Market is again a see-saw. Market opened positive to flat on mixed global cues but then we saw upside movement upto around 5110 levels and then a 90 points fall to around 5011 levels with a marginal positive close at 5056. NIFTY is very volatile with many mixed news around the trading terminal. Today COAL INDIA beats RIL market cap to achieve number one position. RIL was beaten first time ever since 2007 in Market Cap race. Inflation and Anna Hazare are the two trending topics in Indian Market. Talking about Inflation , people are seeing a ease but they are still concerned about the margins. All the companies have shown significant growth in Revenues but the margins have declined due to high interest costs and raw material costs. We may see a decrease in raw material costs as inflation ease but what about interest rates?? Will RBI stop the rate hike? People are saying that 2cd quarter will be worst hit due to high rates and low demand of manufacturing products but I feel margins will improve due to low raw material cost. Coming to Anna Hazare it has posted a new difficult to Manmohan and his team. Sudden arrest by Delhi police has made middle class people roar against the government. What will be the outcome?? We have to wait watch.. And talking about its effect on market then it surely has cascading effect as politics and government are directly related to both markets and Anna Hazare. You might think what is the next option for investment?? Seeing the new highs and increased margins in Gold you might not invest there nor in such a bearish stock market… As per my view you must investment in fixed income instruments such as Shriram City union finance issue or upcoming Muthoot Capital NCD issue.. You might think which is better??? Muthoot is better because it is offering secured debentures which will be traded on Stock exchanges and has fixed return of 12.25% for 3-5 yrs investment. Shriram City Union is also good but its unsecured. I have deeply studied the business model of Muthoot and the company has NIM of 11% which is best in industry above 4% by Shriram City Union. I had mention about RCOM FCCB conversion before a day or 2. They have came up with a deadline to sell its tower biz in next 2 months. In my opinion they are trying to cash rich themselves to meet deadline of FCCB conversion which I think is a good way. So RCOM holders bring a smile on your face J. One more burning issue is on pledged shares. If the promoters pledge his own shares to get more loan then you must exit those stocks because if he is not able to repay then you may see a downside in your investment. Technically speaking markets have acquired the bearish part. MACD and stochastics have shown the bearish mood while RSI was already in oversold zone. I recommend to sell NIFTY on rise with SL of 5390. ISPAT code has changed to JSWISPAT so please make a note of it.
NIFTY levels for 18th August:-