How India lost 'best-performing stock mkt in Asia' tag in less than a month

The best-performing stock market in Asia for much of this year has lost that title in less than a month.

As the S&P BSE Sensex Index sank into a correction Friday, posting its biggest weekly plunge in more than two years, investors began paying up to hedge against more declines. The cost of bearish NSE Nifty 50 Index options jumped to its highest level since August of last year relative to the price of bullish contracts, data compiled by Bloomberg show.

Volatility in Indian stocks started spiking at the end of August and hit on Friday its highest level since February as traders digested a long list of reasons to sell:

— The rupee is Asia’s worst currency this year and slumped even further on Friday after the Reserve Bank of India chose to keep its interest rates unchanged and lowered its inflation forecast for the second half of the year ending March

— A steady climb in the price of oil -- India’s biggest import -- and the government’s request that state-run refiners absorb a portion of sweeping fuel price cuts have raised speculation that price controls may be reintroduced

— A recent default by a major infrastructure financier prompted the RBI to caution non-bank lenders about relying too much on short-term borrowings and warned to brace for tighter regulations.

Infographic: Nifty hits 10k peak, journey from 9,000 takes 592 trading days

STOCK MARKET - The Nifty50 index on July 25 hit the 10,000 mark in intra-day deals, for the first time ever. It took 592 trading days for the index to scale 1,000 points from the 9,000 level to hit 10,000. The shortest 1,000-point rally, however, was when the index had hit the 6,000 mark on September 27, 2007, taking just 24 trading days to rise from 5,000 to the 6,000 level. The NSE had launched its flagship 50-share index on April 21, 1996 with a base value of 1000, and 1995 as the base year. Then called the CNX Nifty, the index was renamed in 2015 as Nifty50.

Nifty IN 10K Club ( Intraday)
Date	Nifty	Date	Nifty	Trading Days
11/3/1995	1000.9	1/9/2004	2014.7	2031
1/9/2004	2014.7	1/30/2006	3002.2	517
1/30/2006	3002.2	12/1/2006	4001.3	212
12/1/2006	4001.3	9/27/2007	5016.4	204
9/27/2007	5016.4	11/1/2007	6012.0	24
11/1/2007	6012.0	5/12/2014	7020.1	1617
5/12/2014	7020.1	9/1/2014	8035.0	77
9/1/2014	8035.0	3/3/2015	9008.4	122
3/3/2015	9008.4	7/25/2017	10011.3	592

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Markets end at fresh closing highs amid earnings optimism; Airtel, RIL gain

STOCK MARKET - The benchmark indices, S&P BSE Sensex and Nifty50 settled the day on record closing highs on Monday as investors remianed optimistic on the June corporate results. Markets also shrugged off the global weakness with Asian markets ending mixed ahead of the joint OPEC and non-OPEC ministerial meeting later in the day.

Meanwhile, the International Monetary Fund (IMF) retained India's economic growth projections at 7.2% in 2017-18, up slightly from 7.1% in the previous year. However, the growth would accelerate to 7.7% in 2018-19, IMF said.

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UK Elections 2017 end in hung parliament, but Indian markets will weather the storm

MARKET NEWS - Indian markets edged lower on Friday, in line with their Asian peers as the polls in the United Kingdom (UK) hinted a loss for the British Prime Minister Theresa May's ruling Conservative party that could result in a hung Parliament and delay Brexit talks.

Asian markets were trading mixed on Friday, with Nikkei, Straits Times and KOSPI marginally in the green, while Hang Seng, Taiwan Weighted and Jakarta Composite slipped 0.1% - 0.3% in intra-day deals. Back home, the S&P BSE Sensex and the Nifty50 indices were trading around 0.2% lower each at 31,153 and 9,618 levels, respectively.

Going ahead, the reaction by financial markets will be seen as an important gauge of how investors look at the United Kingdom’s prospects, the impact on Indian markets, however, is likely to be limited.

Though the fall seen on Friday was warranted given the global linkages, analysts say, Indian markets are expected to perform better than most other emerging and developed markets over the long run. On the contrary, the UK poll outcome that could delay Brexit talks could work in favour of global financial markets, including India.

“Brexit is a fact and the new government will have to negotiate accordingly. However, I expect these negotiations to be weaker in case May loses the election. The markets were never in favour of Brexit and to that extent, incrementally weaker Brexit negotiations and a possible delay will be appreciated by the markets. The Indian markets will weather this storm as there is not much at stake as far as India is concerned. As best, trade negotiations with the UK will have to be reworked,” explains U R Bhat, managing director, Dalton Capital Advisors.

The Indian economy with a stable macro environment and government pushing through reforms, favourable monsoon forecasts and with a banking sector undergoing an overhaul, Indian markets have enough buffers to withstand the poll outcome in the short-term, analysts say. They expect the impact to be transitory in nature with the markets likely to recover soon from any knee-jerk reaction.
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Markets trade flat as investors on edge ahead of major global events

LATEST MARKET NEWS - Benchmark indices were trading flat as investors stayed on edge tracking global peers ahead of a slew of global events including the UK elections, European Central Bank's policy meet and testimony from ex-FBI director James Comey.

Losses were however capped after RBI in its bimonthly policy review yesterday cut its inflation projections and delivered a less hawkish stance. The central bank yesterday kept the repo rate unchanged at 6.25%, in line with Street expectations.

In global markets, Asian shares wobbled as investors braced for any surprises from the UK election and other global events lined up for the week. MSCI's broadest index of Asia-Pacific shares outside Japan was little changed, through China edged up on unexpectedly solid trade data, while Japan's Nikkei dropped 0.4%.

At 1:21 pm, the S&P BSE Sensex was trading at 31,231, down 39 points, while the broader Nifty50 was ruling at 9,661, down 2 points.

The broader market outperformed with the S&P BSE Midcap and the S&P BSE Smallcap indices adding 0.3% and 0.4% respectively.

Dr Reddy's, Sun Pharma, Tata Steel, Cipla and GDFC gained the most on the index while TCSm GAIL, M&M and Asian Paints fell the most.

Financial stocks edged higher, with Kotak Mahindra Bank and Federal Bank leading after RBI made it easier for India's stressed banks to lend, cutting their statutory liquidity ratio by 50 basis points to 20 percent of total deposits from June 24.

BSE IT index was the biggest sectoral loser, down 1.5% dragged by TCS and Infosys. TCS fell over 3.5% becoming the top loser on BSE Sensex while Infosys was down 1.5% .

Reliance Communications continued their slide, after the embattled mobile carrier pushed back against Moody's and Fitch, disagreeing with their rating downgrades earlier on Wednesday. Shares fell as much as 2.8% to their lowest in over a week.

Petronet LNG fell as much as 4.3% to their lowest in over two weeks amid reports that GDF International sold its entire 10% stake of 75 million shares.

Sensex slips in red, Nifty tests 9,650; broader markets outperform

LATEST MARKET NEWS - The benchmark indices pared entire initial gains to slip in red as investors braced for any surprises from former FBI director James Comey's congressional appearance, the European Central Bank's policy meeting and the UK general elections.

At 12:16 pm, the S&P BSE Sensex was trading at 31,236, down 34 points, while the broader Nifty50 was ruling at 9,653, down 10 points.

The broader market outperformed with the S&P BSE Midcap and the S&P BSE Smallcap indices adding 0.2% each.

"Opening moves could possibly aim for the 9727-50 but there are not enough signs that the next push higher could unfold right away. Such constructs puts 9,640 in focus, until above which the near term uptrend prospects will be intact. Direct fall below may not unsettle the overall uptrend prospects though, but break of 9530-9500 might do that. That, though is less expected now," said brokerage Geojit Financial Services in a technical note.

Buzzing stocks

Tata Steel (up 3.6%), Dr Reddy's (up 2%) and HDFC (up 2%) were the leading gainers on the Sensex, while TCS (2.3%), Adani Ports (1.8%) and GAIL (1.7%) shed the most.

Petronet LNG slipped 3% to Rs 421 after GDF International said will sell its entire 10% stake in Petronet LNG in block trades on Thursday for up to $512 million.

UK goes to voting today

The British will vote today in a 'snap election' that Prime Minister Theresa May had called seven weeks ago. Polls had initially suggested a landslide win for her Conservative party, but now are suggesting a narrowing lead for May, with some pointing to the chance that the Tories may not win an outright majority. This will impact the negotiations on Britain leaving the European Union.

ECB to stick to stimulus

The European Central Bank is likely to stick to its aggressive stimulus policy at its meeting later today because inflation remains below its target, despite brisker economic growth in the euro zone.

The ECB is now forecasting inflation at 1.7 percent and growth at 1.8 percent this year. Its mandate is to keep inflation close to but below 2 percent, but inflation slowed to 1.4 percent in May.

Global markets

Asian shares wobbled in early Thursday trade. MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.27% while Japan's Nikkei rose 0.3% thanks to the dollar's rebound against the yen.

Wall Street shares ticked up on Wednesday, despite sharp decline in energy prices, after written testimony from former FBI director James Comey did not add major revelations about an investigation into Russian meddling with last year's US presidential election.  

Markets turn choppy after RBI maintains status quo on policy rate

MARKET NEWS - The benchmark indices continued to trade flat after the Reserve Bank of India (RBI) kept the repurchase (repo) rate unchanged and reduced the Statutory Liquidity Ratio (SLR)  to 20% in its second bi-monthly monetary policy for financial year 2017-18.  

At 2:57 pm, the S&P BSE Sensex was trading at 31,259, up 69 points, while the broader Nifty50 was ruling at 9,655, up 18 points.

In the broader market, the S&P BSE Midcap and the S&P BSE Smallcap indices added 0.2% and 0.5%, respectively.

Stocks of the rate-sensitive sectors such as banking, realty and auto extended gains after policy outcome.

The Nifty Realty index (up 0.7%) was the leading sectoral gainer. Indiabulls Real Estate, Sobha and HDIL gained the most on the index.

The Nifty Bank rose 0.4%, led by gains in ICICI Bank, Bank of Baroda, PNB and State Bank of India, which gained in the range of 3-5%.

The Nifty Auto index was trading 0.5% higher, with Bharat Forge, M&M and Eicher Motors gaining up to 2%.

IT stocks hogged the limelight. The Nifty IT index (down 2.5%) was the lone sectoral loser. TCS, Tech Mahindra, HCL Tech and Wipro were the top losers on Nifty and shed up to 3% on the NSE.

Overseas, European stocks were trading mixed as investors remained cautious ahead of Thursday's UK election and the European Central Bank's policy decision.

The pan-European Stoxx 600 was 0.12 percent lower, while Britain's FTSE 100 and France's CAC 40 added 0.2% each.
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5 Nifty companies announce bonus shares in 2017; highest in 11 years

MARKET NEWS - Engineering & construction giant Larsen & Toubro (L&T) and state-owned oil marketing company, Bharat Petroleum Corporation (BPCL) from the Nifty50 index in last week declared bonus shares in the ratio of 1:2 i.e. 1 new bonus equity share for every existing 2 equity shares.

Besides these two, total five companies including ICICI Bank, Wipro and Gail (India) from the index announced bonus shares thus far in the current calendar year 2017 (CY17). The number of companies from the Nifty50 index rewarding bonus shares to their shareholders is the highest in past 11 years.

Earlier, during the entire calendar year 2006, total seven companies – Cipla, Tata Consultancy Services (TCS), Infosys, Dr Reddy’s Laboratories, L&T, Oil and Natural Gas Corporation (ONGC) and HCL Technologies – from the benchmark index had issued bonus shares.

In 2015 and 2010, five companies from the Nifty 50 issued bonus shares, but Aurobindo Pharma in 2015 and Bajaj Auto and Zee Entertainment in 2010, were not part of the index in that particular year.

In last calendar year 2016, three companies – ONGC, BPCL and ITC – issued bonus shares, while in CY2015, Tech Mahindra, HCL Technologies, Infosys and Kotak Mahindra Bank had declared bonus shares, according to data compiled from CapitalinePlus.

Thus far in 2017, the equity markets have recorded its best ever start during past eight years, with the Nifty 50 index gaining 17.5% between January and May, 2017. In 2009, the benchmark index had rallied 50% during the same period.

Meanwhile, in first five months of CY17, as many as 36 companies announced bonus to their equity shareholders, against 25 firms declared bonus shares in the same period of CY16. In CY13, total 114 companies announced bonus shares, followed by 49 in CY14, 59 in CY15 and 69 in CY16.

BPCL had issued bonus shares for the past two consecutive years and third time in five years. In May 2016 and in May 2014, the state-owned oil marketing companies declared bonus shares in the ratio of 1:1 i.e. one bonus shares for every one share held.

Market observers say bonus shares are being given to improve liquidity, besides rewarding the shareholders. After the issue, the stock price gets adjusted according to the bonus ratio. The total market value of the company, however, remains the same.

A bonus share issue also indicates that the company is confident about the business’s capacity to generate value for a larger number of investors. That apart, it also helps in boosting the trading volume at the bourses, as more number of shares are traded.