Posts Tagged ‘stock index’

Stock Markets Reversed Early Losses, Sensex & Metal Stocks..Up :)

India’s benchmark stock index rose the most in a week, reversing earlier losses.

India’s benchmark stock index rose the most in a week, reversing earlier losses.

India’s benchmark stock index rose the most in a week, reversing earlier losses.

Sterlite Industries (India) Ltd. and Hindalco Industries Ltd. led commodity producers higher after metals prices jumped.

Sterlite, the nation’s largest copper producer jumped 3.1 percent after the price of the metal gained and the stock’s rating was lifted at Nomura Holdings Inc.

Hindalco Industries leapt 6.2 percent after aluminum soared.

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The market reversed early losses helped by metal stocks.

Also, gains in Asian and European markets boosted sentiment here.

The Bombay Stock Exchange’s Sensitive Index, or Sensex, added 92.13, or 0.6 percent, the most since Sept. 30, to 16,958.54.

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The gauge had earlier declined as much as 1.5 percent.

The S&P CNX Nifty Index on the National Stock Exchange rose 0.5 percent to 5,027.40.

The BSE 200 Index advanced 0.4 percent to 2,072.31.

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European and Asian stocks gained as higher commodities lifted metal producers, while financial shares advanced after Bank of America Merrill Lynch Global Research recommended European banks.

Europe’s Dow Jones Stoxx 600 Index gained 1.4 percent to 239.19 at 12:26 p.m. in London, while futures on the Standard & Poor’s 500 Index rose 0.8 percent.

The MSCI Asia Pacific Index advanced for the first time in four days today, adding 1.5 percent.

Overseas funds bought a net 13.7 billion rupees ($286.7 million) of Indian stocks on Oct. 1, the Securities and Exchange Board of India said.

The funds have bought 615 billion rupees of Indian stocks this year to date, compared with record net sales of 530 billion rupees for the whole of 2008.

However, Reliance Communications Ltd., India’s second-largest mobile phone operator, led declines by telecom companies on concern lower call charges will cut earnings.

“The price war can impact the revenues of telecom companies by 15 percent to 20 percent,” said Jagannadham Thunuguntla, the head of equities at SMC Capitals Ltd. in New Delhi.

Kotak Securities removed Bharti from its list of 10 most recommended stocks following yesterday’s downgrade.

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On Energy front, Oil & Natural Gas Corp., the biggest energy explorer, added 1.3 percent to 1,184.8 rupees after saying its in talks with Iran’s state-owned Petropars Ltd. to buy a stake in South Pars, the country’s largest natural gas field.

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Gold Touches a New High of Rs 16,220 per 10 gram !

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Due to the speedy buying by stockists in advance of the festival season, in the midst of the global rates climbing to an 18-month high of $ 1,018.15 an ounce, GOLD rose by Rs 250 to touch a new high of Rs 16,220 per 10 gram in the gold market.

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However, it is said that after the metal in London increased to an 18-month high, the buying action gathered momentum as stockists indulged in buying gold.

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While, the concern was that a global economic revival may strengthen inflation in the midst of a weak dollar, enhancing demand for the metal as an alternative investment.

On the other hand, gold in overseas markets advanced 10.60 dollar, or 1.1%, to 1,018.15 dollar an ounce whereas silver coins also touched a record high of Rs 31,800 per 100 pieces.

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Further, standard gold and ornaments spurted by Rs 250 each to Rs 16,220 and Rs 16,070 per 10 gram, respectively.

On the other side, sovereign increased by Rs  50 to Rs 12,950 per piece of 8 gram.

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Marketmen said the precious metal might see new peaks in the coming days once the festival and marriage season starts on September 19.

Current upsurge maybe purely out of reason of stockists buying as retailers refrained from buying gold during ‘Sharaadh’, the ongoing inauspicious fortnight in Hindu mythology.

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According to analysts, gold may climb a high level of $1,100 an ounce in the overseas market in the next six months.

Silver ready shot up by Rs 700 to Rs 26,600 per kg and weekly-based delivery by Rs 910 to Rs 27,570 per kg.

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Silver coins rose to an all-time high by gaining Rs 200 to Rs 31,700 for buying and Rs 31,800 for selling of 100 pieces.

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However in between due to the increasing investment demand with the commencement of festival and marriage season, gold imports observed a huge rise during August at 21.8 tonnes as compared to the previous month where the import of the precious metal was 7.8 tonnes this year.

This shows that India’s gold imports have trebled in a gap of one month.

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Indian Stocks Rose to a 15-Month High :)

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Indian stocks rose to a 15-month high yesterday. 🙂

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DLF Ltd led gains as investors judged recent declines as excessive. Mahindra & Mahindra Ltd climbed on a report it will make sports utility vehicles for overseas markets.

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DLF, the biggest real estate developer, jumped 5.5% after losing 10% in the previous five trading sessions.

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Mahindra & Mahindra, the largest sports utility vehicle maker, advanced 1.5%.

Sterlite Industries (India) Ltd, the No 1 copper producer, added 3.8% after metals prices climbed.

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The Bombay Stock Exchange’s Sensitive Index (Sensex), rose 240.26, or 1.5%, to 16,454.45, the highest since May 28, 2008.

The gauge declined 0.3% on Monday, snapping a six-day rally.

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“There is strong liquidity supporting the market,” Jagannadham Thunuguntla, the head of equities at SMC Capitals Ltd in New Delhi. “Yesterday’s fall has made some stocks attractive.”

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The rupee advanced against the US dollar as overseas investors added to holdings of the nation’s assets amid signs economic growth is quickening.

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The rupee climbed 0.2% to 48.655 per dollar at the 5pm close in Mumbai, according to data compiled by Bloomberg.

The currency has risen 0.4% this month.

India’s $1.2tn economy expanded 6.1% in the three months to June from a year earlier, accelerating for the first time since 2007, the government said last month.

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Are There Any Advantages of Systematic Investment In ULIPs ??

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The impact of economic recession on life insurance companies has gone unnoticed where not only premium incomes but also the employment potential of many companies has decreased.

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However, the global slowdown and resulting unpredictable stock indices have shaken public confidence in long-term financial planning and there is visible unwillingness to purchase an insurance policy and commit oneself to pay premiums regularly over a number of years.

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Moreover, the Sensex, over the last 25 years, suffered massive crashes in 1992-93, 2000-01 and 2008-09 at eight year intervals.

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However, there was no impact on the life insurance industry on earlier occasions, when the index crashed whereas till the opening of the insurance sector, the Life Insurance Corporation was marketing traditional products, considered symbols of stability and security, immune to the vagaries of the stock market.

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Moreover, the new companies that came on the scene, trying to capitalize on the stock market boom, began marketing unit linked products, ignoring traditional products.

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However, although the Sensex had crashed three times, it had advanced from just 245 in March 1984 to 9700 in March 2009, an annual growth of 16% while stock market indices tend to increase steadily under the influence of economic growth and inflation.

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Nevertheless, under the impact of speculative forces, the growth can be uneven while investors can minimize, if not eliminate, the impact of speculative forces through systematic investment in ULIPs or mutual funds.

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Moreover, under a unit linked plan, the premiums are invested in equities and the value of the units on any day moves broadly in line with the stock index on that day.

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Suppose a person had taken out a ten year policy on March 31, 1984 and paid Rs. 1,000 every year.
Ignoring all charges and the dividend income from investments, what is the gross yield he can expect by March 1994?

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Based on the changes in Sensex, the average yield will be 17.8 per cent. 🙂

If the date of commencement had been March 1985 or 1986 … or 1999, the yield to maturity at the end of ten years would have varied between 4.8 per cent and 30.3 per cent.

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And in four of the 16 cases the yield would have been negative.

The range of variation is quite wide and the chance of negative yield is 4 out of 16, or 25 per cent.

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The range will narrow down and chances of negative yield come down with increasing policy terms.

The results will be still better with quarterly or monthly modes of premium payments.

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This means that an investor in ULIPs should opt for a minimum term of 15 years and, preferably, a quarterly mode of payment.

And, having chosen a plan, he should select a fund with more than 50 per cent equity content.

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Even if the market takes a sudden plunge after the policy is taken, be not panic and allow the policy to lapse.

One should pay the next premium in time.

With a lower net asset value, he can get more units for the same premium.

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Market setbacks at the earlier stages of a policy will not significantly affect the yield to maturity.

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But any setback in the last few years before maturity can reduce it considerably.

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It is therefore advised that the policy holder should start keeping a close watch on the NAV of the relevant fund and the market indices.

If there are indications of a downtrend, he should surrender the policy and take out the cash value.

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By following the above steps one can insulate oneself, though not fully, from market fluctuations and hope to get a better return than what one can get from a traditional product.

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A lucky few may even get a very high return while the unlucky ones may end up with very low or even negative returns.

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Suppose a person had taken out a ten year policy on March 31, 1984 and paid Rs. 1,000 every year.

Ignoring all charges and the dividend income from investments, what is the gross yield he can expect by March 1994?

Based on the changes in Sensex, the average yield will be 17.8 per cent.

If the date of commencement had been March 1985 or 1986 … or 1999, the yield to maturity at the end of ten years would have varied between 4.8 per cent and 30.3 per cent.

And in four of the 16 cases the yield would have been negative.

The range of variation is quite wide and the chance of negative yield is 4 out of 16, or 25 per cent.

The range will narrow down and chances of negative yield come down with increasing policy terms.

The results will be still better with quarterly or monthly modes of premium payments.

If dividend incomes from investments and the fact that fund managers invariably outperform the market index are also taken into account, the net yield after deduction of charges may exceed the gross yield.

This means that an investor in ULIPs should opt for a minimum term of 15 years and, preferably, a quarterly mode of payment.

And, having chosen a plan, he should select a fund with more than 50 per cent equity content.

Even if the market takes a sudden plunge after the policy is taken, be not panic and allow the policy to lapse. He should pay the next premium in time. With a lower net asset value, he can get more units for the same premium.

Market setbacks at the earlier stages of a policy will not significantly affect the yield to maturity. But any setback in the last few years before maturity can reduce it considerably.

It is therefore advised that the policy holder should start keeping a close watch on the NAV of the relevant fund and the market indices. If there are indications of a downtrend, he should surrender the policy and take out the cash value.

By following the above steps one can insulate oneself, though not fully, from market fluctuations and hope to get a better return than what one can get from a traditional product.

A lucky few may even get a very high return while the unlucky ones may end up with very low or even negative returns.