BLOG MEANT FOR 20 JUNE 2018 WEDNESDAY
The weakness continued in all global markets today. Nifty fell by 89 points to close at 10711. Our markets actually fell lesser than other global markets. Major Asian markets fell by more than 2-3 % today. Also, currently European and US markets are also down between 1-2%.
Hence, there is chance that our markets may fall tomorrow also.
However, this is not a surprise since we have been mentioning in the blog during the last few days that global cues are negative and hence we should enter into any short term trades.
Long term investors who are investing regularly can continue to do so.
Nifty is in WAIT TO SELL zone for short term.
The indications for individual stocks for short term only are –
DON’T BUY ZONE – VEDANTA, ITC, HDFC, TITAN, AXIS BANK, YES BANK, ASIAN PAINT, HINDALCO, HDFC BANK
HOLD ZONE – SBI, M&M, MARUTI, RELIANCE INDUSTRIES, TCS
WAIT TO SELL ZONE – INFOSYS,
No fresh buy indications as of now for short term.
Important Information about Demat & Trading Account Operations
Government rules instruct share brokers to transfer any unused balance in trading account at the end of every quarter to the investor’s bank account. Hence, at the end of every March, June, September & December, if there is some cash balance in the trading account, it will automatically get credited to your savings account unless you utilise the funds for purchase of some instruments or shares.
In this quarter, the cut-off date for sending back balance to your savings account is June 23.
Hence, you have few choices:
- Instruct the broker to let the idle money get credited to your bank account (even if you don’t tell the broker to transfer money, it will automatically get credited to your savings account if you do not give them any instruction).
- Buy some shares if you want to with the balance
- Brokers may also suggest that they can buy some liquid mutual funds or similar instruments to ensure that balance does not get transferred to your bank account since it is a hassle for many investors to re-transfer the funds to trading account to purchase shares in future.
This purchase of liquid funds or similar instruments may result in a transaction cost of Rs.10-20 which is quite reasonable. The fund can be sold anytime and the proceeds will get credited to your trading account.
Suppose, Mr.A had Rs.14500 as on June 22 in his trading account, he can:
- Tell broker to transfer money to savings account
- Buy shares partially or fully with the balance available
- Instruct broker to buy liquid funds (usually Liquid Bees) and can sell it once the quarter has ended. After the sale, the same 14,500 minus some minor transaction charges will be re-credited to your trading account.Hence, please understand the above and decide accordingly.
Remember that when an investor is aware of how the things around him/her work, then he/she is in a better situation to take good decisions and nobody can misguide.
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All the best!
Dr.Bharath Chandra and Rohan