This week in Stock market
Finance
Last week, the stock market resumed its bullish trend. Nifty started at 15520 levels and closed at about 15580 on Friday. Here’s a weekly Nifty chart.
Nifty Auto
Last week, the automobile sector finally matched up to the investor expectations and rallied in tandem with other stocks. The bullish move was led by its major contributor - Maruti. The shares of Maruti - which were range-bound between INR 6400 and INR 7300 finally broke out on the upside and are currently trading at INR 7650.
I expect the rally in Auto - more specifically Maruti - to continue until it hits the resistance of INR 7950. Investors would look to book some profits there.
Reliance
While the stock market was aggressively rallying, Reliance actually washed away its gains from the last three weeks in three days with a sharp sell-off. It seems that the Annual General Meeting(AGM) of Reliance, led by Mukesh Ambani, failed to impress the investors.
INR 1900 to INR 2050 is a high-volume trading range for Reliance. If it falls further, it might re-enter the range and stay within it until the next big news. Personally, I believe that the next week shouldn’t bring in a big change in Reliance prices. Anywhere near 2000 would be a great buy!
Nifty Bank
Last week, Nifty snapped its two weeks down-move and returned to positive ways. It created a bullish-engulfing candle, as seen in the chart below.
Nifty Bank generally is in line with the broader markets. I expect the momentum to continue on the upside. For those who love to do break-out (high-risk trades) - Axis Bank is at an inflection point. Tomorrow’s open would be interesting. If it starts trading actively above 760 levels, we might see an upward spike.
Another industry that might see an uptick in the upcoming week is hospitality. Last week, DeltaCorp, TajGVK and EIH hotels saw some buying. If there are indications of the threat of Wave 3 being low in the upcoming week, these hotels might see a good rally.
The risk-reward ratio is in favour of the buyers even at the current prices. However, a fundamental change in the covid situation (like the Delta variant spreading further) might be detrimental. I say take your chances!
Sugar stocks
Last week, a lot of Sugar-based stocks went berserk. For instance, Andhra Sugar saw a move of 15% on the upside. This move comes after data shows that Sugar production internationally has gone down. Moreover, PM Modi talked about mixing more Ethanol in Petrol to decrease pollution. This will again boost demand from Sugar companies.
However, the current prices of some companies are too high. While I expect the rally to continue, the risk-reward ratio is too skewed to get in. But again, any dip might be a good buy!
Calls/Puts
ITC has been a range-bound share for a long time now. Currently, it is trading between INR 203 to INR 218. INR 203 has been a strong support for the last six months.
I believe a July call option with a strike price of INR 207 can serve as a great entry point if you’re bullish on the overall markets. Most of the other stocks are trading at very high prices and since my view is further bullish, derivatives aren’t making a lot of sense for now.
The markets should continue the bull rally. I will not be surprised if Nifty hits the 16000 mark for the first time in its history this week. If there is any sudden weak global cue, that might trigger some sell-off but a strong bearish move looks difficult.
These are my personal views. How are you viewing the market?
A new challenge for India: E-Waste
Opinion
What is E-Waste?
Electronic waste or E-waste is a term used to describe old, discarded or end of life appliances that run on electrical energy. Examples of E-Waste include computers, monitors, mobile phones, headphones, chargers amongst other consumer electronic appliances. Completely obsolete and even slightly out of date electronic equipment find their way into a sea of E-Waste, everyday.
What drives the increase in E-Waste?
Updates in technical innovations, high rate of obsolescence in the electronics industry, urbanisation, economic growth, consumerism — these are the major reasons contributing to the ever-increasing pile of electronic junk across the globe. The tragedy of this classification of waste is that enough attention is not paid towards it by most of us. Even the authorities responsible for waste collection — more often than not — don't follow the protocols of waste classification.
Indian callousness towards E-Waste
In a recent report by the CPCB(Central Pollution Control Board), the data on the collection of E-Waste in India shows a worrying trend: India collected just 10% of the E-waste estimated to have been generated in the country in 2018-19 & 3.5% of that generated in 2017-18.
This is when the report has taken into account only the 21 types of electronic and electrical equipment listed in the E-waste Management Rules, 2016.
Complications in E-Waste disposal in India
1. The monopoly of the unorganised sector
Less than 5% of total E-waste gets recycled annually in India, of which majority reaches unorganised sector operating from the shanties on the peripheries of big cities and small towns alike - where recycling operations are carried out by unskilled employees(including child labourers) using the most rudimentary methods, to reduce cost. Working conditions are abhorrent and practically devoid of any safeguard; efficiency of disposal is naturally scant.
2. E-Waste import
Developed countries have comparatively advanced technologies and resources to better deal with their E-waste when compared to developing countries. Despite this fact, many developed countries still end up exporting their E-waste to developing nations, leading to further exacerbating the already worse off state of safe E-waste disposal.
3. Advancement in technology
Technology has become an inseparable part of our life, integrated with almost every aspect of it. From communication, transportation, medical facilities, space exploration, to fitness, well being and everything in between has become increasingly influenced and eased by so many strides taken by our technological advancement as a developing society.
The steps towards bridging the digital divide in developing regions like India also create a cycle of E-waste generation.
India: Third largest E-waste generator in the world
India has been known in recent years across the globe as the second-largest E-Waste generator in Asia and third-largest in the world. The government is often under the radar for not taking adequate measures to turn the informal sector into a well-managed system.
Through scientific recycling, 95% of materials can be recycled in the organised sector compared to a meagre of less than 20% in the unorganised market.
What should be the way forward?
Pressure groups can be formed to build much-required pressure over the state apparatus to look into the formalisation of the unorganised sector. Conversion to the organised sector will improve the lives and working conditions of workers along with an increase in efficiency of E-waste disposal.
The government should carry out awareness programmes to sensitise the masses about do's and don't with respect to their old gadgets & appliances.
With the new E-Waste Management Rules, 2016, it has now become the responsibility of equipment manufacturers to take up the task of recycling their products. However, we should recognise that we are also responsible for discarding our e-waste as concerned citizens.
A balance between the three institutions — government, manufacturers, and society — is what India needs to manage its E-waste wisely and better.
America’s largest radio station: Starbucks
Business
Starbucks is the world’s largest coffee chain with roughly 32,000 stores across 80 countries and a market cap of USD 132.5 billion.
Headquartered in Seattle, Washington, Starbucks has a market share of 37% in the coffee industry in the USA and in effect, represents the American culture of coffee around the world as well.
But did you ever think about how Starbucks can influence other forms of culture as well?
In 2014, American Pop Star Meghan Trainor released her debut single: ‘All About That Bass’, which was the first song to enter the UK Charts without a physical or digital sale but on the basis of streaming alone.
Trainor’s song had accidentally dropped on Spotify a week before it was available everywhere else and had unintentionally drawn a crowd, large enough to take it to the Top 40.
Determined to find out the reason for this, former Chief Economist of Spotify, Will Page, found that the song had performed extremely well on Shazam, the song discovery platform which enables users to find the name of a song playing around them. Shazam was the bridge between lean-back discovery on radio and lean-forward discovery on your own device.
‘All About That Bass’, however, had not been released on any radio station, nor were any physical CDs sold. So how was the song being ‘Shazamed’ by people if the only way to listen to it was via streaming apps?
An encounter with Emily Blake, who headed the Global Partnerships and New Market Sales at Spotify, seemed to have solved the missing piece of the puzzle. Emily had recently been in meetings across America with Starbucks in their Seattle HQ and found data revealing Starbucks as one of the biggest sources of ‘Shazams’ in the United States.
The hypothesis was, owing to the sheer large number of coffee shops that Starbucks has across the States, it effectively made them one of the largest radio stations in America.
Seems ridiculous, right? However, when you think of it, the numbers start making sense.
Any large US radio station has anywhere between 6-7 million listeners in a month. Starbucks on the other hand, alone, has around 14,000 stores and around 40 million customers.
Think of all those customers queuing up to place their order, waiting to receive their coffee, and then consuming it - any customer spends roughly half an hour in the store. And music is always playing in the background, right? So if they like a particular song, why would they not Shazam it?
Page clarifies in his book:
The fact that Starbucks was able to ‘Draw a Crowd’ meant that it had unknowingly become one of the biggest radio stations in the US!
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