Saturday, May 18, 2013

Weekly Review - 20.05.2013

Dear All,

Standard & Poor's reiterated its negative outlook on India's credit rating, which is one notch above "junk", warning of the need to follow through on reforms and dealing a blow to a government that had recently pitched for an upgrade.

S&P's statement came as Finance Minister P. Chidambaram was in Paris to sell investors on India, part of a road show series that in recent months has taken him to New York, Singapore, Tokyo, London, Hong Kong, Frankfurt, Ottawa, and Toronto.

"We have indicated compared to one year ago, there (is) some easing of the pressure towards the downgrade of the rating," S&P credit analyst Takahira Ogawa said on a conference call on Friday.

"But nonetheless there is still more than one-third of chance for downgrade unless we see significant improvement of the factors that we mentioned," he said.

India's benchmark 10-year yield rose 4 basis points to 7.41 percent from levels before S&P issued a statement affirming the BBB- rating and negative outlook. The yield closed at 7.39 percent on Thursday.

Since taking office in July, Chidambaram has pushed a series of reforms aimed at shoring up government finances and reviving investor confidence in an economy that grew at just 5 percent in the fiscal year that ended in March, its worst in a decade.

However, the most recent parliamentary session ended early amid heated political acrimony over recent corruption scandals, stranding several pieces of legislation including a land reform bill.

Chidambaram has said he will stick to a budgeted fiscal deficit target of 4.8 percent of gross domestic product in the fiscal year ending March 2014 after being able to trim the deficit to around 5 percent in the previous fiscal year.

"We may revise the outlook to stable if the government carries through with its plans to unleash public and private investments (for example, by enacting the land acquisition bill), to implement a nationwide government sales tax, or to further trim fuel and fertilizer subsidies," S&P said.

S&P and its rival Fitch had cut their outlook on India to negative last year, warning the country of a possible rating downgrade to "junk" on worsening public finances, a slowing economy and persistent political gridlock in New Delhi.

In an April 25 meeting with S&P, Indian officials argued the outlook should be changed, and the country deserved an upgrade for actions taken by Prime Minister Manmohan Singh's government to put finances in order and bolster investor confidence.

"S&P's warning of downgrading India to junk status has come as a surprise. At this juncture when signs of improvement are on the horizon, there is a high likeliness that the problems would soon be tackled," industry chamber Ficci said.

Another leading chamber CII said the negative outlook affirmation by S&P for India's BBB-status is "unfortunate".

Within hours the finance ministry stormed into action with chief economic adviser Raghuram Rajan challenging S&P's assessment. "It is disappointing that S&P has not seen it fit to improve its outlook for India, especially given that it acknowledges the important steps taken by the Indian government in recent months. International institutional investors, who have invested over $17 billion into India so far this year, do seem to have a different view. The government will continue to do what is necessary to keep India on a stable, sustainable, and strengthening growth path," Rajan said.

So is India in Trouble again ??? So what my Happen if S&P Downgrades India :-

So Lets move to technicals ..

>>> Nifty - Monthly <<<

>>>Click the chart to see on full screen <<<

Monthly Chart for Nifty looks very scary - as Macd on its all time low while Price moving to new High like a Tripple Top ????
>>>> NIFTY - Daily <<<<

>>>Click the chart to see on full screen <<<

No Major change in Daily chart, after the break out Nifty still on its way up. But notable things here are Macd and Rsi struggling to move along with Price as it usually happens in the last leg of upmove. Only thing to wait is to look for a meaning full move in coming days neither down or upper side.

>>>> NIFTY - HOURLY <<<<

>>>Click the chart to see on full screen <<<

Cross above 6198 should lead to 6250 - Friday consolidation suggest that sub wave (iv) completed at 6146 and move up till 6198. Now above 6198 should target for 6250 and 6326.

>>> SBIN - Update <<<
>>> As given on Last weekly Review <<<
>>>Click the chart to see on full screen <<<

>>> Happened and Yet to <<<
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All explanations on chart.

>>> Performance <<<

>>>Click the image to see on full screen <<<