Buoyancy in market continues; recommend investors to be stock specific..
The benchmark indices on both major
stock exchanges had their fourth straight weekly gain on Friday, both closing
at record highs. On the BSE, the Sensex gained 135.7 points or 0.4 per cent to
close at 31,273. On the National Stock Exchange, the Nifty closed at 9,653, up
37.4 points or 0.4 per cent.
The broader markets reflected a
similar trend, with the BSE mid-cap and small-cap indices going up by 0.7 per
cent and 0.5 per cent, respectively. The Sensex gained nearly one per cent
during the week and has advanced nearly five per cent in the past month.
The rally was led by Hero MotoCorp's
stock, up three per cent on the back of strong sales numbers in May. Shares of
Cipla and Adani Ports went up by 2.6 and 2.1 per cent, respectively.
years of decline, Indian exports to China rose sharply in the first four months
of this year registering a 20 percent increase to USD 5.57 billion, though the
trade deficit continued to persist. Indian exports received a major boost
mainly due to China increasing the steel consumption by importing big quantity
of iron ore as well as gems and diamonds besides cotton materials. The
India-China trade grew by six percent to USD 26.02 billion from January to
April this year, according to the data of China's customs accessed by PTI here.
As per the data, the Indian exports have gone up to USD 5.57 billion,
registering a 20 percent increase. China's exports to India too amounted to USD
20.45 billion, a 14 percent raise.
government on Wednesday said it has achieved the fiscal deficit target of 3.5
percent of GDP in 2016-17. "Fiscal deficit is 3.51 percent of GDP or Rs
5.35 lakh crore in 2016-17," the Controller General of Accounts (CGA) said
while releasing the provisional accounts for the last financial year. For
2017-18, the government aims to further bring down the fiscal deficit gap
between expenditure and revenue up to 3.2 percent. The CGA further said that
revenue deficit during the last fiscal was 2.02 percent of GDP. As per the
provisional data, the fiscal deficit in April 2017 was Rs 2.05 lakh crore,
which is 37.6 percent of the Budget estimate, as against 25.7 percent in last
lenders have agreed to a seven-month moratorium on its debt obligations, giving
the company time until December to sell its towers to Canadian asset manager
Brookfield Infrastructure Group and merge the wireless business with Aircel,
Ambani said. The proceeds for these transactions will help the company reduce
debt by 60 per cent, he said.
performing countries are mostly beaten down debt-ridden high-risk one like
Argentina and Greece while the other performers are emerging markets with
Turkey, India and Poland being the respective ones from peripheral Europe and
Seng (Hong Kong) index has been a recent performer and showcases the preference
for Chinese stocks listed there rather than the Chinese Index which has grossly
current levels, Nifty is valued at a P/E of 23x on trailing twelve months
earnings which we believe is on a higher side. Nifty has been on a upmove since
seen rally in last 4-5 weeks. We believe this was mainly due to liquidity
infused by DIIs.
There is strong positive sentiment
among investors inspite of weak macro economic indicators i.e slower GDP growth
due to ample liquidity, with stable inflow from both domestic and foreign
institutions. Institutional buying is expected to continue, as domestic mutual
funds still get impressive flow. As for foreign funds, India is expected to
receive good inflow, owing to the positive risk appetite of investors. Mutual
funds have purchased shares worth Rs 11,224 crore from the Indian markets in
the year so far. Foreign institutions bought shares worth Rs 51,200 crore ($8
billion) in the first five months.
proved most critics wrong and turned out to be the blessing in disguise for the
mutual fund industry. The flows into SIP (systematic investment plans) from
November 2016 after the demonetization event have been the highest ever
witnessed since the launch of mutual funds and are gaining traction month on
month despite the indices touching new highs.
We expect a recovery in corporate
earnings to be the key headwind in the medium to long term. Although the
markets have scaled new heights in the past two years, growth in earnings per
share (EPS) has been flattish. We believe at current levels it is risky to
enter expensive midcaps and smallcaps and rather advise profit booking. A sharp
fall in the market is not ruled out after a short term further rally.
We recommend investors to be stock
specific and consider companies with good earnings visibility at a decent