..... . VALI disclosures . .....: Wednesday, May 11, 2016

Wednesday, May 11, 2016

NIFTY TODAY, 12-05-2016

1)Market is under consolidation and directionless. May trade with in the range. Expecting some more whipsaws with both +ve and -ve closings.
2)Till last Friday the market moving was honouring Technicals but Monday's sharp rise spoiled the smart down fall as well as profit booking ... now the market is again consolidating to average bought and sold levels which leads direction less and indecisive momentum. ____________________________
NIFTY50
(index cmp 7848.85; future cmp 7865.85)

1)Closing Support to Index for today: cS1= 7808.70 where as Closing Resistance at 7887.25

2)Stoploss to Nifty50Future is 7784 (below 7780 can see panic selling).

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Reliance (equity cmp 975.40)

... .stock may turn to consolidate with positve bias around 945. ...

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NIFTY BANK
(index cmp 16754.45; future cmp 16785.25)

1)Closing Support to Index at 16456.95 and Closing Resistance formed at 16785.45
2)Strong volatility support at 16494 break may strengthen Bears causes furtherance sharp fall to hit 16185.
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NIFTY IT (index cmp 10960.40)
... .as no clear indication towards momentum found, looking directionless. ...
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Infosys Technologies (equity 1201.85)

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FII/FPI trading activity on NSE, BSE and MSEI on Capital Market Segment

The following is combined FII/FPI trading data across NSE, BSE and MSEI collated on the basis of trades executed by FIIs/FPIs

FII/FPI trading activity on NSE,BSE and MSEI in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII/FPI	11-May-2016	4131.71	4493.9	-362.19

Domestic Institutional Investors trading activity on NSE, BSE and MSEI on Capital Market Segment

The following is combined Domestic Institutional Investors trading data across NSE, BSE and MSEI collated on the basis of trades executed by Banks, DFIs, Insurance, MFs and New Pension System

DII trading activity on NSE,BSE and MSEI in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	11-May-2016	2166.17	1436.58	729.59

The data is based on today's activity compiled on the basis of trading codes entered by trading members at the time of order entry and corresponding client category classification provided by trading members as part of unique client code details upload. This trade data is provisional and subject to change, inter alia, on account of custodial confirmation process, modifications etc. For final FII data, please refer to SEBI website at http://www.sebi.gov.in/sebiweb/investment/statistics.jsp?s=fii

BSE data has been compiled on the basis of marking of 'client type' while executing
orders on BOLT-TWs in equity segment.

nifty intraday, 11-05-16

- today's low in Nifty50 Future is 7798.20 - means fell and traded below 7825 support is negative factor - for positivity the Nifty50 Index should close above 7850 for today -

- Niftybank Future formed the low of 16544 (breach of support formed at 16700 was occured) is negative to Bulls - to sustain positivity should close above 16694 -

NIFTY TODAY, 11-05-2016

Mauritius is set to lose its sheen as a conduit for investments into India with both countries modifying their double taxation avoidance pact as part of efforts to clamp down on treaty abuse.

The two countries on Tuesday signed a protocol at Port Louis to amend the Double Taxation Avoidance Agreement (DTAA), under which capital gains earned by a Mauritian entity will be taxable in India at the full domestic tax rate from financial year 2019-20 onwards.

What the protocol says
The protocol confers New Delhi with taxation rights on capital gains arising on the sale of shares acquired on or after April 1, 2017, in a company resident in India. This is effective from financial year 2017-18.

The protocol also provides for a ‘limitation of benefit’ clause for the transition period (April 1, 2017 to March 31, 2019), during which the capital gains tax rate will be 50 per cent of the normal rate.

With this, Mauritius will lose its edge as a popular jurisdiction for routing investments into India. Mauritius currently has ‘nil’ tax rate on capital gains.

Simply put, under the amended treaty, the right to tax capital gains will be available to the country where the income arose. With this, both countries are now moving into a source-based taxation of capital gains from the adopted residence-based taxation methodology for capital gains taxation.

Revenue Secretary Hasmukh Adhia said: “The treaty amendment brings about a certainty in taxation matters for foreign investors. It reinforces India's commitment to OECD-BEPS (Base Erosion of Profit Sharing) initiative to stop ‘double non-taxation’ enjoyed by companies.”

He also said that capital gains on shares for Singapore can also now become source-based due to the direct linkage of the Singapore DTAA Clause with the Mauritius DTAA.

A boost for investment
Economic Affairs Secretary Shaktikanta Das said he believed this development would lead to a surge in investment flow.

Aseem Chawla, Partner, MPC Legal, a law firm, said the inbound investment structures being routed through Mauritius would need to be revisited in the light of some grandfathering proposed in the latest protocol.

Amit Maheshwari, Partner, Ashok Maheshwary & Associates, a CA firm, said that Singapore and Mauritius, the two most popular jurisdictions for routing investments, would lose their advantage. “This is expected to impact funds and companies from the US who used to come through Singapore/Mauritius to avoid double taxation,” Maheshwari told BusinessLine.

Manoj Purohit, Director, Grant Thornton Advisory Private Ltd, said: “The amendment will have a greater impact on Foreign Direct Investment into India coming from Mauritius as well as Singapore."...source: BusinessLIne

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Hindustan Unilever

Shares of FMCG major Hindustan Unilever ended higher by nearly 2 per cent as the company reported a 7 per cent increase in standalone net profit for the March quarter.

The stock jumped 1.93 per cent to Rs. 862.45 on the BSE. On the NSE, the stock was up 2.04 per cent at Rs. 862.75.

Yesterday, Hindustan Unilever had reported a 7.02 per cent increase in standalone net profit at Rs. 1,089.59 crore for the three months to March, after witnessing decline in the previous two quarters.

The company had posted a net profit of Rs. 1,018.08 crore in January-March quarter of the preceding fiscal, HUL said in a statement.

Net sales during the quarter under review were Rs. 7,809.40 crore, up 3.36 per cent, against Rs. 7,555.00 crore in the year-ago period.

For entire 2015-16 fiscal, HUL’s consolidated net profit was down 6.43 per cent to Rs. 4,082.42 crore against Rs. 4,363.08 crore last fiscal.

Consolidated net sales increased 4.11 per cent to Rs. 32,482.72 crore from Rs. 31,199.72 crore.

Tata Steel

Tata Steel shares ended the session down by 0.33 per cent at Rs. 327.95 on the BSE.

Earlier, the stock rose as much as 2.6 per cent to the highest since May 4 as the company has shortlisted bids for UK assets.

Tata Steel Europe had said on Monday it had taken seven expressions of interest for UK assets to the next stage of sale process.

JSW Steel is among the bidders shortlisted, according to media reports, citing a person close to the development.

JSW Steel shares were down 2.92 per cent.

*** *** ***

World stock markets rose on Tuesday, helped by some solid corporate earnings in Europe and a new pledge by Japan that it was prepared to step in to weaken its yen currency.

The MSCI All-Country World index climbed 0.4 per cent, the pan-European FTSEurofirst 300 index advanced 1.2 per cent, while the MSCI Emerging Market index also edged higher.

European stock markets built on positive momentum from earlier on in Japan, where the Nikkei rose 2.2 per cent after Japan’s Finance Minister Taro Aso reiterated his resolve to intervene in the currency market if the yen’s gains last long enough to hurt Japan's fragile economic recovery.

Aso’s comments sent the yen down to its lowest level in almost two weeks against the dollar, and also reinforced the backdrop of central banks around the world looking for ways to boost the global economy.

Lex Van Dam, hedge fund manager at Hampstead Capital, said that record low interest rates from the European Central Bank (ECB) meant equities still offered more attractive returns than cash or bonds.

“Rates are not going anywhere, so buying any dips on the stock market might still be the best strategy,” he said.

European equities were also propped up by some decent corporate results in the region.

Shares in Credit Suisse rose after the Swiss bank reported a smaller-than-expected first quarter loss, while jewellery maker Pandora surged after posting higher profits and raising its financial outlook.

Greek shares also rose after euro zone finance ministers offered to grant Greece some debt relief, with the move also causing Greece’s 10-year bond yields to fall below 8 per cent for the first time in more than six months.

The offer appears to be a compromise between Germany, which does not believe Greece needs additional debt relief, and the International Monetary Fund, which insists it is necessary, and will be fleshed out by deputy finance ministers by May 24.

“At the very least it appears the gap between the IMF and the Germans appears to be narrowing and that has been very well received by investors,” said Nick Stamenkovic, bond strategist at RIA Capital Markets.

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NIFTY50

- left click on charts to enlarge -

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NIFTYBANK

NIFTY IT

Trade Cycles

The four important features of Trade Cycle are (i) Recovery, (ii) Boom, (iii) Recession, and (iv) Depression!

The trades cycle or business cycle are cyclical fluctuations of an economy. A full trade cycle has got four phases: (i) Recovery, (ii) Boom, (iii) Recession, and (iv) depression. The upward phase of a trade cycle or prosperity is divided into two stages—recovery and boom, and the downward phase of a trade cycle is also divided into two stages—recession and depression.

Phases of Trade Cycle:

The phases of trade cycle are explained with a diagram:

(1) Recovery:

In the early period of recovery, entrepreneurs increase the level of investment which in turn increases employment and income. Employment increases purchasing power and this leads to an increase in demand for consumer goods.

As a result, demand for goods will press upon their supply and it shall, thereby, lead to a rise in prices. The demand for consumer’s goods shall encourage the demand for producer’s goods.

The rise in prices shall depend upon the gestation period of investment. The longer the period of investment, the higher shall be the price rise. The rise of prices shall bring about a change in the distribution of income. Rent, wages, interest do not rise in the same proportion as prices.

Consequently, the margin of profit improves. The wholesale prices rise more than retail prices. The prices of raw materials rise more than the prices of semi-finished goods and the prices of semi-finished goods use more than the prices of finished goods.

(2) Boom:

The rate of investment increases still further. Owing to the spread of a wave of optimism in business, the level of production increases and the boom gathers momentum. More investment is possible only through credit creation. During a period of boom, the economy surpasses the level of full employment and enters a stage of over full employment.

(3) Recession:

The orders for raw materials are reduced on the onset of a recession. The rate of investment in producers’ goods industries and housing construction declines. Liquidity preference rises in society and owing to a contraction of money supply, the prices falls. A wave of pessimism spreads in business and those markets which were sometime before sellers markets become buyer’s markets now.

(4) Depression:

The main feature of a depression is a general fall in economic activity. Production, employment and income decline. The prices fall and the main factor responsible for it is, a fall in the purchasing power.

The distribution of national income changes. As the costs are rigid in nature, the margin of profit declines. Machines are not used to their full capacity in factories, because effective demand is much less. The prices of finished goods fall less than the prices of raw materials.

✳Reality Tips to Traders

1)Trading in the stock market is a marathon. 2)Protecting your capital is key. (Learn to protect first) 3)Making 0 on the day is better than losing 50k 4)Losses happen; they are part of this business. 5)It’s not you vs. the market. It’s you VS you. 6)You are your biggest enemy; learn to be mentally disciplined. 7)Don’t follow the majority; follow the correct path. 8)Traders without a stop loss end up not being traders for long. 9)There is always another trade. 10)The big money is made waiting for the right set-ups. 11)Waiting for the right trade is the most powerful strategy. 12)It is better to cut a loss than to wait to be proven right. 13)Position sizing can make or break you. 14)Worry about the downside before you even think about the upside. 15)Don’t listen to headlines

..BANKING TERMINOLOGY

There are various types of Banks: PSU Banks, Private Banks, Co-operative/Regional Banks, Small Finance Banks and Foreign Banks. When you deposit money in a bank, let's say the bank gives you an interest rate of 4%. But when the bank lends out this money, they lend it out at say, 12%. The difference of 8% in the above scenario is effectively the profit of the bank! The loans that do not pay interest for 90 days are known as Non-performing Assets. Banks have to provide for such bad loans. Structure of a Bank Asset for a Bank: The asset portion of a bank's capital includes cash, government securities, and interest-earning loans (e.g., mortgages, letters of credit, and inter-bank loans). Liabilities for a Bank: The bank's main liabilities are its capital (including cash reserves and, often, subordinated debt) and deposits. The latter may be from domestic or foreign sources (corporations and firms, private individuals, other banks, and even governments). Banks are required to maintain Liquidity with the Reserve Bank of India: SLR (Statutory Liquidity Ratio): It is the money a bank needs to preserve in the form of cash, gold or government Bonds before providing credit customers. This limitation is added by RBI on banks to make funds available to customers on-demand at your earliest convenience. Banks are required to maintain SLR at 18%. CRR (Cash Reserve Ratio): Banks are required to hold a certain proportion of their deposits in the form of cash. Banks don’t hold these as cash with themselves, but deposit such amounts with RBI / currency chests. CRR rate is at 4.5% currently. Repo Rate: The rate at which the RBI lends short-term money to the banks. The RBI through its Monetary Policy committee changes the repo rate to balance growth and Inflation. Reverse Repo rate: The rate at which banks park their short-term excess liquidity with the RBI. Now let us understand various terminologies for Banks Net Interest Income (NII): This is the spread the bank makes on its lending. It is calculated as Interest Income – Interest Expended Net Interest Margin (NIM): This is the spread the bank makes on its lending. It is the earning which is left after deducting the cost paid to depositors from its yields on Loans. This is denoted in % terms. The formula is Yield on Loans – Cost of funds Capital Adequacy Ratio (CAR): The capital adequacy ratio (CAR) is a measure of a bank's available capital expressed as a percentage of a bank's risk-weighted credit exposures. Essentially, it is the Capital that is available to lend. Tier I Capital – In simple words this capital is freely available with the bank to lend out. Tier II Capital- This is the capital tied up somewhere and is less freely available to lend. In case of an adverse event, the bank can use this capital to lend. Under Basel III norms, a bank’s tier 1+tier 2 capital must be a minimum of 8% of its risk-weighted holdings. The minimum capital adequacy ratio, also including the capital conservation buffer, is 10.5%. Current Account Saving Account (CASA)- There is no interest paid on the Current Account and a small interest rate is paid on a savings account. The combination of both is called CASA which shows the liabilities of the bank on which it pays relatively less interest. Deposits: Bank deposits are a savings product that customers can use to hold an amount of money at a bank for a specified length of time. In return, the financial institution will pay the customer the relevant amount of interest, based on how much they choose to deposit and for how long. Now let us come to NPA. Gross NPA (GNPA): It is the total loans on which no payment has been paid for 90 days or more. GNPA % is usually shown in each Bank’s quarterly results. The percentage is basically the GNPA amount as a % of the total advances. Slippages: Slippages denote the fresh amount of loans that have turned bad in a year. The slippage ratio of a bank is calculated as Fresh accretion of NPAs during the year /Total standard assets at the beginning of the year multiplied by 100. Provisioning Coverage Ratio (PCR): This is the ratio of provisioning to GNPA and indicates the extent of funds a bank has kept aside to cover loan losses. For Instance, a company has GNPAs of Rs 100 and they have set aside 50 Rs, then the PCR is 50%. Net NPA (NNPA): The total figure left after deducting provisions made for bad loans from GNPA. (GNPA – Provisions+upgrades/writeoffs = NNPA) Special Mention Account (SMA) SMA-0 is a category in which stress with respect to the principal and interest has remained overdue for a period of 0 to 30 days. SMA-1 is a category in which stress with respect to the principal and interest has remained overdue for a period of 30-60 days. SMA-2 is a category in which stress with respect to the principal and interest has remained overdue for a period of 60-90 days

..... . VALI disclosures . .....

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Wednesday, May 11, 2016

NIFTY TODAY, 12-05-2016

nifty intraday, 11-05-16

NIFTY TODAY, 11-05-2016

Today's

04/04/26, Silver rate today: After climbing to an all-time high of ₹4,20,088 per kg on the Multi Commodity Exchange (MCX), the silver rate today in India is at ₹ 2,32,600 per kg, around ₹ 1,87,500 or 45% below the record high.

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