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Brace for a choppy FY18, earnings growth key
The current financial year has been good for Indian equity markets that surged nearly 17 per cent, with the Nifty50 index hitting its 52-week high of 9,218 during this period. While investors hope the momentum will be carried into the next financial year, 2017-18 (FY18), experts say the implementation of the goods and services tax (GST) from July 1, among other factors, will be the key to how the markets react. Experts, however, expect the markets to be choppy or range-bound in FY18, at least in the first half.

Risk from dollar's drop may not be what you thought
A high-risk corner of the $5.1 trillion-a-day currency market has become the collateral damage of the dollar selloff. Whipsawed by the greenback and confronted by US policy confusion, carry trades were supposed to be a rare bright spot for investors who want to stay away from the world's biggest reserve currency . Under the strategy, you borrow in low-rate alternatives such as the yen, and buy high-yielding peers like the Mexican peso, benefiting from low volatility

What the gold-to-oil ratio may be saying about Indian stocks
Okay, no one is asking you to actually empty your bank locker, make a hurried trip to the jeweler and drive home a tanker full of Brent. But calculating the gold-to-oil ratio is an exercise that analysts over the years have found useful in predicting the behaviour of stock markets.

Why a poor monsoon doesn’t spell doom for Indian markets
Factors such as better irrigation, shifting to crops requiring less water, better-yielding seeds, adoption of technology and higher soft commodity prices have contributed in cushioning the impact of poor monsoon.

Dollar may hold key to stock price movement
Wondering whether the stock market will move higher in the days to come? You can turn your attention towards the US dollar to arrive at an answer. The dollar’s movement appears to wield a big influence on Indian stocks. An analysis of the long-term movement of the Nifty 50 and the dollar index (which captures the movement of the dollar against the euro, pound, yen, Canadian dollar, Swedish Krona and Swiss franc) shows that Indian stocks are highly sensitive to dollar movement.

FY18 starts with big earnings cut
Earnings’ downgrades have become a regular feature in Indian stock markets. However, the infection that caught India Inc about three years earlier is now manifesting into a disease. If FY14-17 estimates were marked by a 10-27 per cent earnings’ downgrade, 2017-18 (starting April 1) begins with a 40 per cent downgrade in earnings estimates for Nifty companies. This is the highest in the past four years. The consensus in a Bloomberg poll, pegs Nifty companies’ earnings per share (EPS) at Rs 526.4 in FY18. Two years earlier, the EPS forecast was Rs 739.7.

India remains a hot favourite among foreign investors
With the Assembly elections behind it, the market is preparing for the results season. Jigar Shah, chief executive officer, Maybank Kim Eng Securities, in an interview to Puneet Wadhwa says he expects the earnings for 2016-17 to rise by 3-5 per cent, and for 2017-18 by about 9-10 per cent.

A bleaker FY17 for banks
While balance sheets do not seem to warrant current valuations, analysts say if a concrete plan for bad loan resolution emerges, corporate lenders could be re-rated

As Trump trade fades, investors reverse course
The Trump trade is over. Get ready for “Trump Lite.” Developing doubt about the U.S. administration’s ability to deliver on its pro-growth policy agenda—at least any time soon—has upended a strategy that had been a winner since November’s U.S. election: sell bonds, buy the U.S. dollar and pick up cheap stocks that might benefit from improved U.S. growth.

Beware! There is a quiet bear market in bonds despite the rally
Don't be fooled by the surprising rally in bonds after the US Federal Reserve raised interest rates and signaled that at least two more increases are likely to happen before the year is over. The quiet bear market that has been under way since yields bottomed in mid2016, is alive and well.

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