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  • 5 things to know before Muhurat Trading this Diwali

    The rest of the world may still be in 2016, but by the end of this week, we will be fifty-seven years ahead. In other words, India will be celebrating Samvat 2073. And like every year, this is a good time to stop and check your progress so far. Not to mention what the future holds for investors like you.

    Here are five important things to know before you consider Muhurat trading this year:

  • Monsoon and rural consumption:

    Compared to the last two years, India received a pretty good monsoon this year. This has had a positive impact on agriculture productivity. This could propel an increase in rural consumption, according to a report by Kotak Institutional Equities. This is good news for consumer goods companies. While the demand has not really picked up for the holiday season, the trend is likely to change. This is because a good winter crop would translate to higher incomes in rural areas. This, in turn, can mean higher expenditure. As a result, experts are forecasting a robust consumption six months from now.

  • Brexit impact

    Britain’s decision to exit the European Union (EU) came as a rude shock to the entire world. This was evident from the negative reaction in both equity and currency markets across the globe. Right now, the amount of damage to the Indian markets is not yet certain. This can only be measured after the EU and UK come up with policies on trade and foreign affairs. As of now, IT companies have been marginally affected. Deals from UK and Europe have either slowed down or been put on hold. For any other impact, keep an eye out for further developments.

  • Implementation of reforms

    In the previous Samvat year, the passage of key reforms was an important factor for good returns in the market. Keeping this in mind, the government announced many reforms. Most importantly, the Parliament passed the Goods & Services Tax (GST) bill. Going forward, the implementation of these reforms holds the key for market returns. Sectors like cement, logistics, consumer durables and media are expected to benefit, as per the Kotak report. This, however, depends on whether the government focuses on the effective implementation of reforms already passed.

  • Bad loans in the Banking sector

    The Indian banking sector is an integral part of the economy. Poor results in this sector can have a huge impact on the stock markets. In the past few months, banks have been the center of focus due to the Reserve Bank of India’s (RBI’s) focus on bad loans. This resulted in a massive increase in the amount of bad loans reported in the quarterly financial results. Banks have also had to set aside a larger portion of profits in anticipation of bad loans. This is called provisioning. These increases have been a point of concern for banks as well as shareholders. After all, NPAs can severely impact the profitability of banks. However, some of these concerns have been eased by the passage of the bankruptcy law and sale of assets by various promoters to repay debts. That said, keep an eye on any further increases. This is likely to affect the performance of bank stocks.

  • FIIs in India

    In the last decade, foreign investments have played a great role in shaping our markets. However, foreign investors turned net sellers earlier this year. As a result, the Indian market saw a net outflow of Rs 19,500 crore till February 2016. This changed when the government announced its plan to reduce its fiscal deficit – the amount by when the government’s expenses exceed the income. The Budget announced a fiscal deficit target of 3.5% of the Gross Domestic Product (GDP) – a measure of India’s economy. This changed market sentiments, the Kotak report said. As a result, markets witnessed inflows to the tune of Rs 46,602 crore, as of 26 October 2016. This could improve further after the revision of the tax treaty with Mauritius. Investors might take the tax advantage and invest more before the deadline on 31 March 2017.

    • 10 stocks to buy for Samvat 2073 during Muhurat trading   Read more

    • Read about the revision of the tax treaty with Mauritius and its impact.   Read more

  • 11%

    Samvat 2072 witnessed great volatility in the stock markets. Yet, the benchmark indices are set to end the year with a 11% gain. This is despite the downslide in the markets until March 2016. Post the budget announcement, the Sensex peaked around 29,000 fueled by optimism.