Todays Market from Equitymaster http://www.equitymaster.com/tm.asp The happenings in the stock markets, including a pre-open and closing commentary. Todays Market from Equitymaster http://www.equitymaster.com/icons/eqtm_small1.gif http://www.equitymaster.com/tm.asp http://blogs.law.harvard.edu/tech/rss Indian markets trade flat http://www.equitymaster.com/tm/tm.asp?date=7/31/2014&title=Indian-markets-trade-flat
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After opening weak, the Indian stock markets are trading flat during the morning trading session. Among the sectoral indices, stocks from engineering and metal sectors are among the leading the gainers; while IT stocks are leading the pack of losers.

The BSE-Sensex is trading down 14 points. The NSE-Nifty is trading down 9 points. The BSE Mid Cap index is trading up 0.5% and the BSE Small Cap index is trading up 0.6%. The rupee is trading at 60.25 to the US dollar.

Most Software stocks are trading lower today. HCL Technologies and Wipro are leading the losers. India's fourth largest software firm HCL Technologies, has announced results for the fourth quarter and full year FY14 (the company has a June year end). Revenues for the quarter grew by 1% QoQ to Rs 84.2 bn. In dollar terms, revenues were up 3.4 % QoQ and came in at US$ 1.4 bn. Operating margins declined by 0.5% QoQ. Net profits jumped by 13% QoQ to Rs 18.3 bn. The growth was driven by infrastructure management services. The IMS division grew by 3.2% QoQ in US dollar terms. The company declared a dividend of Rs 12 per share. HCL Tech is trading down 2.7% today.

Majority of Indian Pharma stocks are trading in green with, Aurobindo pharma and Indoco Remedies being the leading gainers. Dr Reddy's has declared its June quarter results for the financial year ending 2015 (1QFY15). The company posted robust topline growth of 24% YoY during the quarter. The large part of growth was led by robust performance in US and RoW markets. However company's PSAI segment witnessed some pressure and subsequently posted negative growth for the quarter at -6% YoY. The company witnessed good improvement in the gross margins due to a better product mix. Subsequently, the operating margins also improved by 500 bps to 25% in 1QFY15. This was in spite of a sharp surge in R&D expenses which were up by 59% YoY for the quarter. On the back of good performance in the topline, the net profits too increased by 52% YoY during the quarter.

This article (Indian markets trade flat) is authored by Equitymaster.

Equitymaster is a leading 'independent' equity research initiative focused on providing well-researched and unbiased opinions on stocks listed on the Bombay Stock Exchange.]]>
Thu, 31 Jul 2014 06:00:00 GMT http://www.equitymaster.com/tm/tm.asp?date=7/31/2014&title=Indian-markets-trade-flat
Indian share markets open weak http://www.equitymaster.com/tm/tm.asp?date=7/31/2014&title=Indian-share-markets-open-weak
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Barring Singapore (up 0.9%) and Japan (up 0.4%), major Asian stock markets have opened the day on a weak note with stock markets in Taiwan (down 1.3%) and South Korea (down 0.3%) leading the losses. The Indian share markets have opened the day on a negative note. The sectoral indices have opened on a mixed note with IT stocks leading the losses. However, metal and realty stocks are trading firm.

The Sensex today is marginally down by around 25 points (0.1%), while the NSE-Nifty is down by about 15 points (0.2%). However, mid and small cap stocks are trading in the green with the BSE Mid Cap and BSE Small Cap indices up by around 0.4% each. The rupee is currently trading at Rs 60.08 to the US dollar.

Textile stocks have opened the day on a mixed note with Eastern Silk Industries, Bombay Dyeing and Arvind Ltd leading the losses. However, Raymond and Vardhman Textiles are trading firm. As per a leading financial daily, one of the leading integrated textile and branded apparel manufacturer Arvind Ltd is set to demerge its real estate business and transfer it to the company's wholly-owned subsidiary Arvind Infrastructure Ltd (AIL). The company also has plans to list AIL on the stock exchanges. AIL will issue one share of Rs 10 each for every 10 shares of Rs 10 held by shareholders of Arvind Ltd. It must be noted that AIL manages 11 real-estate projects in Ahmedabad and Bangalore with 5.3 million square feet over 360 acres of land.

Indian Pharma stocks have opened the day on a mixed note with Torrent Pharma and Aurobindo Pharma leading the gains. However, Cadila Healthcare and Divi's Laboratories are trading in the red. As per a leading financial daily, Mumbai-based drug maker Lupin Ltd has said that it will contest the decision of the European Union to impose 40 million euro penalty on it. It must be noted that the anti-trust wing of the European Commission recently slapped a fine on Lupin for attempting to obstruct the entry of low-cost generic version of cardiovascular medicine Perindropril in the European Union. However, Lupin is confident of its position and is planning to appeal against the decision in the next few days. A couple of other Indian players who were also pulled up by the commission include Unichem Laboratories and Matrix Laboratories.

This article (Indian share markets open weak) is authored by Equitymaster.

Equitymaster is a leading 'independent' equity research initiative focused on providing well-researched and unbiased opinions on stocks listed on the Bombay Stock Exchange.]]>
Thu, 31 Jul 2014 04:00:00 GMT http://www.equitymaster.com/tm/tm.asp?date=7/31/2014&title=Indian-share-markets-open-weak
Is economic data relevant to markets? http://www.equitymaster.com/tm/tm.asp?date=7/31/2014&title=Is-economic-data-relevant-to-markets
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Stock markets are quite fickle when it comes to digesting news. At times they can overreact to the smallest positive or negative event. On the other hand, there are times when markets shrug off a significant event without much of a price movement. This moody nature of the markets is well known. Short term traders are particularly concerned about price swings. However, long term investors do not pay too much attention to short term market moves as they do to the news itself.

In this context, let us examine the impact that economic data has on the markets. On the face of it, economic data is important. Data relating to interest rate movements, GDP, current account deficit/fiscal deficit, inflation, IIP etc are all important economic indicators. They help us to track the health of the economy. Thus one would think that stock markets would keenly await the release of this data and react accordingly. However, this is not entirely true. While market participants do try to predict/anticipate economic data, markets in general, do not react too much upon its release.

Why is this so? Are the markets disconnected with economic reality? The answer is not so simple.

There are various types of investors in stock markets. An intra-day trader will show little concern for such data except on the day when it is released. Long term investors, on the other hand, do keep a sharp eye on such data but they do not react to it in the same way. Macro investors who follow a top-down investing approach might change their portfolio allocation towards certain sectors. For example, if they believe that the inflation is on the rise then they might reduce their exposure to interest rate sensitive sectors like real estate, fearing rate hikes by the RBI. At the same time, bottom up stock pickers would be more concerned about the effect of the higher interest rates on their individual stock picks. Thus, two long term investors in the same stock can react differently to the same set of economic data. The cumulative reaction (to important economic data) of all market participants, results in muted price movements on many occasions.

Does this mean that economic data is irrelevant to the markets?

Certainly not! In the long run, macro economics does play its role in influencing stock prices. Investors should not ignore it. The trends in economic data should be of particular interest, as they can point investors in the right direction regarding the big picture. However, it is important to not go overboard while analyzing such data. We believe investors will be best served by the bottom-up investing approach. In the long run, if the fundamentals of an individual business remain intact then irrespective of the economic conditions, the stock will reward long term investors.

Does economic data impact your investment approach? Do let us know your view in the Equitymaster Club.

This article (Is economic data relevant to markets?) is authored by Equitymaster.

Equitymaster is a leading 'independent' equity research initiative focused on providing well-researched and unbiased opinions on stocks listed on the Bombay Stock Exchange.]]>
Thu, 31 Jul 2014 03:00:00 GMT http://www.equitymaster.com/tm/tm.asp?date=7/31/2014&title=Is-economic-data-relevant-to-markets