wish You a Very Happy & a Prosperous Diwali!!!

With positivity all-around, Sensex ended the week by adding 1000+ points, netting a gain of 2.8% (Nifty at 3.14%) on a weekly basis.

IRCTC IPO, which was oversubscribed by 112 times, got listed on stock exchange this week and delivered a blockbuster market debut, giving 140%+ returns.

IMF (International Monetary Fund) lowered the growth estimate for India to 6.1% in FY19 due to slowing demand, with low IIP no’s (-1.1%), lowest in seven years, slowing auto sales & many other factors. But it also estimated that India will deliver 7% growth in FY20, putting India as the No. 1 country in terms of growth, in-short, India still remains the most attractive place to invest.

The Brexit deal remained one of the main focus points for markets to be volatile, it’s expected for Indian IT companies to get benefit from this deal, as Indian companies are having investments in these countries.

Next Week: other than the global cues, what needs to be seen will be the corporate quarter result announcements, which hopefully should trigger the next wave of gains, leading to a cracking Diwali next week!

The market is on a roller coaster ride due to global and domestic uncertainty. The benefit of the corporate tax cut will be seen in Q2 earnings, which means most of the companies paying tax rate from 35% to 39% including other surcharges, will pay only 25.17%. IT companies are less benefited with the move, as most companies operate in special economic zone (SEZ) & already enjoys below 25% tax.

RBI slashed repo rate by 25 basis points to 5.15%, in a fifth consecutive rate cut to boost growth, but at the same time cut the GDP growth forecast of FY20 to 6.1% from 6.9%.

IRCTC IPO was oversubscribed by 112 times, to debut on Monday, October 14.

Indian Benchmark indices ended in positive territory after positive cues from the global market, over good trade talk between US-China on a Thursday. Sensex settled at 38127 & Nifty 11305. On a weekly basis, Sensex gained 0.72 % & Nifty 0.97%.

Friday IIP (Index of industrial production) numbers were declared, which is worst since 2012, leading to negative growth, i.e. -1.1%, which again shows more measures are needed for recovery.

It’s an old saying, any experience which leads to bitter experience, lingers on for a life-time, hence one takes cautious steps towards the similar encounter.

Best explained by Mr. Abhay from Kolhapur, who witnessed the severe flooding recently, leading to many days & weeks for the entire city of Kolhapur without food, clean water, sanitation & above all, emergency money with residents. How did Mr. Abhay survive?

Mr. Abhay, with his early experience, in his childhood, had thought-thru & planned for such natural calamities. He always maintained at home, emergency cash, some extra stock of food & water, basic medical help. Sounds simple & basic. But do we have such contingency planned & executed?

I am not trying to prepare you for natural calamities, but for a far bigger calamity, i.e. savings & contingency. Why is that we wait for some reason (bad or good) to start the same? Buts that’s the usual story for all of us, mainly the millennial.

Contingency means, planning for an emergency, which could be in any format, key being Job loss or Job shift, Health or Medical. They (emergency) don’t come invited but happens. Usually, it is recommended to have 6 months to 12 months of income saved, towards contingency or emergency funds.

“You win some and lose some, I heard that my whole life
I heard that my whole life, but that doesn’t make it right” … song lyrics by Big Sean.

Indian equity market remained under pressure throughout the week, due to weak global cues and heavy sell-off in banking stocks. RBI’s restriction over Punjab and Maharashtra Coop Bank, huge sell-off in Yes bank, IndusInd bank NBFC exposure, led to negative sentiments with investors, with FII’s remained net-seller in the cash market.

Friday – 4^th Oct, we witnessed buying in the morning trade, but indices declined sharply post the rate-cut announcement and cut in the GDP growth forecast, reducing it to 6.1% for FY20, from 6.9%. RBI cut Repo rate by 25 basis points to 5.15%, a fifth consecutive rate-cut to boost growth and decided to continue accommodative stance, to reduce the lending rates, in-turn to spur spend with more funds in hand.

Sensex settled at 37,673 & Nifty at 11,174; both down by 2.2% this week. Except IT sector, all other sectors & indices ended lower. Major selling happened in Banking, FMCG, Financial Services.

Asian market; continuous sell-off seen in Asian market in this week due to concern over U.S china trade war, slowing growth and US new tariff on European aircraft and agricultural products. Outlook over coming week remains rangebound.

Indian Benchmark indices carried out gains of 20^th September throughout the week, on a positive decision of a cut in corporate tax rate by our dear Finance Minister earlier.

Many of us were caught in the middle, what to do next?

Sensex and Nifty remained volatile due to low Global clues like US political issues, issues related to US-China trade disputes, with three sessions ended in a positive bias, out of 5 sessions. Sensex settled at 38822 & Nifty 11512, cheering up everyone’s mood & sentiment.

Asian market was trading at a mix territory, whereas European stock went-up on a hope of easing economic growth concerns.

Outlook over coming week remains Positive, on a domestic front; due to supportive sentiments, and outcome from finance minister meeting with Bank Heads, and on the international front; hope of development in the Global front, FII/FPI’s buying, easing crude prices.

Like a blockbuster movie’s Day1 opening, today’s announcement by our dear FM Nirmala Sitharaman, pulled the market up by 2000+ points, like there is no tomorrow, snapping losses of last few weeks in a historical single day gain (in last Ten years).

Sensex settled at 38014, a gain of 5.32% percent!! Aggressive buying was seen in banks, auto and metal stocks. IT shares lagged the broader rally, as rupee edged higher at 71.12.

Asian stocks also ended higher on Friday, as economic stimulus around the world eased fears of economic deceleration. On the trade front, Chinese and U.S. delegates are meeting Thursday and Friday ahead of higher-level meetings expected early October to resolve the year-long trade dispute.

Stimulus announced by FM Nirmala Sitharaman on Friday are:

• Corporate tax slashed to 22% for domestic companies, subject to condition they will not avail any incentive or exemptions (the effective corporate tax rate after surcharge will stand at 25.17%).
• Manufacturing companies set up after October 1 to get an option to pay 15% tax (17.01% inclusive of surcharge & tax)
• Listed companies that have announced buyback before July 5, 2019, tax on buyback of shares will not be charged
• To provide relief to companies availing of concessions and benefits, a MAT relief by reducing it from 18% to 15%
• Higher surcharge will also not apply on capital gains on sale of security including derivatives held by FPIs