BREAKING Japan's Nikkei Average opens 0.6% higher at 20,588.98 7:23p

BREAKING
Japan's Nikkei Average opens 0.6% higher at 20,588.98
7:23p

3 charts that explain China's stock market

he sheer size and importance of China’s equity markets cannot be overstated. Second in size only to the New York Stock Exchange, the combined value of the Asian country’s stock markets is $14 trillion and change. Or at least it was, before they fell 30 percent, wiping away nearly $2 trillion in value. To put this in perspective, the gross domestic product (GDP) of debt-troubled Greece is around $200 billion.

US Global Investors

So how did this happen? The answer has a lot to do with the quantity and quality of investors.

In most major economies, stock markets trading is dominated by professional money managers. But in China, between 80 and 90 percent of the domestic A-share market is made up of retail investors, many of them novices who sought to participate in the yearlong bull run. An eye-popping 40 million new brokerage accounts were created in the one-year period ended in May. The Communist Party, by comparison, gained only a little over one million new members in the same period. At the peak, accounts were being added at a rate of over three million per week.

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For many of these first-time or relatively inexperienced investors, the price of entry was margin lending. Cosmic amounts of it. Near the end of June, 2.08 trillion yuan ($335 billion) worth of borrowed funds flooded the Shanghai and Shenzhen markets. Margin lending as a percentage of total market cap rose to as high as 20 percent. In the U.S., it’s about 2.5 percent.

US Global Investors

This combination—millions of new accounts mixed with unprecedented leveraging—greatly contributed to the selloff. As you can see above, this leverage is now unraveling as investors are forced to sell in order to meet margin calls.

Beijing has responded with a host of measures to prevent the market from sliding any further, one of the most significant being a ban on huge institutional shareholders from selling until the Shanghai Composite rises above 4500. As of this writing, it’s just above 3800 after breaking a three-day rally.

The good news is that some analysts believe the worst might be behind us. Financial services firm UBS takes the position that, as massive as the correction was, it shouldn’t have a “major” economic impact.

In the meantime, we have raised the cash level in our China Region Fund (USCOX) and are ready to deploy it when the right opportunity arises.

Read more: http://www.usfunds.com/investor-library/frank-talk/chinas-market-correction-in-three-easy-charts/#.VaaOhRNVhHx#ixzz3g0cCvSSe

Chinese Stock Market: As China swoons, Wall Street bets on Japan

CalSTRS, with $US189 billion under management, owns 4.3 million shares in Toyota Motor. Paul Rovere

 

by John Kehoe

China's stock markets are swinging wildly. Uncertainty clouds Europe as the continent sweats on whether Greece's debt problems will spread. US stocks are elevated near record highs with interest rates poised to rise.
So global investors are returning to an old frontier to put their money to work: Japan. Asia's second-largest economy has stumbled through two lost decades of stagnant performance. But some of the world's biggest money managers are bullish on investing in the nation.
The mounting bets on Japan are predicated on more than just the huge Bank of Japan stimulus that has helped propel the Tokyo stock market to near a 20-year high. The Nikkei 225 Index has returned 18.3 per cent so far this year and has a one-year return of 35.3 per cent.
Corporate governance reforms introduced by Shinzo Abe's government last month have empowered shareholders in their dealings with company managers.

A greater emphasis is being placed on profits for shareholders, challenging the traditional clubby culture of Japanese firms who have historically looked after employees for life.
Wall Street investors like the more ruthless approach.
New York hedge fund manager Eric Mindich of Eton Park Capital Management said he was "most optimistic" about investing in Japan because of the governance reforms across the business sector.
"Companies are now being managed for shareholders," said Mr Mindich, a former Goldman Sachs partner.

Eton Park, a $US9 billion ($12.2 billion) fund, in recent years is reported to have invested in Japanese dairy and chocolate producer Meiji Holdings, Sumitomo Mitsui Financial Group and Coca-Cola East Japan.
In response to the corporate governance overhaul implemented under "Abenomics" as part of the conservative government's "third arrow" of structural reform to revitalise the economy, many companies have appointed more independent board members. Combined with greater powers for shareholders to take on management, investors believe the changes will put greater scrutiny on Japanese firms and lift performance.
Christopher Ailman, chief investment officer of the giant $US189 billion California State Teachers' Retirement System pension fund, said he had become attracted to Japan since the shareholder returns shifted up from eighth to fifth priority on the prospectuses for the country's chief executives.

'It's a dramatic shift'

"It's still not at the top but it's a dramatic shift," Mr Ailman said in New York at the CNBC Institutional Investor Delivering Alpha Conference.
"That's why it's an interesting place to invest, and it hasn't been for two decades."
CalSTRS, with $US189 billion under management, owns 4.3 million shares in Toyota Motor. Shares in the car maker are up 11 per cent so far this year, with a one-year return of 40.5 per cent.
Toyota recently secured shareholder approval to sell a new class of shares to long-term shareholders, a move that drew sharp criticism from some proxy advisers and CalSTRS, who voted against the proposal. The measure passed, but the case highlighted how companies are coming under more pressure from activist investors.

The structural reforms, though still not complete in exposing the coddled farming sector to more foreign agriculture competition, are complementing the Bank of Japan's ¥8 trillion ($87 billion) to ¥12 trillion monthly bond-buying program. The money printing is driving down long-term interest rates and has devalued the yen to a 13-year low versus the American dollar.
The weak currency has made it expensive for Japanese companies to fulfil their plans to buy offshore assets and diversify their businesses. But the plunging yen is opening up opportunities for exporters to sell their products abroad.
JP Morgan Asset Management chief executive Mary Callahan Erdoes said at the conference: "It's not the multinational Japanese company that has gone global that is most interesting right now. They're the ones having the hardest time with the currency.
"It's the truly Japanese company that actually stayed mostly focused in Japan which can now take advantage of exporting. That's where a lot of opportunities are."
Ms Callahan Erdoes warned that investors needed to spend a lot of time on the ground in Japan to analyse firms before investing.
Jeffrey Gundlach, a renowned bond market expert and chief executive of DoubleLine, which manages more than $US63 billion, said investing in Japan was "betting on the currency devaluation game".
"The yen never goes up," he said.
Mr Gundlach forecast the US dollar to hit 200 Japanese yen over the next five years. The greenback was as low as ¥78 in 2011, before surging to ¥123.85 as of Wednesday.
Instead of Tokyo, Mr Gundlach's long-term investment preference is India. He says the country has the potential to follow in China's footsteps, growing strongly over the coming decades, fuelled by hundreds of millions of rural workers moving to cities to join the formal labour market.
"I would buy the Indian stock market," Mr Gundlach said.

Nifty, Sensex, Bank Nifty undecided - Tuesday closing market

A close below 8,420 may mean a short decline for Nifty

 

We had mentioned in Monday’s closing report that NSE’s CNX Nifty has to say above 8,450 for the momentum to be strong. The 50-stock benchmark closed Tuesday just four points above it. It was a listless day with a flat close after lower-than-expected retail inflation data dampened hopes of an interest rate cut by Reserve Bank of India (RBI) next month.

 

 

The 30-share S&P BSE Sensex, which opened at 27,986.92 points, closed at 27,932.90 points, down 28.29 points, or 0.10%, over the previous day's close. The benchmark had touched a high of 28,018.59 points and a low of 27,853.96 points in intra-day trade.

 

The wider Nifty of the National Stock Exchange also closed flat -- down 5.55 points or 0.07%.

 

Rise in food and fuel prices propelled India's retail inflation to 5.40% in June from 5.01% in May, official data showed on Monday.

 

Foreign funds remained net sellers to the tune of $87 million on Tuesday. Good buying was observed in IT and healthcare sectors, while selling pressure was seen in auto and banking sectors during to today’s trading.

 

Among the 12 sector-specific indices of the Mumbai bourse, IT index rose 0.89% and healthcare index gained by 0.64%. However, auto index was down 0.93% and bankex by 0.55%.

 

The 100-scrip and 200-scrip indices were 0.08% and 0.05% down, respectively, while mid-cap index gained by 0.14% and small-cap stocks went up by 0.36%.

 

The major Sensex gainers on Tuesday were: Coal India, up 3.33% at Rs434.05; Infosys, up 2.11% at Rs970.10; Hindustan Unilever, up 1.91% at Rs927.45; and Hero MotoCorp, up 1.52% at Rs2640.20.

 

The losers were: Tata Motors, down 4.10% at Rs385.75; Hindalco, down 1.83% at Rs104.60; State Bank of India (SBI), down 1.81% at Rs268.60; and Vedanta, down 1.63% at Rs145.10.

 

The shares, which were top gainers and top losers among the major indices are given in the table below:

 

 

The closing values of world indices are given in the table below:

 

 

Among European indices, the DAX was at 11,449.35, down 0.31% and FTSE 100 was at 6,722.69, down 0.23%.

Fake Bloomberg Story About Twitter Buyout Sends Stock Soaring

Hair-trigger traders had shares in the social media platform plunging after the hoax report was exposed.

A fake report attributed to Bloomberg LP claiming Twitter received a $31 billion buyout offer on Tuesday had shares in the social media platform jumping 8 percent.

Twitter stock then quickly fell back down to earth after the bizarre hoax was exposed to investors. The fake takeover report appeared on a website called Bloomberg.market, rather than the legitimate Bloomberg.com site.

Bloomberg LP spokesman Ty Trippet took to Twitter to expose the phony report, as he wrote: "Pls note - that $TWTR story everyone talking about is fake." Bloomberg tech reporter Sarah Frier added in her own tweet that the hoax report had drawn an investigation by regulatory authorities.

"The SEC is looking into the fake Twitter story posted on the fake Bloomberg website," Frier tweeted.

Bullish on Sun Pharma, recommend ‘sell’ in Mahindra & Mahindra: Sandeep Wagle

By ET Now | 11 Jul, 2015, 02.12PM IST

"I was more bearish earlier, but looking at the price action now, I see the Nifty going towards 5850-5860 levels," Sandeep Wagle said.

 

 

 

 

 

 

 

 

 

 

ET SPECIAL:Love visual aspect of news? Enjoy this exclusive slideshows treat!

In an interview with ET Now, Sandeep Wagle, Founder & CEO, Power My Wealth, shares his views on the buzzing stocks. The expert also shares his top picks for the coming week. Excerpts:

ET Now: While the management was confident for two days in a row, TCS has posted a couple of percentage points of downtick. It has dragged CNX IT index along with it. If you are a trader, would you trade CNX IT early next week or is a large portion of the damage already done?

Sandeep Wagle: TCS was a 'sell' at higher levels before the results and Rs 2,550-2,560 was the right level to sell into the counter. Now, Rs 2,400-2,380 zone is a very strong support for the stock. Therefore, I would talk of a limited downside. If one had to play for that 4-5 per cent downside, one has probably Monday. I do not have much of a bearish view. In that sense, if you want to start trading CNX IT on Monday, I would not recommend. I would wait and watch or at least wait for some bounce back, before one can sell into.

ET Now: What is your view on Sterlite Technologies? It is an extremely liquidity stock. A total of 4-5 million shares get traded every single day. How would you go about it, come Monday morning?

Sandeep Wagle: I am positive on the stock and see it rising to around Rs 110- 115 levels. But would I buy it on Monday morning? No. It has moved up quite a bit and any correction in the range of Rs 95-90 levels would make better financial sense because then you will have a stop loss of Rs 85 and a target of Rs 115. Hence, I would wait for a correction to buy it. Sterlite Technologies is showing a very positive pattern. The stock may even test the Rs 120 level over the next few weeks.

ET Now: What are the stocks that you are recommending?

Sandeep Wagle: The Nifty is still in the 8,300-8,400 band and some stocks are giving you some cues. There is no clear direction. I would recommend a 'sell' in Mahindra & Mahindra with a stop loss at Rs 1,265, for the target of Rs 1,215. In addition, I would recommend a 'buy' in Sun Pharma, with a stop loss at Rs 895, for the target of Rs 936.

http://economictimes.indiatimes.com/opinion/interviews/bullish-on-sun-pharma-recommend-sell-in-mahindra-mahindra-sandeep-wagle/articleshow/48030989.cms

ETF Mutual Fund houses expect EPFO entry to boost equity ETF space

Mutual fund houses are bullish about the phased entry of the EPFO into exchange traded equity funds from this month, as they believe it will boost investors sentiment.

By: PTI | Mumbai | July 12, 2015 5:00 pm

 

The EPFO wants the commission to be reduced to 0.10 per cent from the existing fee structure that ranges from 0.20 to 1.20 per cent now.

Mutual fund houses are bullish about the phased entry of the EPFO into exchange traded equity funds from this month, as they believe it will boost investors sentiment.
The Employees Provident Fund Organisation (EPFO), which is the second largest institutional investor into Indian equities after LIC, sits over around Rs 6.4 trillion funds contributed by over six crore subscribers.
The retirement fund body is all set to invest around Rs 5,000 crore per annum in equity ETFs out of its total annual investible fund of around Rs 1 trillion, provided the industry meets certain conditions.
The equity ETFs market is a nascent one in the country with its AUM being a paltry Rs 3,500 crore last fiscal, and therefore the industry interest in the entry of the fund-flushed EPFO.
The EPFO wants the commission to be reduced to 0.10 per cent from the existing fee structure that ranges from 0.20 to 1.20 per cent now.
The fund also wants the tracking error to be minimal to ensure that the investment gets the best returns, an EPFO official said.
“So far, we have already held two rounds of meetings with Sebi on these issues,” the EPFO official added.
The EPFO will start investing in ETFs from this month, beginning with an initial investment of Rs 1,000 crore, which by the end of the year will touch Rs 5,000 crore or 5 per cent of the Rs 1 trillion investible fund of the organisation.
When contacted, UTI AMC group president for sales and marketing Suraj Koeley told PTI that “reducing our expense ratio to 0.10 per cent should not be any problem for us as we will be getting money in bulk from the EPFO which will help raise investor sentiment.
“Unlike other mutual funds, equity ETFs are passive funds and hence we can ensure minimal tracking error involved into it,” he added.
The retail and HNI portion of the AUM rose 50 per cent from Rs 1,102 crore in March 2014 to Rs 1,656 crore in March 2015 on the NSE platform, according to the data from the largest bourse.
The AUM of equity ETFs on the BSE could not be ascertained immediately.
Some of the fund houses with equity ETF offerings include Reliance, SBI, Axis, Kotak, IIFL and Goldman Sachs.
UTI AMC, with a total AUM of Rs 92,730 crore as of June 30, including Rs 30,000 crore in equities, has applied for two equity ETFs with Sebi which include Nifty ETF and Sensex ETF.
Out of the total AUM of Rs 86,000 crore, SBI MF currently has Rs 26,000 crore in equities.
Despite offering four equity ETFs, its AUM from this is only Rs 30 crore.
The fund house is all set to launch a Nifty ETF shortly.
“Besides the EPFO, we are also waiting for more such pension funds to come in from other sectors as it will give a boost to the equity ETF market,” SBI Mutual Fund Managing Director and Chief Executive Dinesh Kumar Khara told PTI.
“We will be launching Nifty ETF shortly,” he added.
It can be noted that permitting the EPFO to enter the ETF space in a phased manner, Union Labour Minister Bandaru Dattatreya had said, “We are starting with 1 per cent of Rs 1 trillion in equities) in July and by the end of this (fiscal) year it will go up to 5 per cent.”
The Labour Ministry had in April this year notified the new investment pattern for the EPFO, which allows the body to invest 5 per cent of its funds into ETFs. As per estimates, the EPFO’s incremental deposits for 2014-15 would be around Rs 80,000 crore.
During the current fiscal, the incremental deposits could be around Rs 1 trillion as the body has increased the monthly wage ceiling for coverage under its social security schemes to Rs 15,000 from Rs 6,500 last September.
Earlier, the EPFO, which has over 6 crore subscribers, has been investing primarily in state and central government securities.


http://www.financialexpress.com/article/markets/etf-mutual-fund-houses-expect-epfo-entry-to-boost-equity-etf-space/99799/

 

China's stock market turbulence is over? Don't count on it

The extraordinary recent boom-bust trading pattern appears to be have been halted, but China’s growth model has to change and become less reliant on investment

An investor covers their face with a stock exchange hall in Nantong, Jiangsu Province, China, during the recent week of turbulence. Photograph: ChinaFotoPress/Getty Images

Sunday 12 July 2015 15.37 BST Last modified on Sunday 12 July 2015 16.18 BST

The numbers are mind-boggling. Ten days of falls on the Shanghai stock exchange resulted in losses that exceeded the GDP of Mexico. And 12 million Chinese citizens who opened share trading accounts in May were nursing potentially ruinous losses. Margin trading – speculating on the stock exchange with borrowed money – increased five-fold in a year to 2.3tn yuan (£230bn).

While Europe’s focus has been the crisis in Greece, the Chinese stock market has been gripped by panic. The value of shares went up by 150% in little more than a year, then fell by 50% in just a few weeks.

Live Greece debt crisis: Alexis Tsipras says deal possible tonight - live updates

Eurozone leaders are gathering to discuss the Greek crisis, as pressure mounts on Europe to reach a deal

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Fearful that China in 2015 could find itself in the history books along with Dutch tulips, the South Sea bubble and the Wall Street Crash, the government in Beijing stepped in to halt the rout. It cut interest rates. It banned large shareholders from selling stock. It used public money to buy equities. It allowed trading in more than half the quoted companies to be halted.

And, in the short term at least, it seems to have done the trick. Share prices rose at their fastest pace in more than seven years in the final two days of last week.

Panic over, then? That’s certainly what some China experts believe. They argue that the impact of the boom-bust in shares will have negligible impact on the real economy. Capital Economics, for example, note that the rise in share prices did not lead to higher consumer spending, so why should the fall in share prices lead to lower consumer spending, particularly since most of the losers are high net worth individuals who can afford to take the hit?

Holger Schmieding, chief economist at Berenberg, says the stock market plays little role in funding investment in China. This, he adds, is just one of the “usual panics and manias to which young financial markets are even more prone than established ones”.

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This optimistic assessment could well be correct. After all, the US suffered many boom-busts in the 19th century and they failed to arrest an upward trend that turned an agrarian economy in 1800 into the world’s biggest industrial power by the outbreak of the first world war.

Keynes once wrote: “Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done.” China, if the optimists are right, is not a casino and the speculation is froth.

Naturally enough, there is an alternative view, which is that the false and disorderly stock market is indicative of a deeper malaise, and that the current state of China is little different from the US in the years before the financial crash of 2007. Both appeared strong, both used inflated asset prices to stimulate growth and disguise fundamental weaknesses in the economy. Alan Greenspan dealt with the fall out from one burst bubble by inflating another.

Something similar has been going on in China, where the response to the global financial crisis was to build inefficient industrial plant and infrastructure that was not really needed, while at the same time using cheap and over-abundant credit to boost property prices.

Russell Jones at Llewellyn Consulting says periods of asset price excess are most serious when combined with a credit boom, and that China is the most obvious current example of such a phenomenon. Jones says the risk is that the Chinese authorities struggle to contain the stock market turbulence with the result that broader indicators of business and consumer confidence decline and GDP growth drops below the 7% target. There would, he adds, be a good chance that neighbouring countries, many of them also displaying bubble-like tendencies, would be affected.

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The Chinese authorities won plaudits for their handling of the 2008-09 crisis and may well emerge from this period of turbulence with their reputation intact. They will be helped by the fact that China runs a trade surplus, has strong public finances and has massive reserves. Even so, the lesson of history is that the worst crises are those where excessive credit has led to excessive leverage: investors throw caution to the wind and borrow money in the expectation that asset prices can only ever go up.

This lesson holds true not just for the 2008-08 crash but - according to a 2010paper by economic research body the the National Bureau of Economic Research (NBER) - for the whole era of modern finance capitalism. The authors of the paper studied the relationship between asset prices and the performance of the economy in 17 countries over 140 years and found that what turns a bit of irrational froth into something really nasty was when the irrational exuberance was combined with plenty of easy credit.

This is where things in China start to look a bit worrying. The Bank for International Settlements, the body that represents central banks, has developed a set of indicators to assess whether countries are at risk of a financial crisis. One is whether the ratio of credit to national income (GDP) is more than 10% higher than its long term trend. A second is whether real (inflation adjusted) share prices are more than 40% above their long-term trend. A third is whether property prices are more than 10% above their long-term trend.

The results for China are not good. The credit gap rose from 12.7% to 14.2% in 2014. The equity gap remained only just below the 40% threshold following the boom in share prices in 2014 and early 2015. And the real property price gap was 10.5% in 2014, albeit down from 23.7% in 2014.

China’s leaders clearly have a problem. They understand that their country’s growth model has to change and become less reliant on investment. Consumer spending has fallen from 50% of GDP – low by western standards – to 35% since Deng Xiaoping began his reform programme a little more than three decades ago. Moving to a model where growth is slower but of higher quality is not easy. As Bob Swarup of advisory firm Camdor Global, has noted, to maintain growth rates at the current target of just over 7% while returning household consumption to 50% of GDP within a decade would require consumer spending to rise by 11.5% a year.

The task is complicated because China’s authoritarian regime is fearful that economic distress will fuel political unrest. That’s why there is always the strong temptation – even for a reformist administration like that of premier, Li Keqiang, to resort to the old growth-at-any-price ways when things start to look a bit dicey. As they do now.

http://www.theguardian.com/business/2015/jul/12/china-stock-market-turbulence-is-over-dont-count-on-it

Greece bailout: Europe demands higher price

LONDON (CNNMoney) —It's really crunch time now for Greece.

This much was clear Sunday: Europe will not offer Greece the massive bailout it urgently needs to stay in the euro unless it commits to much deeper economic reforms and shows it can deliver them.

That was the message from European finance officials, after they kicked off a second day of frantic diplomacy Sunday on Greece's request for a new rescue.

Greek Prime Minister Alexis Tsipras, arriving for talks in Brussels with the leaders of the other 18 countries that use the euro, said he was ready to compromise.

Whether that will be enough to get the money flowing again soon, and allow Greek banks to reopen, remains unclear.

German Chancellor Angela Merkel cautioned that Sunday's talks would be "difficult, and there won't be a deal at any price."

Europe and the International Monetary Fund estimate Greece needs between 72 billion and 74 billion euros ($82 billion) over the next three years. They have already lent Greece about 233 billion euros since 2010.

Several officials made clear that the Greek government needed to go beyond a reform proposal it submitted last week, and commit to more changes to pensions, taxes and other areas. And it needs to provide proof those measures will happen.

"We've come a long way but big issues still are open, so we're going to put those to the government leaders and it's up to them," said Jeroen Dijsselbloem, who chaired the meeting of finance officials.

Finland's finance minster, Alex Stubb, said Greece was being asked to pass into law a series of far-reaching conditions by July 15.

Trust in Greece's commitment to reform was shattered by January's election of a prime minister fiercely opposed to austerity, and a series of government U-turns in the last two weeks -- including calling a referendum to reject reforms it then signed up to days later.

The weekend of meetings follows an ultimatum Europe gave Tsipras earlier this week: Show us you're serious about putting Greek finances in order, or you're out of the eurozone.

A separate meeting of the leaders of the 28-nation European Union scheduled for Sunday was canceled.

Without agreement in principle to start talks on a bailout, the crisis in Greece will only deepen, dragging the country ever closer to exit from the euro.

Its banks have been shut for two weeks, and cash withdrawals are capped. The vital tourism industry is suffering. People are spending less, some public services have stopped charging, and the healthcare system is running out of imported medicines.

Greece needs to pay pensions and wages this week, and make a big debt repayment to the European Central Bank next week. Without an injection of funds fast, it may have to issue IOUs, a first step to printing its own currency.

The package of reforms Greece proposed included spending cuts, tax hikes, and plans to phase out tax discounts on some islands, among many other things. Greece also plans changes to public pensions, such as raising the retirement age, and steps to improve tax collection.

They're very similar to ideas put forward by the country's creditors in late June before Tsipras walked out of talks, triggering the collapse of the last bailout and forcing the closure of the banks.

Assuming Greece accepts a broader overhaul of the economy, there are still other potential roadblocks standing in the way of a third bailout.

Opinion in some other countries that use the euro, including Germany and Finland, is running high against another rescue. Taxpayers don't want to put more public money at risk. A new bailout would need to be ratified by parliament in Germany, and a handful of other countries.

And Greece wants creditors to restructure its debt. Europe could give it even more time to pay back loans, and cut already very low rates of interest, but that may not be enough. Some eurozone countries insist they can't go further and cancel Greek debt outright.

That in turn could kill a deal. Some eurozone countries say they'll only back a third bailout if the IMF takes part. The IMF has made clear that it will only participate if the Europeans agree to restructure Greece's debt. 

http://www.wtae.com/money/greece-bailout-deal-still-far-away/34119246

Nifty may correct till 7700; banks, IT cos weak: ATMA

Sushil Kedia, president, Association of Technical Market Analysts , believes the market downtrend is not over yet and the current upmove is merely a counter-trend correction.


Sushil Kedia, president, Association of Technical Market Analysts , believes the market downtrend is not over yet and the current upmove is merely a counter-trend correction. "Out of sense of conservatism, maybe I have been talking about 7,700 in my prior few interactions; that is a humble way to say the market is going down. But now I will be mentally open even at 7400. I am not projecting but, that kind of deep downside is quite possible," says Kedia. On sectoral bets, Kedia says the banking and information technology (IT) space should be avoided for the time-being. Below is the transcript of Sushil Kedia’s interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18. Sonia: I remember you telling us that the top for this market could be somewhere around that 8,550 or so, we have come off from that level, what is the prognosis going forward? A: We have gone back to that level twice. If I may be allowed a little bit of a jargon, the first time we went there it was 7,930 – lower low than all the lows we have seen in the last six months. Traditional trend analysis people will call it as the lowest low. I see that as an early warning that the down trend that started from 9,100 has not yet gotten over. So, the ABC pattern tells me this entire move twice to 8,550 area is only a counter trend correction of the longer term downtrend that started from 9,100 going down 7,930. I am at this moment a bit worried and anticipating a move that will compliment the down trend that came from 9,100 down the way to 7,930. So out of sense of conservatism maybe I have been talking about 7,700 in my prior few interactions; that is a humble way to say markets are going down only till that much. I will be mentally open even at 7, 400; I am not projecting right now but that kind of deep downside is quite possible. Latha: What will take it there, which part of the Nifty? A: In down trends, the correlation of stocks is much lower and they have their own individual trends. It is a bit of risky to cut it fine on everything but then banks are definitely looking weaker than the rest of the pack. Even the IT stocks that look like having a small blip, that will sustain this next one or two days upwards blip on Nifty. I think I am quite worried on the long-term downtrend on IT stocks. What I am also worried about is that BPCL though not so much of a heavyweight on the Nifty, it might lose straightaway 20-25 percent. In that measure there are again some counter trend stocks like now Tata Motors or Tata Steel are oversold, Cairn is oversold, Hindalco is oversold. So, there are a number of oversold stocks and will have cyclical rotations. It is not going to go down in one straight line. However, perhaps over a month, month and a half, a down move to 7,700 looks quite feasible without ruling out 7,400. Sonia: This 7,700 level is something that you would expect in the next one month so what would your year-end target for the Nifty be? Would you have any expectation there? A: I will hazard a guess, once we survive this 7,400 to 7,700 pocket I am hoping this downtrend from 9,100 should get over by then and we should get back to the long-term uptrend. However, forecasting so many legs up and down is a bit adventurous but that is what I would guess right now. Latha: The other pillars of the market have been Reliance Industries , Larsen and Toubro (L&T) to some extent and now BHEL is also getting a lot of look in. How would you draw the charts of these three stocks? A: For a short-term or medium-term trading, say the one month timeframe we are looking at, I will definitely not but L&T. However, perhaps if I see a down close on that, might not be a bad candidate to short sell. While I am quite bullish on BHEL on the very long run but then again BHEL should also participate on the downside given a 15-18 percent kind of a correction from here. You spoke about Reliance – that is not looking like creating any exceptional moves out of line with the market so perhaps it will trade inline with the market

Read more at: http://www.moneycontrol.com/news/technicals/nifty-may-correct-till-7700-banks-it-cos-weak-atma_1895561.html?utm_source=ref_article

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Top six Sensex companies erase Rs 62,808 crore in market cap; TCS loses most

Reliance Industries Limited, ONGC, ITC, Infosys and HDFC were among the losers last week, while HDFC Bank, CIL, Sun Pharmaceutical and SBI clocked gains in market valuations. 

Led by software major TCS, six out of top 10 Sensex companies lost a total Rs 62,808 crore in market valuation last week as sharp correction in Chinese stocks and worries over Greece debt crisis kept domestic markets on the edge.

Reliance Industries Limited, ONGC, ITC, Infosys and HDFC were among the losers last week, while HDFC Bank, CIL, Sun Pharmaceutical and SBI clocked gains in market valuations.

Among the top 10 Sensex companies, the market valuation of TCS plunged the most by Rs 26,031.49 crore to Rs 4,84,177.97 crore last week.

The m-cap of ONGC dipped Rs 13,303.78 crore to Rs 2.51 lakh crore, while that of Infosys tanked Rs 12,162.32 crore to Rs 2.15 lakh crore.

The valuation of HDFC tumbled by Rs 5,178.8 crore to Rs 2.02 lakh crore and that of ITC fell by Rs 4,448.61 crore to Rs 2.48 lakh crore.

RIL's market cap went down by Rs 1,682.95 crore to Rs 3.24 lakh crore.

In contrast, Sun Pharma added Rs 7,315.35 crore to Rs 2.16 lakh.61 crore in market cap.

HDFC Bank's valuation jumped Rs 4,520.62 crore to Rs 2.74 lakh crore and that of Coal India Limited rose by Rs 1,579.09 crore to Rs 2.65 lakh crore.

The market cap of SBI jumped Rs 1,248.42 crore to Rs 2.04 lakh crore.

In the ranking of top-10 firms, TCS stood at number one position followed by RIL, HDFC Bank, CIL, ONGC, ITC, Sun Pharma, Infosys, SBI and HDFC.

In the broader market, the BSE benchmark Sensex fell by 431.39 points to end at 27,661.40.

A sharp downward correction in Chinese stocks and uncertainties involving Greece kept Indian markets on edge, which ended last week in the red.

The key indices of Sensex and Nifty settled below the psychologically significant 28,000 and 8,400 levels respectively, reversing three weeks of gains

Over 16 lakh investor accounts added in stock markets in 1 year

MUMBAI: A strengthening securities market backed by investor-friendly climate has helped boost the number of investor accounts on the depositories by 16.64 lakh to nearly 2.4 crore in the last one year period.

The cumulative number of investor accounts on the country's two depositories -- NSDL and CDSL -- stood at 2.37 crore at the end of June 2015 compared with 2.2 crore in the same month last year.

The National Securities Depository Ltd (NSDL) and the Central Depository Services Ltd (CDSL) allow investors to deposit securities by opening an account.

The securities such as shares, debentures, bonds of investors are held in electronic form (dematerialised form) at the depositories.

As per latest data, the total number of investor accounts at NSDL stood at nearly 1.4 crore, as on June 30, 2015 against 1.32 crore in the same period year-ago.

CDSL reported 98 lakh investor accounts for June-end, this year -- an addition of about 9.5 lakh accounts over 89 lakh accounts in the same period last year.

Together, the total number of demat accounts stood at 2.37 crore at the end of June this year -- translating to an addition of 16.64 lakh accounts from the same period in 2014.

During June 2013-June 2014 period, a total of 8.3 lakh demat accounts were registered on the depositories.

According to market analysts, the number of demat accounts has seen a rise in past year on account of positive stock market sentiments, more initial public offers (IPOs) and digitisation of new securities classes like insurance.

In the last 12 months beginning July 1, 2014, the benchmark BSE Sensex as well as NSE Nifty has risen by about 9 per cent.

"Regulators have also emphasised and directed depository participants towards simplified demat account opening processes to improve inclusiveness and increase participation in markets," Yes Securities' Chitra Pandeya said.

"With the launch of its trading arm 'Yes Securities' over a year ago, Yes Bank has seen a significant rise in the number of demat accounts it opens," Pandeya added.

Meanwhile, data showed that the total value of securities in dematerialised form at the depositories stood at more than Rs 131.26 lakh crore at the end of June, 2015, a growth of 29 per cent over the same period in 2014.

NSDL registered demat securities worth Rs 117 lakh crore while CDSL recorded demat value stood at more than Rs 88.5 lakh crore, as on June 30, 2015. 

http://economictimes.indiatimes.com/markets/stocks/news/over-16-lakh-investor-accounts-added-in-stock-markets-in-1-year/articleshow/48040979.cms

Shailendra Bhatnagar0Jul 10, 2015, 08.31 AM 

 

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Top things to look out for in the markets today

Shailendra Bhatnagar0Jul 10, 2015, 08.31 AM

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The Nifty is likely to remain weak and trade in a sideways band on Friday as investors and traders refrain from taking long positions ahead of the weekend and as overseas cues continue to be muted.

Meanwhile, stocks in Asia posted minor gains after Chinese authorities stepped into absorb panic from their markets. Markets on Wall Street closed with modest gains of 0.19-0.23 percent on Thursday. Commodities offered little or no clue on the direction which equities may take. Crude oil futures continued near 3-month lows, Copper and Gold futures were trading flat.

The Nifty is likely to see resistance coming in at 8,420-8,370 levels and the support at 8,325-8,275 points. The Index closed at 8,328, down 35 points on Thursday, falling for a 3rd day in a row.

Foreign funds continued to remain net sellers on Indian equities on Thursday. The sold net 254 crore rupees of stocks, their 5th straight day of sales and their sales in the derivatives markets stood at 1,247 crore rupees in Index Futures and 497 crore rupees in Stock Futures. These numbers point to further weakness in Indian stocks.

And now for a bit of good news: the IMF has retained its forecast for global growth at 3.8 percent for 2016. It pegs India's GDP expansion at 7.5 percent, making us the fastest growing economy in the world.


STOCKS TO WATCH:

TATA CONSULTANCY SERVICES: Top software exporter failed to meet sales forecast for the fourth time in a row. Q1 Sales rose 6 percent sequentially to 25,668 crore rupees, below analysts expectations. Net Profit fell 3.3 percent sequentially to 5,709 crore rupees. The software giant's attrition rate surged to 15.9 percent. Major global brokerages remain optimistic on TCS's futures growth and they maintain their `Buy' stance on the stock.

BHARAT HEAVY ELECTRICALS: Brokerage CLSA has upgraded the stock to `Buy' from `Sell' and raised its price target to `320 per share from `205 earlier, citing the company to be the biggest beneficiary of the surge in orders in FY16. CLSA sees EPS double over FY15 - 17 as raises FY16 order flow by 17%.

WIPRO: Has finalised a deal to buy a digital Danish firm for 85 million euros.

ICICI BANK: The lender may sell its Housing Finance Arm for `4,400 crore rupees to private equity players, reports the Economic Times. The unit contributes to 10 percent of the lender's total loan book and focuses on financing affordable housing.

JSW ENERGY: signed a non-binding pact to buy out Monnet Ispat's 1,050 MW power plant in Odisha.

MAHINDRA & MAHINDRA: The auto giant is set to enter the branded oils and pulses category with a sales target for `1,000 crore rupees in the first year of operation.

TITAGARH WAGONS: Sets floor price of `104.64/share for its placement process that is aimed at raising 250 crore rupees from institutional investors.

Today Nifty open on a positive note!! Target 8450 (TCS may drag the market down be cautious)

Asian market is trading higher and us market closed little higher. Today we are expecting Nifty to be open in positive side.

We find a good support for the nifty around 8330 yesterday, Today if nifty able to cross 8365 and stay above this level for more then 15 min, we can create new nifty position on buy side for the target of 8420 & 8450.

If Nifty find it difficult to cross 8365 which is a crucial level for upside target, we may find nifty going toward 8300 and break that level today.

Is India’s falling stock market a good investment opportunity?

Published: Friday, 10 July 2015 01:04

Written by Zoë Henry

Since 26 May 2014, the Indian economy has gone from strength to strength, with the stock market moving steadily upwards week on week, month on month.

It has been just over a year since Narendra Modi was voted in as Prime Minster of India – a political move that has benefited the country in every aspect from cultural to economic. Since 26 May 2014, the Indian economy has gone from strength to strength, with the stock market moving steadily upwards week on week, month on month.

However, the last couple of months have seen a dip in the market, with the dip occurring between the all time high at the start of March and falling 8 per cent towards the end of May. This drop in the Indian Stock Market (Sensex) raises two important questions: firstly, why has this drop occurred? And secondly, is buying shares in India’s Sensex a wise move for foreign investors who want to buy low and sell high?

The promises for India’s development have been flowing in thick and fast since Modi was voted in. While these promises won him many votes during the canvassing stages, and helped boost foreign investment in the county, people are now concerned that he will not be able to make good on these large promises.

These include promises to build new roads, factories, trains, and even new cities, to create more jobs for India’s young workforce, as well as making it easier for foreign investors to invest in India’s progress. But as it is with every new government, progress is not being made as fast as both the Indian people and foreign investors had hoped, which is driving the value of the Sensex shares down.

When it comes to whether or not the Indian stock market is ripe for foreign investment, economic analysts are divided. Some say that India’s economic improvement teamed with their young age average of the population make it a wise investment, while others warn about the volatility of the rupee.

However, the opinion that it’s a wise investment is bar far the more popular one. Fundexpert.co.uk analyst Brian Dennehy told the Telegraph: “I would sooner put my money into youthful potential of India, rather than the greying, high income, populations of the West. A youthful population is absolutely essential for a country wishing to sustain high levels of growth. A 25-year-old working Indian with young children has much greater economic potential than a 70-year-old Italian pensioner – it is that simple.”

By Zoë Henry

China Trading Halts Slip After Stock Rally With 49% Still Frozen

The number of companies with trading suspensions on mainland Chinese exchanges fell slightly on Friday the day earlier, following gains by stock indexes.

About 1,422 companies have halted trading, equivalent to 49 percent of total listings, down from 1,439 on Thursday, according to data compiled by Bloomberg. The Shanghai Composite Index surged 5.8 percent on Thursday, its biggest gain in six years, after a rout that wiped out $3.9 trillion in less than a month.

Asia Markets update

Asian markets are mixed. The Hang Seng is higher by 1.28%, while the Shanghai Composite is leading the Nikkei 225 lower. They are down 0.83% and 0.32% respectively.

Why America’s stock market is shrinking

NEW YORK — Believe it or not, the U.S. stock market had way more companies back when Mark McGwire was chasing homerun records.

The number of publicly listed U.S. stocks peaked at a record 7,562 during McGwire’s record-setting summer of 1998, according to the Wilshire 5000 Total Market Index. Today, there are just 3,812.

So what gives? Simply put, there are more companies disappearing than entering the stock market.

This isn’t a trivial problem that only matters to bankers on Wall Street. Not only do investors have fewer options to invest in, but it directly impacts American jobs.

“We’re shrinking the stock market. Unless we figure out how to create a lot more startups and a lot more IPOs, the economy is going to continue to generate jobs at lower rates than it should,” said David Weild, former vice chairman at Nasdaq who has testified in Congress about capital markets.

How did we get here? It’s important to note that the collective value — known as market capitalization — of the stock market has risen tremendously since the 1990s. However, the number of stocks in the market peaked in July 1998, just as companies were racing to go public in the Internet boom.

“There was this myth that if you could start a company and put dot-com in the name you would become instantly rich,” said Bob Waid, managing director of Wilshire Analytics, which oversees the Wilshire 5000.

Obviously, they were wrong. Going out of business is one way companies get delisted from the market.

An illustration depicting an investor during a down stock market.

IPOs can’t keep up with M&A: The other way is through mergers and acquisitions, which cause one stock to stop trading as it’s absorbed by another company. The M&A market is booming: A record $1.1 trillion of U.S. deals were done during the first half of 2015, according to Dealogic.

In a perfect world, delistings are offset by the creation of new public companies through IPOs, or initial public offerings. Yet the IPO market hasn’t rebounded to its dot-com era levels.

Back in 1996, an incredible 848 companies went public, raising a total of $78.6 billion, according to Dealogic. In 2014, the IPO market did $96 billion of deals last year, but only 292 companies went public.

One explanation for the IPO decline is the presence of other sources of capital, including venture capital and private-equity firms. Startups like Uber and Airbnb are raising gobs of money in the pre-IPO market, which some fear looks like a bubble.

Other startups may be discouraged from going public by regulation. Costly disclosure and other requirements in Sarbanes-Oxley have lessened the appeal of the IPO route.

Startup world is shrinking, too: The other explanation is that there are simply fewer young companies in the U.S. Startups made up almost 15% of all U.S. companies in 1978, compared with just 8% in 2011, according to Brookings Institute research.

“We’ve had a massive collapse in the number of startups. That’s where job growth occurs,” said Weild.

Weild blames major changes to market structure in the late 1990s and early 2000s that have disadvantaged small-cap stocks (like startups) against large-cap ones like IBM and Microsoft.

For example, Nasdaq’s decision to become a for-profit corporation has shifted its objectives. Weild said the exchange no longer advocates for the ecosystem of small investment banks that previously supported small-cap stocks.

Likewise, Regulation ATS in 1998 ushered in the widespread use of electronic markets in the U.S., making trading far more efficient and cheaper for everyday investors. However, Weild argues it also made it less profitable for the small investment banks, many of which no longer exist.

Venture exchanges: So what’s the solution? Weild and others have pushed Congress to create so-called “venture exchanges” that would cater to young companies. In theory, these exchanges would help the economy by giving startups access to capital that they aren’t getting from the current market structure.

“We’ve created a market structure in the United States that’s really undermined our future. If you shut down your ability to start small companies, you also inhibit your ability to create large ones,” Weild said.

Japan’s Topix Rises on China Rebound as Greece Submits Proposal

Japan’s Topix index rose as Greece submitted a bailout proposal similar to that mooted by creditors and futures signaled Chinese markets will rebound for a second day.

Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender, gained 1.2 percent. Drugmakers, railways and food companies led gains among the 33 Topix industry groups. Fast Retailing Co. tumbled 5 percent, the biggest drag on the Nikkei 225 Stock Average, after its chief financial officer said cool summer temperatures in Japan and wider losses at Uniqlo’s U.S. stores may weigh on its performance.

The Topix added 0.4 percent to 1,585.79 as of 9:28 a.m. in Tokyo, paring its biggest weekly loss in nine months to 4 percent. Twice as many stocks rose as fell on the gauge, with volume about 16 percent above the 30-day intraday average. The Nikkei 225 lost 0.5 percent to 19,760.68.

“Stocks are being bought on hopes for the new Greece proposal,” Yutaka Miura, a technical analyst at Mizuho Securities Co. in Tokyo said by phone. “China has managed to stop its decline for now using all sorts of government tools. But once trading resumes in shares that had stopped trading, we’ll see more selling.”

The yen weakened 0.3 percent to 121.64 per dollar after yesterday declining 0.5 percent from its strongest level in seven weeks as demand dropped for haven assets after China stocks rebounded. Chinese shares have slumped more than 23 percent the past two weeks, with losses at the start of the week igniting a wave of risk aversion.

U.S. Futures

E-mini futures on the Standard & Poor’s 500 Index jumped 0.7 percent after the underlying measure added 0.2 percent in New York on Thursday.

The government of Greek Prime Minister Alexis Tsipras sought a three-year bailout loan of at least 53.5 billion euros ($59.2 billion), in a last-ditch effort to keep the country in the euro. The proposal is similar to the one presented by creditors last month.

The package of reforms and spending cuts, including pension savings and tax increases, was sent to creditors late Thursday and will be presented to the Greek Parliament Friday. The proposals are set to be discussed at a summit of European Union leaders Sunday to determine whether Greece will get a new bailout, or be forced to leave the single currency.

European market reaction suggested investors believe a deal can be done, or that the European Central Bank can successfully contain the fallout if one isn’t. The benchmark Stoxx Europe 600 Index rose 2.2 percent and Greek, Portuguese and Italian bonds rose.

The largest U.S.-listed exchange-traded fund tracking Chinese stocks soared 20 percent in New York amid relief over Thursday’s rebound. Futures on China’s CSI 300 Index rose 10 percent in recent trading.

The International Monetary Fund cut its forecast for global economic growth this year on Thursday, citing a weaker first quarter in the U.S. The Washington-based lender expressed confidence that financial-market turbulence from China to Greece won’t cause widespread damage.

The Top Three Stocks to Watch in Asia Today

http://finance.yahoo.com/video/top-three-stocks-watch-asia-002606452.html