A welcome step of RBI in CRR

Reserve Bank of India (RBI) has taken an important step by cutting the cash reserve ratio (CRR) by 0.5% at 5.5%. Cash reserve ratio is a parameter set by RBI for any commercial bank of the country, which indicates the minimum cash any commercial bank must hold. It normally represents the physical cash a bank hold in its bank vault. And at the same time there is no change with the repo rate. It still remains at its original 8.5% stage.

A repo rate is the rate of interest at which RBI lends fund to other banks which is 8.5% and the reserve repo rate is that rate of interest at which RBI borrows money from other commercial banks which is also remain unchanged at 7.5 %.

So a reduction in this CRR rate will enables Rs 32,000 crore flow to the economy or in other words to the market which the banks have to kept as per RBI’s regulation. So this flow will definitely hike the liquidity which was very much awaited.

We can easily notice the positive impact of Tuesday’s announcement by RBI governor D Subbarao on the stock market. The sensex and nifty, two major benchmarks of bse nse of indian stock exchange running with a hike. sensex register a jump of250 points and doing above 17,000 mark similarly with a rise of 80 points nifty is above 5,100 mark.

Regarding the GDP growth rate forecast for the year 2011-12 RBI intends a lower growth rate of 7% rather than 7.6% and tries to barricade the inflation first.

Today 6% CRR is reduced to 5.5% will effect from this January 28, 2012 which was hiked 13 times since March 2010 is definitely a welcome step from the market point of view.

SGX Nifty and its magnitude

SGX Nifty stands for Singapore Exchange Nifty, which is one of the leading exchanges of Asian continents. In todays global village every stock market is some or other way related with each other. As import export is an important section of any economy and every country is becoming more and more liberal for its foreign investors.

Through sgx nifty the international investors of Singapore can invest in bse nse of Indian stock market as sensex and nifty provides these opportunity.

As per the Prime Meridian at Greenwich, England  GMT Singapore is about 2hr 30 minutes ahead of Indian standard time so Indian investors are showing interest in sgx nifty  to reach a more accurate speculation on our market. One more thing that affects interestingly is, in Singapore exchange one can trade for 24 hours in all the seven days of a week so when the Indian markets are close sgx nifty can affect Indian indices, which can change its graph. in other words if there is a hike in Singapore exchange then Indian indices will hike and vice versa, so getting these information like how the Indian market will open before the opening of the market works as a warm up session for the intraday stocks investors.

As Singapore and India are in the same continent so definitely it will have an impact on each other’s market. As Singapore dollar is more valuable than Indian rupee so some Indians investors want to invest in Singapore exchange related to tax issues and according to Singapore governments rule one can invest up to USD 200,000 which is really a good option for Indian investor’s point of view.

Intraday tips can make you independent

Heard about something or having a little idea about that and experiencing that, there is really a hell and heaven difference, for an instance if I never drive a car but having knowledge about some driving skills and one day I got a chance to drive a car then definitely there will be a huge difference between those two experiences. Your confidence may not support you on the real road so generally what happens we need a trainer or a guide to start any kind of new journey and the most important thing is  we need a regular support from that guide till the confidence level achieved  about that new track. The situation is all same in every aspect of life.

If it is a question of investment of our hard earned money then the situation will automatically sensitive and we should be more careful. As we all know that share market is a place where making highest profit is possible at the same time a huge loss also can threaten you. So going in a new perilous way without a guide can be dangerous. In this kind of situation a stock broker firm can provide us required safety with their intraday free tips in intraday trading.

As your stock broker firm knows you personally about your investment capacity, your requirement and expectations so they can provide you perfect intraday trading tips on which you can relay, although it is necessary to do personal research comparing with the tips so that you can earn your confidence in long run, which will give you profit and you will be independent.

Equity derivative and nifty futures

Equity derivative is a kind of derivative whose value is at least derived partially from one or more underlying equity securities. For better understanding we must know what exactly a derivative is, it is simply a contract between two parties that comprises certain conditions on a particular speculative amount, date like this on some underlying equity securities.

There are different types of equity derivatives available in the stock exchanges like ‘futures’, ‘options’, ‘convertible bonds’ etc .

National Stock Exchange (NSE) which is a major stock exchange of India, launched its derivative sector in the year 2000. ‘Futures’ and ‘options’ are the most renowned segments of nse’s equity derivative part.NSE which is the 9th most powerful stock exchange in the world can provide you a good number of trading options under its equity derivative segment,  Nifty Midcap 50 index, S&P CNX Nifty Index, Bank Nifty are some of the example of those trading options.

The National Stock Exchange or nseindia presently offers trading on  9 major indices and 226 securities  for its Futures and Option segment.

stock futures is exactly a contract between the two parties for buy or sell of some asset in coming future. The contract includes generally details of the asset, date and the speculative price for the future.

stock futures segment is may be risky or safe depending how good you are in speculating and on what basis you do this if every thing will run according to you then for sure you are going to gain a very good margin or else you may have to face a heavy loss.

SENSEX AND NIFTY Fundamentals

Sensex Nifty these words becomes very common in the current world, though these words enfold certain commercial technical meanings than also nobody could say a 100 percent ignorance of these terms. So what is exactly Sensex and Nifty?

The exact answer will be ‘ Index’ then what is index?

Index can be defined as a parameter or a scoreboard from which we can know about its performance.

Sensex is the index of BSE. Similarly Nifty is the index of NSE. Both BSE NSE are the front liner stock exchanges of India. Both are situated in the capital city Mumbai. Bombay Stock Exchange or  BSE India is older than National Stock Exchange or  NSE India. BSE is not only older than NSE but also considered as the oldest stock market in Asia.

BSE’s major 30 stocks forms sensex. Sensex is also known as BSE30.If stock exchange news says sensex goes up, it means on an average these 30 stocks performance is good. So in other words sensex is not representing any individual stock position rather the average of all the 30 stocks it includes. So from the sensex we can contemplate the entire bse’s performance.

Similarly nifty includes the major 50 stocks of NSE. S&P CNX Nifty are the indices of NSE and managed by India Index Services and Products Ltd. (IISL), a joint venture between NSE and CRISIL. As nifty includes its major 50 stocks of 24 economic sectors so from nifty index we can consider the nse’s performance.

Although the head quarter offices are in Mumbai but both sensex and nifty have their branches in all over India and from any where you can do your work online. Apart from NSE and BSE there are also many other stock exchanges are present in India.

ABC of Share Market

In todays materialistic world, if you want to lead a real good life style then you need to know about smart investments, where you can earn a good return to fulfill your requirements. Whether you are in a job or running a small business or a house wife also, you just need to gather knowledge and you are ready for this smart investments or we can say investment in share trading

What is the fundamental idea, on which share market stands?
 

• It is a wonderful concept, which is equally beneficial for the introducer as well as the shareholders.
• Both can make money from the market.
• Both are free to set their own limits.

How all this become possible?

To stand or to run or to accelerate any business, money is required and this is the best platform to generate money, what happens actually any share market listed company can sell its share to the public and can raise its fund by this. In this way company's aim is fulfilled then the next major question is -

why public will buy its share, what is the point?

The point is, they can also make money, once you will purchase any company's share you become automatically its shareholder who can enjoy its share from the company's profit like a silent partner. You don't have to do any thing expect investing the money and most important thing is you can sell your share online any time you want in the stock market and absolutely ready for the next investment with some other company who you think can give you better return.

These simple fundamentals and great flexibility brings the boom for the share market.

Can IPO bring you great profit

IPO stands for initial public offer is comes under the Primary market, where private companies (small or large), governments or public sector units can introduce their securities for the first time. It is also known as new issue market or NIM.

IPO is the best medium to raise funds for the introducer for anything like for expansion or for the betterment of the existing one or for any new and strong upcoming projects etc.

When a company decides to go to the public to raise fund then the next important thing to decide at what price structure (means the lowest and highest price range) the IPO should introduce for biding within a certain period of time, and this process comes under book building. The main criteria behind this is to gain money as much as possible.

The most important thing during bidding is the duration of days and the quote which can’t be less than the floor price, by the eligible participants according to the exchange list prepared by the book runner.

As today’s flexible share market can allow any corporate sector to issue IPO, so every day you will have some or other company’s IPO introduced in the primary market. So it is not that easy to choose the best IPO. It becomes more difficult as we have less information about that related company as this is new to the trading market.

There are also some other things about which one should careful before invest in IPOs, the price can change rapidly may be due to the insider holdings. The company can set a minimum period of holding the share for its inside share holders and after the expiration of  that holding period the urge to gain profit made the inside share holders to sell their shares and this increases the supply chain instantly means a huge number of shares is waiting for another holders and that leads a sudden fall in the share price.

So a thorough investigation and knowledge can convert your investment into a huge profit.

Finally a Smile for Gold Consumers

India is a country of great cultural value and gold is such a metal which includes close relation with its tradition, culture and belief. So the fascination for this metal is rich as it was in old age.

Statistics shows that consumption of gold increased about 7-8 times within the last three decade. The demand as well as world stock market condition hike the price to extreme than also the belief system works and the market runs smoothly.

By taking all these conditions into consideration the govt. has taken the right step with the BIS 1986 Act to stop some antisocial organs related to adulteration of gold with other metals, decrease the purity of gold to gain their own benefit.

The amendment approves the proposal of compulsory hallmarking of gold. No doubt this is a very good step taken by the government. Now hallmarking will be done according to the criteria set by the BIS stands for Bureau of Indian Standards.

Hallmarking of gold means providing the purity certification so that if you purchase a 22 carat gold means it will be a 22carat gold for sure, so some unprincipled persons were not providing the hallmarking certificate with some negative intention as hallmarking was not compulsion.

Ministry of consumer affairs will investigate if any complain will register related to this new amendment for compulsion of hallmarking of gold as it was done for 77 another products.

This amendment will also help to control the unauthorized surplus of gold with in the country, whether it may be between two businessmen or directly with the consumers. However this amendment will hopefully brings at least the purity confidence for the consumers.

Tips on equity market

What is equity market?

Trading market can be divided in to two parts primary and secondary market. As its name says initially companies present their shares in the primary market and then it get listed for stock or equity in the secondary market.

The possibility of earning the maximum profit than any other investment always attracts the buyers towards equity market. Once you buy a share of any company you become the shareholder and in long run with the company’s progress you can easily book your profit.

What are the risk factors of share market?

If without analysis you set your financial goal in equity market then it is definitely risky. So a detail study is necessary like company’s main source of income, its expansion planning, upcoming projects, its liabilities etc. You have to go through in detail about the growth chat of that company. These are some factors on which a company can extend its control by performing well. This is only a part of the analysis, the other part includes things like natural disaster, governments subsidy schemes, international relation with other countries (related to border and financial issues) etc. these are the parts where you need to be very careful because this is not the only question about the company, it includes the entire country, anyway if a company maintains its consistency then in long run everything will be ok.

Points for final consideration

There are certain points on which an investor should pay focus

1.    About your broker – whether registered under SEBI or not

2.    Be careful about rumours

3.    Always calculate the risk and prepare accordingly

4.    Never go beyond your set limit.

If you follow these simple steps then definitely you can minimise the risk and win the profit.

5 Tips – To Win Stock Market

Every game has certain rules, if you want to master a game then you should have the Capability of not just follow but can play with its rules. What I mean to say that, if you want to enter into the stock market and you don’t know the meaning of the technical terms of this field then you are going to face little difficulty. So first of all before invest your money 1. Try to gain knowledge about its language.

Once you know the language you can easily understand the scoring system of the game like, by following the Index you can know where the market is going, 2. According to the graph.

If you really want to search then there is hardly something about a company which you are not going to get by this knowledge you can judge a company’s movement.  If you think, the company is going to make good profit then this can be your selected sector and your selected company and more over you know 3.why you want to invest in this company.

If you are ready to invest then next most important step is to finalize the time frame means 4.are you a long term or short term investor this is really important because 

If you opt for short term then you should have a close eye on your stock, always be careful on two things that always follow the stop loss and don’t wait once your target is achieved.

In case of long term the risk is always less if you go smartly although there is always a market risk but these good returns attracts from a long time if you will be little careful then this stock market can give you good result, some safe investments for long term like mutual funds, gold, real estate etc. are really good options.

Now it’s time to give great strength to your portfolio, 5. By making a good combination just like a balanced diet by which your investment and payment mode will be always fit and healthy. Instead slab will stand more strongly, and you can easily achieve your target.