The best money advice anyone can ever give you is the “time value of money” concept . It is a vital concept in finance. Every financial decision involves the application of this concept directly or indirectly.The calculation of time value involves simple mathematics and it’s easy to calculate. Since this topic is a very important to everyone, we put it down as principle number two.

ENTER-TIME VALUE OF MONEY

The principle is – Rs 100 today is more valuable than Rs 100 a year from now. The reasons for this is quite simple to understand -

• First, since the cost of living goes up , your money will  buy less goods and services in the future .So, today, money has more value or the purchasing power of your money is more
• Second, if you have that money today, you can invest and earn returns.When you receive the money at a future date instead of receiving it today, you lose the interest or profit you would have made, had this money been with you now
• Third, you prefer to have money today since the future is uncertain.

EXAMPLE :

Lets’s assume that you are  25 years old. You have Rs.2500 with you now. You  can either put it in bank FD or buy yourself a new dress. Now, let me further assume that you opt for buying new dress.The reality is that you are spending far more than that Rs 2500. How? Let’s try to calculate the real cost of not investing that money.
FV = pmt (1+i)n
FV = Future Value
Pmt = Payment
I = Rate of return you expect to earn
N = Number of years

HOW TO SOLVE THE EQUATION?

N = Number of years invested - The money you’ve spend on a dress is lost forever. That means,  that  Rs 2500 could have compounded in the bank for atleast 35 years.  How did i get that ’35′ figure? I assumed that you’ll retire at 60 and since you are 25 now, there’s 35  years left. let’s substitute 35 for “n” in the equation.
I= Rate of return expected – The ‘I’ in the formula stands for the expected rate of return. Since  bank fixed deposits would pay around 8% and   stock markets have returned an average of 15 %- 17% ,  Let’s assume you would earn some where in between – an average of 10% rate of return. So, we’ll assume  ’I’ as 10% .

PMT –  is the value of the single amount you want to invest (in this case Rs 2500).
Now substituting the figures, our   formula would be –  FV = 2500 (1+.10)35.
Enter 1.10 into your calculator (this is the sum of 1+.10). Raise this to the 35th power. The result is 28.1024. Multiply the 28.1024 by the pmt of Rs 2500. The result (Rs 70,256 ) is the true cost of spending the Rs 2500 today (if you adjusted the Rs 70256  for inflation of 6 % , it would probably work out to about Rs 9150  That means your real purchasing power would increase approximately 4 fold).
Now,  after realizing the actual cost of spending Rs 2500,   would you prefer to buy a dress for Rs 2500 today or Rs 9150 in the future. The answer is entirely personal.
Once you understand this vital concept,  you would realize that all those bits and pieces of money you spend unnecessarily are costing you thousands in future wealth. This is why time value of money is considered as the central concept in finance.

MORE EXAMPLES..

Future value of money –compounded annually.
You deposit Rs 50,000 for 5 years at 5% interest rate compounded annually. What is the future vale?

• FV= PV ( 1 + i ) ^N
• FV= Rs. 50,000  ( 1+ .05 ) ⁵
• FV= Rs. 50,000  (1.2762815)
• FV= Rs. 63,815.

Future Value of money – Compounded Monthly
You deposit Rs 50,000 for 5 years at 5% interest rate compounded monthly. What is the future value?
(i equals .05 divided by 12, because there are 12 months per year. So 0.05/12=.004166, so i=.004166)

• FV= PV ( 1 + i ) ^N
• FV= Rs. 50,000 ( 1+ .004166 ) ⁶⁰
• FV= Rs. 50,000 (1.283307)
• FV= Rs. 64,165.

GOING BACKWARDS.

Present Value of money – Compounded Annually
You will receive Rs 50,000 5 years from now.  How much money should you get now instead of Rs 50,000 5 years later if the interest rate is 6%?

• (i=.06)
• Rs.50,000 = PV ( 1 + .06) ⁵
• Rs.50,000 = PV (1.338)
• Rs.50,000 / 1.338 = PV
• Rs. 37,370.

Present Value of money – Compounded Monthly

You will receive Rs 50,000 5 years from now.  How much money should you get now instead of Rs 50,000 5 years later if the interest rate is 6% calculated on monthly compounding basis?

• Here , (i equals .06 divided by 12, because there are 12 months per year so 0.06/12=.005 so i=.005)
• FV= PV ( 1 + i ) ^N
• Rs.50,000 = PV ( 1 + .005) ⁶⁰
• Rs.50,000 = PV (1.348)
• Rs.50,000 / 1.348= PV
• Rs. 37,091.

KNOW IT

• A rupee received today is greater than a rupee received tomorrow because money has ‘time value’
• The time value of money is the compensation for postponement of consumption of money. It is the aggregate of inflation rate, the real rate of return on risk free investment and the risk premium.
• ‘Time value of money’ can be different for different people because each has a different desired compensation for postponing the consumption of money.

Fundamental analysis is one of the most useful tools that investors use when making decisions about which stocks they’re going to buy. It is a process of examining key ratios that show the current worth of a stock and the recent performance of a company.
Fundamental analysis is used to determine the amount of money a company can make and the kind of earnings an investor can expect. Future earnings may be subject to interpretation but good earning histories create confidence among investors. The stock prices may increase and the dividends may pay out.
Stock market analysts determine whether a company is meeting its expected growth by examining the earnings that are reported by the company on a regular basis. If the company doesn’t meet its expected growth, the prices of its stocks usually experience a downturn.
There are a lot of tools that are used to determine the earnings and the value of a company on the stock market. Most of these tools rely on the financial statements released by the company. Details about the value of a company which include competitive advantages and ownership ratios between the management and the outside investors can be revealed through further fundamental analyses.

Financial Statements

Public traded companies are required to publish regular financial statements. These statements are available either in printed forms or in online pages. These statements include an income investment, a balance sheet, an auditor’s report, and a cash flow statement. They also include a description of the planned activities and expected revenues for the coming year.

Auditor’s Report

One of the most important sections found in financial statements is the auditor’s report. The auditor, who is an independent Certified Public Accountant (CPA), is the one who examines the financial activities of the company in order to determine whether the financial statement is an accurate description of the earnings or not. A financial report is considered worthless without an independent auditor’s report because it might contain some misleading or inaccurate information. Although it is not a guarantee of accuracy, an auditor’s report provides credibility to the financial statement.

Balance Sheet

The balance sheet, which is another important section in financial statements, serves a “snapshot” of the company’s financial condition at a single point in time. It shows the relationship between the assets such as cash, property, and equipment; the liabilities such as debt; and the equities such as retained earnings and stocks.

Income Statement

The section in financial statements that shows the information regarding the company’s net income, revenue, and earnings per share over a certain period of time is called the income statement. The top line of the income statement shows the amount of income that is generated by sales, underneath which the costs incurred in doing business are deducted. The bottom line shows the company’s net income or loss and the company’s income per share.

Cash Flow

The cash flow statement shares some similarities with the income statement because both sections provide a picture of a company’s performance over time. Unlike the income statement, the cash flow statement doesn’t use accounting procedures like depreciation. It simply indicates how a company handles its income and its expenses. The cash flow statement shows the incoming and outgoing cash from the sales, the investments, and the financing of a company. It is used as a good indicator of how the management runs the company and how the company handles the creditors. It also shows from where a company receives its growth capital.

Firstly, decide if you are a trader or an investor. 
 
If you decide to become a trader – to win – you must have a survival strategy…

You need to study the market yourself – not just rely on ‘reading the news’, or listening to others advice and tips.

Take advantage of technology – computers, software, electronic data – all at your finger tips. Seek out charting software and appropriate internet sites – they are plentiful.


Ensure that you ‘manage’ your money and keep some in reserve.

Have the ability to quickly identify failures as well as successes.

Stock Market trading appeals to those who are a little adventurous – rather than just placing their capital into bricks and mortar.


But – be mindful that portfolio values are less stable than real estate as they are continually moving up and down.

However – investing in the Stock Market means that you are putting your money to work – be aware, and enjoy the gains !

Online Stock Trading is a recent way of buying and selling stocks. Now you can buy and sell any stock over the Internet for a low price and you don’t need to call up a broker.
 

These days, you can’t retire without using the returns from investments. You can’t count on your social security checks to cover your expenses when you retire. It’s barely enough for people who are receiving it now to have food, shelter and utilities. That doesn’t account for any care you may need or in the even that you need to take advantage of such funds much earlier in life. It is important to have your own financial plan. There are many kinds of investments you can make that will make your life much easier down the road.

The following are brief descriptions for beginning investors to familiarize themselves with different kinds of investment options:

Life Insurance

Stocks

Stocks are a unique kind of investment because they allow you to take partial ownership in a company. Because of this, the returns are potentially bigger and they have a history of being a wise way to invest your money.

Bonds

A bond is basically a promise note from the government or a private company. You agree to give them a set amount of money as a loan and they keep it for a set number of years with a predetermined amount of interest. This is typically a safe bet and one that is a good investment for a first time investor because there is little risk of losing your money.

Mutual Funds

Mutual funds are a kind of investment that are based on the gains and losses of a shareholder. Basically one person manages the money of several or many investors and invests in a list of various stocks to lessen the effect of any losses that may occur.

Money Market Funds

A good short-term investment is a Money Market Fund. With this kind of investment you can earn interest as an independent shareholder.

Annuities

If you are interested in tax-deferred income, then annuities may be the right kind of investment for you. This is an agreement between you and the insurer. It works to produce income for you and protect your earning potential.

Brokered Certificates of Deposit (CDs)

CDs are a kind of investment where you deposit money for a set amount of time. The good thing about CDs is that you can take the money out at any time without paying a penalty fee. We all know life isn’t predictable, so this is a nice feature to have in your option.

Real Estate

Real Estate is a tangible kind of investment. It includes your land and anything permanently attached to your piece of property. This may include your home, rental properties, your company or empty pieces of land. Real estate is typically a smart and can make you a lot of money over time

Budget 2014: Breather for FDI!

Budget 2014: Revenues and Expenditure

• Estimates that total expenditure will be Rs 17.95 trillion in 2014/15
• Revenue deficit seen at 2.9 per cent of GDP in 2014/15
• Capital receipts seen at Rs 739.5 billion in 2014/15
• Retains tax collection targets and makes no major changes to direct tax rates
• Allocates Rs 2.29 trillion for defence spending in 2014/15; capital outlay raised by Rs 50 billion over interim budget
• Earmarks Rs70.6 billion to create 100 'smart cities'
• Proposes Rs 50 billion for warehousing capacity; Rs 100 billion of private capital for start-up companies; and Rs 378 billion of investment in national and state highways
• Rs40 billion for affordable housing proposed through national housing bank; Rs 80 billion proposed for rural housing scheme

• Budget 2014: Cigarettes to lit Fire in pockets

   FM Jaitley targets raising Cigarettes prices which may lit Fire in common man’s pockets

• To raise export duty on bauxite to 20% from 10%
• To cut excise duty to 6% from 12% on footwear below Rs1,000
• To raise excise duty on cigarette between 11%-72%
• To raise excise duties on chewing tobacco, cigars
• To raise excise duty on aerated water containing added sugar
• Raises excise duty on pan masala to 16% from 12%

 

Budget impact on consumer goods

• Footwear (excise duty reduced from 12% to 6%)
• LED TVs with panel below 19 inches (basic custom duty on import of panel made nil)
• CRT TVs

• Gutka (excise duty hiked to 70% from 60%)
• Aerated water products with added sugar
• Cigarettes (excise hike on some cigarettes to 72% from 11%)

 

Budget 2014: Education

• To set up Jai Prakash Narayan National Centre for Excellence in Humanities in Madhya Pradesh.
• To set up five more IITs in Jammu, Chhattisgarh, Goa, Andhra Pradesh and Kerala.
• To set up five more IIMs in Himachal Pradesh, Punjab, Bihar, Odisha and Maharashtra.

 

Share Market Terms

INVESTING

Investing is not just about depositing your savings in the bank every few months. It’s about growing your money. It’s about making your money work for you.

INVESTING IS A LONG TERM ACTIVITY

When you invest, you  buy an asset like shares, mutual funds, gold or real estate when it’s available at a bargain and wait till its price go up. You may have to wait for a long time, say 5 or 10 years to get a real appreciation for your invested funds. So,  investing is a long term activity, you have to wait for your rewards.

IT’S ALSO ABOUT GROWING YOUR MONEY PRUDENTLY.

Money is a weapon that’s to be used very very carefully or else, it can backfire within no time resulting in a total ruin of your life. By being ‘prudent’ we  mean, determining an action or a line of investing that’s practically wise, judicious and careful.
When you look around for opportunities to invest, it’s natural to stumble upon ideas like multi level marketing of certain financial schemes or money chains etc that may seem to be too good an opportunity to make a quick buck. It’s important not get tempted by such investment offers. Any investing decision you take must be practical, legal, safe and capable of creating wealth for you in the long run.

REWARD FROM INVESTMENTS

Investments range from risky types like stocks  to very safe ones like fixed deposits. Depending on the type of investment you’ve made you get return in the form of rent, interest, dividends, premiums, pension benefits or appreciation in value. The more risk you take, the more you earn as rewards.

OBJECTIVES OF INVESTING

Objectives or purpose of investing would be different for different people.  By choosing to budget your expenses, accumulate money, invest that accumulated fund and limiting the amount of debt – you can achieve most of your life’s goals. Normally, a person would invest with one or many of the following objectives in mind:

• A Regular Income
• Creation of wealth
• Preserving his capital
• Planning for retirement life
• Education /marriage of his children.
• To start a business

THE PROCESS OF INVESTING

The process of investing is quite simple-
Depending upon the money you got, you will have to short list the type of asset suitable for investment.
Next, you’ll have to assess yourself and find out how much knowledge you have in that particular asset category. This assessment will tell you where you stand right now, and the amount of preparatory work you need to do before investing you money in it.
Once you gain enough knowledge, try to draw a plan to invest systematically – get access to the right information, plan properly and make the right choice.

REASONS TO INVEST

Why does investing acquire so much of importance? That’s because of three core benefits of investing-
First, the probability that you’ll beat inflation.
Second, the probability of achieving your financial goals quickly.
Third, the probability of building something for your next generation.
An investor’s  main focus should be to beat inflation.  Inflation and it’s after effects were discussed in our previous articles.  You’ve to invest in such a way that the rate of return beats the inflation rate. If you don’t do that, it eats away your returns. Unless your rate of return beats the inflation rate, you’re not growing your investments.We said ‘probability’ because, investments carry the risk of not hitting the desired targets. When you set higher targets ( higher returns) the risk of not achieving it is also high.
Apart from achieving financial goals and securing your children’s future, another important reason would be to plan for your retirement. When do you plan to retire? At 60 or at 50? You can opt to retire when you have a sufficient amount of wealth so that, you can maintain the standard of living that you are maintaining today. The earlier, the better!
In the coming lessons, we take to you through different aspects of investing. Each lesson has a concept to share. At the end, you’ll know what investing is all about, why it’s essential to invest early, different avenues to invest etc..In our next article , let’s see why investing is the most important activity one should have.

The markets ended on a high note last week after three weeks of sideways movement. It was the hopes built around the first budget of Modi government that made the sensex and the nifty rally 862 and 242 points respectively.
Going ahead, the Big day is here. Millions of people, corporates and businessmen are waiting to hear what the finance minister has worked out for each one of them so that they may retain the hope of good days ahead. A friendly budget which will not impact the living standards of the people negatively and which will kick off the growth process will immediately spur an upward movement that may crack the 27,000 level (sensex) and 8,000 levels (nifty) for the first time. But on the other had if the budget turns out to be a disappointing one (especially for the FD investors) we’re going to witness a plunge that may dip below 23,500 (sensex) and 6,500 (Nifty). Finally, if the budget happens to be an ordinary one which leaves some happy n some sad, it’s going to have a mixed reaction with a short rally on the budget day and then a retreat back to where we’re standing now.

Now, we can’t really say what exactly is going to come out of Mr. Arun Jaitley’s box on July 10^th. So we suggest investors to watch the game from the sidelines. It will be prudent for those who have profitable positions in cash market to liquidate a portion and take some profits home. Investors having loss positions may hold on to their investments for a gamble – should the budget spark a rally, they might get an opportunity to off load their investments at a profit or at least at par. Remember that not all is well with the fundamentals and Mr. Modi had earlier hinted about taking tough steps that may not impress the common man. Apart from the budget, the first quarter earnings results will also kick off this week with Infosys results on July 11th. For investors looking for opportunities in banking sector , Indian overseas bank looks fairly valued at the present market rate of Rs 84.
Expect a volatile week ahead. We expect the sensex and the nifty to trade in a range of 25,000-26,500 and 7,550-7,890 for the nifty assuming that the budget is going to be a reasonably good one.

Hi there,
After interacting with some beginners, I found 3 very silly mistakes that’s so common. So, i thought i should write about that in this article, with the help of an example.
– You buy shares in company ‘x’ of IT sector. The shares move up and you get a decent profit. From that moment, you are tempted to look more deals like that., preferably from the IT sector- since you get a feeling the IT sector is a sure bet !
Not only that, in the process of trying to find such deals, you tend to overlook other investment opportunities that come your way – a new mutual fund offer or a low  rate in gold ETF or an opportunity to lock in a  debt fund that’s available at a higher rate of interest.

• This is the first point – as long as your investment remains in a few stocks or markets, you may be missing on other opportunities. It’s important to have an overall view of the economy and financial markets regularly- and not just stock market alone.Beginners tend to concentrate on stocks alone and in the process, they forget to take note of what’s going around in the financial world. For example – in 2010-11, it was gold that out performed all other asset classes. Those who had an overall knowledge about financial markets would have invested a part of their funds in gold.

Continuing the above example – let us assume that the buy price of that IT stock was Rs 150 and you sold it for Rs 225 in one month, thereby making a gross profit of Rs 75 per share. You made a killing on that stock. Every time that stock drops to Rs 150, even if it’s a year or two later, you’ll be tempted to buy that stock based on the previous experience. That ‘Rs 150’ remains in your memory as a sweet spot to buy. You tend to forget the fact that financial fundamentals of the company might have changed by then.

• So, that’s my second point – financial fundamentals of a company keep changing. That’s the reason why result announcements create such hype in the stock markets. It’s important to keep track of the fundamentals of the company every quarter. Do not buy a share just because it came back to the previous levels. This time, may be, there’s some problem with the fundamentals.

Let’s continue our story – after valuating some IT companies including the stock you previously owned, you have now short listed 2 companies – one trades at Rs 200 and the other trades at Rs 600. A common belief of beginners is that Rs 200 stock is 3 times cheaper than a Rs 600 stock. That’s wrong. For example, the company that trades at Rs 200 may have 6 million shares while the other one that trades at Rs 600 may have only 2 million shares. So the market capitalization of the two companies is the same. So the solution to this is in finding out the P/E of the stocks. The price of the stock is divided by the earnings per share and that tells you which company is more expensive. A stock that has a P/E of 20 is definitely priced lower than a stock that has a P/E of say, 65.

• That brings us to our 3^rd point – price per share is not the criteria to decide whether a stock is cheap or expensive. You need the P/E of the stocks.

From my interaction with freshers, these are 3 of the most common mistakes that they commit.
Bye for now!!

Commandment 1: Don't attempt to time the market

Timing the market is no guessing matter. To the little investor, timing the market is like taking a random walk. Most people only recognise the correct path after already having set foot on the wrong one. One exception to this is “bottom-fishing”, an approach to buy stocks that you want in your portfolio at prices below the prevailing levels. This entails biding your time and buying into a market downturn before the others do (the age-old philosophy of buying low, selling high). The downside of this approach being that the stock you want may never see the downside you expect.

Commandment 2: Don't try to outguess the market

Market psychology is for shrinks, not for couch potatoes like we humans. What captures the imagination of the market is transient. This means that what is “in” today is “out” tomorrow. Most people only recognise the pattern after it has become apparent to almost everyone else and is too late to act upon. For example, if investment in technology appears to be the current flavour, you are probably already too late to cash in on the trend. In this instance, you should only invest in technology as part of a long-term balanced approach.

Commandment 3: Treat investing like marriage--go for the long haul

Short-term investing could go either way. Invest for the long term. Almost all market pundits and investment studies show that stock investing should be part of a long-term strategy, lasting for five to ten, or even 20, years or longer. Beware that not every year will result in a positive return on your investment. However, over time the plus will likely overwhelm the minus by a substantial margin.

Commandment 4: Stay clear of broker's advice, hot tips and "multibaggers"

Every portfolio advisor is not Sharekhan (J) who swears by sound investment principles. Think. Wouldn't most brokers be tempted to make their living by goading their clients to constantly move in and out of positions, thus garnering commissions? This is diametrically opposite to Commandments 1, 2 and 3. For most people, stock advice is like a game--of darts! Only accept advice if the person has your financial interest in mind and is not making a living by selling your stock. Of course never buy from someone who calls on you and gives you advice. J

Commandment 5: Almost always invest in blue chips and blue chips-to-be

Do invest in companies that are considered blue chips. These include not only the BSE 100, but also the others that are slowly stepping into the big league. Invest only in established companies with a good track record. Beware that not every blue chip will rise after you buy it, and that even these otherwise stellar performers will have their good months/years and bad months/years. But over time, the fluctuations will even out and you would be left with a considerable net plus. Also invest in companies that have a good record of declaring dividends (and if you find the solitary one that increases its dividend pay-out each year...you know what to do).

Commandment 6: Prefer steady installment-like buying of stock to buying at one go

Investing should never be done in panic or be treated as an emergency. Purchasing your favourite few is best accomplished at a steady rate over time, so as to avoid the ups and downs of the market. This is called rupee cost averaging and is one of the safest approaches to investing. It works just like any other habit: you buy, regardless whether the price is up or down, until you reach the desired number of shares of that stock.

Commandment 7: Diversify, diversify and diversify

Do diversify your portfolio, both within your selected sectors and within the overall industry. For example, don't invest in only technology because it happens to be in vogue but consider the other industries as well.

Commandment 8: No shopping with borrowed money and maintain a core reserve

Never use margin money to buy stocks. You should not invest money you don't have. A simple and basic rule is to not leverage yourself to an extent that when the tide turns against you, all you are left with is nothing.

You never know when a financial emergency might arise. That's why you must keep a comfortable cash reserve in your savings account, so you do not have to tap into your long-term investments. A reserve equal to six months of salary should be just about ideal.

Commandment 9: Set realistic financial goals

Treat a 500% return with as much derision as you would a 5% return. Decide what you need the money for: To retire early, to finance your kid's college education or to fund your daughter's marriage or just to preserve and build wealth? Whatever the goal you set, make sure it is reasonable and attainable. Expecting too much will only lead to disappointment down the road. Aim for an expected return level that is realistic--not mediocre or overambitious.

Commandment 10: There are 10 more commandments

For those who thought that was the last of the ten commandments I have good news. There's more. Ensure that your portfolio size is controllable (15 stocks is about ideal) and your stocks are well researched. Checkpoints: Is the management quality above board? Does the company have a positive cash flow? Does it have the capability to compete on a global scale? Most importantly, is it shareholder friendly?

Finally, leave your emotions behind when you enter the world of investing. Follow the ten commandments. Time is on your side. Investment success won't happen overnight, so stay focused on long-term returns and avoid overreacting to short-term market swings. Remember, investment success depends on time, not timing.
Sharekhan has the best stocks under its coverage. Invest in them for the long term for healthy returns.

In line with the key identified investment themes (policy push-driven re-rating of construction, power and public sector undertakings, and early beneficiaries of an economic revival, like auto and financial services), we are adding
LIC Housing Finance, 
TVS Motor Company, 
Gabriel India and  
Gateway Distriparks
to the Top Picks basket. We believe that a possible pull-back or correction in these stocks after the recent upsurge would offer an attractive opportunity for investors to accumulate these stocks with a little longer time horizon.

Country's largest carmaker Maruti Suzuki India (MSI) reported a 5.5 percent decline in total sales in March at 1,13,350 units as against 1,19,937 units in the same month last year. The company said its domestic sales declined  by 5.2 percent during the month to 1,02,269 units as against 1,07,890 units in March 2013. Sales of mini segment cars, including M800, Alto, A-Star and WagonR, declined by 11 percent to 40,085 units as compared to 45,047 units in the year-ago month, MSI said in a statement.
The company said sales of the compact segment comprising Swift, Estilo, Ritz rose by 9.3 percent to 28,285 units in March this year as against 25,868 units last year, reports PTI. 12:50pm HSBC's India manufacturing PMI down in March HSBC's India manufacturing PMI declined in March at 51.3 versus 52.5 in February, but remained above the waterline, indicating positive growth. "Growth in the manufacturing sector eased on the back of weaker growth in output and a slowdown in order flows from domestic clients.
By goods, consumer goods firmed, but the production of investment goods remains subdued according to panellists. Looking ahead, the recovery is likely to prove protracted. Meanwhile, inflation eased in March, with the PMI index for input and output prices falling," the HSBC report said.
12:45pm Expert on RBI policy Kunal Shah, fund manager-debt, Kotak Mahindra Old Mutual Life Insurance said, "RBI has maintained status quo as per our and consensus expectations, though not clearly spelled out in policy but RBI is incrementally concerned about sticky growth underperformance." According to him, RBI has hinted that lead indicators do not point to any sustained revival in industry or services & hence believes that slower activity will help disinflate the economy which will support the fight against inflation. "Till these processes evolve RBI feels current policy rates are appropriate and may not require further tightening," he added. "We expect current disinflation process to continue and core inflation to moderate further however sharp fall is unlikely in short-term. Monsoon will be key to watch as it can create short-term volatility in inflation path," Shah said.
12:40pm Rate hike unlikely if inflation does not rise further The Reserve Bank’s policy stance will be firmly focussed on keeping the economy on a disinflationary glide path that is intended to hit 8 per cent CPI inflation by January 2015 and 6 per cent by January 2016, the central bank said. It further said that at the current juncture, it is appropriate to hold the policy rate, while allowing the rate increases undertaken during September 2013-January 2014 to work their way through the economy. Furthermore, if inflation continues along the intended glide path, further policy tightening in the near term is not anticipated at this juncture, the RBI said.
12:35pm RBI says Since December 2013, the sharper than expected disinflation in vegetable prices has enabled a sizable fall in headline inflation. Looking ahead, vegetable prices have entered their seasonal trough and further softening is unlikely. Meanwhile, CPI inflation excluding food and fuel has remained flat. There are risks to the central forecast of 8 percent CPI inflation by January 2015 stemming from a less-than-normal monsoon due to possible el nino effects; uncertainty on the setting of minimum support prices for agricultural commodities and the setting of other administered prices, especially of fuel, fertiliser and electricity; the outlook for fiscal policy; geo-political developments and their impact on international commodity prices. 12:30pm Market falls further, banks extend losses Equity benchmarks extended losses in afternoon trade weighed down by banking and financial stocks.
The Sensex is down 81.76 points to 22304.51 and the Nifty down 20.25 points to 6683.95. India's biggest lender State Bank of India plunged 2 percent while rival HDFC Bank slipped 1.9 percent. Top private sector lender ICICI Bank and housing finance company HDFC dropped over a percent. Shares of L&T, ITC, HUL, Bharti Airtel, Maruti Suzuki, Bajaj Auto, BHEL and Coal India declined over 1 percent.

However, TCS held its early gains, up 2 percent followed by Wipro and ONGC with more than 1.5 percent. Infosys and Tata Motors climbed over 0.5 percent. 12:25pm RBI says Retail inflation measured by the consumer price index (CPI) moderated for the third month in succession in February 2014, driven lower by the sharp disinflation in food prices, although prices of fruits, milk and products have started to firm up. Excluding food and fuel, however, retail inflation remained sticky at around 8 percent. This suggests that some demand pressures are still at play.
12:20pm RBI increases the liquidity provided under 7-day and 14-day term repos from 0.5 percent of net demand and time liability (NDTL) of the banking system to 0.75 percent. It decreases the liquidity provided under overnight repos under the liquidity adjustment facility (LAF) from 0.5 percent of bank-wise NDTL to 0.25 percent with immediate effect.
12:15pm Rajan says the bank may need to push foreign banks to follow subsidiary model. Foreign banks avoid subsidiary route on priority sector norm, he adds.
12:10pm While addressing press conference after an announcement of bi-monthly review, RBI governor Raghuram Rajan said the bank had responded to Election Commission queries on banking licences. "We took Election Commission (EC) opinion on banking licences to stay away from controversy. Bimal Jalan had also suggested getting EC nod for banking licences," Rajan said. He further said the window for differentiated banking licences would be opened soon. 12:05pm Reserve Bank of India kept repo rate, at which banks borrow money from RBI, unchanged at 8 percent and cash reserve ratio at 4 percent. The central bank also left marginal standing facility rate and bank rate unchanged at 9 percent.
12:00pm The market remains volatile after the Reserve Bank of India kept policy rates unchanged that is in-line with expectations. The Sensex slips 15.12 points to 22371.15 and the Nifty declines 4.75 points to 6699.45. About 1174 shares have advanced, 1042 shares declined, and 131 shares are unchanged.   Top lenders State Bank of India, ICICI Bank and HDFC Bank decline 0.5-0.8 percent. Housing finance company HDFC slips 0.66 percent. State-run power equipment maker BHEL drops 1.7 percent, and engineering and construction major L&T is down 1.3 percent.

Media plays an important role in helping political parties interact with voters and most of the parties are now using the print media, television, radio and other social networks like Facebook, Twitter and WhatsApp to convey their messages to their prospective voters.
It is true that this would translate into huge revenue growth for the media industry at large. Also, it is expected that the formation of a stable government at the Centre post-election would result in a series of reforms to boost the economy and this would further enhance the revenue growth prospects of the industry. 
However, the sluggish economic growth and a decrease in consumer spending have strained advertisers, leading them to cut promotional budgets. This has adversely affected the media industry. 
As the election is around the corner, media stocks have become attractive to investors and some of the media stocks have witnessed smart gains since the Election Commission (EC) announced the schedule for the general election on March 5, 2014.
Also, the fast moving consumer goods (FMCG) companies are raising their advertising expenditure, which is expected to further boost the performance of the media companies.
Almost 75 per cent of television advertising is concentrated over just three categories -- FMCG, telecom and auto -- while FMCG continues to dominate television advertising. 

Nandan Chakraborty, MD, Institutional Equity Research, Axis Capital recommends investors to have a judicious mix of defensives and cyclicals in their portfolios now.
Sharing views on the current market rally, Chakraborty told CNBC-TV18 that in upmoves, consumer discretionary and BFSI stocks rise first. He expects 15 percent growth in Sensex levels by year-end. He sees big upside in select engineering and infrastructure  stocks.
Also, certain pockets of banking stocks may see large upmove going ahead. From the PSU banking pack, he is positive on  SBI  and PNB  . One can bet on auto ancillary stocks like  Motherson Sumi  in the midcap auto space, he added.
 Further, he added that earnings upgrade is seen only for companies with improvement in balance sheet, he said. Meanwhile, he expects further appreciation in the Indian currency.

IDFC and L&T Finance Holdings extended gains to 6 percent and 4.6 percent, respectively on hopes of banking license. 
The decision of whether to issue banking license or not during elections period is in hands of Election Commission and not the government. 
Election Commissioner VS Sampath on Tuesday said he has not taken a final call on the banking license issue. "
We will take up this issue on Monday," he added. Election Commission has raised legal ethical issues on banking licenses matter. 
12:20pm Talwalkars in focus Shares of Talwalkars Better Value Fitness rose 11 percent as buzz of stake sale gathered steam. According to media reports UK's health and fitness group David Lloyd is looking to buy 20 percent stake in the Indian health and fitness company. "The management of David Lloyd is in talks to pick up an equity stake in Talwalkars. This will help both companies to expand their current relationship," the report quoted an investment banker. 
12:10pm FII View Credit Suisse is bullish on India and considers elections to be a turning point for the country. Speaking exclusively to CNBC-TV18 on the sidelines of the Credit Suisse Asia Conference in Hong Kong, Sakthi Siva, Asia Strategist, Credit Suisse said that atleast 5-10 percent upside in the Indian market is possible from current levels in the near-term. Siva is quite confident that though India’s growth last year was the lowest in the past 10 years, but with politics, potential change, there could be a turning point for the Indian market and the economy. 
12:00pm The market extended an upmove in noon trade with the Sensex rising over 100 points supported by banks, capital goods and auto stocks. The Sensex rose 107.58 points to 22202.88 and the Nifty climbed 38.45 points to 6639.85. About 1468 shares have advanced, 869 shares declined, and 141 shares are unchanged. Top lender State Bank of India jumped 3.5 percent after Goldman Sachs has upgraded the PSU bank to buy from neutral rating and revised target price to Rs 2,080 from Rs 1,440 apiece. 
PNB and Bank of Baroda gained 2.5-3 percent while rivals HDFC Bank and ICICI Bank advanced 0.7 percent each. Axis Bank rallied 2 percent. Brokerage house Morgan Stanley added Axis Bank to its Asia ex-Japan model portfolio. The firm is positive on the stock given company's reducing risks in books. 
Telecom operator Bharti Airtel surged 3 percent followed by Hindustan Unilever, M&M, Hero Motocorp, BHEL and NTPC with 1-2 percent. However, state-run oil & gas major Oil and Natural Gas Corporation's stock (ONGC) is quoting ex- dividend today. It fell nearly a percent. The board of directors on March 24 have approved second interim dividend of Rs 4.25 per equity share of Rs 5 each for the financial year 2013-14.  
 Drug majors Sun Pharma and Dr Reddy's Labs declined more than 1 percent. Dr Reddy's Labs has launched Amlodipine Besylate (to treat high blood pressure) and Atorvastatin calcium tablets in US market.