World shares hold at 5-year high...!!!!!

Reuters  |  London  September 20, 2013 Last Updated at 13:55 IST

World shares hold at 5-year high after Fed stimulus boost

Investors lock in some gains ahead of German elections on Sunday

World shares steadied at a five-year high on Friday and bond and commodity markets were consolidating a week of major gains after the US Federal Reserve's shock decision to keep its stimulus intact.

After the sharp moves of Wednesday and Thursday, Asian and early European trading was largely subdued as investors took stock of their positions and locked in some of the gains, with half an eye on German elections on Sunday.The pan-European FTSEurofirst 300 share index inched down 0.1% in opening trading, core and peripheral euro zone bonds were little changed, while the euro was holding near an eight-month high after its best week since July.

MSCI's index of world shares, which tracks stocks in 45 countries, was also flat but this week's rises, the best in over a year for Asian stocks, put it was on track for its first three-week run of plus 2% gains since 2009.Behind the moves was Wednesday's surprise decision by the Fednot to scale back its support for the US economy, but for some the obsession of investors with cheap central bank money has raised concerns.

"It's always nice to see equity markets go up but I'm not overly happy that markets are so obsessed with the Fed at the moment," said Uwe Zöllner, head of European equities for Franklin Templeton investments. "This should not be and must not be base for stock price movement at the moment ... The market at some point later in the year might get ahead of itself and then have to have a second thought."

For the dollar, the prospect of extended Fed stimulus has not been good news. It was holding above its week lows against a basket of major currencies in early European trading having found support after a string of upbeat US data on Thursday.

"We think the dollar is likely to recover quickly versus the lower yielding currencies in the G10," analysts at BNP Paribas wrote in a client note.

Rate hike hits rupee

Emerging market currencies and stocks were some of the biggest winners from Wednesday's Fed move, after being battered in May and June by the prospect of reduced stimulus. Indian financial markets were roiled again on Friday, however, after the Reserve Bank of India unexpectedly raised interest rates by 25 basis points. The Indian rupee fell 1.0% to 62.40 to the dollar while Indian shares fell more than 2%.The Indonesian rupiah also gave up some of Thursday's gains to trade at 11,390 to the dollar, down 1.0% on the day. Jakarta shares, which jumped 4.7% on Thursday, lost 1.3%.

Thursday's brighter US data, which included a surge in home sales and some encouraging unemployment claims figures, provided a timely reminder that a scaling back of stimulus will come eventually, despite this week's delay.That helped push the US 10-year notes yield back up to 2.73% from a five-week low of 2.67% touched just after the Fed's decision and kept the dollar index just clear of a seven-month low at 80.315.

Benchmark 10-year German government bonds were also stable at 1.865% at 0750 GMT after yields - which move inversely to prices - sank to a one-month low of 1.812% on Thursday. The euro was at $1.3533 not far from a nearly-eight-month high.

The common currency and the bloc's shares have been supported by signs of recovery in the euro zone, but some investors are getting nervous before Sunday's German election. While Chancellor Angela Merkel is likely to win a third term, her lead has narrowed in recent opinion polls and a new eurosceptic party, Alternative for Germany, could make headway in parliament, which might rattle some investors.

"If the party gets 5-to-6% of the vote, people will start gauging the risk of Germany leaving the euro. That would be negative for the euro zone," said Arihiro Nagata, head of foreign bond trading at Sumitomo Mitsui Banking Corp.In the commodities market, oil steadied at $109 a barrel on Friday after a 1.5% drop the previous day on increased Libyan production and signs of a thawing of diplomatic relations between Iran and the West.

Meanwhile, gold - whose reputation as an inflation hedge means it usually benefits from central bank stimulus - hovered at $1.356 an ounce, on track for its best week in five. "Should the Fed refrain from any moderation in its bond purchase programme for the rest of the year, gold is likely to rally past $1,400 in 2013 before setting a downward course once again in 2014," OCBC Bank said in a note

http://www.business-standard.com/article/international/world-shares-hold-at-5-year-high-after-fed-stimulus-boost-113092000502_1.html

TIME TO MAKE NEW PORTFOLIO....

PLS READ MY POSTING ON 8-9-13....TITLED---CAN NIFTY CROSS...5930 LEVEL...????...FOR.....FULL TEXT....

.....Now the Nifty has not lost the BEAR hug but the immediate threat to breach 5300 and 5100 to touch 4800 is a distance dream. Either, the BULLS could see some light at the tunnel to cross the series of hurdles placed at 5775…5840---5930. 

The momentum indicators also generated hope to touch 6200 level  but the fundamentals fail to support such dreams. The new range set in due to change in guard at the RBI is 5900-5400. 

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The ICICI rise is very interesting and the stock could clear many hurdles in two days of rise from 760-960, it had a serious cut in the price from 1050 level to 950 level in July15-20. Now it could bounce to a better place in two days. The worst is not over to AXIS but the 40 lakh OI short covering helped the stock to gain from a low of 760 to 960. The HDFC bank worst is not over despite of the rise from 528 to 623 level.

The best Buying opportunity will emerge in metal stocks. The mining stock like SESAGOA will open good buying opportunity at 160 level and Tatasteel at 255-250 level. Both the counters will out-perform the market in near term and will see 100% rise in next one year and half. The surprising short build up has opened in RIL and M&M. The ONGC could see some short covering. ....................

...............................

NOW THE BEST TIME TO MAKE NEW PORTFOLIO.....
I SUGGESTED PEOPLE TO BUY SBI FOR 1780 AND REL INFRA FRO 400 AND ICICI FOR 1040....NOW TIME TO SELL ABOVE 6280... SELL.....FOR 5500-5550.

THE STORY OF INDIA's BANKING PROBLEMS ARE NOT OVER, THE SLOW DOWN IN GROWTH WAS NOT OVER, THE "CAD" ISSUE WAS NOT ADDRESSED, THERE ARE POLITICAL UNIVERSITIES CROPPING IN NEXT FEW MONTHS...

THIS SHARP RALLY IS TO OFFLOAD LOTS OF JUNK STOCKS, SECTOR ROTATION HAS HAPPENED. THE IT NAMES SPARKLED, WILL RISE FURTHER FOR OFF-LOADING IN NEXT ONE YEAR. THERE IS A SERIOUS SHIFT IN THE PORTFOLIO ALLOCATION....OBSERVE AND BE WITH THE WINNERS.... 

Is another market crisis ...Post Lehman..!!!!!!

Nishanth Vasudevan  |  Mumbai  September 14, 2013 Last Updated at 15:00 IST

Post Lehman era: Is another market crisis possible?

5 years after the lehman crisis, investors fear the market coming full cycle

When former US Treasury secretary Henry Paulson told a packed audience of bankers at a New York hotel early this week that many factors leading to the 2008 financial crisis still exist, it sent a chill down the spine of many. The unease was not without a reason. The remark had come from a person who played a major role in rescuing the financial system after Lehman Brothers collapsed on September 15, 2008, that led to one of the worst global market turmoil in decades. Eerily, Paulson said this less than a week before the fifth anniversary of Lehman's collapse.
The trauma of the ensuing financial market crash is still fresh in the minds of investors and traders, many of whom were virtually wiped off in the mayhem. Some on Dalal Street could take comfort from the fact that benchmark indices-Sensex and Nifty-have returned to the heights before the Lehman crisis but they are aware that the existing elevated index levels are just a mirage, as the pain is much more widespread.
Still, they could choose to let bygones be bygones, as there are some steep battles to fight immediately-the closest being the outcome of the US Federal Reserve meeting on Wednesday that will discuss scaling down its monetary stimulus, known as quantitative easing (QE3).
Investors consider the decisions in the meeting as the single-biggest trigger for global financial markets in the near term, as the third round of QE has been key to billions of dollars flowing into various asset classes, including emerging market equities such as India's. While a roll-back of QE3 is more or less expected, the fear is about the extent of the pull-out that might spark withdrawals from risky asset classes.

With the Fed very clear that there would not be another round of QE soon, investors fear the market cycle since later 2008 is coming full circle. Though the broader feeling is that a partial withdrawal of the Fed's monetary stimulus is unlikely to create a Lehman-like crisis, the mood is jittery because of uncertainty about how markets would adjust to a scenario of lesser money sloshing around.
"The probability of a Lehman-like event recurring is much lower because of the various checks and balances in the form of higher and purer capital requirements and more prudent liquidity framework by governments and central banks across the world," said Hitendra Dave, managing director-global markets head India, HSBC. "That does not mean there is no chance of such an event recurring but the probability is surely far lower".
With companies' earnings this year set to grow at its slowest since 2001-02, there are worries that the likely QE3 withdrawal announcement could trigger a sell-off by FIIs.
"It is clear that we may not get the kind of FII support that we have got in the last few years. We need to generate support internally,” said UR Bhat, managing director, Dalton Capital India. 

 

But a section of the market feel a mass pull-out by FIIs from Indian equities is unlikely. “The effect of QE3 tapering is unlikely to be drastic because FII ownership (especially proprietary desks) in debt is very low, while their holdings in equity are proving to be relatively sticky," said Dave. 

Bhat said the positive is that European Central Bank and Japan's central bank may continue their monetary stimulus programmes.
 Even as Paulson warned bankers of the possibility of a repeat of the 2008 crisis, there might still be a sense of relief. This is because risks surrounding QE3 unwinding did not figure in his list of factors that could cause the relapse.

http://www.business-standard.com/article/markets/post-lehman-era-is-another-market-crisis-possible-113091400048_1.html