Reliance unveils the “Next Big Idea”

Company set to explore Indian Consumption Story

Reliance Industries finally announced its mega foray into the Retail world. Calling retailing "the next big idea" in the company's plans, Reliance chairman Mukesh Ambani said the petrochemicals giant would set up a 100 per cent owned subsidiary, Reliance Retail, to "spearhead this revolution."

The company will initially infuse Rs.10000 Crore into the retail setup and gradually increase it to Rs. 25000 Crore. Reliance Retail would have a footprint in 1,500 cities and towns through convenience stores, supermarkets, speciality stores, and hypermarkets; and will create 10 lakh jobs. The company would partner farmers, logistics operators, small shopkeepers and traders in this initiative.

Reliance could emerge as the biggest single player in India's burgeoning retail market. The spending power of its estimated 300 million strong middle class has been on the rise, making the sector increasingly attractive to domestic and foreign investors. India's retail market is estimated to be worth around $200 billion but it is still hugely fragmented, with organised retail outlets comprising just two percent of the sector. Reliance entry in this segment is set to change the dynamics in this sector. Read More!

77 scrips moved to T2T segment

NSE has vide its circular dated 26th June,2006 moved 77 stocks from rolling segment to Trade for Trade segment. This has been done as a part of regular market surveillance and to with a view to curb speculative activities in stocks.

The effect of this movement is that such stocks would have restrictions on trading and would be settled on trade to trade basis. This means Investor will be required to take delivery of shares. Investors would not be allowed to net off trades in such stocks. These stocks will have 5% circuit limits.
Few notable stocks in the list of stocks are FourSoft, Williamson Tea. Madras Fertilisers, Mysore cement, Mid-day Multimedia, Piramyd retail, Provogue, Shringar Cinema, SSI Ltd and Usha Martin.

List of Stocks moved to T2T Segment Read More!

Where will the markets go from here ?

Pessimism rules, Volatility to continue with downward bias

It's more than 10 days since the blog has taken note of the market scenario. However, I have been sounding investors through my replies in the comment section. Nothing much has changed since then. Markets are tumbling each day and every effort to pull back is thwarted by the stronger selling pressure. Mutual funds too have joined the selling bandwagon due to redemption pressures.

How the immediate future looks like ?
It's a million dollar question and actually, nobody has a definite answer to it. At the best one can give his or her perspective based on experiences. However, lets try to find a reasonably accepted answer to the above question.

Global cues would remain on forefront
Yes, due to timing differences the other Asian markets open before the Indian markets and then a follow up process begins. Indian markets are , to a large extent, mirroring the global downtrend in the emerging markets. I sometimes wonder why can't 'we' set an example and make the global markets follow us instead of we following them?? Ever thought about it !!!

US Interest Rate hike on the cards
This is another alarm bell for the emerging markets including India. A rise in interest rates in US makes the emerging markets less attractive for FII's from risk reward ratio. News are alive that we may witness another round of rate hikes by UD Fed.

Back home, the same story
Why to blame US only for all wrongdoings, the interest rates are set to harden in our own country. RBI has given clear indications that interest rate would rule hard in the time to come.
This will adversely impact both investors as well as corporate.

Quarterly Results, The Silver Lining !
Yes, here is a catch. A good set of numbers by Corporate India may make the days brighter on the bourses and remove the clouds of pessimism which is hovering large on the investors mind.
A good set of numbers may prove to be stepping stone in moving towards value based buying in stock markets. So keep watch on the quarterly results and hook along the winners!

From above clues, it looks like that the coming days would be tough for the markets as it struggles through lot of external factors and it would a challenge for the markets to sustain the rallies in course of volatile trading. No doubt that fundamentals are intact and will definitely take the markets higher in long term. However, the next stage for markets would be to consolidate itself and stabilize at certain levels. This would be a Key factor for markets to revive itself from the shocks it has suffered in the month of May and June.

The suggestion for investors is to keep a close watch on markets and keep accumulating good stocks in small quantities at every fall. Don't wait for the markets to bottom out as you never know when they would. Avoid over exposure to midcaps and ignore small caps till markets shows clear signs of recovery. One can also look at good dividend yield stocks as they offer hedge against high volatility. Read More!