Sensex tumbles 172 points

Greece debt woes, weak European stocks impact sentiment

MUMBAI: The Bombay Stock Exchange sensitive index, Sensex, fell 172 points on Monday mirroring weakness in European stocks over concerns if the $146 billion EU-IMF package approved on Sunday to rescue debt-riddled Greece would work.

Funds and investors booked profits at existing higher levels pulling the barometer index down by 0.98 per cent or 172.63 points to 17386.08.

This ended two straight sessions of gains, which also had followed strength in global markets after the single European currency euro gained in anticipation of the rescue package. The financial crisis in Greece worsened after rating agencies downgraded that country's debt, raising doubts about its ability to meet $85 billion worth bond payments later this month. The benchmark index dropped 212 points in the final hours to touch an intra-day low of 17345.92, after the European stocks opened in the red on unease over euro zone sovereign debt levels.

Analysts said weak global cues, coupled with sustained selling in index heavyweights such as Infosys, RIL and ICICI Bank dragged the barometer.

The euro weakened after three successive days of advance, and European shares fell as the $146 billion EU-IMF bailout of Greece failed to calm concern about the region's growing debt problems, said an analyst.

The largest financial rescue of a nation from bankruptcy will involve credit of 80 billion euro from the 15 other euro zone nations and 30 billion euro from IMF.

Rupee turns weak

The rupee on Monday weakened by 15 paise to close at 44.51/52 against the U.S. currency due to weak domestic stock markets and a strong dollar overseas. Dollar demand from importers, too, put pressure on the rupee sentiment, dealers said.

The domestic unit opened lower at 44.54/55 from its last weekend's close of 44.3550/3650. It moved in a range of 44.47 to 44.6050 during the day. — PTI

SEBI issues norms for credit rating agencies

New rules to be implemented latest by June 30

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CRAs to disclose the shareholding pattern

To keep all records in support of each credit rating

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MUMBAI: The Securities and Exchange Board of India (SEBI) has issued transparency and disclosure norms for credit rating agencies (CRAs) order to impart higher credibility to the processes and procedures associated with credit rating.

“Recent events in the global financial system have underlined the pivotal role that credit ratings play. Effective use of credit ratings by the users is crucially dependent upon quality and quantity of disclosures made by the credit rating agencies (CRAs),” SEBI stated in a circular to all credit rating agencies on Monday.

The CRAs were asked to take necessary steps to implement this circular immediately and ensure its full compliance at the latest by June 30.

The half-yearly disclosures, stipulated by the regulator, would be made by the CRAs within days from the end of the half-year (March/September). The yearly disclosures stipulated would be made by the CRAs within 30 days from the end of the financial year. However for 2009-10 only, the half yearly and yearly disclosures stipulated would be made by the CRAs by June 30.

SEBI stated that a CRA can make additional disclosures other than those stipulated with the prior approval of its board. The CRAs were asked to communicate to SEBI the status of the implementation of the provisions of this circular by July 15. “They shall also place the compliance status of this circular before their boards. The CRA shall disclose its shareholding pattern as prescribed by stock exchanges for a listed company under clause 35 of the Listing Agreement.”

A CRA would be formulating policies and internal codes for dealing with the conflict of interests: A CRA shall ensure: that its analysts do not participate in any kind of marketing and business development including negotiations of fees with the issuer whose securities are being rated; that the employees' involved in the credit rating process and their dependants do not have ownership of the shares of the issuer; prompt review of the credit ratings of the securities as and when any of its employees joins the respective issuer.

The CRAs were asked to keep all records in support of each credit rating and review/surveillance thereof: The important factors underlying the credit rating and sensitivity of such credit rating to changes in these factors; summary of discussions with the issuer, its management, auditors and bankers which have a bearing on the credit rating; decisions of the rating committee(s), including voting details and notes of dissent, if any, by any member of the rating committee.

“If a quantitative model is a substantial component of the credit rating process, the rationale for any material difference between the credit rating implied by the model and the credit rating actually assigned. These records should be maintained till five years after maturity of instruments and be made available to auditors and regulatory bodies when sought by them,” it stated

What Are Shares All About and How to Invest in The Share Market?

What are shares and the stock market all about?

All business enterprises need funds to meet their short term and long term business goals. Such capital (big amounts) can only be raised when large number of investors are available and interested to invest in business. Institutions like BSE (Stock Exchange) give a common platform to a "Business Man" and an "Investor" where a business man can sell its stock and an investor can but the same stock. Institutions like BSE give the flexibility of buying and selling of stock as and when required. Stock (shares) are nothing but 'ownership of business broken-up into a large number of small units. Each unit of stock can be easily bought and sold independently. And this buying and selling of stock takes place in stock exchanges like BSE and NSE.

There are 23 recognized stock exchanges in India. Out of these, 4 stock exchanges are national and 19 are regional stock exchanges. The 4 national stock exchanges are BSE (Bombay Stock Exchange), NSE (National Stock Exchange), and OTCEI (Over the Counter Exchange of India). In a stock exchange like BSE, shares are traded (bought and sold in daily basis). Securities are a very broad term which can be defined as an "investment instrument issued by government or a company indicating the evidence of either ownership (shares) or creditor ship (bonds, debentures). The securities can be bought and sold from one party to another. If in a trade, the ownership cannot be transferred then it cannot be classified as securities". Securities include stock, mutual fund, bonds, and debentures etc.

Security market can be classified into capital market and money market. In capital market long term investment options are traded like stock, bonds, mutual funds, debentures etc. Money market makes it possible for companies to generate funds to meet its short term demands (working capital). Examples of money market securities are T-Bills issued by government for its own borrowings. A Primary market (BSE) is where a company in search of capital makes its first contact with general public. In other words IPO's are bought and sold in Primary market (BSE). The secondary market comprises of buyers and sellers of stock and debentures subsequent to original issue (IPO). Primary and secondary (BSE) market is not physically segregated from each other. Both IPO's and subsequent buying and selling of stock take place in instructions like BSE.

How to buy and sell shares in stock market?

When we are talking about buying and selling of shares, there are mainly two type of shares we can trade. First is the IPO's and second is the regular shares daily traded in the stock market. Both IPO and regular shares can be traded through online trading. Online trading is the most convenient way of buying and selling of shares from the comfort of your house or office. You are not authorized to buy or sell shares directly from the stock exchange. Only brokers can trade shares on your behalf. There are quite a few brokers available in India who provides online share trading facility. Like HDFC Bank, ICICI Bank, Axis Bank, SBI etc. To know more about opening an online trading account please visit the link

Is investing in shares really risky?

When you are thinking to buy shares and you are a 'first timer', think like a business man instead of a trader. This type of thought process will drastically reduce the risk involvement in share trading. FOCUS ON COMPANIES FUNDAMENTALS.

Step-1) List down 5 companies that you remember by its brand name. e.g infosys, Tata Steel, SAIL, Reliance, L&T, Tata Motors, ICICI...

Step-2) List down 5 companies that you think has a stable product.e.g. Tata Steel, Tata Motors, Hindalco, infosys, ICICI.

Step-3) List down 5 companies that has made reasonable business in last 3 years.

e.g. Tata Steel, Infosys, ICICI etc.

Objective is to know one name that has a strong fundamentals. If you do one hour research in the internet you will get your answer. FOCUS ON LONG TERM INVESTMENT. When you are thinking of investing in shares, think to keep your money invested for at least 8/10 years. In other words if you buy a share now, you shall hold it for at least 8/10 years. When you have this kind of time in your hand you can take bigger risks. When I say risk, the fear is not to loose money but how much one can gain. If you invest in Insurance Policies, your money is safe. You will never loose. But you will gain not more than 4%-5%. Means @ 5% interest your invested money will take 15 years to get doubled. If you invest in Fixed Deposit, your money is safe. You will again not loose.

But you will gain not more than 6%-7%. Means @ 7% interest your money will take 10 years to get doubled. If you invest is Debt Linked Mutual Fund, your money is comparatively safe. The chance of loosing money is very less. But when we are talking about investment time span of 8/10 years, loosing money in debt schemes is negligible. You can expect average returns of 8%. Means your money will take 9 years to get doubled. If you invest is Equity Linked Mutual Fund, your money is at risk. The chance of loosing money is very high. But when we are talking about investment time span of 8/10 years, loosing money in equity mutual fund is very less.

You can expect average returns of 12%. Means your money will take 6 years to get doubles. If you invest is Equity/Shares directly your money is at high risk. The chance of loosing money is very high. But when we are talking about investment time span of 8/10 years, loosing money in shares is very low. Only care you have to take is to invest in companies with very strong fundamentals. In layman's term select a company which is not going to close in next 8/10 years, which is only going to grow in next years. When I talk about companies with strong fundamentals I am talking about Infosys, Tata Steel, Reliance, Tata Motors etc. You can expect average returns of 16-18%. Means your money will take only 4 years to get doubled.

Important is to understand, if you have less time in hand invest in less risky investments. But if you have good time in hand (5-10 years or more), you can invest in share market / Equity linked mutual funds and feel safe.

The author is a big enthusiast of the process of Investment and aspires to set-up a highly successful online business of himself. He is a firm believer in the concept of 'working for self can make this world a better place to live'. He has also been heavily influenced by the theories and practices of Warren Buffett and would like to practice investment just like his guru.

Market Trend - Using Trendlines to Your Advantage

It is part of human nature to want to feel like we accepted, and a welcome member of something larger than ourselves. If you're relatively new to the stock market trading game, you've probably heard people say things like "the trend is your friend," or "never go against the trend," without really knowing what they meant. Although the stock market is a very dynamic place, with prices constantly moving up and down all the time, it's important for all new investors to realize that prices don't just increase or decrease arbitrarily: what you're looking at is the manifestation of the market trend.

Outside the stock market, trends don't always make much sense, especially if you're talking about fashion or music trends. Thankfully, the stock market trend is usually motivated by much more logical principles of economics and mathematics, although public opinion and emotionalism can still act as interruption some of the time. Basically, trends in the stock market are defined as the overall direction in which prices are observed to be moving, either up, down, or neutral (flat). If you've been studying up on the practice of technical analysis, you'll know that trends are very important for predicting the future movements of stock prices before they happen.

It's important for new investors to realize that the market trend is one of the most important things they can learn to identify on stock market charts. In order to confirm that a trend is upward moving, you have to be able to point out at least two low points on the chart, and the second low point must be charted at a point that is higher than the first. Conversely, a downward trend can be confirmed by looking for successive high points, each of which closes lower than the previous one.

Of course, you won't have to spend much time looking at stock charts to realize that the market trend doesn't always take a completely positive or completely negative slope throughout the day, week, or month. There are smaller trends that form within the larger trends, which can sometimes appear like pauses or even retracements in the larger trend. These internal trends are classified as intermediate, short-term or long-term, depending on where they are positioned inside the larger trend. Becoming skilled at spotting and identifying trends is an important skill for a trader, because it can prevent them from making premature sales, or early purchases.

If you're interested in learning more about Market Trend or you looking for Stock Picks ready to breakout, go to Stock Market Video the best source on the Internet that is recognized as the leading provider. Visithttp://stockmarketvideo.com and get your FREE Daily Video!

Can Gold Climb to $6500 an Ounce? Investing in Gold Stocks Maybe the Best Investment of This Decade!

Right now, gold prices are hovering around $1,100/ounce. Can gold prices go as high as $6,500/ounce in the medium term? If you take a look at the charts of gold and silver appreciation against 23 currencies in the past ten years, one thing becomes crystal clear!

It is not the gold and silver that are appreciating rather it is the currencies that are losing against the gold and silver. What this means is that the regime of fiat currencies that was put in place after the collapse of the Bretton Woods System in 1973 is fast heading towards it's implosion. What's the reason?

Governments all over the world including the US are abusing their currencies and destroying their people's purchasing power by spending beyond their means and using debt to stay afloat. In US, the FED is printing green backs trying to goose up an economic recovery by taking up huge deficit financed by a massive debt.

Soon, this economically irresponsible behavior is going to lead to economic chaos, upheaval and later on to a recovery. Those who hold on to gold and silver investments are going to reap the most reward. As these governments print more and more of their currencies to spend more and more in hope of starting an economic recovery, gold and silver prices are going to appreciate sky high.

Gold offers the safe way to hedge against these falling fiat currencies. Take a look at these gold stocks; Ventana Gold stocks skyrocketed 3,000% in just six months, Appleton Exploration surged by more than 3,000%, Azteca Gold leaped by 2,300% and so on. This might be the best time to invest in gold stocks!

Mr. Ahmad Hassam has done Masters from Harvard University. Turn $200 into $100K in just 1 month with this FREE Penny Stock Trading Report that shows how to find killer stocks that are about to triple in price in the next few days. Watch this weird 30 minutes Stock Trading FREE video just now, don't miss it!

Investing in Funds Using a Fund Supermarket Could Save You Time and Money

In financial services it can often save money to leave the middle man in. And when it comes to investing in funds it can be beneficial to let someone, in this case a website, do the hard work for you.

Funds enable investors to pool their money with other investors to get access to more stocks or bonds than most people can buy or manage themselves. Funds can usually offer greater diversification, professional management and more convenience than investing in individual stocks or bonds and are looked after by a fund manager, who researches the market to try and provide a good return.

But because investing in funds can be complicated there are so many to choose from, many investors research and manage their funds using a fund supermarket.

Discounts and offers

These online platforms provide a facility for buying and selling a wide range of investment funds from different fund management companies. But generally one of the attractions of a fund supermarket is the discounts and offers available to customers.

Usually the initial charge, which you pay every time you invest in a fund, is as high as 5.50 per cent but via a fund supermarket you can reduce the upfront fee by as much as 100 per cent and some even offer cashback when you invest your money or transfer certain amounts from other investments.

Manage your money in one place

As well as big discounts fund supermarkets can make buying funds and managing your investments straightforward by bringing them all under one roof. So if you have existing investments with separate fund managers a fund supermarket can help you consolidate all of your investments and bring them together in one place.

Fund supermarkets also give you access to a large range of funds, Fair Investment Company allows you to choose from up to 1,300 funds from more than 90 fund managers, including Invesco and Jupiter. once you are registered you can easily switch between funds in the future, and the minimum investment is often as little as £500 or £50 a month.

Research

Fund supermarkets allow you to make an informed decision about how and where to invest your money. They will often enable you to see tables, charts and company information so you can compare and contrast the different deals at your computer screen.

You can also compare funds from different sectors against each other to see which one best suits your investment needs.

ISA investments

You can also use funds to take advantage of your annual ISA allowance by investing within your individual ISA wrapper. You can either choose to invest the whole annual ISA allowance as stocks and shares within a fund, which is up to £10,200, or up to £5,100 can be invested, with the other £5,100 reserved solely for cash savings.

Using a fund supermarket to do this bypasses hefty charges, some of which can be up to 5.50 per cent of the initial investment. This allows you to make the most of your tax free allowance in one go. Existing ISAs can also be brought together into one place using a fund supermarket.

For fund quotes and advice visit Fair Investment Company

Article submitted by Lois Avery, Editorial Assistant for Fair Investment Company Ltd. Writing about savings & investments and pensions. Fair Investment Company is a financial services provider, acting as an 'introducer' for consumers to other companies who provide financial products and services. Through our website Fair Investment Company we offer a range of online tools that enable consumers to engage with leading financial products and services so they can make an informed decision about what to do with their money.

Mutual Funds and Other Cruise Control Investing Approaches May Perhaps No Longer Cut It

It used to be that if the analysts called it a burst bubble, or a recession, or an economic slowdown, all you required to do was hold your breath and hunker down, whilst it played itself out; and pretty soon you found items had been on the mend. Those had been the beneficial days. Now although, booms, busts, bubbles and recessions are just as normal as the waves that rock your boat. If you desire to hunker down, you could possibly too make your self acquiring comfortable in there. They wipe out your company, leave your carefully planned-out portfolio in tatters, and should you aren't punchdrunk already it looks like acquiring used to being wiped out is one of the very best expense methods to have nowadays.

And not without having reason as well. Even a minor exposure to how hedge funds work, shows that you can find alarming issues in the air. The huge banks and also the hedge funds have been constantly involved in moving fantastic sums of money out of the country; it definitely points to some thing. You cannot actually predict what exactly it may well be even though or put together factors investing techniques for it. Just a couple of years ago, it was the housing bust, wherever individuals bought too much property they could not afford, with money that was not theirs. Who's to say exactly where the next scare is heading to come from? It might be treasury bonds, or investments in South America or anything at all.

But you do not truly have to have particular data; it is possible to still plan your life on certain all-weather investing techniques that may protect you no matter what. For example, keeping your debt levels under control, is an ever-popular life strategy. At a time when one of these economic Katrinas is bound to tear via your life sooner or later, a beneficial method to conduct factors could be to lower your monthly bills for everything, and to lower debt in general. Picking a fixed-rate mortgage to refinance now will be fantastic. If you've everything left on your student loans or your car loans or on your credit card, it could be finest to direct your income towards bringing them down as far as feasible. Everything you need to purchase, you could be much better off purchasing for cash, whenever you save up for it.

You are heading to have to not strategy on any support from anyone but your self. Everyone who relied on their pensions and their health insurance from GM is beginning to wake up to a new reality. Even government programs like Medicare or Social Security, are just as well generous being in a position to stay afloat for considerably longer. Needless to say it is the government, and they'll maintain them in place for long as they can. But the party has to end sometime. So much for lowered expectations. Let's come down to basic expense approaches. You've been performing the disciplined thing over the last ten years - you spread your money out among all the respectable low-cost mutual funds, and you did this regularly. There nevertheless isn't a lot to show for it, what with the shakeup inside markets.

In case you believe that you simply have to speculate to accumulate, and would like to bet on China or India, or short treasury bills, you just entered a raging debate on regardless of whether these kinds of tactical investing techniques may well perform anymore. It just takes too much knowledge and too much disciplined timing. But then there's definitely no other selection. The whole theory that you just could bet risk-free, and stay on top may well just belong to an additional era. We live in a time when America may well no longer be capable to dictate terms inside world. When American firms lose clout and power, investments in them, no matter how secure, may perhaps inevitably not do very much for you. The way individuals used to bet harmless across a variety of stocks, nowadays, betting across a range of expense techniques is exactly where it is heading. Try a tiny of the old technique, try a tiny of the new. Who knows which one will strike?

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