sensex

Sensex ends down 90pts at 14,634

2008-08-19T09:02:00.001-07:00

The Sensex opened 43 points lower at 14,681. After the initial weakness, the index rebounded into the positive zone and touched a high of 14,825. The index, however, could not hold gains and slipped back into the negative zone.

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Considerable weakness in energy and metal stocks saw the index drop to a low of 14,601 - down 224 points from the day's high. The Sensex finally ended with a loss of 90 points at 14,634.

The NSE Nifty was down 41 points at 4,390.

The market breadth was fairly negative - out of 2,575 stocks traded so far, 1,490 have declined, 992 have advanced and 93 were unchanged today.

Sensex slips below 15K

2008-08-19T09:00:00.000-07:00

Snapping previous weeks’ gaining streak, the Sensex this week dipped 2 per cent, retreating below the 15,000 mark. With interest rates rising and inflation forging ahead of the 12 per cent mark (it stood at 12.44 per cent for the week ending August 2), there appears to be little relief in sight for the loss-stricken markets. Interest-sensitive sectors like realty and bankex were hit the hardest and registered slumps of 7 and 5 per cent respectively. Only oil and gas and healthcare indexes managed to hold on to their gains with 0.4 and 0.3 per cent rise respectively.

The whole week buzzed with activity. Even a decent growth rate of 5.4 per cent in the Index of Industrial Production for June failed to enthuse the stock markets. Crude prices, too, after declining steeply in earlier weeks, increased marginally and stood at $112 per barrel on August 14.

Towards the end of the week, what weakened sentiments further was the Prime Minister’s Economic Advisory Council’s report that painted a gloomy picture for the economy and predicted a drop in GDP growth rate from 9 per cent to 7.7 per cent. In addition, concern about the impact on fiscal deficit once the Sixth Central Pay Commission recommendations are implemented also led to the benchmark index declining.

Sensex dips by 78.52 points; Nifty ends below 4400 mark

2008-08-19T08:59:00.000-07:00

The key benchmark Sensex today ended in the red at 14,645.66 on the Bombay Stock Exchange (BSE) with a loss of 78.52 points on sustained offloading by Foreign Institutional Investors and mutual fund operators.

The Nifty index of National Stock Exchange (NSE) was quoted below the 4400 mark to close lower at 4393.05 points, showing a net loss of 37.65 points.

Trading resumed after the three-day holiday, including the Independence day, lower below the 14,700 mark at 14,681.14 with a small loss of 43.04 points.

Select heavyweight stocks ended in negative terrain after trading with extreme volatility throughout the day. Sell off in oil & gas, metal, power, auto, cement, FMCG and realty stocks put pressure on frontline indices.

Most active shares on the bourses were Reliance Industries, ICICI Bank, SBI, L&T and HDFC.

On the global front, Asian markets closed weak barring Nikkei.

Shanghai fell 5.34 per cent, Hang Seng 1.09 pc, Jakarta Composite 1.02 pc, Straits Times 0.73 pc, Kospi 0.28 pc and Taiwan Weighted 2.72 pc. However, Nikkei gained 1.12 pc. European markets were trading lower.

FTSE declined by 0.35 pc, CAC 0.54 pc and DAX by 0.80 pc, which affected the Indian bourses, brokers pointed out.

The Sensex touched an intraday high of 14,824.92 and low of 14,600.65, before closing at 14,645.66, down 78.52 points or 0.53 per cent. Nifty index of NSE closed also low at 4393.05, down 37.65 points or 0.85 pc from its last finish of 4430.70 points. It has hit a high and low of 4447.40 and 4379.85 points respectively during the session.

Market breadth was negative with 932 shares advancing, while 1678 shares declined. Nearly 552 shares remained unchanged.

How to make money in the stock market?

2008-08-19T08:50:00.000-07:00

This article is a COMPLETE guide to the basics of making money in the stock market! If you are considering investing in the stock market, you MUST read this article! We have explained all the concepts and talked about all the "myths" that people have about the stock market!

Plain and simple, a “stock” is a share in the ownership of a company.

A stock represents a claim on the company's assets and earnings. As you acquire more stocks, your ownership stake in the company becomes greater.

Note: Some times different words like shares, equity, stocks etc. are used. All these words mean the same thing.
Holding a company's stock means that you are one of the many owners (shareholders) of a company and, as such, you have a claim to everything the company owns.

This means that technically you own a tiny little piece of all the furniture, every trademark, and every contract of the company. As an owner, you are entitled to your share of the company's earnings as well.

These earnings will be given to you. These earnings are called “dividends” and are given to the shareholders from time to time.

A stock is represented by a "stock certificate". This is a piece of paper that is proof of your ownership. However, now-a-days you could also have a “demat” account. This means that there will be no “stock certificates”. Everything will be done though the computer electronically. Selling and buying stocks can be done just by a few clicks.

Being a shareholder of a public company does not mean you have a say in the day-to-day running of the business. Instead, “one vote per share” to elect the board of directors of the company at annual meetings is all you can do. For instance, being a Microsoft shareholder doesn't mean you can call up Bill Gates and tell him how you think the company should be run.

The management of the company is supposed to increase the value of the firm for shareholders. If this doesn't happen, the shareholders can vote to have the management removed. In reality, individual investors like you and I don't own enough shares to have a material influence on the company. It's really the big boys like large institutional investors and billionaire entrepreneurs who make the decisions.

For ordinary shareholders, not being able to manage the company isn't such a big deal. After all, the idea is that you don't want to have to work to make money, right? The importance of being a shareholder is that you are entitled to a portion of the company’s profits and have a claim on assets.

Profits are sometimes paid out in the form of dividends as mentioned earlier. The more shares you own, the larger the portion of the profits you get. Your claim on assets is only relevant if a company goes bankrupt. In case of liquidation, you'll receive what's left after all the creditors have been paid.

Another extremely important feature of stock is "limited liability", which means that, as an owner of a stock, you are "not personally liable" if the company is not able to pay its debts.

What are the Sensex & the Nifty?

2008-08-19T08:43:00.000-07:00

The Sensex is an "index". What is an index? An index is basically an indicator. It gives you a general idea about whether most of the stocks have gone up or most of the stocks have gone down.

The Sensex is an indicator of all the major companies of the BSE.

The Nifty is an indicator of all the major companies of the NSE.

If the Sensex goes up, it means that the prices of the stocks of most of the major companies on the BSE have gone up. If the Sensex goes down, this tells you that the stock price of most of the major stocks on the BSE have gone down.

Just like the Sensex represents the top stocks of the BSE, the Nifty represents the top stocks of the NSE.

Just in case you are confused, the BSE, is the Bombay Stock Exchange and the NSE is the National Stock Exchange. The BSE is situated at Bombay and the NSE is situated at Delhi. These are the major stock exchanges in the country. There are other stock exchanges like the Calcutta Stock Exchange etc. but they are not as popular as the BSE and the NSE.Most of the stock trading in the country is done though the BSE & the NSE.

Besides Sensex and the Nifty there are many other indexes. There is an index that gives you an idea about whether the mid-cap stocks go up and down. This is called the “BSE Mid-cap Index”. There are many other types of indexes.

BSE launches new Internet Trading Portal

2008-08-10T06:36:00.001-07:00

BSE has launched new Internet Trading Portal -- BSE Webx with three products viz., Eazy, Classic and Premium. Members can provide any one or all of them to their clients for smooth trading through Internet.

1. BSEWebx Eazy

This trading product offers the following features
1. Investors can view Online quotes, market depth, indices, and company related announcements on scrips.
2. The Investors can place orders, track the status of orders placed and confirmations on trade execution and view their Net/Margin positions.

2. BSEWebx Classic

This is the high end product from the BSEWebx stable offers the following
1. Investors can create his own portfolio of scrips
2. Investors can view portfolio of scrips in the market watch online.
3. The Investors can place orders, track the status of orders placed and receive confirmations on trade execution and view their Net/Margin positions.

3. BSEWebx Premium

This is the advanced product from the BSEWebx system which includes the following features
1. Investors can create multiple portfolios of scrips for market watch.
2. Investors can view multiple market watches (upto - 3) at a time
3. Charting of Scrips i.e. intra-day/EOD/historical are available to Investors
4. The Investors can place orders, track the status of orders placed and receive confirmations on trade execution and view their Net/Margin positions.

Direct Market Access (DMA)

2008-08-10T06:35:00.000-07:00

Securities & Exchange Board of India (SEBI) vide its circular no.MRD/DoP/SE/Cir-7/2008 dated April 03, 2008 as per Annexure I, has approved and given necessary guidelines for providing Direct Market Access (DMA).

Direct Market Access (DMA) facility through various connectivity modes permits the trading members of BSE to provide direct trading terminals to their DMA clients.

As quoted in the SEBI circular 'Direct Market Access (DMA) is a facility which allows brokers to offer clients direct access to the exchange trading system through the broker’s infrastructure without manual intervention by the broker. Some of the advantages offered by DMA are direct control of clients over orders, faster execution of client orders, reduced risk of errors associated with manual order entry, greater transparency, increased liquidity, lower impact costs for large orders, better audit trails and better use of hedging and arbitrage opportunities through the use of decision support tools / algorithms for trading.'

For compliance of the said circular, the guidelines are as follows:

Eligibility:

As per the SEBI Circular, DMA facility initially is being restricted to institutional clients only.

SENSEX RECOVERS BY 496 PTS

2008-07-31T07:48:00.001-07:00

The domestic stock markets took an about turn on Wednesday as crude oil prices dipped, the US markets rallied and also the Asian markets traded higher. On the domestic front, end of settlement of July derivatives contracts also helped speculators to push up the market, despite substantial foreign fund selling. As a result, the BSE Sensex rallied 496 points to close at 14,287 with banking and real estate stocks leading the gainers. The day’s rally added Rs 1.35 lakh crore to investors’ wealth with BSE’s market capitalisation now at Rs 46.60 lakh crore. On Tuesday, crude oil prices had dipped to near the $120-a-barrel level which led to a 200-plus points rally in the Dow Jones Index. This in turn provided a positive cue to Asian markets like Hong Kong and Japan. As a result the Sensex opened over 200 points higher and picked up gains through the day to close 3.6% higher.Market players are however not sure that the gains could be sustained. And the main reason for this is that foreign institutional investors (FIIs) were on the selling side, although buying by domestic funds more than offset the magnitude of selling by the foreign funds. BSE data showed that during the day FIIs net sold stocks worth about Rs 630 crore while domestic funds net bought stocks worth Rs 670 crore.
Brokers and dealers said it could have been strong speculative buying, a day ahead of the expiration of July derivatives contracts, that lifted the Sensex. There is a high probability that the speculators would try to sustain the rally on Thursday, and after the settlement is over would again pull it down on Friday.
The day’s gainers were led by banking and real estate stocks, the two stocks which were the worst hit on Tuesday, after the RBI increased key policy rates beyond market’s expectations.

Home, car EMIs set to get higher

2008-07-30T09:11:00.000-07:00

With inflation remaining at double-digit levels for six weeks running, the RBI decided on Tuesday to further tighten its monetary policy. The measures will squeeze liquidity and push interest rates upwards-- for you it means EMIs on loans, whether for housing, car or other purposes, are likely to get still higher. The move is also likely to hit demand in the economy, which could dampen the growth momentum.
The central bank has hiked the rate at which it lends to banks--the repo rate --by half a percentage point and the proportion of deposits the banks have to set aside in cash-- the cash reserve ratio (CRR)-- by 0.25 percentage points.
A half percentage point hike in housing, car and personal loan interest rates seems on the cards. This would be the third time in calendar 2008 that rates have been moved upwards and the second time in the current month. Earlier this month, banks had increased lending rates by 0.5 to 0.75 percentage points.
Since the beginning of 2008, interest rates on home loans have already gone up by around one percentage point. Include the rise in the interest rate expected due to Tuesday's measure and the total increase will be to the tune of 1.5 percentage points. On a 20-year loan of Rs 50 lakh that translates into an increase in EMI of over Rs 5,250.
In fact, the interest rate on home loan has gone up by almost 75% from 7% in 2004 to 12.5% at present. This sharp hike in interest rates by 5.5% has led to increase in the EMI by around 50% over these last four years, causing a huge burden for the salaried middle class.
Reviewing the credit policy on Tuesday, RBI expressed the hope that these measures, along with those already taken, would help bring inflation down to "close to 7%" by the end of the financial year in March. However, back-of-theenvelop calculations show that if the wholesale price index remains at its current level till the end of 2008, it would still end the year with an inflation rate of just over 10%.
RBI governor Y V Reddy said controlling inflation was the key objective and that the central bank was more concerned about the poor, who are paying more to purchase food items like rice and pulses, than those who might be forced to pay more to borrow to buy a house or a car. Reddy conceded that growth was likely to be affected and projected an 8% figure for the year, down from the earlier projection of 8-8.5%. BANKS MAY HIKE INTEREST RATES RBI targets 7%

Investing in Indian Real Estate

2008-07-21T07:27:00.000-07:00

Tax reform measures in the last few years have ensured real estate in India is one of the most productive investment sectors, with money invested in real estate offering regular returns on investment including appreciating in value. And, the Government of India by opening up 100% foreign direct investment, and fiscal reforms like stamp duty and property tax reductions, setting up real estate mutual funds has turned real estate into a promising investment option.

Already, it has approved the first Rs. 100-crore FDI project in Gurgaon. With urban populations expected to grow from 290-million to 600-million by 2021, housing requirements are expected to top 68-million by 2021, which means India's urban housing sector could do with an investment of US $25-billion over a 5-year period. Poised for rapid urbanisation, 3 out of 10 of the world's largest cities are in India. An influx of jobs due to off-shoring / outsourcing has resulted in rising disposable incomes, increased consumerism, factors responsible for changing the face of residential and commercial real estate in India.

Wishing to take advantage of real estate investment opportunities, banks and housing finance companies are falling over themselves to tie-up with developers or offer project loans at competitive rates.

Indian Real Estate: Foreign Direct Investment (FDI)

Recent government policies have seen to it that inbound FDI for housing, commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure, no longer requires prior government approval, with the exception of the Reserve Bank of India (RBI). It is important that all inward remittances or issues of shares to NRIs are reported to RBI within 30-days, and all FDI in the above areas is subject to the following conditions:

Minimum area for development under each project is as under: Serviced housing plots, minimum requirement of 10 hectares. Construction-development projects, minimum built-up area requirement of 50,000 sq. metres. Combination project, either of the above two conditions suffices. Investment is further subject to the following conditions: Minimum capital investment = US$10 million for a wholly owned subsidiary, and US$5 million for joint ventures with Indian partners. Further, the funds have to be brought in within six months of commencing business.

It is not permissible to repatriate original investment before a period of three years from the date of minimum capital investment. However, if the investor gets prior approval from the Government through FIPB, early exit is permitted.

Fifty percent of the project is to be completed within 5-years from the date of obtaining all legal clearances. No undeveloped plots can be sold where roads, street lighting, water supply, drainage, sewerage and other conveniences are not available. Serviced housing plots can only be sold if the investor has provided infrastructure and obtained a completion certificate from the concerned local body / service agency.

Development has to be in accordance with town master plans, planning norms, standards, and local bye-laws.

The investor is responsible for obtaining all necessary approvals, including building / layout plans, internal / external / peripheral area development, infrastructure facilities, payment for development and other charges. All development has to be in compliance with State Government / Municipal / Local Body requirements that are prescribed under applicable rules / bye-laws / regulations. Further, Non Resident Indians (NRIs) are allowed investment under the Automatic Route of FDI in the following Housing and Real Estate Sector:

Services plot development and construction of built-up residential premises.

Real estate investment covering construction of residential / commercial premises including business centres, offices, etc. Development of townships.

City / regional level urban infrastructure facilities, including roads and bridges.

Investment in manufacture of building materials. Investment in participatory ventures in (i) to (v) above

Investment in housing finance institutions.

Permissible FDI private / joint / state investment in construction in the export processing zones (EPZS) / special economic zones (SEZS) is as follows:

100% FDI real estate investment within Special Economic Zone (SEZ). 100% FDI for developing a township within the SEZ i.e. residential areas, markets, playgrounds, clubs, recreation centres etc.

Standard Design Factory (SDF) building development in existing Special Economic Zones. SEZ land may be leased or sub-leased to developers as per relevant guidelines for this purpose.

Full freedom to allocate developed plots to approved SEZ units on commercial basis including competent authorities for provision of water, electricity, security, restaurants, recreation centres etc. along commercial lines.

As you read this, a wide spectrum of changes are and have taken place in Indian real estate. Various proposed reforms e.g. removal of tenancy laws, computerization of land records, correction in taxation structure etc., are ensuring India emerges as a favoured and profitable destination for real estate developers / investors, both domestic and international.

How To Trade Stock Market System

2008-07-21T07:23:00.000-07:00

The stock market system is an avenue of how to trade stock for listed corporations. As a corporation is formed, its initial shareholders are able to acquire shares of stock from the point of subscription when a company is created. When a company starts to be traded to the public, the primary market comes in where those who subscribe to the initial public offering (IPO) takes on the shares of stock sold from point of IPO. When those who bought into a company at IPO point of view decides to sell their shares of stock to other people, they can do so by going to the stock market.

The stock market is a secondary market for securities trading wherein original or secondary holders of a company’s shares of stock can sell their stocks to other individuals within the frame work of the stock market system.

The stock market has buyers of stocks or those who wants to own a part of the company but wasn’t able to do so during the initial public offerings made by the company to the public when it has decided to list itself as a publicly listed company. The secondary market or the stock market allows other individuals to sell shares of the company when the initial shareholders may have realized that they want to sell their shares after gaining either significant profit or realized significant loss from point of acquiring a company from its IPO price.

As the stock market has developed and progressed over the years, the ways of how to trade stock from one individual to another has become more complicated and more challenging to be regulated. Technology has aided in providing more efficient ways of transactions. Front and backend solutions are put into place that helps direct the exchange of shares of stock in timely and secure manner.

Public education over how the stock market works is one of the primary concerns of the investing public in order to promote the trading activities of the stock market to other individuals who may also benefit from doing transactions over this secondary type of equities market.

With the abundance of relevant company information on performance of publicly listed companies, this information will help the investors to become more aware of the directions of the companies where they have share of stocks on and this will also aid them in how to trade stock and where to direct their investment strategies.

India's Sensex hits record high

2008-07-21T07:17:00.000-07:00

Bombay's benchmark Sensex index jumped to 14,028.47 points when trading began on Tuesday, topping a previous peak set in November.

India's economy has beaten expectations by growing at an annualised rate of 9.2% during July to September.

The Sensex's recovery marks a change in fortunes for the exchange, which plunged in value earlier this year.

In later trading, however, the Sensex dropped below the 14,000 mark again, closing 63.32 points, or 0.5%, higher at 13,937.65.

Market analyst Rahul Rege said the rising stock index was the result of strong economic fundamentals and more players investing their money in the market.

"Lot of money has flowed in from foreign investors in the last three months..the investor base has widened tremendously, economic growth numbers are positive and corporates have registered good results," he said.

This year, foreign institutional investors pumped nearly $9bn into India.

Asia's fourth-largest economy has grown at an average of 8% in the last three years. But critics say the benefits have not reached the poor fast enough.

Inflation inches up at 11.91%

2008-07-18T06:42:00.000-07:00

Inflation went up marginally to 11.91% during the week ended on July 5 from 11.89% in the previous week. Exuding confidence that measures taken by the gove r n m e n t would help m o d e r at e p r i c e s, Union finance minister P Chidambaram said the upward pressure on prices still exists. Food items, including pulses, atta, tea, fruits and some petroleum products like jet fuel became more expensive during the week under review, according to the WPI released by government on Thursday.
The finance ministry in a statement said the annual inflation rate for the group of 30 essential commodities during the week ended July 5 has declined to 5.74% from 5.98% in the week ending June 28, 2008.
It further said the prices of essential commodities like food grains, pulses, edible oils, vegetable, dairy, kerosene, soap and safety matches have more or less stabilised.

Sensex recovers by 536 pts on global cues

2008-07-18T06:41:00.000-07:00

On Thursday, the stock market bounced back from its lows and reversed a five-session losing streak with the BSE Sensex closing 536 points or 4.36% higher at 13,112. It had sunk to a new low for 2008 in its previous trading session and market players said there was some bargain hunting witnessed in the markets with many blue-chip stocks available at multi-year lows. Significant drop in crude oil price coupled with some amount of short-covering from institutional players, post the turnaround, also helped the indices move northward, brokers and dealers said.
Investors saw their wealth increase by nearly Rs 88,000 crore with the BSE’s market capitalization now at Rs 42.2 lakh crore. The overall market breadth was positive with 1,536 stocks on the BSE closing higher compared to 1,081 laggards. The day’s gains however were restricted to large-cap indices, with the broader indices not gaining as much. The BSE mid-cap index closed 1.3% higher and the small-cap index moved up by just 1%.
During the day, the government released the inflation figure for the week ended July 5, which came in at 11.91%, compared to 11.89% in the previous week. Post the release of the inflation data, the finance ministry said that inflation has stabilized.
The government has decided to release the inflation figures on Thursday evenings henceforth rather than at noon on Fridays. There were concerns about leakage of sensitive data on inflation and also the government wanted to prevent traders and investors from overreacting to the data. Over the past few weeks as inflation soared to record highs, the trading sessions on Friday were marked by a high degree of volatility.
On Thursday, among the sectoral indices, the banking index was the biggest gainer after being beaten down in the previous trading sessions. The index moved up by over 6%. Other indices like capital goods and realty bounced back.