VIEW OF INFOSYS :- HEADING TOWARDS RS. 3100............05.02.2014

50 Basis Points Rate Hike is expected by Companies in RBI Policy Today........18.12.2013

10 Laws of Stock Market Bubbles..............17.12.2013

10 Laws of Stock Market Bubbles:-

1. Debt is cheap.
2. Debt is plentiful.
3. There is the egregious use of debt.
4. A new marginal (and sizeable) buyer of an asset class appears.
5. After a sustained advance in an asset class’s price, the prior four factors lead to new-era thinking that cycles have been eradicated/eliminated and that a long boom in value lies ahead.
6. The distance of valuations from earnings is directly proportional to the degree of bubbliness.
7. The newer the valuation methodology in vogue the greater the degree of bubbliness.
8. Bad valuation methodologies drive out good valuation methodologies.
9. When everyone thinks central bankers, money managers, corporate managers, politicians or any other group are the smartest guys in the room, you are in a bubble.
10.Rapid growth of a new financial product that is not understood. (e.g., derivatives, what Warren Buffett termed “financial weapons of mass destruction”).

Combined Value Of The World’s Stock Markets ,Now at $ 63.4 Trillion (All Time High ).....................17.12.2013

It’s well-known that the U.S. stock market breached all-time record levels repeatedly in recent months.
 But what about the rest of the world?

According to new data from the World Federation of Exchanges (WFE), the combined market cap of the world’s major stock markets hit an all-time high in November.

We first read about this on Professor Mark Perry’s Carpe Diem blog. Here’s Perry:

As of the end of November, the total value of equities in those 58 major stock markets reached $63.4 trillion and set several milestones. First, global equity value reached a new all-time record high in November, and second, exceeded for the first time the previous all-time record monthly high of $62.8 trillion for global equity valuation in October 2007, several months before the global economic slowdown and financial crisis started, and caused global equity values to plummet by more than 50% (and by almost $34 trillion), from $62.8 trillion at the end of 2007 to only $29.1 trillion by early 2009…

ALERT :China’s economic rebound “is over”..............17.12.2013

China’s economy has slowed down again in the final months of the year, according to analysts at London consultancy Capital Economics. And growth may be back to where it was before the Beijing government caused activity to rebound over the summer with a new round of GDP-boosting stimulus measures.

Official statistics will show that the economy expanded around 7.5 per cent, year on year, in the final three months of 2013, Capital Economics predicts. That is the same rate of growth recorded for the three months to June, and is below the 7.8 per cent expansion seen in the third quarter.

Capital Economics’ forecast is based on its “China Activity Proxy”, which is made up of data that tracks economic activity such as travel, property sales and the volume of goods being shipped across the country. Here is what the group sees is happening: Cargo moving through China’s seaports is “unusually slow”.

Growth in the number of passengers travelling by road, rail water and air is “close to a multi-year low”. Construction accelerated in November, but developers’ unsold inventory is rising so housebuilding should slow down.

On the plus side, demand from overseas “looks to have held up relatively well”.
Capital Economics also says its “China Activity Proxy” has since 2012 “signalled that growth has been 1-2 percentage points slower than the official GDP figures”.

Below is a chart of how the proxy has predicted changes in China’s GDP figures.

Positive Economic data from United States influenced the SGX Nifty also trading @ 6224, +45.50 Points up........17 Dec 2013

Positive Economic data came from United States yesterday. Check the full article regarding those economic data :- http://nifty-analysis.blogspot.in/2013/12/us-and-european-market-jumped-on-better.html. And those data influenced not only the U.S market as well as European Market and now SGX Nifty has also influenced from those data and trading @ 6224, +45.50 Points up in the morning of 17 Dec 2013.

U.S and European Market Jumped on better U.S Economic Data yesterday.........17.12.2013

U.S and European Market jumped on positive Important Economic Data of U.S that came from United States yesterday. 

1.  Nonfarm Productivity (QoQ) @ 3%, Forecast @ 2.8%, Previous @ 1.9%

Note:- Nonfarm Productivity measures the annualized change in labor efficiency when producing goods and services, excluding the farming industry. Productivity and labor-related inflation are directly linked-a drop in a worker's productivity is equivalent to a rise in their wage.

2. Unit Labor Cost (QoQ) @ -1.4%, Forecast @ -1.3%, Previous @ -0.6%

Note :- Unit Labor Costs measure the annualized change in the price businesses pay for labor, excluding the farming industry. It is a leading indicator of consumer inflation.

3. Capacity Utilization Rate @ 79.0%, Forecast @ 78.4%, Previous @ 78.2%

Note:- The Capacity Utilization Rate is the percentage of production capacity being utilized in the U.S.(available resources includes factories, mines and utilities). Capacity Utilization reflects overall growth and demand in the economy. It can also act as a leading indicator of consumer price inflation

4. Industrial Production (MoM) @ 1.1%, Forecast @ 0.5%, Previous @ 0.1%

Note:- Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.

Time To Shot Bank Nifty Future Dec Expiry.......................16.12.2013

Effects of WPI (Whole Sale Price Index) data on Bank Nifty Future Dec Expiry................16.12.2013

WPI data came @ 7.52% at 12:08 Pm and after that Bank Nifty Future Dec Expiry became down up to 11386.05 till 12:09 Pm within a minute from 11456.85. Before coming the data there were 6 Hanging Man Pattern on the intraday chart which was showing selling technically. 

See the Intraday Chart of Bank Nifty Future Dec Expiry which shows the trend also :-

The official Wholesale Price Index for ‘All Commodities’ (Base: 2004-05 = 100) for the month of November, 2013 rose by 0.7 percent to 181.5 (provisional) from 180.3 (provisional) for the previous month.

 INFLATION

The annual rate of inflation, based on monthly WPI, stood at 7.52% (provisional) for the month of November, 2013 (over November, 2012) as compared to 7.00% (provisional) for the previous month and 7.24% during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 6.70% compared to a build up rate of 4.84% in the corresponding period of the previous year

ALERT :- Indian Bank Loan Growth came @ 14.20%, -8.30% from the previous on 13 Dec 2013........16 Dec 2013

ALERT :- Indian Bank Loan Growth came @ 14.20% on 13 Dec 2013

Note : - Bank Loan Growth measures the change in the total value of outstanding bank loans issued to consumers and businesses. Borrowing and spending are closely correlated with consumer confidence.

Some Previous Indian Bank Loan Growth data :-

Release Date Actual Previous
Dec 13, 2013 14.200% 15.500%  
Nov 29, 2013 15.500% 16.400%  
Nov 15, 2013 16.400% 16.600%  
Nov 01, 2013 16.600% 17.700%  
Oct 18, 2013 17.700% 17.900%  
Oct 04, 2013 17.900% 18.200%  

After analyzing the above data, it is clear that when data came every time then it was below from previous data consistently. Means to say Banks lending ability is decreasing in the market and one of the main reason for this is increasing Non Performing Assets (NPAs) of the banks. 

Read the full article on Biggest Loan Defaulters in India :- http://nifty-analysis.blogspot.in/2013/12/biggest-loan-defaulters-in-india14122013.html