Nifty Panic

What explains the sharp selling in the Nifty…? Source: Google Finance The Nifty showed signs of getting closer to the 10,500 mark during the week but closed below the 10,200 mark. The selling in the last 2 days was quite hectic taking the markets down sharply. What were the key triggers? Politics gets shaky… In…

Ban on LOUs

What could be the immediate outcome of this move…? In the aftermath of the PNB fiasco over the issue of fake Letters of Undertaking (LOU), the RBI decided to ban further issues of LOUs and Letters of Comfort (LOC). However, this move will be with prospective effect which means that all existing LOUs and LOCs…

Current Account

The CAD is a lot more worrisome than the trade deficit… During the week the trade data was announced wherein the trade deficit came in sharply lower at $12 billion. This is in comparison to $16 billion reported in the month of January. Even the growth in exports of goods was sharper than the previous…

Nifty IT Index

Why has IT outperformed in the last 1 year… At a time when the Indian market has been talking about commodities, banks and rural stories, there is one sector that has actually surprised with its outperformance. The NSE-IT index is up by 18.58% in the last 1 year. But, hold your breath, the NSE-IT index…

Bond Losses

The hit for banks could be much bigger than expected… Over the last few years the focus of banks has been entirely on getting over the NPA problem. Most of the measures of the government have also been focused on attacking NPAs and boosting the capital of banks. But a new problem may have cropped…

Equity Fund Flows

Flows continue unabated in Feb despite the LTCG overhang… At a time when the markets were worrying about the impact of LTCG on the equity fund flows, AMFI data for February shows otherwise. Consider the statistics. During the month of February, equity funds and ELSS schemes saw a net inflow of Rs.16,300 crore with more…

Crude Oil Prices

Shale output could hold the key to future oil prices… Between July 2017 and January 2018 the price of Brent Crude went up from $45/bbl to $70/bbl. While the price has toned down to $64/bbl, oil analysts are betting on oil prices staying elevated till the year 2020. Here is why! Supply cuts to continue……

Fugitive Legislation

The Draft Bill is far-reaching but should not be misused… In the immediate aftermath of the $2 billion PNB fraud caused by Nirav Modi of Firestar Diamonds, the government has approved the draft of the Fugitive Economic Offenders Bill in the cabinet. This is a far-reaching bill and gives the government broader powers to punish…

GDP Q3 Estimates

There is a bounce, but now it needs to sustain… The GDP estimates for the third quarter of the financial year came in at 7.2%. That is a sharp rise from 5.7% in the first quarter and 6.5% in the second quarter of the year. While the bounce in GDP estimates is evident, there is…