MSCI demotes Greece to emerging market.

MSCI has cut Greece's classification to emerging market from developed market, making the country the first to suffer such a demotion. MSCI attributed the move to Greece not meeting requirements related to securities borrowing and lending facilities, short selling, transferability and stock-index size. MSCI's decision follows similar action from Russell Investments in March.

Japanese shares fall, Europe and U.S. regain poise.

Japanese shares (EWJ) had another volatile day, dropping as much as 2.4% before rebounding to close a mere -0.2%. Better-than-expected eurozone industrial output helped EU stocks (FEZ) recover some poise after two days of declines, with U.S. futures and the dollar-yen rate (FXY) (+0.55% at the time of writing) also higher. But the continuing theme of uncertainty about central bank stimulus is keeping markets on edge.

An economy just entered the club of emerging markets. The term 'emerging' brings to mind a fast growing developing economy, right? But this is not the case with the economy under consideration.

The country we are referring to is none other than the crisis-struck economy of Greece. As per Bloomberg, Greece has been downgraded to emerging-market status by index provider MSCI Inc. This is the first time ever that a developed nation has been downgraded to a lower status. Just to recall, Greece had been elevated to the developed-market status in 2001 by MSCI. But the sovereign debt crisis that engulfed the nation in the last decade crippled the country's economy. The benchmark ASE index has plunged 83% since October 2007.

The downgrade is likely to make matters worse for Greece. It could further lead investors to dump the country's stocks. Greece's condition is a clear proof of the status of progress in the Eurozone. The crisis is still far from over. 

India's budget deficit worst in the BRICS

Back in 2007, the BRICS were the apple of global investors. The blistering pace at which these countries were growing, it was little wonder that everyone wanted to invest in them. But in recent times things have changed. The countries have slowed down. Inflation has shot up and the current account situation in nearly all of the countries has worsened from what it was in 2007. But even when all BRICS are doing badly, India seems to be faring even worse. Especially when it comes to budget deficits which is nothing but the excess of government's spending over what it earns. As per The Mint, India's budget deficit stood at 4.9% of GDP in 2013. This makes it the worst on the BRICS list. In fact India has fared badly even on other economic parameters. Inflation is high, its current account gap is increasing, growth has slowed down drastically and the fiscal mess is getting worse. This is a poor reflection on the country's government. We have been writing about how the gover nment needs to pull up its socks and fast track reforms. Though it has gone ahead with some reforms

in the recent past, however, there is still a lot of work that needs to be done. 

 

                                                                                                                     Source: The Mint

Sterling Lifted by Job Data, Strength Limited

Sterling strengthened mildly against dollar and Euro today after better than employment data. Claimant count dropped more than expected by -8.6k in May, versus consensus of -5.0k.

Unemployment rate was unchanged at 7.8% in April. The data added more evidence to recovery in UK.

Nonetheless, strength in the pound is relatively limited. BoE Fisher warned that "growth is going to be slow for a long time". He noted that while Q2 looked "very good", "these things will flip from one quarter to another".

In Eurozone, German constitutional court continued the hearing on ECB's OMT bond-purchase program today.

 

 Bundesbank chief Weidmann noted that "secondary market bond purchases should not be used in my understanding in a European currency union to lower the solvency risk premiums of individual countries.

 

" ECB board member emphasized that the program is within ECB's mandate. The strong signal was "required to convince market participants of our seriousness and decisiveness in pursuing the objective of price stability."

 

Yesterday, MSCI lowered Greece to emerging market status, down from developed market status.

 

 It said that in the Greek equity markets, the "in-kind transfer and off-exchange transaction like facilities" are so "restrictive" and "unusable".

 

And Greece, failed to meet the criteria including securities borrowing, lending facilities , short selling and transferability. Greece was the first developed country downgraded.

 

Elsewhere, Japanese domestic CGPI rose 0.1% mom in May, machine orders dropped -8.8% mom in April.

 

Australia Westpac consumer confidence rose 4.7% in June. German CPI was finalized at 1.5% yoy in May. Eurozone industrial production rose 0.4% mom in April.

Nifty June Futures - Important Levels for Thursday, 13.06.2013.

TREND DECIDING LEVELS : Today, the Important Trend Deciding Levels on Levels on Lower side is  5740-5720.  Below this, next important level is  5710-5680. (This levels, Either Acts as a support while Nifty is moving in downward direction orActs as a down side Break out/Break down Trigger level which fuels further downward movement from here).

Today, the Important Trend Deciding Levels on Levels on Higher Side is  5770-5780.  Above this, next important level is  5805-5815. (This levels, Either Acts as a hurdle while Nifty is moving in upward direction or Acts as a Upside Break out Trigger level which fuels further upward movement from here).

Disclaimer :

The stock Tips and recommendations given in this blog is for information and educative purpose only. No representations can be made that the tips given here will be profitable or that they will not result in loss. Trading involves risk of loss of money. The Tips in this news letter are given with the understanding that readers acting on this information assume all the risks involved and that they are trading at their own risk. The above recommendations are based on the theory of price related technical analysis and they do not reflect the fundamental strength or weakness of the respective stocks. We shall not be responsible for any loss incurred for acting on the tips given above

RBI takes steps to increase dollar inflows

The Reserve Bank of India (RBI) on Tuesday took measures to increase the supply of dollars in the market including asking exporters to realise their dollar earnings and get them back into the country within one year to support a plunging rupee.

 

The RBI also hastened the process of dollar inflows through online payment channels by increasing the amount that exporters can bring back to $10,000 from $3000, it said in a separate release on Tuesday.

 

The new norms will be applicable with immediate effect, the Reserve Bank of India said.

 

Striking 58.98 per dollar at its weakest, the rupee had plunged 3.25 percent this week, notching record lows for two consecutive days.

 

These are the first few steps taken by the RBI to send a signal of its intention to protect the rupee through administrative measures. The central bank had done away with the time limit for realisation and repatriation of export proceeds in 2003.

 

However, dealers said the RBI needs to impose a cap on banks' daily net open position in the forex market, similar to the one done in 2012 to reduce speculative trades in the forex market which is adding to the rupee slide.