Goldman Sachs Nifty ETF (the best ETF for Nifty investments in India) has been moving is a reliable envelope for last 2 years. Current downside during year 2014 is 575, which would coincide with Nifty 5700. Upside band is at 675, which would coincide with Nifty 6700. That’s the 1000 point range for Nifty in year 2014. A visit to 5700 can happen by end-March 2014. There further downside targets till Nifty 5400, which may also materialize in case of sudden market sell-off. Therefore, Nifty investors must remain cautious, holding adequate Put options till June-July to protect long positions, which in turn should payoff in later part of 2014.
China’s central bank said over the weekend it will lower the reserve requirement ratio (RRR) that banks must hold as reserves to 20.5 percent from 21 percent, effective Friday. This 50 basis points (bp) reduction will free up tens of billions of dollars for loans at a time when the growth rate is expected to drop from last quarter’s 8.9 percent to closer to 8 percent. This is the second rate cut in two months.
Chinese real construction companies, and global commodity stocks, especially base metals like copper and aluminium, should benefit from this move. Investors hoping for more lending in the real estate sector pushed up Chinese property shares and banks. Hong Kong-listed China Resources Land Ltd. rose 1 percent and China Overseas Land & Investment Ltd. added 1.3 percent. China Construction Bank Corp. added 1.1 percent.
World stock markets were also positive on hope that Greece will clinch the aid to avoid bankruptcy. Whether Greece can actually implement and deliver an auterity plan is not a consideration for now! Continue reading China reduces Reserve Requirement Ratio by 50bp→
India’s GDP for Q2 FY12 grew at 6.9% (Bloomberg estimate: 6.8%). Core sector growth for the month of October dropped to a six year low of 0.1%. The core sector has expanded 7.2% last year (October 2010).
India’s food inflation for the week ended November 19 declined to 8%on a week-on-week basis from 9.01% for the week ended November 12 while fuel price index increased to 15.53% (15.49% last week).
Indian Prime Minister Manmohan Singh failed to break an impasse with opposition parties and his own allies demanding a rollback on FDI hike in retail sector. And as of today, this new policy has been put on hold to get agreement from opposing political parties. Continue reading Indian Economy and Capital Markets Review- 04Dec2011→
