Market Climbs Up on Global Cues

The BSE Sensex opened over 0.5% higher today tracking gains in the global stock markets. Global markets rallied on Wednesday after Turkey stunned investors with a huge hike in interest rates, stirring hopes that the drastic action would short-circuit a vicious cycle of selling in emerging markets and revive risk appetite generally. China’s Shanghai Composite and Hong Kong’s Hang Seng were trading up 0.3% and 0.93%, respectively. Japan’s Nikkei Stock Average was up 1.74%. Overnight, US markets closed higher. The Dow Jones Industrial Average closed up 0.57%, while S&P 500 and Nasdaq Composite were up around 0.61% and 0.35%. respectively. The 30-share benchmark Sensex was trading up 0.54%, or 111.44 points, at 20,794.95 points, while the National Stock Exchange’s (NSE’s) broader 50-share Nifty rose 0.65%, or 40.05 points, to 6,166.30 points. The gainers among the Sensex stocks included Maruti Suzuki India Ltd that jumped 5.23% to Rs.1,645 and ICICI Bank Ltd that rose 1.65% to Rs.1,036. Among the losers, Gail India Ltd shares fell 0.83% to Rs.342.25, while Infosys Ltd slipped 0.24% to Rs.3,668.30. The BSE Bankex rose 1.14% to be the biggest gainer, while the BSE IT index was the biggest loser, falling 0.03%. After the results announcement, Bharti Airtel Ltd was trading at Rs.311.75 on BSE, up 2.16% from its previous close. The company reported a net profit of Rs.610.2 crore, while net sales stood at Rs.21,938.5 crore for the December quarter. It will be a results-heavy day. Aditya Birla Money Ltd, Crompton Greaves Ltd, Gail India Ltd, Godrej Properties Ltd, ICICI Bank Ltd, Nalco Ltd, Shriram Transport Finance Co. Ltd, Titan Ltd, TVS Motor Co. Ltd and VIP Industries Ltd are some of the companies that will release their earnings for December quarter today.

On Tuesday, Reserve Bank of India (RBI) unexpectedly raised benchmark repurchase rate by 25 basis points to 8%; only 3 of 45 economists surveyed by Bloomberg had predicted an increase. Reverse repurchase rate got lifted to 7% from 6.75%. Cash-reserve ratio was unchanged at 4% as forecast by all 38 economists surveyed. The benchmark 10-year bond yield was down by 3 bps at 8.72%. The rupee was trading higher at 62.20/21 vs Tuesday's close of 62.51/52 on broad Asian FX gains.

Stocks on a Cautious Note as RBI to Review Policy on Jan 28

Indian equity benchmarks continued to trade in an extremely narrow range with a negative bias in afternoon session amid selling witnessed in IT, Tech and Auto stocks. Weak global cues and depreciation in rupee value against the dollar weighed on the sentiments. Prevailing caution ahead of RBI’s policy review on January 28, 2014, is mainly weighing on the sentiment after earlier expectations for the RBI to hold rates have been thrown into doubt after the central bank recommended keeping a high consumer inflation in check a priority. Meanwhile, market losses remained capped as buying was witnessed in capital goods and healthcare stocks. Sentiments got some support as the Moody’s Analytic, in its report titled 'India Outlook: Steady Growth, Lower Risk' has noted that the worst is over for the India’s economy with GDP expansion likely to touch 5 to 5.5 percent this year and more than 6 percent in 2015. Capital Goods index was the top gainer among the sectoral indices up by over 2.16% on the BSE amid better than expected result of Larsen & Toubro for Q3 FY14.

Benchmark 10-year bond yield is trading in a range at 8.62 per cent as investors are waiting for the upcoming RBI policy review next week. Uncertainly over the likelihood of a rate pause has risen after a central bank panel recommended making retail price inflation a primary indicator while setting monetary policy. Market participants are not expecting a rate hike in the policy review but the chances of a rate cut, as was popularly expected, has come down. 

Is Investing in Mutual Funds Safe? Sachin Karpe Opines

Mutual funds are a kind of investments in equity, but managed by professional fund managers. That makes your investment relatively safer. The most important benefit of a mutual fund is that you get an instant access to several stocks from different sectors., observes Sachin Karpe. Since they offer transparency, they are safe. At any given point you can evaluate the NAV of a particular fund and decide to withdraw and re-invest your money.

Sachin Karpe opines that if a particular fund is performing well then the dividends can be re-invested further. If one wants to achieve liquidity, the money can be immediately withdrawn. Overall, one needs to have a good judgment of the market. A Mutual fund investment, if done smartly, can take care of all your major financial goals like education, marriages and retirements.