The equity benchmark Sensex scaled a new all-time high of 40,816.38 in the morning trade on November 20. Not just the Sensex, even the Nifty has been rallying at a time when concerns over the Indian economy are growing, with macroeconomic data pointing to a slowdown.Why is the market behaving differently from the economy?"Markets usually run ahead of macros and price future growth. There are three positive indicators for growth – reduction in the corporate tax rate, proposed divestment of large public sector units and a possible resolution of the US-China trade impasse. Therefore, we see growth coming back in 2020. Now, we expect broader markets to outperform," said Sanjiv Bhasin, Director, IIFL Securities.Close Experts and brokerages are of the view that the market is factoring in a recovery in the economy. related news The role of P/E multiple in deciding investment returns Sensex hits a new high, 4 factors that could be fuelling optimism Hot Stocks: Short-term trend … [Read more...] about Economy in stress and markets on a high; time to be careful?
Labour in the labour market
All eyes are set on the underway meeting of the Federal Open Markets Committee (FOMC) of the US Federal Reserve which concludes on September 18.Even though the US Fed is broadly expected to announce a rate cut of at least 25 basis point to prop up slowing economic growth, the market is assessing the possibility of any surprise, thanks to cooling fears of a recession and signs of improvement in the macroeconomic environment of the US.Moreover, the recent comments of Fed officials have shown their dissenting views over the state of the US economy which has raised curiosity for the rate cut decision.Close However, analysts are still convinced that the Fed will go for a rate cut. related news Wall Street ends choppy day higher; tech helps, Brexit weighs [email protected] | Roundup of key happenings in the market [email protected] | Roundup of key happenings in the market "There is a good indication of a rate cut. There is slowdown in the major economies across the … [Read more...] about Will US Fed cut rates? How important is it for Indian market?
India has raced ahead of Korea Exchange, in terms of the ratio of equity derivatives turnover to the cash market turnover, according to data by World Federation of Exchanges Forum. The derivatives to cash market ratio for India has increased to 29.6 from around 15.0 two years ago, and is way ahead of Korea, which had a ratio of 18.8 at the end of March 2018.As per the forum, March data shows that NSE cash market volume stands at USD 90,968.9 million and derivatives volume at USD 2,689,055 million dollars. Cash volumes for the Korea exchange were USD 240,760 million while derivative volume was at USD 4,529,445.1 million.A discussion paper on the development of equity derivatives had recently raised concern over the high ratio of derivatives to cash following which the Securities and Exchanges Board of India (SEBI) had proposed introduction of physical delivery for single stock futures and options in a phased manner. … [Read more...] about India’s derivatives to cash market turnover ratio at highest among world markets
Volatile markets have made investors see their portfolio in red. Many first time investors, who have only seen 20-30 percent returns in CY2017, are baffled and are finding it difficult to tread the market. Anxiety and lack of confidence has made many see their losses on trading positions amplify. In such a situation here are a few mistakes one must avoid.Anchoring biasThis is a behavioural issue with most naive investors. “Many traders believe that market won’t go below a particular level or the benchmark index will respect 200 day moving average without understanding the reason behind the fall,” points out Dinesh Rohira, founder and CEO of 5nance.com. The market has its own reasons to go down and unless you understand them there is no point believing such market talk, he adds.Close Many investors look at a stock hitting 52 week low and believe that the stock is cheap. However do not get anchored to such levels. When you buy a stock at 52 week low, then … [Read more...] about Five mistakes you must avoid while trading in downward trending markets
Much of the debt market is still reeling under the after-effects of the Infrastructure & Leasing Finance Services Company’s (IL&FS) debacle. But there’s one financial instrument that appears to have benefitted from the devastation. This instrument is market linked debentures (MLD), also known as structured notes.According to report titled ‘Market Linked Debentures: Issuances at its all-time high’ by CARE Ratings, the net outstanding MLDs grew to Rs 21,191 crore as on December 31, 2018 as against Rs 11,356 crore as on September 30, 2017 and Rs 32,165 crore as on June 30, 2017 (when they hit a peak).Financial year that begun on April 1, 2018 has so far seen issuances worth Rs 12,910 crore.Close Experts attribute the strong uptick in the issuances of MLDs to two factors - the necessity of corporates to raise funds in a tight market and investors looking for some extra returns on post-tax basis. related news Double your … [Read more...] about Market linked debentures in favour again; should you invest?