Stock Market Correction

It is reverse movement, usually downward, in the price of an individual stock, bond, commodity, or index. If prices has been rising on the market as a whole, and then falls dramatically, this is known as a correction. As long as you see the patterns acting as continuation patterns, the overall health of the market is strong. Failures by continuation pattern can forewarn of a more substantial market correction on the horizon.

                        “A relatively short-term drop in stock market prices, generally viewed as bringing overpriced stocks back to a level closer to companies’ actual values.”

When prices fall too fast, a market often retraces part of the trend move. often the degree of retracement is measured utilizing a Fibonacci ratio . Recently, our markets witnessed a drastic fall, owing to the pull out of the foreign institutional investors (FII). The recent Mumbai blasts have also affected it.

The investors in these markets form consortiums among themselves such that, a group of these investors are able to make changes in the overall market indices. FII’s are one such group. When they think, the time has come to book profits; they take up a selling position. This causes the market to fall and when the market falls, these groups again buy the shares; thus making profits again out of their buying back the shares.

This phenomenon is possible only if the group’s transactions can exercise a considerable influence in the concerned market.
Market sentiments play an increasingly important role in the fixing of share prices. News such as decrease in interest rates, good rainfall, etc promotes investment thereby raising the price of the indices in the process. But bad news such as a bomb blast or an earthquake quake the investors see, thereby lowering the indices. 

Advantages for those:

• Who invest conservatively, to the exclusion of stocks whose performance depends on the successful execution of a very aggressive growth strategy.

• Who invest primarily in stocks that are not dependent on the American Stock market.

• Who focus on rapidly growing industries and industries benefited by long term shifts in global economics.

• Convertible preference shares could be the right investment for protection against potential market correction

Markets go up and they go down, they have to, in fact. Because if shares rose in a straight line then everyone would put their savings in the stock market...and that would mean no opportunity for shrewd investors to get in ahead of the crowd. Those who have the nerve to invest in shares are rewarded for our daring that must mean volatility and short-term losses even on the strongest positions, so the investor must react with the same equanimity to any move in the broader stock market index, whether it goes up or down

Disadvantages over ordinary shares:
1. Limited exposure to capital growth.
2. Often do not hold right to vote.
Over Fixed Interest Investments:
1. Relatively less attractive in a rising interest rate environment.
2. Not completely sheltered from market volatility.
3. Higher risk.
4. Extensive conditions can be complicated.
5. Payment of brokerage and stamp duty.

Cheap Stocks can bring Forth Cheeky Profits

Stock is generally a term that is used to describe the ownership certificates of a company, and shares refers to that of the certificate of ownership of the particular company. Therefore when the investors say that they own stocks, then they generally are referring to their overall ownership in one or more companies. Stocks are considered to be as a tool for building wealth because they are the part of almost all investment portfolios. These are bought in the form of shares and represent the ownership of a company. We can now say that the shares are reference to the stock of a particular company. So, we would have a look at how the cheap

How to invest in shares

You might have seen people investing a lot of their money in the stock market. There are some people who do not wish to go for investing in the stock market because they think that it is very risky to invest their money. So, it is very necessary that you get some idea how to invest in shares.  So let us learn how to go for investing in shares in the share market.
Focus on your investment decision
It is very important that you make your investment plan very wisely. You should be very careful that you focus whether you wish to go for short term or long term investment. If you wish to go for long term investment, then you can go for day trading. But there are some traders who do not wish to go for day trading as they think that this type of trading is very risky. But in reality it is not so. But if you have any doubt regarding this type of trading then you can consult some expert. You should always know that there is always some sort of risk that is associated with the Indian stock market. So, you need to be very careful when it comes to investing your money in the stock market.

Online stock market

You can also go for online stock trading where you can buy and sell stocks online. There are also online stock brokers who can assist you in investing in the right stocks. They are the persons who know where to invest your money and which stock to choose. So, it is very important to get the best broker possible. This is the main reason why it is very important that you make a good research of the broker before you hire him. This is important because this would help you to know whether the particular broker would be able to help you in your investments. You should check their past works as well. You should also try to think of your budget as well.
You need to be careful when you go for online trading. There are many websites which have come up where you can trade online. But there are some fraudulent sites that ask for the information of your credit card. Now you need to be very careful as you should never reveal your credit card details to anybody and not even to your best friend.  You never know when you would become bankrupt when your credit card information falls into the hands of a wrong person.

Never be in haste
You should always try to be patient when it comes to investing your money in the stock market. It is also important that you should not lose your heart when you happen to lose your money in the stock market. You might have seen people who lose all their hope in the stock market after getting to know that they have lost much of their money in the market. This is very wrong. Risk is always there in the stock market and you should try to face it boldly. You never know when you become rich or incur huge losses in the stock market. Nobody can predict the stock market.
So, you have got some idea how to invest in shares,right? Do make a good research on the stock market before you go for investing. This would help you give you the maximum profits from your investment.

Sensex lifeline: high beeps and pratfalls

Shares of Astra Microwave Products Ltd soared 19.31% on the back of huge volumes. There were around five-six block deals during the day. The promoter holding in the company remains low, at around 20%. Mauritius-based Strategic Venture Fund holds a 15% stake in the firm.

Peninsula Land (11.86% up)

Shares of Peninsula Land Ltd rose 11.86% after the Reserve Bank of India notified that Peninsula Land has agreed to enhance the limit for purchase of its equity shares and convertible debentures by foreign institutional investors to up to 40% of its total paid up capital.

Amtek Auto (14.32% up)

Shares of Amtek Auto jumped 14.32% to Rs182.05 on the National Stock Exchange on Friday to its highest level in almost a year after the firm said it will raise $175 million through foreign currency convertible bonds which would be listed on the Singapore Stock Exchange.

Radico Khaitan (8.29% up)

Shares of Radico Khaitan gained 8.29% on the National Stock Exchange. The stock has been in the news ever since Diageo’s talks to buy a minority stake in United Spirits Ltd broke down as the companies failed to agree on the valuation. Diageo already has a joint venture in the country with Radico Khaitan.

IFCI (11.29% up)

Shares of IFCI Ltd rose 11.29% due to a huge build-up in futures and options segment. IFCI stock future added 1.8 crore shares or 25% in open interest. The stock has been in the news after offloading nearly 4% of Tata Motor differential voting rights in a few trading sessions through the bulk deal route.

Shree Renuka (3.17% down)

Shares of Shree Renuka Sugars Ltd were down 3.17% after the government announced that the maximum holding period of refined (or imported) sugar will be reduced from three months to one month. Sugar stocks continue to remain subdued in spite of positive news for the sector.

SAIL (2.62% up)

Shares of Steel Authority of India Ltd (SAIL) gained 2.62% after domestic sales in August rose 20% to 1.1 million from a year ago on the back of a 30% jump in sales of special steel. The company has raised prices on flat products by Rs1,500 a tonne beginning September.

Maytas Infra (5.02% up)

Shares of Maytas Infra Ltd gained 5.02% on the National Stock Exchange on Friday. The stock has been in the news ever since Infrastructure Leasing and Financial Services Ltd offered to buy Maytas Infra shares at Rs112.8 each. The offer will start on 24 October and end on 12 November.

Jaiprakash Associates, IDFC to be included in CNX Nifty index

Infrastructure firm Jaiprakash Associates and core sector financier Infrastructure Development Finance Co (IDFC) are on their way to join the Nifty-50 club, the National Stock Exchange said on Friday.

The two companies will be replacing of aluminium major Nalco and telecom service provider Tata Communications, which are on their way out, it added.

The changes will come into effect from 20 October 2009 NSE said in a statement.

Further, Bajaj Auto, Crompton Greaves, United Phosphorous Indiabulls Real Estate, Zee Entertainment, Colgate Palmolive (India) and Federal Bank would join CNX Nifty Junior index.

The scrips which would be exiting the CNX Nifty Junior index include Jaiprakash Associates, IDFC, Vijaya Bank, Chennai Petroleum Corporation Ltd (CPCL), Apollo Tyres, Raymond, and Wockhardt, also with effect from 20 October.

Stocks like Bajaj Auto, Crompton Greaves, Indiabulls Real Estate, United Phosphorous, Zee Entertainment, Federal Bank and Colgate Palmolive would also be taken in CNX 100 index.

Nalco, Tata Comm, Vijaya Bank, CPCL, Apollo Tyres, Raymond and Wockhardt would be excluded from CNX 100 index as well, the statement said.

The CNX midcap index would see the inclusion of stocks like Zee Entertainment, Aditya Birla Nuvo, Torrent Power and Tech Mahindra, these will be taking the place of Parsvnath Developer, Sobha Developers, Gammon India and Bombay Dyeing.

Further, Tulip Telecom would be included and Hexaware Technologies would be excluded from CNX IT index, the NSE said in a release.

FMCG major Emami would be included while Radico Khaitan would be excluded from CNX FMCG index. Reliance Power would replace Financial Technologies (India) in the CNX Service Sector index, the statement said.

Further, companies including United Breweries, IFCI, PTC India, Ispat Industries, KEC International, Great Offshore, Gujarat State Petronet, Yes Bank, Everest Kanto Cylinder and Redington (India) would be included in S&P CNX 500 index.

While, companies like Uttam Sugar Mills, Lumax Industries, Honda Siel Power Products and Chettinad Cement Corporation would be excluded from CNX 500 index, the statement added.

Corporation Bank would replace by Allahabad Bank from PSU Bank index.

Further, Peninsula Land would be included in place of Orbit Corporation with effect from October 20, 2009.

Markets | Nomura gets primary dealer licence from RBI

The Reserve Bank of India (RBI) on Friday issued a primary dealer licence to Nomura Fixed Income Securities Pvt. Ltd. Primary dealers buy and sell government bonds, and also must pick up any unsold bonds at a government auction.

Nomura applied for the licence early this year, according to Pankaj Vaish, India head of equities and fixed income for the group. The team that will be handling this primary dealership business will mostly be from the former Lehman Brothers’ primary dealer business that Nomura acquired in October 2008.

Separately, Nomura Funds Ireland Public Ltd bought a 1.5% stake in Radico Khaitan Ltd, India’s second largest liquor maker, on Thursday. Nomura bought 1.5 million shares at Rs104 apiece, data from the National Stock Exchange showed.

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NTPC follow-on issue likely after Oil India IPO

New Delhi: The government is likely to float NTPC Ltd’s follow-on public offer after Oil India Ltd’s initial public offering (IPO), a finance ministry official said on Friday

Oil India’s IPO opens on Monday and closes on Thursday.

“NTPC follow-on issue should follow Oil India’s IPO. IPOs of the state-owned companies will hit the market thereafter,” the official said.

— Newswire18

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IIFCL to raise Rs3,000 cr through bonds by March

Kolkata: State-owned lender India Infrastructure Finance Co. Ltd will raise Rs3,000 crore from the domestic market through bonds by March, chairman and managing director S.S. Kohli said on Friday.

The infrastructure financing firm will sign a loan agreement of $700 million (around Rs3,400 crore) with the Asian Development Bank next month, Kohli added.

— Newswire18 and PTI

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DSE says trading to commence in October

Mumbai:Delhi Stock Exchange Ltd (DSE), which has received 110 applications from brokers under its deposit-based membership scheme, expects to restart trading in October, the exchange said in a release.

DSE executive director H. S. Sidhu said, “We are looking to commence trading around Diwali, give or take a week. We are expecting that the membership number will cross the 150-figure mark by the launch date.” Diwali, a major Hindu festival, is scheduled for 17 October this year.

Membership to the exchange, which offers trading rights, is being offered against a non-refundable deposit of Rs5 lakh and a one-time admission fee of Rs1 lakh.

The stock exchange is also launching an amnesty scheme to revive trading in inactive stocks and encourage compliance.

MCX-SX to divest 50% stake much before deadline

MCX Stock Exchange (MCX-SX) on Friday said it would divest 50% of the stake held by the promoters “much before” the extended deadline of 15 September 2010, to meet the requirements of market regulator Sebi.

“We are confident of doing it (divestment) much before September 2010. There’s roughly 50% more to divest,” MCX-SX chairman Ashok Jha told reporters after signing an agreement with industry body Assocham to promote the SMEs.

The duo agreed to promote small and medium enterprises (SME) sector for which MCX-SX has sought an approval from the Sebi to either set up a separate segment in the bourse or establish a different stock exchange for the SMEs.

The Securities and Exchange Board of India needs MCX-SX, which went online last October and runs currency derivatives trading, to meet the divestment requirement of no single entity owning over 5% stake barring exceptions.

“Once we meet the divestment requirement of Sebi, we can start trading in interest rate futures,” Jha said, adding they would be interested in all other products also. The exchange is waiting for regulatory approvals to start equity trading.

The exchange’s promoters, Financial Technologies (India) Ltd and commodity bourse Multi Commodity Exchange (MCX), have already divested 30% stake in the stock exchange to various public and private banks and institutions, he said.

The deadline to get more investors for India’s third largest national level exchange earlier was September 2009 which they failed to meet due to market conditions. “We did not divest because the capital market was in deep turmoil,” Jha said.

As per Sebi norms, no single entity can hold over 5% in an exchange barring some like stock exchanges and banking organisations that can hold up to 15% stake.

After meeting the divestment requirement, the exchange’s promoters are likely to jointly hold 20% stake.

Financial Technologies is expected to hold 5% stake and parent company-cum-commodity bourse MCX is likely to hold 15% stake in MCX-SX.

Global stocks rally--too much too soon?

Global stock markets may have rallied too far too fast over the last five months as they bounce back from a panic plunge provoked by the collapse of Lehman Brothers Holdings Inc. a year ago, analysts warn.

Leading markets climbed back from the depths in March and April, and then in July and August rallied strongly again, recovering much of the ground lost over 12 months. But in the last few days they have faltered because of doubts about the underlying dynamics of signs that leading economies are pulling out of recession.

On Wall Street, losses since Lehman Brothers collapsed have been reduced to 18%, in London to 10%, Tokyo 16% and Paris 15%. Shanghai’s main stock index has jumped by 37%.

The head of share portfolio management at Groupama Asset Management in Paris, Romain Boscher, commented: “The good news is that things are on the move again.

“The bad side is that this is not on a solid basis. The economy is emerging from its torpor, but this is still very financial without extension to the labour market or industry.”