Global Economic and Political News and It's Impact:-
1. US President Barack Obama’s visit
The Indian investment community & markets have pinned high hopes on the upcoming India visit by US President Barack Obama. Many companies in sectors as diverse as defense, pharmaceuticals, software, nuclear energy & infrastructure are expecting a solid push from the deliberations between him & Prime Minister Modi.
1.1. Defence :- India's defence sector offers an unbounded opportunity for the two countries to scale up their engagement. India has already imported arms worth $10 billion from the US over the last few years in government-to-government contracts. Indian corporates are looking forward to deepen their engagements with the powerful military-industrial complex in the US by ensuring that large scale manufacturing is done in India with transfer of technology.
1.2. Pharma :- Indian pharma companies are alarmed by the fierce lobbying unleashed by the Big Pharma in the US that has sought to queer the pitch on lack of IPR or spotty IPR protections accorded to patents in India, when in fact India is in full compliance with the WTO rules. There is a dark foreboding that some of the Indian generic drug manufacturers are being sought to be systematically hounded over the last couple of years by the US FDA at the behest of the Big Pharma interests.
1.3. Software :- Indian software companies are rightly worried about the rise in alarmism and hostility across the political spectrum in the US and indeed in the mainstream discourse against outsourcing of jobs. India is keen to sign a totalization agreement between India and the US as Indian workers are losing around $3 billion annually, in what he termed as foreign aid.
1.4. Nuclear Energy :- Indian workers are paying the US government by way of social security contributions that India can never recover & the Indian aid is involuntary. Ironing out the issues develling the nuclear liability clauses is the key to the US companies setting up nuclear reactors in the two sites offered by the Indian government to them in Gujarat and Andhra Pradesh.
1.5. Infrastructure :- In view of massive investments needed in building 100 smart cities, investments in various industrial corridors, building of ports, airports, power plants, India would be looking to the US corporates to actively participate. Japan & China have already committed to invest billions of dollars in helping build these long-term, capital-investive infrastructure projects.
2. Saudi king's death
Oil prices traded narrowly mixed on Friday after the death of the king of Saudi Arabia, OPEC's largest oil producer, and on concerns about unrest in Yemen.Though I do not expect any significant change in the oil policy of Saudi Arabia and I expect and hope that they will continue to be a stabilization factor in the oil markets but Brent, the European benchmark, had risen on increased turmoil in oil-producer Yemen, where the president resigned Thursday amid a deadly standoff with Shiite militia controlling the capital. Still any improvement is oil price will directly benefit upstream oil companies like Crain India,GAIL etc.
Indian Economic and Political News and It's Impact:-
1. Budget is on the card
The Budget is one event that the Indian market always looks forward to. From the beginning of the year, traders and investors start studying market conditions and building positions based on their expectations from the Budget.
Data since 1992 show that 15 out of 22 times, the market had rallied from the beginning of the year to the Budget day. Of these 15, in as many as 11 times, the Sensex at the end of the year had closed higher than at the beginning of the year.
More recent data - since 2005 - showed that in each of the years when the Sensex gained from the beginning of the year until the Budget, it continued to gain through the year (see table). This year, the Sensex has already added 5.5%.
In the previous bull run - in 2004, 2005 and 2006 - the Sensex gained from January 1 until the Budget day, by between 0.5% and 10.4%, and continued the uptrend through the years. In fact, the post-Budget gains were sharper.
On seven occasions since 1992, the market had corrected before the Budget. Most of these had been during bearish times, and the market had continued the downtrend until the end of the years. For instance, in 2008, the Sensex fell 13% from the beginning of the year until Budget and then corrected by another 45% by December-end. A similar trend was observed in 2011.
The year that closely resembled the current situation was 2005. The UPA 1 was unveiling its second Budget and the bull market had begun around a year earlier.
The Sensex rose 0.5% from the beginning of the year until the Budget and gained another 40% from the Budget day till the year-end.
Expectations from the current BJP government are high. The Sensex has gained 5.5% year to date and if one has to believe market observers, the index should continue its momentum.
New Deals and It's Impact:-
Market Outlook:-
Market will remain bullish with FMCG,Pharma,Auto to go up.
Big Bulls Entry & Exit:-
1. US President Barack Obama’s visit
The Indian investment community & markets have pinned high hopes on the upcoming India visit by US President Barack Obama. Many companies in sectors as diverse as defense, pharmaceuticals, software, nuclear energy & infrastructure are expecting a solid push from the deliberations between him & Prime Minister Modi.
1.1. Defence :- India's defence sector offers an unbounded opportunity for the two countries to scale up their engagement. India has already imported arms worth $10 billion from the US over the last few years in government-to-government contracts. Indian corporates are looking forward to deepen their engagements with the powerful military-industrial complex in the US by ensuring that large scale manufacturing is done in India with transfer of technology.
1.2. Pharma :- Indian pharma companies are alarmed by the fierce lobbying unleashed by the Big Pharma in the US that has sought to queer the pitch on lack of IPR or spotty IPR protections accorded to patents in India, when in fact India is in full compliance with the WTO rules. There is a dark foreboding that some of the Indian generic drug manufacturers are being sought to be systematically hounded over the last couple of years by the US FDA at the behest of the Big Pharma interests.
1.3. Software :- Indian software companies are rightly worried about the rise in alarmism and hostility across the political spectrum in the US and indeed in the mainstream discourse against outsourcing of jobs. India is keen to sign a totalization agreement between India and the US as Indian workers are losing around $3 billion annually, in what he termed as foreign aid.
1.4. Nuclear Energy :- Indian workers are paying the US government by way of social security contributions that India can never recover & the Indian aid is involuntary. Ironing out the issues develling the nuclear liability clauses is the key to the US companies setting up nuclear reactors in the two sites offered by the Indian government to them in Gujarat and Andhra Pradesh.
1.5. Infrastructure :- In view of massive investments needed in building 100 smart cities, investments in various industrial corridors, building of ports, airports, power plants, India would be looking to the US corporates to actively participate. Japan & China have already committed to invest billions of dollars in helping build these long-term, capital-investive infrastructure projects.
2. Saudi king's death
Oil prices traded narrowly mixed on Friday after the death of the king of Saudi Arabia, OPEC's largest oil producer, and on concerns about unrest in Yemen.Though I do not expect any significant change in the oil policy of Saudi Arabia and I expect and hope that they will continue to be a stabilization factor in the oil markets but Brent, the European benchmark, had risen on increased turmoil in oil-producer Yemen, where the president resigned Thursday amid a deadly standoff with Shiite militia controlling the capital. Still any improvement is oil price will directly benefit upstream oil companies like Crain India,GAIL etc.
1. Budget is on the card
The Budget is one event that the Indian market always looks forward to. From the beginning of the year, traders and investors start studying market conditions and building positions based on their expectations from the Budget.
Data since 1992 show that 15 out of 22 times, the market had rallied from the beginning of the year to the Budget day. Of these 15, in as many as 11 times, the Sensex at the end of the year had closed higher than at the beginning of the year.
More recent data - since 2005 - showed that in each of the years when the Sensex gained from the beginning of the year until the Budget, it continued to gain through the year (see table). This year, the Sensex has already added 5.5%.
In the previous bull run - in 2004, 2005 and 2006 - the Sensex gained from January 1 until the Budget day, by between 0.5% and 10.4%, and continued the uptrend through the years. In fact, the post-Budget gains were sharper.
On seven occasions since 1992, the market had corrected before the Budget. Most of these had been during bearish times, and the market had continued the downtrend until the end of the years. For instance, in 2008, the Sensex fell 13% from the beginning of the year until Budget and then corrected by another 45% by December-end. A similar trend was observed in 2011.
The year that closely resembled the current situation was 2005. The UPA 1 was unveiling its second Budget and the bull market had begun around a year earlier.
The Sensex rose 0.5% from the beginning of the year until the Budget and gained another 40% from the Budget day till the year-end.
Expectations from the current BJP government are high. The Sensex has gained 5.5% year to date and if one has to believe market observers, the index should continue its momentum.
New Deals and It's Impact:-
Market Outlook:-
Market will remain bullish with FMCG,Pharma,Auto to go up.
Big Bulls Entry & Exit:-
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