Nifty above 10700

Blog meant for 2 May 2018 Wednesday

Dear friends,

Nifty closed 47 points higher on Monday to close at 10739. Many of the global markets were closed today due to May 1 holiday. But, on Monday, they were all quite positive. So, depending on how Asian markets open tomorrow, our markets will trade.

Nifty is in Hold zone for short term.

The indications for individual stocks for short term only are –

DON’T BUY –  MARUTI

WAIT TO SELL – AXIS BANK

HOLD – TITAN, M&M, RELIANCE INDUSTRIES, TCS, ITC, YES BANK, INFOSYS, HDFC, ASIAN PAINT, HINDALCO, HDFC BANK, VEDANTA

WAIT TO BUY –SBI

Long term investors to invest as per their plan without any changes. Markets slowly inching towards the 11000 mark which it had touched in January. Lets see whether it reaches new highs in coming days or profit booking will take place again.

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Question of the Day – 

Just few days back, Maruti Suzuki announced a good quarterly results whereas Axis Bank announced a quarterly loss. Normally, we would expect Maruti shares to go up and Axis Bank shares to fall after announcement of results. However, the opposite happened. Maruti stocks fell and Axis Bank shares went up the next day of announcement results. Why did this happen?

Answer – 

This was an interest situation.

In Stock Markets, usually how stocks react are not based on any particular formula. It is not like Physics or Chemistry where certain things result definitely in a particular result.

Reaction to result happens based on market expectations and not only what results have been announced.

For example, Axis Bank results were as per expectations and in fact certain parts of the results meant that the coming months will be better for the company and hence markets perceived to be good news and hence the stock price went up.

On the other hand, market analysts/investors expected a higher growth in net profit for Maruti as compared to the 10% growth announced by the company. Hence, even though the net profit grew compared to previous quarter, since the expectation was higher, the markets were disappointed with the results and hence the stock price fell.

So, with respect to financial results of the company, expectations of the markets is also as important or may be more important than the actual announcement of the results.

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All the best!

Dr.Bharath Chandra and Rohan

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(The above comments are only the personal views of the authors of this blog. Please do your own research before taking any investment decisions. The reader of this blog must understand and take full responsibility for the Profit or Loss made by taking actions based on the above views)

About the author

Dr. Bharath Chandra

Hi there! This is Dr. Bharath Chandra & Rohan, International Trainers & Success Coaches. We have addressed more than a crore people on Stock Market, Personality Development, Wealth Management and Financial Planning over the past 35 years.

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