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MARKETS LIVE: Sensex continues to trade lower, Nifty nears 10,350

MARKETS LIVE: Sensex continues to trade lower, Nifty nears 10,350Oil India gains 2% on fixing record date for 1:2 bonus issue Shares of Oil India were trading 2% higher at Rs 336 on the BSE after the company said it has fixed March 29, 2018 as the record date for 1:2 bonus issue. The stock will turn ex-bonus on March 27, 2018. READ MORE Jindal Worldwide hits new high; stock zooms 50% in three days   Jindal Worldwide hit a new high of Rs 898, up 17% on the BSE, extending its past two days rally in otherwise subdued market.   The stock of textiles Company zoomed 50% from Rs 600 on March 9, 2018, as compared to 1.3% rise in the S&P BSE Sensex. In past one year, it rallied 560% from Rs 136, against 14.6% rise in the benchmark index.   Jindal Worldwide is having a large consumer base in India within the home textile domain and strong and reputed clients like Wal-Mart, Springs, Disney, WestPoint Stevens, Carrefour to name a few, whom the company is serving directly or via vendors. READ MORE Market Check S&P BSE Sensex 33,720.91 -0.40%   Nifty 50 10,386.05 -0.39%   S&P BSE 200 4,534.34 -0.21%   Nifty 500 9,133.10 -0.27%   S&P BSE Mid-Cap 16,284.79 0.10%   S&P BSE Small-Cap 17,633.34 0.18% Uncertain times in bond market casting shadow on economy   The notion that the bond market will eventually replace bank loans is coming under scrutiny as yields rise, while banks keep their lending rates relatively unchanged. The rate cycle has decisively changed to an uptick, as can be seen by the sharp reaction to any incremental adverse news flow.   Investors are cutting losses, while the successive withdrawal of high-yielding quasi-equity bonds, which yielded returns of as high as 11-11.25 per cent, has caused further losses to investors, particularly mutual funds. READ MORE The Indian stockmarket and liquidity: Is the party over?   Since 2004, the Nifty’s trailing P/E has moved in the same direction as EPS growth. However, this trend was broken in the summer of 2014; since then the Nifty’s P/E has rocketed upwards even as earnings growth struggled to break out of single digits.    We believe that rather than attributing this breakout to political developments, a more rational explanation lies in liquidity. Since mid-2014, system liquidity as measured by LAF (Liquidity Adjustment Facility), a measure of how much banks in India are borrowing from the RBI, has increased considerably. In fact, the period post August 2014 is the longest period of sustained positive LAF in India since the turn of the century. Other than liquidity, the other factor that the Nifty is sensitive to is GDP growth.    In specific, healthy GDP growth and rising GDP growth helps drive Nifty returns. The ideal situation for Nifty returns is high GDP growth and high system liquidity alongside positive changes in both. However, history also shows that provided GDP growth is improving, Nifty returns are almost always positive even if system liquidity is decreasing PROVIDED the absolute level of system liquidity (as opposed to the delta in the metric) is healthy.   (Source: Saurabh Mukherjea, CEO, Ambit Capital) Illustration by Ajay Mohanty Bank stocks trade weak COMPANY LATEST CHG(RS) CHG(%) FREE FLOAT MKT CAP (RS CR) WEIGHT IN INDEX (%) HDFC BANK 1857.70 -2.20 -0.12 375835.93 30.31 INDUSIND BANK 1722.00 -9.00 -0.52 87854.20 6.84 KOTAK MAH. BANK 1078.85 -5.70 -0.53 135676.56 12.22 YES BANK 311.00 -2.10 -0.67 55864.96 3.39 ICICI BANK 300.40 -3.60 -1.18 193028.03 21.55 AXIS BANK 524.30 -6.50 -1.22 94180.27 10.52 BANK OF BARODA 139.40 -2.00 -1.41 13169.14 2.17 FEDERAL BANK 94.90 -1.40 -1.45 18702.42 1.39 ST BK OF INDIA 251.20 -3.70 -1.45 86735.34 10.29 PUNJAB NATL.BANK 94.90 -3.10 -3.16 8747.20 1.32

Source: Business Standard