Dev'S Invest Notes - Blogosphere !!!

Good Morning! Great news and cheap stock valuations never co-exist. Even recent history from 2001, 2003 and 2008-2009 suggests every time markets fall hard, they do bounce back. It may take a while for them to find their feet and find some sort of a bottom. And there is no hard and fast rule about how that happens. Markets get cheap when people do not have the confidence about what the future holds, and that is exactly the situation now. Dalal Street veteran Vetri Subramaniam says this is the time for investors to focus on valuations to figure out whether one should be positively disposed or negative disposed towards the asset class. MARKET CUES: Where do we stand >>> Nifty futures on the Singapore Exchange-traded some 162 points higher at 7 am (IST) in signs that Dalal Street is poised for a major rebound after Monday mayhem. On Monday, Nifty broke below its crucial support at 8,900 by a wide margin, opening the doors for further selloff that can take the ind

Good Morning! The CEA has put out a solid explanation of Modi’s version of ‘New Deal’. The effect of Covid pandemic is a war-like situation, but it is different from a war, he says. It is causing supply-side disruptions, which are not permanent; just hands are off the machines. Temporary liquidity can tide over those difficulties. On the demand side, the impact can manifest if people start losing jobs. So, the demand-side measures are to lessen the impact on jobs. It is this focused resource allocation which helped the FM limit the stimulus impact on fiscal deficit at less than 2% of GDP. MARKET CUES: Where do we stand  >>> Nifty futures traded some 50 points down on the Singapore Exchange at 7 am (IST) in signs that Dalal Street was heading for some more selloff. At the end of Friday's trade, maximum Call open interest stood at Nifty strike prices 10,000 and 9,500 levels, and maximum Put OI at 9,000 and 8,500. Options data indicated an immediate tr

Good Morning! Liquidity is nothing but a short-term supply mismatch adjustment. It is not new money coming into the hands of the consumers. Liquidity is not something that is going to alter GDP growth of the nation. What the Modi government is currently doling out is a combination of liquidity and some real money, but it's more of the first. When the April rally was building up to this big package, expectations were more for the second and sector-specific doles to the badly battered parts of the economy. The current package offers no clarity which segments will benefit from it, which is why the market has lost direction. MARKET CUES: Where do we stand  >>> Nifty futures on the Singapore Exchange traded some 16 points down at 7 am (IST) in signs that Dalal Street is indecisive amid lack of directional cues On Thursday, Nifty50 formed a bearish candle on the daily chart. Such a chart following Wednesday's 'Bearish Belt Hold' pattern suggests t

Good Morning! The stimulus unveiled on Wednesday roughly amounted to Rs 5.95 lakh crore, leaving some Rs 6.7 lakh crore (2.3% of GDP) worth of more spending announcements to be made over the coming days. As economists counted the doles keenly to gauge the size of fiscal slippage, the government walked the tightrope tactfully, trying to evade a red flag from the rating agencies. Some estimates pegged the actual impact of the first batch of stimulus on the balance sheet at just Rs 55,500 crore, which left room for spending another Rs 1.35 lakh crore in further measures. By that measure, the government could be ending FY21 with a somewhat imaginable fiscal deficit of 6% of GDP. MARKET CUES: Where do we stand  >>> Nifty futures on the Singapore Exchange traded some 130 points down at 7 am (IST) in signs that the market may see some profit booking. Nifty formed a 'Bearish Belt Hold' pattern on Wednesday as it could not hold on to its opening g

Good Morning! The Rs 20 lakh crore economic stimulus announced by the Prime Minister takes into account the measures that the government and RBI have already rolled out in the form of Rs 1.7 lakh crore in cash and free food and Rs 5.24 lakh crore in liquidity support. That pegs the new stimulus at Rs 13.1 lakh crore, or 6.5% of GDP, which will likely come in the form of loan guarantees for MSMEs, wage support for MSME workers, aid for migrant labourers, tax sops to make local production competitive, tax cuts to spur spending and support for construction and housing sectors. The total package at 10% of GDP puts India in league with likes of Germany, Sweden and France and way ahead of Spain, Italy, the UK and China. MARKET CUES: Where do we stand  >>> Nifty futures on the Singapore Exchange-traded 211 points, or 2.29 per cent, higher at 9,436 at 7 am (IST), indicating a gap-up start for Dalal Street. On Tuesday, Nifty50 staged a smart recovery from the