Markets In June 2016 : Movers & Shakers Of The Month (Part 2/3)

Markets In June 2016 : Movers & Shakers Of The Month (Part 2/3)

After covering Rexit, and the FDI changes which were perceived as by many as a move to blunt the hangover effects of the Central Bank Governor, Raghuram Rajan’s unexpected exit decision from his office, we now bring to you the Part 2/3 of our June 2016 monthly newsletter. Have a look at the our topic in focus:

Monsoon Onset

  • 2016’s best news for India has been the “above normal” rainfall that the IMD has predicted after two consecutive years of droughts. Rainfall, which is the lifeline for lakhs of farmers in India, has been disappointing for the past two years, is expected at 106% of the Long Period Average (LPA).
  • In India, LPA is the average of rainfall between 1951 and 2000, which is 89 cm. A “normal” monsoon is one when rainfall is between 96-104% of the LPA. An “above normal” monsoon occurs when rainfall remains between 104-110% of the LPA, which is expected in 2016.
  • Here is why India may receive high rainfall this year:
    • 1) According to a Skymetweather report, a stagnating El Nino and an evolving La Nina will be one of the reasons for excess rainfall. The increase in El Nino was the reason why our country faced repetitive droughts for two years. However, this year, El-Nino is on the decrease and La Nina is on the increase hinting better rains. Generally, La-Nina after El-Nino has great potential of excess rainfall.
    • 2) The Indian Ocean Diapole (IOD) another critical factor that impacts the monsoon is also expected to turn positive during the second half of the 2016 season.
    • 3) The third factor that is that snow formation in the Himalayas has been encouraging, which has been proven to decide the fate of monsoons in Southeast Asian countries.

This will enable agriculture and allied activities to grow at an expected 1.1% in FY16 against of (-ve) 0.2% in the previous year. Higher farm sector growth would push up India's overall economic growth, officially pegged at 7-7.75% (unofficially at 8.1%) in the current financial year against 7.6% in FY16.

For an economy like India, a good monsoon holds the key to uptick in the rural demand. A good monsoon will trigger high rural wage growth and spark off rural spending, which will in turn mark earnings recoveries in many of the Indian companies. This also gives more money to the farmers and keeps the inflation in check by increasing supply of food articles, thereby calming the increasing food prices. In a nutshell, keeping inflation in check also raises the expectation for another interest rate cut by the RBI.

  • Here are some of the sectors that are expected to benefit from a good monsoon:
    • 1) Two wheelers (Almost All Automobiles)
    • 2) FMCGs
    • 3) Consumer Durables
    • 4) NBFCs
    • 5) Fertilizers (All Agri-Related segments)
    • 6) Irrigation

This time, the southwest monsoon in Kerala arrived almost a week late on June 8. Last month saw the country as a whole received an area-weighted rainfall of 145.4 mm, which was 11.1% below the "normal" LPA of 163.6 mm for June.

But there has been a huge turnaround in the last few days, so much so that the Met Department’s data now reveals a cumulative rainfall from June 1 to July 6 at 218.2 mm, which is a surplus of 1.3% over the LPA of 215.3 mm for this period.

Stay tuned for the Part 3/3 which will be covering the "Fed Rate Hike Impact On India", "The Market Performance" & "Concluding Thoughts On Our Stock Market" after the events in June 2016.

16 comments: Markets In June 2016 : Movers & Shakers Of The Month (Part 2/3)

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  • ahmad        
    A.k.koul
    jul 11,2016 at 09:07 - Reply

    Due to above average mansson in this year stocks belonging to sector like automobile , FMGC , consumer durables ,fertilisers and irrigation n farm machinery products look bright. Companies with good track record in these sectors need to be bought at dips.

    • ahmad        
      Team StockAxis
      jul 12,2016 at 07:45

      Hello Mr. Koul,

      Thank you for showing interest in our services. Our advisor will get in touch with you shortly for the same.

      Happy Investing!

    • ahmad        
      A.k.koul
      jul 12,2016 at 06:58

      what are the minimum chages for ur paid services. how can your services help small capital investors whose capital are small , say upto 1 lakh rupes only.

    • ahmad        
      Team StockAxis
      jul 12,2016 at 12:06

      Hello Mr. Koul,

      Yes, exactly. Like mentioned in the newsletter and by yourself,

      1) Two wheelers (Almost All Automobiles)
      2) FMCGs
      3) Consumer Durables
      4) NBFCs
      5) Fertilizers (All Agri-Related segments)
      6) Irrigation

      are expected to perform positively in the coming quarters.

      We would also like to mention that Mahindra & Mahindra Fin. Services Ltd., one of our PAID recommendations, whose price rise is largely attributed to the expected monsoons, has given more than 70-72% returns to our PAID CLIENTS w.r.t its current price of Rs. 364.

      Do let us know in case you would like to know more about our services or have any queries related to the stock market, we'll be happy to assist you.

      Happy Investing!

  • ahmad        
    Maniah kumar
    jul 11,2016 at 02:44 - Reply

    Hiii

    • ahmad        
      Team StockAxis
      jul 11,2016 at 03:06

      Hello Maniah Kumar,

      How can we help you?

  • ahmad        
    RABINDRA SAHU
    jul 11,2016 at 12:20 - Reply

    informative article!

  • ahmad        
    vasant pilke
    jul 11,2016 at 11:51 - Reply

    Very good info.but advise stock also. Thanks

    • ahmad        
      Team StockAxis
      jul 11,2016 at 12:52

      Hello Mr. Vasant,

      We are happy to see that you found the newsletter useful. And yes, we can definitely assist you with your request. Our advisor will get in touch with you shortly. Also, dont forget to read, Everything You Need To Know About The Indian Retail Industry (click here). We would love your feedback!

      Happy Investing.

  • ahmad        
    BHARAT SONGIRKAR
    jul 11,2016 at 11:07 - Reply

    VERY GOOD A VERY USEFUL INFORMATION AND BENEFICIAL TO ALL INVESTORS. BUT SIMALTENIASLLY SUGGEST SOME STOCKS ALSO RELATED TO THESE SECTORS

  • ahmad        
    Himanshu Hingu
    jul 09,2016 at 11:32 - Reply

    That's good news but what specifically stock for buy right now

    • ahmad        
      Team StockAxis
      jul 11,2016 at 01:14

      Hello Mr. Himanshu,

      As mentioned in the newsletter, here are some of the sectors that are expected to benefit from a good monsoon:
      1) Two wheelers (Almost All Automobiles)
      2) FMCGs
      3) Consumer Durables
      4) NBFCs
      5) Fertilizers (All Agri-Related segments)
      6) Irrigation

      We are sorry to say but we cannot disclose individual stock names here on the portal, but would like to mention that Mahindra & Mahindra Fin. Services Ltd., one of our recommendations, whose price rise is largely attributed to the expected monsoons, has given more than 70-72% returns to our paid clients w.r.t its current price of Rs. 364.

      For more, our advisor will get in touch with you shortly.

      Happy Investing!

  • ahmad        
    manish
    jul 09,2016 at 08:08 - Reply

    Useful information

  • ahmad        
    hitesh
    jul 09,2016 at 06:29 - Reply

    market reach about 28000 if possibal year return about 24% ca do this market it is replace about sensex 8000

    • ahmad        
      Team StockAxis
      jul 11,2016 at 02:09

      Hello Mr. Hitesh,

      Thank you very much for your insights. We at StockAxis try and select stocks, whose growth stories are not linked with the index's growth but on its own future plans and visions.

      You can go also through Media & Entertainment (M&E) Industry: The Sunrise Sector Of India (click here). We would love your feedback!

      Happy Investing.

  • ahmad        
    ARUN DINKAR RAJHANS
    jul 09,2016 at 05:13 - Reply

    I whish to know about PPF detais new rules

    • ahmad        
      Team StockAxis
      jul 11,2016 at 03:22

      Hello Mr. Arun,

      Thank you for writing to us. We are a long only equity advisory firm, and with out thrust on fundamental and technical research, we cover more than 2000 listed companies in the Indian stock market.

      If you have any queries related to the stock market, you can comment here, or write to us at research@stockaxis.com or even give a missed call on 9773061000 and we will get back to you.

      Happy Investing!

  • ahmad        
    Sreedhara
    jul 09,2016 at 03:55 - Reply

    Eqity

    • ahmad        
      Team StockAxis
      jul 11,2016 at 03:12

      Hello Sreedhara,

      How can we help you?

  • ahmad        
    KUNJUKUNJAMMA
    jul 09,2016 at 03:26 - Reply

    No comment

    • ahmad        
      Team StockAxis
      jul 11,2016 at 03:18

      Hello,

      Do let us know in case you have any queries related to the stock market, we'll be happy to assist you.

      You can comment here, or write to us at research@stockaxis.com or even give a missed call on 9773061000 and we will get back to you.

      Happy Investing!

  • ahmad        
    neelakantan c n
    jul 09,2016 at 02:54 - Reply

    very short but sweet article with good covering about themes that requires investors interest.

    • ahmad        
      Team StockAxis
      jul 11,2016 at 03:11

      Hello Mr. Neelakantan,

      Thank you very much for your remarks. We are pleased to see that you found the newsletter useful. We will be coming up with such newsletters on a monthly basis.

      Also, don't forget to read New Products and New Management - How do they facilitate stock price movements? for further insights into investment methodologies.

      Happy Investing!

  • ahmad        
    k.p.asawa
    jul 09,2016 at 02:53 - Reply

    A very good article on 'movers & shakers' of mansoon this tear which paves way to understand as to how it reflects positively on equity market. segments also provided for a correct direction. Thanks as an assistance to investors.

  • ahmad        
    RAJAT DHONDIYAL
    jul 09,2016 at 02:52 - Reply

    Excellent and beneficial for all invested. Please keep it up.

  • ahmad        
    Sowmay
    jul 09,2016 at 12:07 - Reply

    Great. Liked it.