"The nineteenth century
believed in science but the twentieth century does not."
—Gertrude Stein (American,
1874-1946)
Word for the day
Pneumatic (adj)
Of or relating to air,
gases, or wind
Malice towards none
Rahul Gandhi - The
Alchemist.
RaGa never fails to amaze us
with revelation of his new side everyday!
First random thought this morning
Sometimes I find it very unfair. Price of a publicly traded equity
share can rise infinitely. But it can fall only 100%.
The history of stock market therefore is dominated only by the
winners. No one bothers to remember the stocks which lost 100% of their value.
Even if these losers outnumber the winners by 100:1.
Judging mood of market
In the past 17 odd weeks, since Nifty first touched 10K level, the
simple average traded value of Nifty has been 10064. The value will be lower if
we take the volume weighted average. In this period market breadth has remained
decisively negative. The net institutional flows (DII and FPI combined) have
been mostly neutral in past 4months.
In period from July to October over Rs220bn have been invested in
domestic equity mutual fund schemes through systematic investment plans (SIPs).
The current monthly run rate for equity SIP flows is over Rs56bn/month.
This is the period when some significant economic events have
taken place, the most notable being implementation of GST. The investors and
businesses had been waiting eagerly for this event for past many years.
Besides, implementation of new Bankruptcy code and announcement of a
comprehensive plan to recapitalize beleaguered public sector lenders are being
widely acclaimed as transformational events for Indian economy.
Two sets of quarterly results have been announced in this period.
The general consensus amongst analysts and fund managers (at least going by
their public utterances) appears to be that earnings for corporate India have
bottomed out and a sharp recovery in imminent. Many reputable global fund
managers and investment strategist who had turned their back on Indian equities
have turned bullish on India in this period.
In the period between July and now, INR has weakened vs USD by
almost 1.5%; benchmark yields have jumped up by almost 10%; RBI has cut policy
rates once by 25bps and inflation has jumped higher by 200bps.
However, after scaling the mount 10K in last week of July 2017,
Nifty has literally gone nowhere, despite much excitement and enthusiasm.
The moot point is weather the markets are still assimilating the changes
and may make a move up after consolidating for few months; or market has
already assimilated the changes and decided that rally since February 2016 is
overdone and a correction would be in order....to continue
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