India’s GDP data came  in yesterday and it “seems” to be a weaker 7% compared to 7.5% in the march quarter. There’s two ways to look at it – the new calculation shows “Gross Value Added” which is actually UP from the previous quarter! (up to 7.1% from 6.1%) GDP is just GVA plus the effect of indirect taxes, in my opinion. Given that it makes sense to consider indirect taxes and that anyway India’s going to look at the GDP (not GVA) as the headline number, we will grudgingly look at it too: Nominal Growth (that is, the number that includes the impact of inflation) saw an uptick at 8.81% which is slightly better. Sectors: Agri is Happier, but Services Show Sustained Drops As you can see 1.9% as the Agriculture GDP growth which seems to be on a recovery path. Mining at 4% is also pretty good. However Manufacturing at 7.2% is lower than the previous quarter , which is strange because input costs (steel, crude etc) should have fallen and prompted much more growth!… (Read On…)

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We had a wild week on the markets in the week. Just as the markets recovered a good portion of what they had lost and we “reclaimed” the 8000 mark on the Nifty. However this seems to be a strong area of resistance. The Nifty has moved up from these lows twice before, and from below it will serve as a point of resistance. But what’s more important is that this is a confirmation of the downturn: The rest of this content is only available to premium members. Register for a premium membership today ! Apart from this content you will get our proprietary research and weekly newsletter too! Already a subscriber? Log in now !… (Read On…)

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In News to Read today: NHB “considering” a proposal to allow home lenders to reintroduce prepayment penalties . But this is just retrograde – the excuse that they need to recover their costs is a load of bull, they charge the customer legal costs and processing fees, and are covered from day one. How farmers from Rural China bet on the market and lost . The village that played the markets in its spare time, seems to have lost its spare money. A Navi Mumbai flat sold for 50% less . It probably deserves to fall a lot more, as most Mumbai real estate should. Dubai based Atlas Group founder M M Ramachandran absconds, reports are that the jewellery company is in financial trouble . Atlas shops seem to have reduced inventory, has lenders concerned. It’s a 30+ year old company. China is getting hilarious; now punishes 197 for spreading “rumours” .… (Read On…)

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In a body blow to the political parties that either wanted to work all Saturdays or to party with bankers on all weekends, the RBI has in a sober note pronounced that counting of Saturdays will go in the following manner: First Saturday, FULL working day, banking system to operate till 6:30 pm or such time as a normal weekday Second Saturday, Holiday! Third Saturday, FULL working day, like the First. Fourth Saturday, Holiday! Fifth Saturday, Sorry bankers, this round goes to FULL working day. What “FULL Working Day” means is that there will be all banking functionality: Cheque clearance NEFT and RTGS Go to the bank and get sold insurance disguised as a fixed deposit Operate your lockers (if you had got one) Banks can borrow from RBI (Repo or MSF) or park excess cash with it Which means that on the Second and Fourth Saturdays of a month, none of the above will happen.… (Read On…)

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The  MA20  is our proprietary indicator about market breadth. The MA20 is calculated by taking the number of Nifty stocks above their 20 Day Moving Averages, and we subtract from this number those that are below. We then take a further four day MA of the resulting number to smooth it out. The rest of this content is only available to premium members. Register for a premium membership today ! Apart from this content you will get our proprietary research and weekly newsletter too! Already a subscriber? Log in now !… (Read On…)

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The rest of this content is only available to premium members. Register for a premium membership today ! Apart from this content you will get our proprietary research and weekly newsletter too! Already a subscriber? Log in now !… (Read On…)

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Today we explore the options market in some detail. AP has been providing some excellent trading knowledge on the #options channel on Slack, and we’ve seen some incredible moves in recent times. Here’s a couple of trade ideas beyond the discussions there, that we’ve noticed that has been interesting. The rest of this content is only available to premium members. Register for a premium membership today ! Apart from this content you will get our proprietary research and weekly newsletter too! Already a subscriber? Log in now !… (Read On…)

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Remember Amtek Auto ? That company that fell big time on the exchanges and the official excuse was that it was taken out of the F&O category? Well, that’s not that only thing that seems to have been hit. JP Morgan AMC’s short term debt funds have seen a large dip in their NAV yesterday. From Invest Mutual : JP Morgan Short Term Income Fund  -3.38% – This is a short debt fund with Avg Maturity of 3.59 yrs and a Modified Duration of 2.01 JP Morgan India Treasury Fund  -1.73% – This is an ultra short term fund with Avg Maturity of  0.51 yrs and Modified Duration of 0.37 This is HUGE. Because short term debt funds aren’t supposed to fall unless interest rates rise – people assume that the credit risk in the short term is very low. But look, it’s not! Apparently the funds here have invested in Amtek Auto’s bonds.… (Read On…)

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Foreign Investors are taking money off the table, yet again. In the last 10 days they have removed Rs. 14,000 cr. worth of equities (including a provisional Rs. 2,300 cr. sold today). This does make August the worst month for equities since October 2008, when Lehman collapsed and left the whole world bloodied. This time it’s China, which is arguably bigger than Lehman but it hasn’t exactly collapsed yet. Jan 2008 was even worse, and that was after the Reliance Power IPO, and the market was battered in the last 10 days. We didn’t see this kind of exit even in August 2013, when FIIs ran out the door and took the USDINR to a record Rs. 68. And strangely, with this level of selling we still haven’t seen a 10% drop on the index on a monthly basis (Jan and Oct 2008 were about 20% falls). Even so, let’s not forget that this month, though very very bad for equities, is only creating a small blip in overall FII investments in the country.… (Read On…)

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The markets are 6% down. And in the carnage we saw it move from a bad open, to a worse mid-day, to an absolutely terrible afternoon. The Nifty sank to nearly the lowest in a year (we went briefly below this level in Oct 2014). This is not Normal of course. And markets haven’t tanked this much since…January 2009! My Few Paise (Tweets) 1/ This has not been an easy day. It seems to be that investors have panicked. We’ll know who and when and how later. — Deepak Shenoy (@deepakshenoy) August 24, 2015 2/ There would have been margin calls, panic selling, lower circuits and what not. This would have fed into even more selling. — Deepak Shenoy (@deepakshenoy) August 24, 2015 3/ There wasn’t a letting up, right to the end. Which means it’s unlikely to be “speculators” that drove the markets down. — Deepak Shenoy (@deepakshenoy) August 24, 2015 4/ There will be no end to reasons but it’s just this – just because markets have been calm recently, doesn’t mean they stay calm. … (Read On…)

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