Category Archives: Economy & Finance

Read the latest on Economy and Finance aspects of the country. Find out how the Micro and Macro factors affect the Indian Economy.

Economy & Finance

Myths & Realities of Options Trading Indian Stock Markets #Trading

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Just to update, Indian Stock market is on fire and is doing fantastically and for last one week, it’s making an all-time high on a daily basis and trading at 11750 now. Not very long ago people were talking about corrections and fall in the market, which never happened. In many of my last posts, I have spoken about the importance of the Stock Market as a financial instrument to make money. Most of you would understand the Stock Market well, the actual motive behind the investments in stocks is to make profits. But unfortunately, when stocks fall and you lose your money it shakes your faith on the stock market.

That’s something which is not in your hands, but yes what is in your hands is to cut losses even in falling markets and that is possible only in ‘Options Market’. To trade in options market, all you need is a decent portfolio of stocks which is not less than 1 lakh rupees.

If I have explained options in simple words, here it is: Let’s say that you are the owner of a house, and the value of the house is a 30 lakh rupees. Suppose you need money on an urgent basis and you in short of cash, you can pledge the house and raise funds to meet your needs and then slowly you can re-pay it back in installments. After you clear everything, your financial need is met, as well as the ownership of the house is also with you.  In another case, let’s say that you have instead of pledging the house as collateral, you will given the half of the property for rent to make money. This will make it more easier for the people as you get the rent money which can be used to pay back the money you borrowed.

Options are also something similar. Your stocks in the portfolio can be used as the collateral in options and you can make money with ZERO investments as the collateral is only required to shown. This is one of the good ways of utilizing your portfolio to make that extra cash when the portfolio is making losses. As mentioned above all that you need to have is at least 80,000 to 1,00,000 rupees worth of stocks. Then you can go for trading in Options markets.

Let me now tell you a bit more about Options.  There are two types of Options Contracts: Calls and Puts.

Suppose you are expecting that market will fall a bit, then showing your portfolio as collateral you will sell a call. If the market actually falls, then you get the entire money that you sold the call option. In other case, if you feel that the market is going to rise a bit, then you can sell a put for the same collateral. If the market rises, you make profit by getting all the money that you have sold the put for.

These Calls and Puts are the two sides of the Option Chain and are risky to trade.  But there are many people who actually trade in the options market and lose lot of money. That failure can be mainly because of the improper understanding of the market. So don’t enter the options, if you are not completely aware and take the advice of a professional who you can trust, before entering the market.

Lastly, the reason for writing this article is because, these days many demat accounts are coming with options trading and the greedy companies pull innocent people by giving them wrong picture about options. Options are to be traded only after knowing everything about it totally and it’s something that can be easily learned. All that is required is common sense and presence of mind. This is just an introductory article to give you broad overview of options. I will come up with more articles in future that will teach you options trading in a simpler way. That way you can prevent yourself from getting cheated by greedy stock broking companies.

Economy & Finance

It’s Just Another Nifty Correction or are we heading to CRISIS?

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It’s Just Another Nifty Correction or are we heading to CRISIS?

It’s been long time since I have written something on stock market and I think there is no other better time than today to write. All because of the

worries that are ruling the stock market. So, deviating from the promise that I made last week where I said I would give my predictions on Rajya Sabha polls, I am writing about markets. The reason is simple. In last one week many things have changed and many allies are deserting BJP and its not wise to predict anything as of now.

So, coming to the markets we have seen a lot of volatility in last one week. With Global Factors in negative plane and Domestic Factors adding to it the fall seemed to be immine

nt and it did happen. Investors need to very cautious at this point of time, because it is very crucial not to lose his patience and take a rash decision. I would say that this is worrying but it’s not game over yet. Let’s not panic because that will only make it worse for investors.

 

I have few points to discuss whic

h will make you to see the other side of the story. I have taken the point of analysis as the time when Modi came to power i.e. from May 2014.

  1. Correction is Obvious for Long Term Growth

If you look at the table given in the image you can see that in the history of stock market every time after good bullish run we had seen a fall that is ranging from 10% to 15% on Nifty. When the stock market goes up trending by 25%-35% there is always chance of 10% correction minimum. So, the correction that we are seeing now is natural because after the

demonetization we have moved all the way

up by 40% from 7980 to 11120 and now is the time to cool down a bit.

  1. Connecting Nifty 50, Bank Nifty, NSE Mid Cap 50 and BSE Small Cap 100

Nifty 50 is the major index that represents the Stock market of India. But there are also other Indices which are slowly gathering pace in the Stock Market. They are much riskier and have got lot of movement when compared to nifty. The average returns on Nifty for last 4 years are standing at 31.6% whereas the average fall is at -12%. Bank Nifty is with average returns of 46% and average fall of -16%, Mid Cap 50 with average returns of 45% and average fall of -13% and finally BSE Small Cap 100 with average returns standing at 53% versus fall of -14% average. That statistics shows that Nifty can mostly fall till 12% which is the lowest when compared to all other indices.

  1. Crisis and the fall comparing to 2008 vs 2018

There are also voices which are talking about the fall going as deep as the 2008 economic crisis. In 2008 Nifty fell from 6300 in Jan to 2525 in October month. Making it a worst fall ever in the history with a fall of 60% in just 10 months.  Coming to present situation, the patterns of chart look the same when compared to the 2008 crisis. But the factors that are there today are not that worrying as in 2008 and don’t carry huge weight to make the market crash as bad as 50%. The average fall of 10-12% is something that is surely acceptable and one should be able to take it.

All the voices talking about the fall due to NDA Govt and its policies doesn’t look strong. Because already in NDA Government Stock Market has seen three 10+% fall and seen huge recoveries. I would say that It’s just a correction and chances of big crash look low. That said, the target of 12,000 that we had thought of in the beginning of the year now looks very slim but its not impossible. If a 10% fall can happen in 2months then we have more 8 months for out target to be reached. So, never lose faith on the markets. Move cautiously, observe the fundamentals, evaluate the technical and use the Futures and Options wisely to make up for the money that you are losing on your portfolio!

So, cheer up India is shining!

Economy & Finance

Importance of Companies in Country’s Growth

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A Special Post – Company and its Results!

Today, am coming up with this special post, just to tell my friends on Facebook and the followers on Twitter and on my website the growing importance of corporate company results of listed companies. For keen watchers of Indian economy, they act as a leading indicator in predicting the growth. In this post I have two points to discuss

  1. How much has one company grown with respect to profits?
  2. How are the overall Q3 results till now?

Every Business applies itself only to make profits and that’s their motive. But in doing so the economy also grows and that is the direct goal of Govt. When the Govt goes onto make liberal policies, they expect the Companies to generate more employment. Govt and Business look to be two different things in a country, but in reality they are inseparable. Yes, every company isn’t always true with respect to using the people’s money neither is the Govt. Governments fails and so does Businesses.

The main course of this article is to bring out the review for Quarter 3 results till now and how good or bad the companies have been reporting.  But before that I will talk about one company that has been doing wonders in the Business. Its undoubtedly the Big ‘D’’ Dhirubhai Ambani’s Reliance Industries.

Reliance Industries 1976-77 2016-17 % Gain
PAT 0.5746 Cr 31,425 Cr 54,68,921.92

In 1976-77 financial year Reliance made profits of 57.46 lakhs or 0.57 crore and in the last fiscal year they recorded profits of 31,425 crore which is whopping 54.6 lakh % increase in 40 years!

Not sure if this can be achieved by any other investment source. That’s the power of Business. Keeping profits aside and talk about the growth that Reliance has brought to the country then it is impeccable. From textile to telecom and refineries to retail. Everywhere its Reliance and with it, India is also growing. Thanks to Dhirubhai Ambani and his Vision.

 

Quarter 3 results FY 17-18 – PAT and Revenue in crores

Sl. No Company PAT Revenue % PAT % Revenue Result
1 HCL Tech 2207 12433 9.47 7.93 Average
2 HDFC bank 4642.6 14183.5 20 23.9 Good
3 ICICI Prudential life 452 6795.13 0.5 19.26 Bad
4 IDFC bank 146 495 -24 -5 Bad
5 ITC 3090.2 10579.11 16.75 -35.86 Bad
6 Infosys 5129 17794 37.6 1.3 Good
7 Jubilant Foodworks 66.02 798.5 230 20.55 Good
8 Kotak Bank 1053.2 2393.72 19.7 16.8 Good
9 NIIT Tech 75.6 756.5 21 9 Good
10 Reliance Industries 9423 102500 23 7.8 Good
11 Wipro 1930 13669 12 1.83 Average
12 Adani Ports 1001 2689 19.5 22 Good
13 Bharti Airtel 306 20319 -39 -13 Average
14 Ultratech cement 421.5 7590 2.25 19.1 Bad
15 Yes bank 1076.9 1880.8 22 26.82 Good
16 HUL 1326 8590 28 14 Good
17 Bharti Infratel 585 3655 -6 -7 Bad
18 SREI Infra 105 1405 56 24 Good
19 Tata Sponge 36 226.12 228 36 Good
20 Zee Entertainment 321.7 1838.07 28 12 Good

 

So far, we have seen more than 50 companies declaring their results and off them I have picked up 20 companies. The result if we see objectively there have been 12 companies with good results, 3 with neutral or average results and 5 of them coming out with bad results.

The results from 12 companies though look good they aren’t enough to call this as good earnings season for Quarter 3. There are both equal positives and negatives to be picked up.

Positives

  • Hindustan Unilever results are the biggest positive till now as HUL clocked 28% increase in the profit and 14% increase in the revenues. This big up trend is clearly signifying the recovery in fast moving goods segment triggering growth.
  • Infosys which has been the company in the news for wrong reasons has caught the good eye and are doing very well both in primary and secondary market. Infosys beat street estimates this time and came out the profits increase at 37.6%.
  • The Pizza Maker Jubilant Foodworks which controls Dominos Pizzas has come with stellar results with 3-fold increase in profits. Thanks to the Pizza Eaters!
  • Banking is growing at faster pace as HDFC, Kotak, YES have hit the bulls eye yet again.

Negatives

  • Bharti Airtel is the company which has been taking so much pressure from the Big Boss Reliance as he entered with Jio. Jio has damaged Airtel bigtime and that’s the reason why Airtel had slowed down and couldn’t make higher profits this time. For future though, Airtel is still the front runner. Bharti Infratel also came in line with Airtel.
  • ICICI Prudential – the insurance wing which makes more than 19% increase in revenues but couldn’t make any profits and that’s bad sign.
  • Ultra tech and IDFC Bank are the other two bad results but not much is to be worried about the two.
  • Finally, the Software sector which is coming back into form is still seeing hiccups from big one TCS and Wipro.

Overall, it looks to be average results season till now and rate the performance companies at 5.5/10.

The rating is given with conservative approach. Hopefully we will have better performance coming ahead and maybe we will hit the ‘A’ grade rating of 7.

Till then keep an eye on remaining companies, because big one’s are still to come‼

Economy & Finance

Investments for Calendar Year 2018

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Hello and welcome to the Sriram’s Portfolio Show!

Exactly about a year ago or to be precise 366 days ago on 8th January 2017 I have given 17 stocks to invest to earn minimum 17% returns. In the last Tuesday post, I have given the report card of those 17 stocks and the average returns of the portfolio were seen at 74%. Which means the portfolio was able to make 4.35 times of promised 17% returns. Well, its history now and time to talk about future.

Future is here, and India’s growth is clear!

Today am ready with 18 stocks in 2018 which will give you 18% returns and 2% extra to pay off your brokerage charges. So, overall the list of 18 stocks I am going to give will ripe 20% profits by end of the year 2018. Stocks are attached as picture to this post. Following are the stocks and their targets.

  1. Indo Count – A textile company which is weaving growth for 25 years and continuing strongly. Stock Price 125                         Target Price 150

 

  1. Gujarat Minerals – Major Lignite mineral supplier in the country hailing from Ahmedabad.

Stock Price 168                  Target 198

  1. Jet Airways – Flying high since last year and will continue to do so!

Stock Price 837                  Target 1010

  1. Escorts – The Farmer’s Choice!

Stock Price 795                  Target 945

  1. Reliance Capital – Anil Ambani’s Capital is up for Big returns!

Stock Price 604                  Target 720

  1. Yes Bank – Only one word and that is ‘YES’

Stock Price 340                  Target 405

  1. PFC – The Backbone for the growth of India’s power sector!

Stock Price 126                  Target 152

  1. Heidelberg Cements – A public limited company established under Germans and is growing big!

Stock Price 164                  Target 197

  1. Ambuja Cements – Asia’s biggest cement producing company is up for returns!

Stock Price 277                  Target 335

  1. Jindal Steel – Any cement company is useless without the Steel and its Jindal Steel!

Stock Price 248                  Target 290

  1. Infosys – Salil Parekh is up for rescue and bring back the glory!

Stock Price 1041                Target 1250

  1. Bata – Tera shoe Batha – Haan BATA hai!

Stock Price 745                  Target 880

  1. Dabur – If any Ayurveda is to be believed then believe in Dabur.

Stock Price 360                  Target 433

  1. Voltas – Now you complain of cool climate but very you soon you run behind Voltas!

Stock Price 648                  Target 778

  1. MRPL – ONGC’s obedient child is up for knocking big this time!

Stock Price 132                  Target 157

  1. Reliance Industries – One of the most important stock in India’s Stock Market growth!

Stock Price 940                  Target 1128

  1. Airtel – Though its colored red it’s the evergreen telecom company!

Stock Price 510                  Target 602

  1. Granules India – Apna Hyderbadi patta!

Stock Price 140                  Target 168

Just invest, relax and look at your portfolio when the targets are achieved!! Reap the profits, Keep investing!!!

Economy & Finance

Stocks for Investments 2017 Diwali

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Diwali 2017 Investments in Indian Stock Market

Diwali apart from bursting crackers and lighting diyas is also good time for investments. From many years Indians look forward to Diwali time as the ideal moment for entering the markets. The tradition started with Gujaratis for whom Diwali is a new year and they find this as an auspicious occasion to start an investment.

Slowly others also started continuing this tradition. Today millions of investors create their portfolios immediately after Diwali.

This year according to Gujarati calendar is Samavat 2074, going with the tradition and the year I thought of giving investment option of 74 stocks in 20 different sectors marking Samavat 2074.

The 20 sectors that I have identified and the number of stocks associated with each sector and my opinion on the sector is as follows.

Pharma Sector (4 Stocks) – This is a sector which will give slow and steady returns if we pick up the right stocks.

Pharma Sector
Stock Name Price Target
Cipla 608 716
Biocon 375 450
Aurobindo 752 870
Thyrocare 690 764

 

Steel Sector (3 Stocks) – Steel sector is the backbone of Indian economy and with growth promised for next two years this sector will surely yield good returns.

Steel Sector
Stock Name Price Target
SAIL 58.95 71
Tata Sponge 921 1036
Tata Steel 703 830

 

Sugar and Textiles (4 Stocks) – This is an Agro based Manufacturing sector which is mostly driven by monsoon. So better rains are required for this sector.

Sugar and Textiles Sector
Stock Name Price Target
Digjam 11.5 14
Lambodhara 69.4 80
EID Parry 352 414
Balrampur chini 160 182

Automobile (3 Stocks) – This is one of the fastest growing sector in Indian economy and is the future of Indian economy. You can keep the stocks in this sector for a very long time of 10 years also.

Auto mobiles Sector
Stock Name Price Target
Ashok Leyland 129.5 170
TVS 680.15 960
Tata  Motors 424 500

 IT (4 Stocks) – IT is on decline and the big four are longer in demand. So carefully choosing some midsize IT companies can give you good returns.

IT Sector
Stock Name Price Target
Mindtree 496 620
Hexaware 282 325
L&T Infotech 810 950
Mphasis 648 765

 Power Sector (5 Stocks) – Never before power sector was so much in demand. With government promising uninterrupted electricity for all by 2018 this sector has a huge potential to give you better returns.

Power Sector
Stock Name Price Target
Adani Transmission 225 275
Torrent Power 248 291
NTPC 175 218
Powergrid 210.55 250
Tata Power 81.5 98

 

Telecom Sector (3 Stocks) – This is weakest of all the sectors but as mobile phones are indispensable this sector will continue to make money.

Telecom Sector
Stock Name Price Target
Airtel 471 550
Idea 91 99
Bharti Infratel 460 520

Banking (4 Stocks) – This is the riskiest sector in India where you should carefully choose the stocks. In any economic revival banking is the one which is the leader so banking stocks will go up faster than the other.

Banking Sector
Stock Name Price Target
Yes Bank 357 470
State Bank Of India 243 280
HDFC 1868 2170
Kotak Mahindra 1075 1210

Logistics (3 Stocks) – A traditional sector which has a steady performance. Logistics yield slow and study returns like pharma.

Logistics Sector
Stock Name Price Target
Jindal poly film 413 510
Gati 115 132
VRL 357 430

 Agri Chemical Sector (2 Stocks) – Investments here are speculative and are driven by monsoons. If rains are good this sector will perform.

Agri chemicals Sector
Stock Name Price Target
Madras Fertilizers 24.5 31
Deepak Fertilizers 436 650

 Auto ancillaries Sector (2 Stocks) – A supplement of Automobiles. This is a complementary sector that will continue to follow the track of automobile sector.

Auto ancillaries Sector
Stock Name Price Target
Exide 207 240
Motherson Sumi 355 480

 

Capital Good Sector (2 Stocks) – This is like steel sector and plays a very vital role in the growing economy and has a good chance of performing.

Capital Goods Sector
Stock Name Price Target
Havells 547 710
V Guard 191 220

 

Cement Sector (5 Stocks) – This is the next fastest growing sector after auto mobile where huge investments are being planned by government.

Cements Sector
Stock Name Price Target
Ultra tech Cement 4034 4530
Prism Cements 109 130
Heidelberg 120 139
Sagar Cements 863 940
Andhra cement 11 14.1

 

Construction Sector (2 Stocks) – This is a complimentary sector to cement and will follow cement sector if the economy does well.

Construction Sector
Stock Name Price Target
Man Infra 63 70
Berger Paints 259 315

 Financial Services Sector (7 Stocks) – This is a gold mine for any investor as many high beta stocks are placed in this sector. They can give you higher returns even if nifty moves marginally.

Financial Services Sector
Stock Name Price Target
JM Financials 174 220
Muthoot 498 586
PFC 129 160
Edelweiss 287 345
India Bulls Venture 285 350
Indiabulls Housing 1364 1600
DHFL 588 725

 

Realty Sector (5 Stocks) – With many reforms introduced by government recently this sector has finally come out of recession and started it uptrend.

Realty Sector
Stock Name Price Target
Purvankara 88 100
Koltepatil 223 284
Oberio Realty 462 550
Delta Corp 225.45 275
Sobha 473 535

 Oil Marketing Companies (2 Stocks) – These are the indicators of economic growth and have a link either directly or indirectly with every sector reason is if petrol and diesel prices go up they affect every business in India.

Oil Marketing Companies 
Stock Name Price Target
HPCL 462 510
BPCL 510 580

 

Crude Oil Sector (2 Stocks) – It is the complementary sector to oil marketing companies which does the refining work. Investments are normally high here and so are returns.

Crude Oil Sector
Stock Name Price Target
Petronet LNG 261.25 320
GAIL 432 510

Media and entertainment Sector (5 Stocks) – Entertainment is a must in Indians life and lot of money goes into this sector which gives a natural Push for this sector to perform.

Entertainment & Media Sector
Stock Name Price Target
Sun Network 808 930
Cinevista 23 28
Network 18 51 59
Saregama 575 700
HT Media 102.4 125

 FMCG and Consumer Durables sector (7 Stocks) – This is the biggest and most happening sector in India which creates record volumes it is also everyone’s favorite sector for investments.

Consumer Durables and FMCG Sector
Stock Name Price Target
Britannia 4685 5622
KRBL 585 640
Heritage 778 925
Dabur 318 385
Pratap Snacks 1162 1368
Bajaj Electricals 407 500
Bluestar 800 960

 

Investment always depends on time and choosing the right time to enter is the key for the success of any portfolio. So, spend some time or take weeks in analyzing and timing the entry and add you will see good returns coming in by next Diwali.

Once again, a Happy Diwali, Happy Investing and Stay Invested!

Economy & Finance

Nifty Records All time High – 10191

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Today am going to talk just fundamentals and tell you where the NIFTY will go next Diwali in 2018!!

Today Nifty hits the new all-time high of 10191!

Last Diwali we were at 8600 and this year with Diwali just a week to go we are at all time high of 10191. The cheer from banking sector, inflation and production has taken nifty out of worries. It is now placed well and all set to take on longer bullish journey. So, by the time we reach Diwali this year we might hit 10,300 or near about! On that day I am going to talk about the investments to be made from this Diwali to next Diwali. Now for today am going to take you step by step different points NIFTY will cross in next one year!

What next for Nifty and Indian stock markets?

The first important thing that is coming up as biggest test for Narendra Modi is the Gujrat Elections in December. It looks to be easy throne to retain for BJP and that cheer will take Nifty to 11,000 by end of the year.

New Year is always a buying time and many people make new investments and profit booking. That way we can see small hiccups but could still be somewhere close to 11,000-11,100 and the Pre-Budget will push the Nifty to 11500. Pre-Budget rally will happen from mid of January to first week of February as Budget is scheduled to be released in first week of February. So, by end of February we can expect the 11,500 to be held.

Next stop is in April.

Nifty will then track Karnataka elections and see whether Congress can retain their last big state or will the congress mukt bharat be completed with Karnataka loss? Recent polls show that BJP will win it with simple majority which will be another good positive trigger for Modi’s Mission 2019. This Victory will take Nifty to 11,800 to 12,000.

We now have Earnings of the companies coming in and GDP coming for the fiscal year 2017-18. With macro factors picking up we can expect good GDP figures and that will keep the Nifty moving up. From May till Diwali in November in the gap of 6 months there are no elections. So, it will be the economic factors and Earnings that will act as big boost. Then we will see a massive 1000 points up trend in 6 months to end at 13,000 on Diwali 2018.

So, from 10,300 to 13,000 is a huge up trend that we are about to see. Wait for my Diwali post which will give you Diwali stocks that will surely increase by 25% by next Diwali.

Economy & Finance

Monetary Policy Review

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Monetary Policy August 2nd 2017

Big day today in the history of Indian Economy because the Monetary policy created a record today. Heartfelt congratulations to the Indians because the central bank of India that is RBI has cut interest rates by 25 percent to bring it to 6.00% which is the lowest in 6 ½ years. A Big achievement and economy well in course of growing big. Celebrations can begin, people can enjoy. Maybe after reading this post completely….

Let me take a minute and explain a little about Monetary policy. Monetary policy is a process by the which central bank of the country controls the supply of money by doing various activities which are related to demand and supply creation. Most important factors taken into consideration are Inflation and Production. In India RBI is the authority which holds responsibility of Monetary policy, this monetary policy can change the game of growth to huge extent for any country. India has system of Bi-monthly monetary policy which means six policies in a year.

Now about the D-Day Monetary Policy that happened today on 2nd August 2017!

The base interest rate of India now stands at 6.00% which as I said earlier is 6 ½ years low figure. Such big thing that India has achieved and we all should be proud of that fact. Now you can have lower Home Loan interest rates, Lower EMI’s and so on … What if I say this is all something that had to happen almost 10 months ago which means 5 policies ago in October 2016.

Yes, you heard it right. The rate cut that was to come way back in October 2016 has come today and clearly Markets were in no mood to accept this fact and saw a fall end at of the day. That also means the growth of India for 10 months is now gone for toss. We start all over again.

Mr. Governor – Urjit Patel

Mr. Governor you have given lame reasons for not giving rate cut all this while and today when you give rate cut to make up for the messed-up situation. Are you given that role to ponder over past events or to predict future and act accordingly!  You spoke about increasing inflation and you see that inflation never hit 4% and today it is 1.5% and that is when you wake up or is this realization after Government hammering you for your dumb decisions taken in last policy. Other reason you talk about is the crude oil hitting 60$ which looks like a far stretched dream of yours.

Now after giving a small rate cut of 25bps which is of no use you talk about 18-24 months inflation and vegetable prices. When the policy decisions are taken looking at 2 months past data how are you balancing it with next 2 years?

People may enjoy this cut and celebrate it but I am bitterly disappointed and feel sad for Government and people of India for having a person like you as Governor.

Economy & Finance

Kid has grown, Can Nifty overtake Dow Jones?

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A Small Story

While Markets trade, let me narrate you a Story of Mother and her Kids!
Mother USA (DOWJONES) is very strong and dynamic and is called as power house of the World. She has many kids like Nifty, Hang Seng, Kospi, Shanghai so on… Years have passed and each kid has grown big. Of which some kids are on their own, some are with Mother and some are very smart in their approach. One kid was the apple of the eye of the mother. That was NIFTY.  Very recently Nifty has moved into his teenage. We all know how crucial is teenage. It is that period where you Win or Lose, Grow or Fall.
Nifty now in its teen has to be behave matured and shouldn’t get into negative area. Because as they say next gen has the capacity to create new heights. Same way once Nifty passes this period in right way it is to reach bigger heights much faster than the Mother. He will also overtake the mother to stay on Top of the world. Welcome to 10,000 which is the teenage for NIFTY!!!
Economy & Finance

Nifty Breaks 10,000 Mark

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And now 10,000 is reached!!!

NIFTY started at a base value of 1000 way back on 3rd November 1995 has reached a 5 digit figure of 10,000!! It took NIFTY 21 years 8 months and 22 days to scale this peak! What a journey it was!! On a day when we are celebrating the 10,000 let’s look back and see how this milestone was achieved step by step.

1. Journey from 1000 to 2000 (3rd November 1995 to 15th December 2004):

It took 3,330 days for NIFTY to double. The NDA govt did lot of disinvestment and brought in out sourcing but still NIFTY failed to cross 1700 mark. Once Vajpayee lost election in May 2004, NIFTY fell 10% on a single day and the new govt under Manmohan singh continued reforms and took it to the next level. Its BPO and KPO brought by the UPA govt after May 2004 propelled NIFTY. The inflow of dollars with outsourcing companies queuing upto India market the land mark of 2000 getting crossed on 15th December 2004 just before Christmas!!

2. Journey from 2000 to 4000 (15th December 2004 to 4th December 2006):

It took NIFTY just 719 days to double from 2000 to 4000. A slew of reforms undertaken by Govt. took NIFTY in one direction that is Up Up and Up. The journey was unabated. GDP grew at a phenomenal rate of 9.5% in 2005 and 9.3% in 2006. A 9% plus growth triggered huge demand all over growth with IIP averaging 9% in 2005 and 11.5% in 2006. The total number of phones at end of 2005 stood at 12 Crore up from just 2 Crore seen in 2002. Exports grew by 17% in 2005-06 compared to 8% growth in imports. That bridged the trade deficit a lot. For some time during that period we had trade surplus. Rupee was rock solid at 45 per dollar. On back of all this 2000 to 4000 was achieved in under 2 years!

3. Journey from 4000 to 6000 (4th December 2006 to 11th December 2007):

It took just 372 days to add another 2000 points at a rate of 6 points per day compared to 0.15 points seen the journey from 1000 to 2000. This was the last leg of journey that happened at a super high speed. 2007 was the continuation of the previous 2 years with a 9.1% growth in GDP and in the 1st quarter of 2007-08 GDP even crossed 10%. IIP was at a 9.5% which is a record. The dollar value was still under 50 and exports continue to grow. But inflation was also was on the rise and went upto 7% by end of 2007 from 5% seen at the beginning of the year was seen as the first warning signal. Thus India was propelled to 6000 from 2000 in just over 1000 days!!

4. Journey from 6000 to 7000 (11th December 2007 to 13th May 2014):

It took 6 years 5 months and 2 days or 2346 days to just climb 1000 points. This is the slowest movement of NIFTY in terms of percentages. The global meltdown of 2008 and a disastrous UPA II from 2009 to 2014 was responsible for NIFTY to remain stagnant at 6000. The Coal gate scam, 2G scam, the common wealth games scams and Aircel-Maxis scam and many other scams tainted the image of the govt. Its only in February 2014 when Modi and BJP were the favourites to win the elections that NIFTY started moving and just 2 days before the election results 7000 was achieved as a gift for Modi. Markets knew the impending victory for BJP as the day before exit polls predicted a huge win for Modi and BJP and markets crossed 7000 mark!!

5. Journey from 7000 to 8000 (13th May 2014 to 2nd September 2014):

It took 111 days to climb 1000 points at the fastest ever rate of 9.5 points per day. The feel good factor, expectations and the hope was responsible. No economic reasons, its just modi magic and the things he promised were factored in and NIFTY scaled 8000 just before Maharashtra elections in 2014 which BJP was all set to win. It was the acche din that were supposed to come that brought acche din well in advance to the dalal street. Its just under 4 months NIFTY scaled from 7000 to 8000!!

6. Journey from 8000 to 9000 (2nd September 2014 to 3rd March 2015):

It took 182 days or exactly 6 months to scale another 1000 points and reach 9000. Make in India, Start up India, Swachh Bharath and slew of FDI investments that flowed into India in 2014-15 fiscal was responsible for this. GDP was on a path of recovery and from under 5% growth in 2013 GDP grew to 6.5% by 2015 beginning. Inflation halved from 11% in 2013 to 6% by the beginning of 2015. RBI took some good economic decisions under Governor Rajan. There was a feel good factor and a big promise. Plus some solid measures taken on the ground added credibility to the promises made.

7. Journey from 9000 to 10,000 (3rd March 2015 to 25th July 2017):

Slowest movement of market since modi took 854 days for NIFTY to climb the final frontier of 9000 to 10,000. 2015 was a bad year for BJP where it lost a series of elections especially Delhi and Bihar. IIP grew at a sluggish 3.5% irrespective of make in India in 2015 and India growth story was looking shaky. But Modi put every thing back on track with demonitization and the GST passed in early 2017 propelled the economy and brought back the feel good factor. The landslide win in UP in early 2017 restored the credibility and growth is back again. GDP is above 7% and inflation is below 2%. Growth looks imminent and the magic number is achieved on this day of 25th July!!

What is the road ahead?

With 10,000 under its belt NIFTY is on full swing. There is no stopping and NIFTY might hit 10,500 by this Diwali. And by budget of 2018 we might flirt with 11,000. Fundamentals are looking bright and healthy and there are no reasons for worries. The govt is looking stable, reforms will continue. There is a good chance that Govt will get re elected.

So, by budget of 2019 NIFTY might gain another 1000 points and reach 12,000. 1000 points in 1 year is achievable. If that happens then 2019 Feb to June might be a repeat of Feb to June 2014 when in those 5 months NIFTY gained 25%. If we add the same 25% from 12,000 in Feb 2019 then by the time BJP govt is re elected we might see a 14,000 and by the time of 2019 Diwali we might hit 15,000 on NIFTY.

Yes, 15k on NIFTY is possible in next 30 months and you wouldn’t want to miss out on the 50% gain to be achieved in 30 months!!

So, it’s a good time to invest to reap the future profits!

Happy Investing, Stay Invested!

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