During the week sensex rose by 1.73%
S.Saravanan
I Believe in Keeping things Simple
Friday, 11 November 2022
This week in stock market
Saturday, 25 June 2022
This week in stock market
Stock Market index moved up 2% this week indicating some turnaround for stocks,
This was primarily due to softening of oil prices to $ 106 levels. Concerns still remain on inflation and increase in US Interest rates.
Coming week in stock markets will be quite volatile and we can expect a lower finish of sensex in next week
Friday, 24 June 2022
Flight of Foreign Portfolio Investors (FPI)
Till todate, Foreign Portfolio Investors (FPI) have pulled out Rs.212,966 crores from stock markets in 2022
Source : SEBI / NSDL
This pull off by FPI is one of the major reason for fall in stock market by 14% in 2022
Movement of stock market in 2022
What has triggered this pull off by FPI from Indian stock markets?
- Inflation in USA and subsequent interest rate hikes (total 1.5% in 2022), triggered flight of capital from emerging markets to USA. This resulted in FPIs pulling out funds from India to USA
- Anticipation of further rate increases by USA also made FPI pull out money from India.
- Depreciation of Rupee by 5% in 2022 is triggering FPI outflow as they find it more attractive to invest in USD than in INR
Will stock market continue to decrease?
Markets will be volatile in the short term considering the economic situation currently. It is best to stay invested and continue with Systematic Investments to reap long term benefits as markets will re-bound once economy recovers (time frame 1 to 2 years).
Thursday, 23 June 2022
5% drop in Rupee in 2022
Rupee has dropped 5% in 2022 in comparison to US Dollar. USD vs INR was trading at 74.57 on 1st January and now it is at all time record high of 78.19.
- High Inflation in USA (8.6% as on May 2022) and consequent three times interest rate increases (0.25% in March, 0.50% in May & 0.75% in June) by US Federal Reserve has moved funds from emerging economies like India to US thereby depreciating the Rupee. The high point here is further rate increase is anticipated from US Federal Reserve so Rupee will continue to be under pressure in the near future.
- Oil the largest item to be imported into India is having a bull run due to multiple factors including Ukraine war. Oil is up by 26% in 2022 currently trading at levels of $ 106 compared to $ 77 at the beginning of 2022. As per data from Petroleum Planning & Analysis Cell (PPAC) India imported oil worth of $ 120.4 Billion in 2021-22 which was 25% of all imports by India. With increased costs in 2022 it is estimated that imports for the month of April 2022 will be a whopping $ 16.2 Billion. The key point to note here is cost per MMT of oil was $ 316 in 2020-21, $ 568 in 2021-22 & $ 775 in 2022-23. This effectively means price increase between 2021-22 & 2022-23 is around 36%. This increase in import costs of oil is exerting pressure on Rupee as there is high demand for USD and USD is strengthening
- Foreign exchange reserves are currently at $ 596 Billion compared to $ 635 Billion in September 2021 signalling a drop of 10% in 8 months. This depreciation in reserves is mainly attributed to Reserve Bank of India intervening in the Rupee market and selling Dollars to curtail depreciation in Rupee. This though to a certain extend holds Rupee depreciation brings in uncertainty in minds of investors and impacting the Rupee
Wednesday, 22 June 2022
Oil Economics
Oil is dropping fast and WTI crude is currently trading at $103 per barrel levels. What caused this change? Is India buying more oil from Russia? The answer will be on the affirmative, India is buying more oil from Russia in 2022 as there are deep discounts offered by Russia. Commodity data from Kpler states that India imported more than 60 million barrels from Russia till now in 2022 compared to 12 million barrels in 2021.
To facilitate this purchase Indian banks will likely be joining hands with Russian banks who are not hit by sanctions to facilitate payment for purchases of oil from Russia in Indian Rupees. Setting up of payment mechanism is underway.
With China also buying higher volumes of oil from Russia global oil prices will be under stress and will drop further.
Friday, 4 March 2022
Book Review - En Sarithiram (My History) By U V Swaminatha Iyer
En Sarithiram (My History) is an autobiography written by the Tamil Scholar Dr.U V Swaminatha Iyer (1855 to 1942) who published about 100 books in ancient Tamil literature, poem, puranas, & devotional songs. It all started with him publishing the Jain kapiyam (Epic) "Seevaga Sinthamani" which was written around 10th Century by Thiruthaka Thevar. He went around collecting the old palm leaf manuscripts from various people who were holding it, complied it wrote commentary and published this epic. In similar manner with a career spanning more than 70 years he published many long lost books in Tamil and made it available to the world by going around village by village meeting people collecting palm leaf manuscripts (which were almost lost). His main publications which received great adoration are "Cilappathigaram, Manimekalai, Purananuru, Seevaga Sinthamani, Pattupattu, Ettuthokai".
In his book "En Sarithiram" he gives a beautiful view of village life near Kumbakonam in mid nineteenth century. Written in simple Tamil which can be well understood by everyone he gives a gripping account of his journey through education & professional life. The sequence of events are so well narrated that even though this book is somewhat long there is not even a dull moment.
Some interesting topics in the book.
Marriage - he describes how a traditional Tamil marriage happens in the 19th century, the simplicity, the elegance the gathering of relatives. He even comments about the extravaganza carried out in weddings in mid 20th century compared to his wedding (Ps : If he is to see weddings today I wonder what will be his comments!)
Respect for teacher - This is the ultimate lesson in this book. His respect for all his teachers especially Mahavidvan Meenakshi Sundaram Pillai is simply adorable. He gives lot of accolades to all his teachers right from his childhood.
Efforts for publication - His effort for his first publication Seevaga SInthamni is well narrated in the book. His efforts, obstacles faced, financial challenges, logistical challenges etc. He also narrates how it felt when all the hard work turned into a beautiful book.
A great man whose life was an illustrious one and needs to be studied and followed.
A must read book for all.
Balancing Act
Drop in stock markets and with oil prices not helping it either there is severe under current for all investors who are losing quite a lot of money on the markets. This is where the balancing act has to come into play.