Stock, currency markets shut today for Muharram

Domestic stock exchanges, currency as well as debt markets will remain closed on Tuesday on account of Muharram. The commodities market will …
Domestic stock exchanges, currency as well as debt markets will remain closed on Tuesday on account of Muharram. The commodities market will also remain shut during the first session from 10 am to 5 pm.

Asian stocks traded mixed this morning after a global bond sell-off and their US peers snapping three days of gains. Treasury yields stabilized after Monday’s climb.

Equities saw a modest rise in Tokyo and Seoul, and dipped in Sydney. S&P 500 futures edged higher after US stocks closed flat with sectors that had driven a recent rally such as health-care, tech and real estate underperforming. UK contracts were little changed after the British Parliament again rejected an early election. The pound was steady.

On Monday, India’s benchmark equity indices ended higher following gains in select financial stocks amid firm global cues. The 30-share BSE Sensex closed 163.68 points, or 0.44 per cent, higher at 37,145, while the 50-share Nifty index settled 56.85 points, or 0.52 per cent, up at 11,003.

“Nifty will remain in the range of 10,800-11,200 this week. Traders should sell on the rise,” said Nirav Chheda, derivatives & technical analyst at Nirmal Bang Securities.

Equity markets would track announcement of some key macroeconomic data points in this holiday-shortened week for further cues.

Vinod Nair, Head of Research, Geojit Financial Services, said the market reversed its early losses on Monday based on the positive view in the global market that interest rate will be eased further by ECB. “Global uncertainties like Brexit and US-China talks will be watched carefully by the market. While domestically, data like CPI, IIP, and FII inflows during the week will be assessed to understand whether the worst for the economy is over or weakness will continue in the short term,” he said.

Overseas investors have already pulled out a net of Rs 1,263 crore from the capital markets in the first week of September amid global headwinds even as the government rolled back enhanced surcharge on FPIs. They remained net sellers for the previous two months, pulling out Rs 5,920 crore in August and Rs 2,985 crore in July from the domestic capital markets (both equity and debt).

FPIs withdrew more than Rs 30,000 crore from the equities during July-August after Finance Minister Nirmala Sitharaman in her maiden Budget enhanced tax surcharge on them.

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I would always recommend mutual funds over individual stocks: Anand Rathi

Highlighting the mistakes ordinary investors make, he argues that mutual funds are better options than stocks for most of them. Equity markets in India …

Anand Rathi, founder of Anand Rathi Group, which is active in wealth management and brokerage and distribution in equities, mutual funds and other financial services, talks about the ongoing economic slowdown and the reforms that can reverse it. Highlighting the mistakes ordinary investors make, he argues that mutual funds are better options than stocks for most of them.

Equity markets in India have been suffering in the past 12-18 months. Factors behind this such as consumption slowdown or global trade wars are unlikely to be resolved quickly. Should investors lower their return expectations from equity then?

These types of patches have come several times in the last 35-40 years. They come and will keep coming. Interest rates are going down due to easing of liquidity in India and globally. A margin of 8-10% over the risk-free interest rate is good. Thus, if you can make 14-15% from equity, that’s a good return expectation.

Brokers often say buy bluechips and forget about them. But many blue-chips have failed over even long periods of time. So should the mantra be buy mutual funds and forget? Alternatively should it be: buy the index and forget?

Never say buy and forget. You can’t forget. You need to buy with a long-term view but your portfolio requires continuous review. A large investor should review the portfolio at least once a month, a smaller investors should do so at least once in three months. You need to review your portfolio whether you are invested in individual stocks or in mutual funds. Today’s bluechips were not bluechips 20-30 years ago and the bluechips of 20-30 years hence are not today’s bluechips. You don’t have to churn your portfolio and become a trader. However, between individual stocks and mutual funds, I would recommend the latter. Everyone talks of risk management but critical risk management requires quantifying risk. This will lead to a lot more objective decision making.

You need to see the amount of volatility in prices, measured by standard deviation (measures the volatility in returns). The volatility of an individual stock may be 20-30%. In Nifty, it is a lot lower. As you go into portfolios rather than stocks, volatility comes down. In the long term, investors should look at mutual funds or something based on the index. The effort needed to manage individual stocks is much higher than the effort required for funds.

Will the recent announcements on the FPI surcharge rollback and the loosening of FDI be enough to revive the market? What else is needed?

It is a good beginning. Some positivity has come. The market was very negative after the budget and as a result of global news. However, this is not enough. Many more things need to be done. Changing the FPI surcharge has given a good signal that the government is open-minded and objective-oriented. From a stock market angle, double taxation of dividends should go, which the committee on the Direct Taxes Code has also recommended, from what I understand. Similarly capital gains in equities should go. The securities transaction tax (STT) was introduced in lieu of capital gains in 2004. But today we have both capital gains and STT and STT is higher than what it was when it was introduced. Making the cost of transactions higher or having very heavy taxation on people capable of generating higher income is not a desirable sign. Globally, governments have brought down rates of tax. The prime minister himself said that wealth creators must be respected. From a macroeconomic angle, liquidity is the biggest challenge. The Reserve Bank of India (RBI) has taken steps to ease liquidity but liquidity remains with RBI. Some announcements such as vigilance cases to be determined at the bank level are good. The banking sector should not remain afraid of lending. Gradually that confidence has to be built.

Will 1.76 trillion transferred by RBI to the government have an inflationary effect?

I don’t think so. The amount is not that large and in fact we need more liquidity. Government payments to vendors are getting delayed over a period of time. The government should pay people faster and you will have more money circulating. An amount of 90,000 crore was estimated in the budget, while 1.76 trillion was actually given. I don’t think this will have an inflationary effect. At present there is a lot of unutilized manufacturing capacity. Hence, more money in the market is not likely to have an immediate inflationary effect.

With so much uncertainty, when should an ordinary investor buy a stock?

It’s a very big question. The only way the investor can go right in buying a stock, is with the right advisor. This is the disadvantage of the online system. To buy online, the investor should be very well educated and extremely competent. This is not easy in a complex market like India. My advice to people has all along been to invest in mutual funds rather than stocks, if you are not a trader. Second, I would say, go to a proper advisor.

When to exit? Who will tell the investor? When a stock falls, people keep on averaging their purchase price. In a falling market, never average down. Instead you should use a stop-loss system (a price at which an investor’s position is automatically closed).

Finally, our derivatives market is open to small investors although Sebi has gradually increased the lot size. It is very difficult to make money in the derivatives market. The problem in derivatives is that people lose money and the image of stock market gets spoiled.

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Infosys Shares Touch New Record High

It has been an eventful year for Infosys Ltd’s share price. On Friday, the stock rose as much as 1.6 percent to touch a new high of Rs 847 apiece on …
Business
oi-Olga Robert

| Published: Friday, September 6, 2019, 14:57 [IST]

Infosys Shares Touch New Record High

It has been an eventful year for Infosys Ltd’s share price. On Friday, the stock rose as much as 1.6 percent to touch a new high of Rs 847 apiece on NSE. So far, in 2019, the share price has rallied over 25 percent aided by strong revenue growth outlook from brokerages and consistent deals.

In the current calendar year, the stock has hit fresh 52-week highs several times.

For the April-June period, Infosys reported a 6.8 percent fall in profits from the previous quarter, however, the company increased its full-year constant currency revenue to 8.5-10 percent from 7.5-9.5 percent earlier.

It reported a 1.23 percent increase in consolidated sales to Rs 21,803 crore from Rs 21,539 in March.

On Friday, Infosys was one of the top performers on the two Indian stock market benchmark indices, Sensex and Nifty 50. Nifty IT index was trading 0.69 percent higher at 10,922.65 at 2.40 pm. Stable demand, large deals and an increase in the share of the digital segment have improved the brighter outlook for the information technology sector in an otherwise dull market.

Strengthening of the US dollar against other currencies amid geopolitical uncertainties has also helped with the gains as these companies make significant earnings in the American currency.

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You Can Save $30 On The ECOVACS DEEBOT N79S Robot Vacuum Today

Amazon is shaving $30 off of the regular price of the ECOVACS DEEBOT N79S Robot Vacuum today, dropping it down to just $199. For a sub-$200 …

Amazon is shaving $30 off of the regular price of the ECOVACS DEEBOT N79S Robot Vacuum today, dropping it down to just $199.

For a sub-$200 robot vacuum, this is a really good bargain.

The ECOVACS DEEBOT N79S is a really great robot vacuum. It has just about every feature that you could want in a robot vacuum too.

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This includes plenty of suction power, so that it can get up all of the dirt and dust out of the carpet in your home, with ease. That way you won’t have to worry about it leaving dirt and dust behind, after it is done cleaning up.

There’s also a pretty large battery inside. ECOVACS says that it should last around 110 minutes on a single charge. That’s about the same runtime as many other robot vacuums on the market today.

There is also app control available for the ECOVACS DEEBOT N79S. Allowing you to control it with the app, and also see where it has cleaned and where it still needs to clean. This is actually a really helpful feature for those that have larger homes. As you can tell the robot vacuum specifically where you want it to clean. Like the bathroom or the kitchen only.

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Of course, it wouldn’t be a robot vacuum in 2019 without voice support. It works with both Google Assistant and Amazon Alexa. Allowing you to use your voice to control the robot vacuum and tell it when and where you want it to clean in your home. That’s a pretty nifty feature to have, especially if you already have a number of smart home products in your home.

You can pick the ECOVACS DEEBOT N79S robot vacuum from Amazon for just $199 by clicking here. This isn’t going to last long, so you’ll want to grab it before it’s gone.

ECOVACS DEEBOT N79S – Amazon – $199

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Financial Markets To Remain Closed On Monday For Ganesh Chaturthi

Domestic equity, debt, currency and commodity markets will remain closed on Monday on account of Ganesh Chaturthi. Last Friday, the stock market …

Domestic equity, debt, currency and commodity markets will remain closed on Monday on account of Ganesh Chaturthi. Last Friday, the stock market benchmark index S&P BSE Sensex rose 263.86 points – or 0.71 per cent – to close at 37,332.79, while the broader NSE Nifty index settled at a gain of 74.95 points – or 0.68 per cent – at 11,023.25. The rupee rose by 39 paise against the US dollar to end at 71.41 on Friday, led by strength in domestic equities and renewed hopes of the US-China trade talks. The 10-year benchmark bond yield finished at 6.56 per cent, as against the previous close of 6.55 per cent. (Also read: President Kovind, PM Modi greet citizens on Ganesh Chaturthi)

The financial markets will resume trading on Tuesday, September 3.

The Sensex and Nifty shed 148.33 points – or 0.40 per cent – and 94.75 points – or 0.85 per cent – respectively in August.

The rupee depreciated 3.81 per cent against the US dollar last month.

Analysts expect the markets to remain volatile in the near term.

“Weak GDP numbers could prompt the government to take urgent remedial measures especially to boost rural incomes and facilitate public and private spend in capacity creation,” said Deepak Jasani of HDFC Securities.

Official data released last Friday showed India’s GDP or gross domestic product expanded 5 per cent in the quarter ended June 30, marking the slowest pace of growth since March 2013. Weakness in consumer demand and private investments affected economic growth. (What economists say)

“Auto stocks will be in focus as auto companies will start announcing monthly sales numbers for August 2019 starting from September 1, 2019,” Mr Jasani added.

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