The markets in India gained by the Auto stocks and HDFC support but there is no short covering seen in the main counters and the OI kept raising...!!!. The BULL market may keep the bears trapped at selling 7660 level if they fail to cover at 7720-7740 range.
yesterday suggested to go short as SELL on Rise will go by a strict stop loss at 7740. any move above 7750 will take us to 7950 level with ease as the Bears couldn't put pressure on the Index to trade below 7550 level. The counters like LT, RIL and ONGC up tick may trigger sharp rise in Nifty level needs to be watched carefully.
The general trend in the Banking stocks is laggard as the BRIBE issues and NPAs weighing. The Bank Nifty may touch 15050 level but it has strength above 15150 level. the SBI above 2440 can easily take us to 2485-90 level and it may touch 2540 level due to short covering. The ICICI bank is the indicator, so long trades above 1442 is strong, good above 1469-72 level. The Bank Baroda shall not trade below 874 level to see 940-60.
The power stocks may get hammered more if the GAS price is HIKED.
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Rajan warns capital outflows will test Indian economy RBI governor expresses optimism that the central bank had ‘done enough’ to prepare for an imminent outflow of capital once interest rates rise abroadMumbai: Reserve Bank of India (RBI) governor Raghuram Rajan on Monday warned that India “will be tested” by capital outflows once interest rates “start picking up” in industrialized countries. Replying to a question after delivering the 20th Lalit Doshi memorial lecture, Rajan expressed hope the central bank had “done enough” to prepare for an imminent outflow of capital once rates rise abroad. “I have no doubt that when rates start picking up in industrialized countries, we will be tested by capital outflows. My hope is that we have done enough in terms of strengthening the macro-economic framework and building up reserves to buffer up the economy,” Rajan said. India’s foreign exchange reserves have climbed to near all-time highs of more than $320 billion, benefiting from huge dollar inflows this calendar year. Money and equity markets in developing countries are worrying over the consequences of the end of 0% interest rates in the US as growth, and hence inflation, there picks up in the next few months. Traders in India are particularly nervous because the last time US Federal Reserve indicated an end to its multi-billion dollar bond-buying programme in May 2013, the resulting outflows pulled the rupee down to a historic low of 68.85/dollar by August 2013. Rajan said that the way asset prices have been “boosted” by central banks in the last few years, a flight of capital from developing countries is likely. “Monetary policy is doing too much. Monetary authorities are boosting asset prices rather than the economy. Especially my colleagues in industrial countries are trying too hard,” he said, while suggesting that other parts of the developed countries’ economies should also contribute to reviving growth there. Rajan said he expects capital outflows from developing markets to resume because asset prices “have been blown up for a very long time”. “I was speaking with Ruchir Sharma (head of developing economies and macroeconomics at Morgan Stanley) and he was telling me that asset prices have risen at the fastest pace he has ever seen. There is clearly a disconnect,” he said. In his prepared speech, Rajan purposefully batted for direct cash transfers to the poor to improve public services. “Money liberates. Could we not give them cash to pay for their medicines and food, and command respect from the private service providers?” Rajan asked. He said the RBI will “nudge” banks to offer simple financial products to the poor at a low cost and, at the same time, be profitable. “Implementing cash transfers does not dismantle public services. It only means that they will pay (for services) and command respect. It is not a cure-all but will help people out of poverty,” Rajan said. He said the RBI will work with the government on its new financial inclusion plan to be announced on Independence Day, Friday. “We are already licensing payment banks and intend to move forward quickly. We have also released a paper on small banks which will be local in nature, serve local communities and employ local people,” Rajan said. Rajan said the debate about crony capitalism in the elections just gone by means that concerns about it are real for the people today. “Crony capitalism is harmful because it kills competition.... Our country suffers for the want of a few good men in politics.... Financial inclusion is important got for both the government and RBI in the coming years,” Rajan said.
Read more at: http://www.livemint.com/Money/zi5eBPCY0VNb4nWQV2cZyH/Raghuram-Rajan-warns-of-capital-outflows-as-interest-rates-r.html?utm_source=copy
yesterday suggested to go short as SELL on Rise will go by a strict stop loss at 7740. any move above 7750 will take us to 7950 level with ease as the Bears couldn't put pressure on the Index to trade below 7550 level. The counters like LT, RIL and ONGC up tick may trigger sharp rise in Nifty level needs to be watched carefully.
The general trend in the Banking stocks is laggard as the BRIBE issues and NPAs weighing. The Bank Nifty may touch 15050 level but it has strength above 15150 level. the SBI above 2440 can easily take us to 2485-90 level and it may touch 2540 level due to short covering. The ICICI bank is the indicator, so long trades above 1442 is strong, good above 1469-72 level. The Bank Baroda shall not trade below 874 level to see 940-60.
The power stocks may get hammered more if the GAS price is HIKED.
---------------------------------------------------------------------------------------
Rajan warns capital outflows will test Indian economy RBI governor expresses optimism that the central bank had ‘done enough’ to prepare for an imminent outflow of capital once interest rates rise abroadMumbai: Reserve Bank of India (RBI) governor Raghuram Rajan on Monday warned that India “will be tested” by capital outflows once interest rates “start picking up” in industrialized countries. Replying to a question after delivering the 20th Lalit Doshi memorial lecture, Rajan expressed hope the central bank had “done enough” to prepare for an imminent outflow of capital once rates rise abroad. “I have no doubt that when rates start picking up in industrialized countries, we will be tested by capital outflows. My hope is that we have done enough in terms of strengthening the macro-economic framework and building up reserves to buffer up the economy,” Rajan said. India’s foreign exchange reserves have climbed to near all-time highs of more than $320 billion, benefiting from huge dollar inflows this calendar year. Money and equity markets in developing countries are worrying over the consequences of the end of 0% interest rates in the US as growth, and hence inflation, there picks up in the next few months. Traders in India are particularly nervous because the last time US Federal Reserve indicated an end to its multi-billion dollar bond-buying programme in May 2013, the resulting outflows pulled the rupee down to a historic low of 68.85/dollar by August 2013. Rajan said that the way asset prices have been “boosted” by central banks in the last few years, a flight of capital from developing countries is likely. “Monetary policy is doing too much. Monetary authorities are boosting asset prices rather than the economy. Especially my colleagues in industrial countries are trying too hard,” he said, while suggesting that other parts of the developed countries’ economies should also contribute to reviving growth there. Rajan said he expects capital outflows from developing markets to resume because asset prices “have been blown up for a very long time”. “I was speaking with Ruchir Sharma (head of developing economies and macroeconomics at Morgan Stanley) and he was telling me that asset prices have risen at the fastest pace he has ever seen. There is clearly a disconnect,” he said. In his prepared speech, Rajan purposefully batted for direct cash transfers to the poor to improve public services. “Money liberates. Could we not give them cash to pay for their medicines and food, and command respect from the private service providers?” Rajan asked. He said the RBI will “nudge” banks to offer simple financial products to the poor at a low cost and, at the same time, be profitable. “Implementing cash transfers does not dismantle public services. It only means that they will pay (for services) and command respect. It is not a cure-all but will help people out of poverty,” Rajan said. He said the RBI will work with the government on its new financial inclusion plan to be announced on Independence Day, Friday. “We are already licensing payment banks and intend to move forward quickly. We have also released a paper on small banks which will be local in nature, serve local communities and employ local people,” Rajan said. Rajan said the debate about crony capitalism in the elections just gone by means that concerns about it are real for the people today. “Crony capitalism is harmful because it kills competition.... Our country suffers for the want of a few good men in politics.... Financial inclusion is important got for both the government and RBI in the coming years,” Rajan said.
Read more at: http://www.livemint.com/Money/zi5eBPCY0VNb4nWQV2cZyH/Raghuram-Rajan-warns-of-capital-outflows-as-interest-rates-r.html?utm_source=copy
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