Thought for the day
"It took me years to understand that words are often
as important as experience, because words make experience last."
—William Morris (English, 1834-1896)
Word for the day
Kismet (n)
Fate, destiny
Malice towards none
Who stole my Data?
Has anyone heard about Google Baba?
One may call Rahul Gandhi by whatever name, ridicule him, reject
him outrightly, but one thing is definite - he has put the mighty BJP on
defensive.
Since past couple of months in particular, Rahul Gandhi would make
some seemingly absurd allegation and the entire BJP machinery (including
firebrand defense minister, textile minister, law minister and army of
spokespersons) would remain busy denying it and levying some counter
allegations.
The TV channel debates appear like someone in a crowded room has
thrown his s**t in the air and switched on the fan.
FY18 - Market recap
The financial year 2017-18 started on a very optimistic note for
Indian financial markets.
BJP had just scored a massive electoral victory in UP. This was
widely assumed to mean that people and economy have moved on leaving the scar
of Demonetization behind.
The market participants were full of hope anticipating GST to be
panacea for many economic ailments.
The proposed New bankruptcy law, that was about to be passed by
Lok Sabha, promised speedy resolution of NPAs.
Analysts were very optimistic about earnings finally growing after
staying mostly flat for two preceding years.
The world economy and markets were also looking in great shape.
The fears of Trump disrupting the global economy had mostly receded. US Fed had
assured of orderly normalization of monetary policy. ECB and BoJ were still in
"whatever it takes" mode and appeared in no hurry to withdraw
stimulus.
Riding on the high hopes, markets world over rose to new highs.
Indian equities also scaled new highs, before some dark cloud started gathering
on the horizon.
Energy prices suddenly appeared sustaining at higher levels. US
President appeared acting on his threat to build tariff walls and VISA
restrictions. US yields started to rise. Domestic inflation started to pick up.
Liquidity tightened, pushing rates higher. FPI flows turned negative even in
debt. Market started anticipating a hike from RBI instead of cut. A bout of new
bank defaults raised fear of fresh slippages. CAD shot up beyond 2% of GDP.
Growth targets were cut. Earnings did not match the expectations.
The market accordingly responded negatively.
Benchmark equity indices corrected ~10% from their all time highs.
Broader markets corrected even higher. One year SIP return vanished. Debt fund
returns also moderated considerably as bond yields rose sharply.
Introduction of long term capital gains tax and inclusion of
equity funds in the ambit of dividend distribution tax in union budget for FY19
changed the rules of the game for equity investors.
Change of rules prescribed by SEBI for categorization and
benchmarking of mutual fund schemes also caused some disturbances in the
market.
A certain degree of uncertainty has crept in after the recent
bypolls in UP & Bihar, and withdrawal of TDP from NDA fold.
Consequently, the financial year is ending on rather cautious note
with below par returns and considerably moderated expectations forFY19.
10yr benchmark yields rose and bond trading volumes shrunk.
 |
Markets corrected sharply in last two months.
 |
Consumption best performer, pharma the worst.
 |
 |
Foreign investors remained consistent sellers most of the
year. Domestic flows sporadic.
 |
Huge divergence in mutual fund returns. Small cap and FMCG
funds best performers. Pharma fund the worst.
Large cap funds returns mirrored the nifty. Multi cap a
shade better. Small cap outperform despite late sell off.
 |
FY18 NIFTY EPS downgraded to ~Rs455, from Rs520 in the
beginning of FY18.
FY19 still elevated.
 |
Technically Nifty at threshold of two important events —
(a) crossover of 50EDMA below 100EDMA and (b) Nifty sustaining below 200EDMA.
In mid 2015 this occurrence resulted in sharp corrections.
 |