Markets opens the year on a weak note ::HDFC Sec

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The markets are likely to begin the New Year on a weak note, courtesy the fact that U.S. indices had slumped overnight on low volumes. 

Though the markets may open lower, there are unlikely to be any further external reasons to herd our markets further lower, as the rest of the global markets, barring a few Middle East markets are closed for the New Year Holiday.

Volumes are likely to be low. The news on the domestic economic front is mixed. While the core industrial growth is good, the fiscal deficit has already reached 99% of the budgeted figure, indicating a tough exam ahead for the FM in the form of the Union Budget.

Globally, while we have outsmarted other emerging markets and developed markets, China has come from behind and beaten us. 

The markets are healthy, with no Modi Premium

From the intraday high seen on 16th May 2014, the date when election results were announced, Nifty has been up just 9.5%. There is no Modi premium into the Index pricing.

You might ask, why are we saying this as the markets have surpassed those levels?

We believe that the rise does not even fully discount the lower crude prices. Nymex Crude has fallen 48% for the Calendar year and 50% from the top in June. If the crude prices were to be fully discounted, our markets would have been much higher.

That means that the markets do not expect much to happen on the passage of bills in the Rajya Sabha. To that extent, the markets unhappiness with the Government is already built in.
That should make our markets buy on dips .

How the indices and their constituents performed?

In the following tables we take a look at the performance of the indices and Nifty constituents. 

BENCHMARKS

SR.NO	Name	DEC 2013	DEC 2014	%Chg
1	NSE Nifty	6304.00	8282.70	31.39
2	CNX 500	4914.85	6773.00	37.81
3	CNX Midcap	8071.30	12583.00	55.90
4	CNX Smallcap	3402.90	5272.00	54.93

SECTORAL

SR.NO	Name	DEC 2013 CLOSE	Dec 2014	%Chg
1	Bse ConsDura	5821.34	9673	66.16
2	Bse Banks	13001.94	21458	65.04
3	Bse Auto	12258.83	18630	51.97
4	Bse Capital Goods	10264.26	15442	50.44
5	Bse Healthcare	9966.26	14692	47.42
6	Bse PSU	5909.74	8226	39.19
7	Bse Power	1700.75	2092	23.00
8	Bse FMCG	6567.01	7766	18.26
9	Bse IT	9081.78	10583	16.53
10	Bse Oil/Gas	8834.42	9895	12.01
11	Bse Realty	1433.41	1555	8.48
12	Bse Metal	9964.29	10752	7.91

NIFTY GAINERS

SR.NO	Name	%Chg
1	AXISBANK	93.30
2	INDUSINDBK	90.74
3	MARUTI	88.77
4	BPCL	85.69
5	SBIN	76.54
6	PNB	74.87
7	KOTAKBANK	307.88
8	BANKBARODA	67.90
9	ICICIBANK	60.68
10	LUPIN	57.24

NIFTY LOSERS

SR.NO	Name	%Chg
1	JINDALSTEL	-41.82
2	CAIRN	-25.70
3	DLF	-17.58
4	TATAPOWER	-7.29
5	TATASTEEL	-5.85
6	WIPRO	-0.72
7	RELIANCE	-0.45
8	NMDC	2.18
9	NTPC	5.11
10	SSLT	6.21

CNX500 GAINERS

Sr.No	Index	%Chg
1	GATI	506.45
2	NBCC	439.12
3	JKLAKSHMI	412.11
4	PFS	406.55
5	WELSPUNIND	339.47
6	SIMPLEXINF	313.43
7	NCC	301.00
8	SUNDRMFAST	295.59
9	SRF	294.83
10	JKTYRE	272.22

Core Infrastructure Growth a healthy 6.7%

Eight Core Industries posted a healthy growth of 6.7% for the month of November. This is the highest since June 2014. In the previous month it had grown by 6.3%. Coal, cement and electricity remained the major contributing sectors with growth of 14.5%, 11.3% and 10.2% respectively over the previous year. However fertilizer and natural gas production remained negative by 2.8% each during the month.

Lower Trai price for Spectrum augurs well for Telecom

The Telecom Regulatory Authority of India (Trai) yesterday recommended a base price of Rs 2,720 crore a megahertz (MHz) for 2,100-MHz spectrum across the country (22 telecom zones). 
This price is about 22 per cent lower than the reserve price of the same spectrum in the previous auction, conducted in 2010. Trai has also suggested spectrum in the 2,100-MHz band be put up for auction along with that in other bands ? 800, 900 and 1,800-MHz ?scheduled to be auctioned in February.

The authority has kept the price for the 2,100-MHz band about 14 per cent lower than the price it had recommended for the 800-MHz band. The price is, however, lower than for 900 MHz, though it is much higher than the base price for the 1,800-MHz band.

Trai?s recommendations will now be deliberated by the DoT and, subsequently, the Telecom Commission will decide the final price. 

Fiscal deficit in Apr-Nov touches 99% of Budget estimate

Reflecting tight financial position of the central government, fiscal deficit at Rs 5.25 lakh crore as of November-end almost touched 99 per cent of the full year target of Rs 5.31 lakh crore.

As per the data released by Controller General of Accounts yesterday, the fiscal deficit during April-November period was 98.9 per cent of the 2014-15 estimate, mainly because of subdued revenue realisation.

The government is committed to restricting the fiscal deficit at 4.1 per cent of the GDP during the current financial year, the lowest in seven years, and has taken several steps towards it. 

The fiscal deficit ? the gap between government expenditure and revenue ? during the same period last year was 93.9 per cent of that year?s target.

U.S. Markets skid yet again on Oil

Wall Street finished an otherwise robust year on bearish note. A slide in Crude and the disappointing weekly jobless claims combined to rattle the markets on thin pre-holiday volumes.

The Dow Jones Industrial Average, which surged nearly 60 points in the morning fell to close 160 points down, falling 0.89% at 17,823. With this fall, the blue-chip Index has closed the month of December in the red.

The S&P 500 tumbled 21 points or 1.03% to 2,059. The Nasdaq Composite Index fell 41points or 0.87% to 4,736.

For the year, however, the indices closed with gains. The S&P 500 closed with double-digit percentage gains, up nearly 12%, while the Dow Jones Industrial Average added more than 8%. The tech-heavy Nasdaq Composite climbed 14%.

The Russell 2000 gained of 3.5% for the year.

Crude closed  down 0.83% at  $53.67 a barrel. With this Crude has fallen 46% 2014. Oil has been in freefall as supply outpaced global demand and the Organization of the Petroleum Exporting Countries refused to limit future production.

Disappointing weekly jobless claims data climbed 17,000 to 298,000 for the week ended Dec. 27. Economists had expected 290,000 new filings for unemployment benefits for the week. However, if you look at the four week average, which smoothens out the weekly changes, the trend is still down, which is positive for the markets.

Pending home sales increased 0.8% in November, recovering from a 1.1% fall a month earlier. The reading came in better than the 0.5% rise economists had expected.

Airlines, the beneficiary of plunging gasoline prices, were the best performers of the year, helping to boost the SPDR S&P Transportation ETF   more than 34% over 2014. Southwest Airlines  was the best performer of the S&P 500, gaining nearly 130%, while Delta Air Lines  surged 82%.


Drilling companies fared the worst with the SPDR S&P Oil & Gas Exploration and Production ETF down more than 30%. Among the worst performers, Transocean  plunged 63%, Diamond Offshore  dropped 35%, and Noble Corp  tanked 55%.

Meadowbrook Insurance Group was one of the best performers of the day, up nearly 19%, after China-based Fosun International said that it will purchase the company for $433 million to strengthen its insurance unit and expand into the United States. The offer represents a 21% premium over Meadowbrooks' Tuesday closing price.
In Asia, most markets ended higher, although Australia and New Zealand finished in the red. The stock markets in Japan, South Korea, Indonesia, Thailand and the Philippines were closed for New Year?s Eve.

Trading was upbeat but thin in Europe. German and Italian stock markets were closed.

The dollar gained, with the greenback achieving a yearly advance of more than 12% and its best year since 2005. Oil prices slumped, while gold prices dropped.