Nifty Observations

What is the Nifty Price to Book telling us

Jayant Manglik of Religare Securities recently wrote an article where he predicts that Nifty will cross 6600 by Dec this year.In the article, he states “our valuations are reasonable. Nifty price to book is at multi-year lows,”

I thought it would be interesting to see how the Nifty P/B fared over the years:

The current P/B of 3.07 is is certainly higher than the 5 year low hit on 27 Oct, 2008 when it was 2.12.The current P/B is however is slightly lower than the 5 Year average of 3.28 and 5 Year Median of 3.3



Nifty Observations

Sensex Vs Nifty-The generation gap

There was an interesting discussion at Atma about which index better represents the Indian market-the Nifty or the Sensex.

I find that the answer often depends on the age of the person. For old timers (above 40), the answer is the Sensex.They have spent the better part of their trading lives talking,dreaming and thinking about the Sensex.

For the young ‘uns, it is the Nifty.They trade F&O on the Nifty and can tell you its movement tick by tick.They will be hard pressed to even know what the Sensex levels are.

So when somebody asks you where the market is, the index you quote tells something about you as much as it does about the market !


Best & Worst Performing Nifty stocks

The best 5 performing Nifty stocks for the year so far (30 Dec,2011- 25 May, 2012):

BPCL: 52%

TATA Motors: 50%

AsianPaints: 45%



The worst 5 performing Nifty stocks for the year so far (30 Dec,2011- 25 May, 2012):

Infy: -15%

Bharti Airtel: -13%

BHEL: -12.8%

GAIL: -12.2%

NTPC: -12%


Watch out below

In an earlier post,I had mentioned the importance of the Nifty breaking its 200 DMA.

Now that Nifty has finally broken its 200 DMA, watch out below !!


Nifty in terms of Gold

If I were to ask you, how well did the Nifty do in this century, your answer would be quite well.

Nifty closed at 1528.45 on 31st March, 2000.On 30th March, 2012, it closed at 5295.55.This represents a gain of 246%. A nifty gain by the Nifty you would agree.

But this is only one side of the story.

The performance of the Nifty in terms of a hard currency like Gold takes a different hue all together.

In March, 2000, one Nifty could have bought 3.95 grams of gold.In March 2012, one Nifty can buy only 1.94 grams of gold.(see chart below)

So the gain by Nifty wasn’t so nifty after all !