Market

Top 30 stock ideas from Morgan Stanley, Citi amid heightened geopolitical volatility

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In a bull case scenario, Morgan Stanley see the index touching 41,500 (bull case scenario), in the base case scenario it sees Sensex to touch 35,700, and in the bear case scenario, it sees Sensex slipping towards 25,000 by December 2018.

Kshitij Anand@kshanand
Volatility gripped markets across the globe after US President Donald Trump along with UK and France fired over 100 missiles on Syrian chemical establishments over the weekend.

Equity markets, in general, do not likely uncertainty and events like these usually trigger risk-off sentiment. Things could turn ugly for markets across the globe if Russia starts to retaliate. In this scenario, what should investors do?

Market experts said that Indian markets have always managed to surmount the wall of worries in the past and this time too it will be no different. The Nifty is trading above its crucial short and long-term moving averages. The Sensex did reclaim Mount 34,000 in April which suggests ongoing strength on D-Street.

Morgan Stanley in its report released earlier this month highlighted that Indian markets can outperform emerging markets (EMs). In a bull case scenario, the brokerage see the index touching 41,500. In a base case scenario, it sees Sensex touching 35,700, and in a bear case scenario, it sees the Sensex slipping towards 25,000 levels by December 2018.

 “Returns are moderating in 2018, especially down the capitalisation curve. Largecap valuations look reasonable and better than midcaps. Hence, we remain more constructive on largecaps relative to midcaps,” it said.

Top 20 stocks in its focus list include Bajaj Auto, M&M, Maruti Suzuki, ITC, Bharat Financial, HDFC Bank, ICICI Bank, M&M Financial, ZEE Entertainment, IndusInd Bank, Dr Reddy’s Laboratories, Havells India, JSW Steel among others.

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Although most global brokerage firms did tweak their targets with respect to the Sensex and Nifty, there is general consensus that investors should focus on individual stocks.

Market experts said the focus will now shift to individual stocks in 2018 from benchmark indices. “The crucial factors will be earnings which will chart a direction for Indian markets in the near future.”

The Indian market has digested a rise in rates, domestic political news, bank scandals, rise in equity supply, protectionist waves, global market volatility, rise in Fed rates, higher oil prices and a reduction in portfolio weightage by FPIs.

Another global brokerage, Citigroup expects a 10 percent YoY growth in Q4 earnings of stocks in its coverage universe, led by strength in commodities (oil & gas and steel) and domestic autos (excluding JLR).

“With FY18 likely to be another year of tepid earnings growth (single-digit growth expected), we would watch out for downgrade risks to our FY19 estimates. We expect 2018 to be a volatile year for Indian markets and have our December 2018 Sensex target to 35,700, factoring in downward earnings revisions,” it said.

Its top picks from the mid and largecap space include Apollo Hospitals, DB Corp, Emami, Exide Industries, Federal Bank, Gujarat State Petronet (GSPL), L&T Finance, Mahindra & Mahindra Financial Services, Petronet LNG and Voltas.

In the largecap space, it is positive on Ambuja Cements, Aurobindo Pharma, Bharat Electronics, Cipla, HDFC Bank, ICICI Bank, IndusInd Bank, M&M, Tata Motors, and IOC.

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Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com and blogger advises users to check with certified experts before taking any investment decisions.

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Markets@Moneycontrol: Nifty likely to open flat; 3 stocks which can give up to 11% return

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Trends on SGX Nifty indicate a flat opening for the broader index in India, a fall of 3 points.

Moneycontrol News@moneycontrolcom

The Nifty50 is expected to open flat on Tuesday following muted trend seen in SGX Nifty. But, positive handover from Wall Street and stable Asian markets may push the index higher. The Nifty closed 47 points higher at 10,528.35 on Monday.

Trends on SGX Nifty indicate a flat opening for the broader index in India, a fall of 3 points. Nifty futures were trading around 10,544-level on the Singapore Stock Exchange.

US stocks closed higher on Monday, with the biggest boosts from technology and healthcare sectors as investors were optimistic about earnings season and appeared less worried about US-led missile attacks in Syria, Reuters reported.

The Dow Jones Industrial Average rose 212.9 points, or 0.87 percent, to 24,573.04, the S&P 500 gained 21.54 points, or 0.81 percent, to 2,677.84 and the Nasdaq Composite added 49.64 points, or 0.7 percent, to 7,156.29.

 Asia stocks edged higher on Tuesday, tracking Wall Street gains as the focus shifted to corporate earnings and looming economic data from China amid signs Western-led strikes on Syria weren’t likely to escalate, a Reuters report said.

Stocks in news:

Cipla: USFDA conducts inspection at Indore facility

Bajaj Electricals: Company wins orders worth Rs 3,577.93 crore as part of govt’s Saubhagya Yojna

Fortis Healthcare: The company said that the Board will meet this week to look at eligible options.

Reliance Communications: No legal restriction any more to proceed with sale of spectrum, MCNs & real estate.

Adani Ports: Signs A Long Term Regasification Pact With Indian Oil For Dhamra LNG Terminal

Results in focus: CRISIL, Muthoot Capital, Orchid Pharma, and Tata Sponge Iron, among 9 companies declaring results on Tuesday.

Sobha: Company to invest Rs 500 crore for residential project in GIFT City, Gujarat.

Sterlite Technologies: Board to consider raising funds through issue of securities on April 25

 

Technical Recommendations:

We spoke to HDFC Securities and here’s what they have to recommend:

Tata Global: BUY| Target Rs. 300 | Stop-loss Rs 268 | Return 7%

JAI CORP: BUY| Target Rs. 181 | Stop-loss Rs 154 | Return 11%

GENUS POWER: BUY| Target Rs. 62 | Stop-loss Rs 54 | Return 8%

 

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com and blogger advises users to check with certified experts before taking any investment decisions.

This entry was posted in Market.

Top 5 stock picks which can deliver up to 7% return in the near-term

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“Nifty is likely to retest 10,650-10,670 levels on upside i.e. Inner Trendline which might work as immediate hurdle zone,” says Rajesh Agarwal of AUM Capital.

Benchmark indices managed to close in the positive zone for the eighth straight session on Monday on positive economic data that revived overall investors’ sentiment despite mixed global cues. Shares of India’s second-largest IT services company, Infosys, tumbled nearly three percent after the management forecast FY19 operating margin between 22 percent and 24 percent. Credit Suisse said this was 100 basis points below expectations and slightly lower than its previous year’s 24.3 percent.

Meanwhile, in economic data, March wholesale price inflation (WPI) came in at 2.47 percent on Monday versus 2.48 percent month-on month.

Broader weakness in Asian markets also weighed on sentiment amid tensions between the United States and Russia over Syria.

The Nifty opened with a gap down around its 50 EMA and rebounded from Monday’s low to close higher at 10,528.35, up 0.46 percent. The index has formed a ‘Bullish Engulfing’ candlestick pattern. This candle indicates the change in sentiment from a bearish gap down in the morning, to a large bullish real body candle that closes at the highs of the day. It is likely to retest 10,650-10,670 levels on the upside: Inner Trendline which might work as an immediate hurdle zone.

Bank Nifty
Nifty Bank is consolidating within its two major moving averages of 200 and 100 SMA for five consecutive days. It has formed a ‘Bullish Candle’ after multiple bearish reversal candles, thereby negating a bearish set up. Now the Nifty Bank has to cross 25,420 decisively for a further upmove.

If the index fails to cross this level and sustains below it, Nifty Bank may correct till 24,700. On the hourly scale, the index is trading around overbought zone with a negative divergence on RSI.

Below are the top five stocks which can deliver up to 7% return in the near term:Indiabulls Ventures | Rating: Buy | Target: Rs 398 | Stop loss: Rs 365 | Return: 5%

Tata Global Beverages | Rating: Buy | Target: Rs 293 | Stop loss: Rs 271 | Return: 5%

Bombay Dyeing | Rating: Buy | Target: Rs 270 | Stop loss: Rs 252 | Return: 4%

Jai Corp | Rating: Buy | Target: Rs 173 | Stop loss: Rs 155 | Return: 7%

Sun Pharmaceutical Industries | Rating: Buy | Target: Rs 534 | Stop loss: Rs 510 | Return: 3%

Disclaimer: The author is the Head of Research at AUM Capital Markets. The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com and this blogger advises users to check with certified experts before taking any investment decisions.

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RBI bans Bitcoin and other virtual currencies

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A day after the Reserve Bank of India (RBI) barred banks from dealing in cryptocurrencies, investors rushed to square off positions and sought advice on how much tax they should pay on returns made in FY18 and if they can do so before the July-end deadline.

The worry is that they may be left holding the virtual currency if they don’t sell it now and transfer the money into their bank accounts. They also fear a crackdown by tax authorities and other government agencies, experts said.

Bitcoin exchanges such as Zebpay and CoinSecure saw a spike in transaction volumes of about 40%, with about 90% of that being on the sell side, sources said.

The Reserve Bank of India (RBI) has effectively banned any dealings in  cryptocurrency via banks or e-wallets in the country stating “dealing with or providing services to any individuals or business entities dealing with or settling virtual currencies.”

Nischal Shetty, CEO of  WazirX , a Bitcoin and crytocurrency exchange said: “Blockchain technology and cryptocurrencies are going to define the future of financial technology and the way money operates. While the security features intact in the blockchain technology have been acknowledged by the Finance Minister himself, the latest mandate by the Reserve Bank of India, discouraging Indians from dealing in cryptocurrencies, is quite disheartening. More so, since in the recent past, the RBI had seemed to be favourably predisposed towards supporting new, innovative and tech-driven processes.
“While India continues to debate and hold back the mainstreaming of cryptocurrencies, our global counterparts in the USA, Japan, South Korea etc are moving forward and regulating cryptos. By supporting blockchain and cryptocurrency, RBI could have given Indians an opportunity to be at the forefront of a global phenomenon, act ahead of time and be future-secured with our own set of digital assets.”
The central bank said in its statement that virtual currencies (VCs), also variously referred to as cryptocurrencies and crypto assets, raise concerns of consumer protection, market integrity, and money laundering, among others.
“The RBI statement will negatively impact startups, because no matter how great an idea they have, investors will be wary of putting money into a crypto-venture given their uncertain future in uncertain regulatory environments,” said Nehaa Chaudhari, Public Policy Lead, TRA, a technology policy and law firm.
After these RBI guidelines, Shetty added that this will exclude India from global crypto revolution. There will be massive wealth erosion of all the tax paying people who have invested in cryptocurrencies.
“Gullible investors will now try to buy cryptos through cash and other OTC means where they would have no buyer protection and end up falling for scams. This will also make illegal trades almost impossible to track,” said Shetty.
Atulya Bhatt, Co-founder of BuyUcoin, a multi cryptocurrency wallet and exchange, said: “There will be a parallel economy and in few months people will find unregulated ways of cashing out. Some investors are in utter shock because the government has given only three months to handle the transactions. ”
As for startups, he said, “It disturbed the whole structure of crypto exchanges. We have plans and we are discussing it. But banning it is an unfair step.”
“The alternate way for the cryptocurrency exchange will be to do crypto to crypto trading,” said Bhatt.
Ravi Kikan, COO, Panaesha Capital, said: “If you look at the complete circular it first talks about RBI exploring the desirability and feasibility of introducing its own crypto currency (a fiat-digital one). In fact, it has set up a panel to review the proposal and come up with suggestions by June.

“The RBI is more concerned about the other side of negatives like speculative trading, Consumer protection, Ponzi Schemes, Money laundering and terror financing that can pop up through this un regulated market, which I think is a very fair stand to safeguard the public at large. In the long run keeping the above in light the digital currencies which have a certain usefulness towards their utility/usage will be the ones that will have a shot at the silverline and more prone to acceptability.”
In its budget speech, Finance Minister Arun Jaitley clarified in his budget speech that it is not a legal tender and the government will discourage its use. However, he had mentioned that the government will look at the utilisation of blockchain.

This entry was posted in Market.

Trade Setup for Wednesday: Top 15 things to know before Opening Bell

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The index formed a Doji type of pattern after a strong bullish candle which suggests that the momentum could take a pause.

The Nifty climbed its crucial resistance level of 10400 on Tuesday but lost momentum towards the close of the session and made a ‘Doji’ type of candlestick pattern on the daily charts.

The index formed a Doji type of pattern after a strong bullish candle which suggests that the momentum could take a pause; hence, for bulls to remain control Nifty should hold above 10,348 levels.

A ‘Doji’ is formed when the index opens and then closes approximately around the same level but remain volatile throughout the day which is indicated by its long shadow on either side. It appears like a cross or a plus sign.

The Nifty index opened at 10412 and rose to an intraday high of 10424. It slipped below 10400 in intraday trade to record its intraday low of 10381 before closing the day at 10,402, up 22 points.

 “Despite positive global cues Nifty lacked follow-through buying which should be a cause for concern as it registered a Doji kind of indecisive formation after moving in an extremely narrow range of around 45 points,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in, told Moneycontrol.

“The Nifty may be in need of a breather as momentum oscillators on short-term charts are in an extremely overbought zone and hence unless it gets past its 50-Day Simple Moving Average, whose value is placed around 10438, which successfully curtailed its up move in the past,” he said.

Mohammad further added that bulls may not pick up momentum going forward and a close below 10348 shall confirm short-term weakness in the indices. Hence, it looks prudent for traders to book profits and remain on sidelines till such a breakout occurs above 10450 on a closing basis.

India VIX fell down up 2.51 percent at 14.49. A decline in VIX suggests a range bound move with limited upside as well downside in the market.

We have collated the top 15 data points to help you spot profitable trades:

Key support and resistance level for Nifty

The Nifty closed at 10,402.2 on Tuesday. According to Pivot charts, the key support level is placed at 10,380.87, followed by 10,359.53. If the index starts moving upwards, key resistance levels to watch out are 10,424.17 and 10,446.13.

Nifty Bank

The Nifty Bank index closed at 25,226.8. The important Pivot level, which will act as crucial support for the index, is placed at 25,138.04, followed by 25,049.27. On the upside, key resistance levels are placed at 25,297.74, followed by 25,368.67.

Call Options data

In terms of open interest, the 10,500 call option has seen the most call writing so far at 41.66 lakh contracts. This could act as a crucial resistance level for the index in the April series.

The second-highest buildup has taken place in the 11,000 Call option, which has seen 38.76 lakh contracts getting written so far. The 10,700 Call option has accumulated 36.25 lakh contracts.

Call writing was seen at the strike price of 10,500, which added 2.03 lakh contracts, followed by 10,600, which added 1.13 lakh contracts, and 10,400, which added 1 lakh contracts.

Call unwinding was seen at the strike price of 10,300, which shed 2.89 lakh contracts.

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Put Options data

Maximum open interest in put options was seen at a strike price of 10,000, in which 45.66 lakh contracts been added till date. This could be a crucial resistance level for the index in April series.

The 10,200 put option comes next, having added 39.24 lakh contracts so far, and the 10,300 put option, which has now accumulated 38.76 lakh contracts.

During the session, put writing was seen the most at a strike price of 10,400, with 9.73 lakh contracts being added, followed by 10,300, which added 6.33 lakh contracts and 10,200 with 3.01 lakh contracts.

There was hardly any Put unwinding seen.

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FII & DII data:

Foreign institutional investors (FIIs) sold shares worth Rs 684.99 crore, while domestic institutional investors bought shares worth Rs 653.65 crore in the Indian equity market, as per provisional data available on the NSE.

Fund flow picture:

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Stocks with high delivery percentage:

High delivery percentage suggests that investors are accepting delivery of the stock, which means that investors are bullish on it.

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68 stocks saw long buildup

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38 stocks saw short covering:

A decrease in open interest along with an increase in price mostly indicates short covering.

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57 stocks saw short build-up:

An increase in open interest along with a decrease in price mostly indicates build-up of short positions.

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45 stocks saw long unwinding

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Bulk Deals:

VRL Logistics Limited: Morgan Stanley Mauritius Company Ltd sold 5,26,393 shares at Rs 389.22 per share

Apl Apollo Tubes Ltd: WF Asian Reconnaissance Fund Limited bought 2,64,000 shares at Rs 2140 per share

Supreme Industries Ltd: Smallcap World Fund INC sold 17,99,545 shares at Rs 1205 per share.

(For more bulk deals click here)

Analyst or Board Meet/Briefings:

Indian Hotels: At a public event, the company met around 17 institutional investors on April 10, 2018.

Mahindra & Mahindra: BOB Capital Markets along with several other funds and investors will meet the company between April 11 and 12, 2018.

Stocks in news:

Tech Mahindra: Balbix tie up with the company for artificial intelligence-based cyber security platform

Dr Reddy’s Labs: Company gets EIR from USFDA for Cuernavaca plant in Mexico

Punjab National Bank: Fitch has Downgraded PNB’s Viability Rating To ‘BB-‘; Maintains Rating Watch Negative

Calix, Infosys Enter Strategic CoCreation Partnership to Accelerate Time to Market for New Capabilities on AXOS Platform

Max Life: Company leads race to buy IDBI Federal Life stake

MRPL: Company trims oil purchase deal with Saudi Aramco: Sources

JSW Steel, AION get creditors’ nod for Monnet Ispat takeover

2 stocks under ban period on NSE

Security in ban period for the next day’s trade under the F&O segment includes companies in which the security has crossed 95 percent of the market-wide position limit.

For April 11, 2018 Jet Airways and Balrampur Chini are present in this list.

This entry was posted in Market.

Buy, Sell, Hold: 6 stocks and 2 sectors are on investors’ radar on April 10, 2018

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Tata Motors, Wipro and Adani Ports, among others, are being tracked by analysts on Tuesday.

Moneycontrol News@moneycontrolcom

Tata Motors

Brokerage: Kotak Sec | Rating: Maintain Buy | Target: Cut to Rs 465 from Rs 520

The brokerage house highlighted how weakness in UK and Europe hit JLR sales and volumes there declined by 8 percent year on year in March. It further stated that the outperformance by new models was offset by steep decline in volumes of existing models. It has lowered its FY19-20 consolidated EPS estimates by 17-22 percent. Going forward, it expects JLR’s overall volume to increase 3.5% yoy in FY2019 led by growth in China JV. It is also building in 6.3-6.4 percent EBIT margin for JLR in its estimates.

Adani Ports

Brokerage: Kotak Sec | Rating: Upgrade to Buy from Add | Target: Cut to Rs 450 from Rs 475

Kotak Securities said that the revised target is factoring in worst case business impact of closure of Mundra plant. It highlighted that ports data for key cargo classes suggests a healthy 3-9% yoy vol growth for FY18. It has cut estimates by 10 percent to factor nil imported coal volumes for Mundra power plant.

Hindalco

Brokerage: Credit Suisse | Rating: Maintain Outperform | Target: Rs 310

Credit Suisse said that aluminium prices have bounced back sharply driven by news of sanctions on Rusal, but the impact of the same is unclear. It also said that the stock is trading near the lowest EV/EBITDA multiples since 2012.

IT

Brokerage: CLSA

CLSA expects cross-currency benefits to support growth and margin for Indian IT companies, even as they are seen to be reporting the strongest March quarter in four years. It expects revenue for the quarter to grow 2.1-3.1 percent, while the margin may expand by 50-260 basis points. While overall demand trends haven’t improved, deal signings are better, it observed.

Among stocks, it expects Infosys to guide for 6-8 percent growth in dollar terms, while maintaining a margin of 23-25 percent. For HCL Tech, it sees a guidance of 10.5-12.5 percent growth in dollar terms, while the margin is seen at 19.5-20.5 percent. For Wipro, it sees growth guidance of 0.5-2.5 percent in dollar terms on a QoQ basis for the first quarter of next year. The brokerage has maintained a buy call on HCL Tech, Infosys, TCS, & Sell Ratings On Tech Mah & Wipro.

Wipro

Brokerage: Morgan Stanley | Rating: Underweight | Target: Rs 290

The global research firm highlighted the company’s exchange filing, which said that one of its telecom service provider clients in India filed a petition to initiate insolvency resolution process with the National Company Law Tribunal in February 2018. It subsequently admitted its claim in March 2018.

Since then, Wipro has been engaged with the client to discuss the potential outcome of the process. It has now estimated that this development will have an adverse impact on both revenue and profitability.

The impact would be 0.65-0.75% of consolidated revenues at the net income level for 4Q18, the brokerage cited Wipro’s filing. “We believe impact on IT Services revenues for the quarter is likely to be less than the impact on profitability, given the likelihood of provisions against receivables hitting the bottom line. We think the company may still report revenues within the guided range,” the research note from Morgan Stanley added.

SAIL

Brokerage: HSBC | Rating: Upgrade to Hold from Reduce | Target: Raised to Rs 88 form Rs 84

The global financial services firm pointed that domestic steel sector is witnessing one of the best time in many years. Steel prices trending higher on the back of uptick in demand, while both flat and long prices are up 15 and 20 percent quarter on quarter, respectively. The crude steel production run rate is also steady at about 4.5 percent for six months.

HSBC said that SAIL has shown a remarkable turnaround with the company posting a profit in Q3. All of its major plants are profitable at EBIT level and finished steel capacity has increased by 45 percent.

Going forward, it expects the company to report an average volume growth of 11 percent and EBITDA growth of 46 percent for FY19-20. It is also expecting the company to return to profitability for the first time in four years.

Axis Bank

Brokerage: CLSA

CLSA said that change of top management can also drive discussion around M&A possibilities. It further said that appointment of successor will be key to stability & valuation. Having said that, it sees limited risk to earnings of the bank.

Banks

Brokerage: UBS

UBS said that stressed corporate debt has largely been flat since March 2015. Further, around 15.5 percent of loans needed a haircut, of which 3.6 percent are yet to be recognised as NPL.

It pointed out that a fresh wave of NPLs rose following PNB fraud and new RBI rules as well. It has cut loan growth and earnings estimate by 0-22 percent for Fy19.

It is removing ICICI Bank from its Asia Pacific key call list and has retained anti-consensus cautious views on Yes Bank, State Bank of India, Punjab National Bank and IndusInd Bank. It prefers ICICI, HDFC Bank and Kotak Mahindra Bank.

On their earnings, it cited RBI rules being a new threat and the results could be 27 percent lower in a downside scenario.

This entry was posted in Market.

5 changes you need to focus while computing your taxes for filing tax returns this year

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As a taxpayer, it is necessary for you to keep abreast of the latest amendments to enable a salaried individual to compute taxes and file individual tax returns.

Navneet Dubey@imNavneetDubey

The financial year 2017-18 has just come to an end on 31 March. Soon, it will be time to file your tax returns, the initial deadline for which would be July 31, 2018. As a taxpayer, it is necessary for you to keep abreast of the latest amendments to enable a salaried individual to compute taxes and file individual tax returns.

Homi Mistry, Partner, Deloitte India told Moneycontrol that salaried individuals should keep these 6 things into consideration before computing their taxes for the AY 2018-19.

=> The applicable slab rate with respect to an individual having taxable income between Rs 2.5 lakh to Rs 5 lakhs has been reduced from 10% to 5%. However, there has been no change in the tax rates for other slabs.

=> Earlier, an individual having taxable income up to Rs 5 lakhs was entitled to a tax rebate. Now, this limit has been reduced to Rs 3.5 lakhs. Also, the tax rebate has been reduced from Rs 5,000 to Rs 2,500.

=> Where an individual has taxable income of more than Rs 50 lakhs but not exceeding Rs 1 crore, a surcharge of 10% is also applicable. Further surcharge of 15% continues for individuals having an income of more than Rs 1 crore.

=> Until AY 2017-2018, there was no restriction on the setting off of losses on the rented property or a deemed to be let-out property (arising on account of claiming interest payable on loan taken) against other income arising in the same financial year. Now with effect from AY 2018-2019, such losses can be set off only up to Rs 200,000 against other income. Any excess loss can be carried forward for set-off against income from house property over the following eight tax years.

=> For an individual having long-term capital gains arising from the sale of property, there is a change in the base year for indexation purpose from April 1, 1981 to April 1, 2001. Accordingly, the government has notified new cost inflation indexes. In the case of sale of immovable property, there has been a relaxation in the holding period from 3 years to 2 years, to be considered as long-term capital gains.

=> Further, in case an individual misses filing his income tax returns by the due date, a fee of Rs 5,000 will be levied if the return is filed on or before 31 December 2018; Rs 10,000 will be levied for returns filed after December 31, 2018. However, if the total income does not exceed Rs 5 Lakhs, a fee of Rs 1,000 will be levied.

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Blockchain

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Blockchain technology is commonly associated with Bitcoin and other cryptocurrencies, but that’s really only the tip of the iceberg. Some people think blockchain could end up transforming a number of important industries, from health care to politics.

Whether you’re simply looking to invest in Bitcoin, trade some Ethereum, or are just intrigued about what the heck blockchain actually is, you’ve come to the right place.

Blockchain isn’t just for Bitcoin

While blockchain technology isn’t simple when you dig into the nitty-gritty, the basic idea isn’t so opaque. It’s effectively a database that’s validated by a wider community, rather than a central authority. It’s a collection of records that has a lot of people give it the thumbs up, rather than relying on a single entity, like a bank or government, which most likely hosts data on a particular server.

Each “block” represents a number of transactional records, and the “chain” component links them all together with a hash function. As records are created, they are confirmed by a distributed network of computers and paired up with the previous entry in the chain, thereby creating a chain of blocks, or a blockchain.

The entire blockchain is retained on this large network of computers, meaning that no one person has control over its history. That’s an important component, because it certifies everything that has happened in the chain prior, and it means that no one person can go back and change things. It makes the blockchain a public ledger that cannot be easily tampered with, giving it a built-in layer of protection that isn’t possible with a standard, centralized database of information.

While traditionally we have needed these central authorities to trust one another, and fulfil the needs of contracts, the blockchain makes it possible to have our peers guarantee that for us in an automated, secure fashion.

That’s the innovation of blockchain, and it’s why you may hear it used to reference things other than Bitcoin and other cryptocurrency. Though generally not used for it yet, blockchain could be used to maintain a variety of information. An organization called Follow My Vote is attempting to use it for an electronic voting system that’s more secure than modern versions, and healthcare providers might one day use it to handle patient records.

Where did blockchain come from?

Although blockchain technology has only been effectively employed in the past decade, its roots can be traced back far further. A 1976 paper on New Directions in Cryptography discussed the idea of a mutual distributed ledger, which is what the blockchain effectively acts as. That was later built upon in the 1990s with a paper entitled “How to Time-Stamp a Digital Document.” It would take another few decades and the combination of powerful modern computers, with the clever implementation with a cryptocurrency to make these ideas viable.

In order to validate the blocks in the same manner as a traditional private ledger, the blockchain employs complicated calculations. That, in turn, requires powerful computers, which are expensive to own, operate, and keep cool. That’s part of the reason that bitcoin acted as such a great starting point for the introduction of blockchain technology, because it could reward those taking part in the process with something of financial value.

Bitcoin ultimately made its first appearance in 2009, bringing together the classic idea of the mutual distributed ledger, the blockchain, with an entirely digital currency that wasn’t controlled by any one individual or organization. Developed by the still effectively anonymous “Satoshi Nakamoto,” the cryptocurrency allowed for a method of conducting transactions while protecting them from interference by the use of the blockchain.

How do cryptocurrencies use the blockchain?

Although bitcoin and the alternative currencies all utilize blockchain technology, they do so in differing manners. Since bitcoin was first invented it has undergone a few changes at the behest of its core developers and the wider community, and other alt-coins have been created to improve upon bitcoin, operating in slightly different ways.

In the case of bitcoin, a new block in its blockchain is created roughly every ten minutes. That block verifies and records, or “certifies” new transactions that have taken place. In order for that to happen, “miners” utilize powerful computing hardware to provide a proof-of-work — a calculation that effectively creates a number which verifies the block and the transactions it contains. Several of those confirmations must be received before a bitcoin transaction can be considered effectively complete, even if technically the actual bitcoin is transferred near-instantaneously.

dont worry about bitcoin regulation it cant be stopped hong kong finance economy

Anthony WallaceAFP/Getty Images

This is where bitcoin has run into problems in recent months. As the number of bitcoin transactions increases, the relatively-hard 10-minute block creation time means that it can take longer to confirm all of the transactions and backlogs can occur.

With certain alt-coins, that’s a little different. With Litecoin it’s more like two and a half minutes, while with Ethereum the block time is just 10-20 seconds, so confirmations tend to happen far faster. There are obvious benefits of such a change, though by having blocks generate at a faster rate there is a greater chance of errors occurring. If 51 percent of computers working on the blockchain record an error, it becomes near-permanent, and generating faster blocks means fewer systems working on them.

What’s the catch?

Blockchain technology has a lot of exciting potential, but there are some serious considerations that need to be addressed before we can say it’s the technology of the future.

Remember all that computing power required to verify transactions? Those computers need electricity. Bitcoin is a poster child of the problematic escalation in power demanded from a large blockchain network. Although getting exact statistics on the power requirements of bitcoin is difficult, it’s regularly compared to small countries in its current state. That’s not appealing given today’s concerns about climate change, the availability of power in developing countries, and reliability of power in developed nations.

Transaction speed is also an issue. As we noted above, blocks in a chain must be verified by the distributed network, and that can take time. A lot of time. At its worse, bitcoin’s average transaction time exceeded 41 hours. Ethereum is much more efficient, but its average time is around 15 seconds — which would be an eternity in a checkout line at your local grocery store. Blockchains used for purposes other than cryptocurrency could run into similar problems. You can imagine how frustrating it would be to wait 15 seconds every time you wanted to change a database entry.

These problems will need to be resolved as blockchain becomes more popular. However, considering we’re less than a decade on from the blockchain’s first implementation, and we’re already on the road to developing new uses for it, we remain optimistic that those involved will work out it.

 

 

This entry was posted in Market, SCI & TECH, Science, Tech, Videos.

Top buy & sell ideas by Ashwani Gujral, Mitessh Thakkar & Sudarshan Sukhani for March 1

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Mitessh Thakkar of miteshthacker.com recommends selling Bosch with a stop loss of Rs 18,900 and target of Rs 18,200, Shree Cements with a stop loss of Rs 16,850 and target of Rs 16,000 and Zee Entertainment with a stop loss of Rs 576 for target of Rs 545.

Moneycontrol News@moneycontrolcom

The Nifty50 managed to recoup some losses towards the end of the trade on Wednesday but there is no confirmation of a trend. A direction move is required above 10600 fir bulls to take control or a breakdown below 10,300 will put bears in driving seat.

The Nifty50 which opened with a gap on the lower side managed to recoup losses and closed near its opening level forming a ‘Doji’ kind of candle on the daily candlestick charts.

According to Pivot charts, the key support level is placed at 10,457, followed by 10,422. If the index starts to move higher, key resistance levels to watch out are 10,531 and 10,570.

The Nifty Bank closed at 25,107, down 276 points or 1.09 percent. Important Pivot level, which will act as crucial support for the index, is placed at 24,968, followed by 24,829. On the upside, key resistance levels are placed at 25,219, followed by 25,331.

RELATED NEWS

The Nifty futures on the Singaporean stock exchange were trading lower by around 69  points at 10,450, a fall of around 0.66 percent. This indicates that the domestic market is likely to open on a negative note.

Moneycontrol.com has collated a list of trading ideas from top market experts which one can take cues for better returns:

Ashwani Gujral of ashwanigujral.com

Buy Bharat Forge with a stop loss of Rs 780, target of Rs 815

Buy Ashok Leyland with a stop loss of Rs 138, target of Rs 150

Sell ICICI Bank with a stop loss of Rs 317, target of Rs 305

Sell Axis Bank with a stop loss of Rs 535, target of Rs 510

Sell Capital First with a stop loss of Rs 672, target of Rs 650

Mitessh Thakkar of miteshthacker.com

Sell Bosch with a stop loss of Rs 18,900 and target of Rs 18,200

Sell Shree Cements with a stop loss of Rs 16,850 and target of Rs 16,000

Sell Zee Entertainment with a stop loss of Rs 576 for target of Rs 545

Buy Apollo Tyres around Rs 272 with stop loss of Rs 265 and target of Rs 286

Buy Bharat Forge around Rs 782 – 780, stop loss of Rs 767 and target of Rs 805

Sudarshan Sukhani of s2analytics.com

Sell Andhra Bank with stop loss at Rs 47 and target of Rs 43

Sell Dish TV with a stop loss at Rs 75 and target of Rs 71

Sell LIC Housing Finance with stop loss at Rs 513 and target of Rs 491

Buy DLF with stop loss at Rs 215 and target of Rs 231

Buy Jubilant Foodworks with stop loss at Rs 1990 and target of Rs 2075

This entry was posted in Market.

Bull’s Eye: Buy India Cements, Century Textiles, Voltas, NOCIL, Mindtree

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Gaurav Ratnaparkhi of Sharekhan is of the view that one may buy Motherson Sumi with a target of Rs 343.80.

Bull’s Eye, CNBC-TV18’s popular game show, where market experts come together to dish out trading strategies for you to make your week more exciting and compete with each other to see whose portfolio is the strongest.

Remember these are midcap ideas not just for the day, but stocks that look attractive in the medium-term as well.

This week, Gaurav Ratnaparkhi, Jay Thakkar and Shahina Mukadam battle it out for top honours.

Below their top stock picks and analysis:

RELATED NEWS

Gaurav Ratnaparkhi of Sharekhan

Buy Bharat Electronics with a stoploss at Rs 150.80 and target of Rs 160.50

Buy Ujjivan Financial with a stoploss at Rs 367 and target of Rs 391.80

Buy Century Textiles with a stoploss at Rs 1188 and target of Rs 1274

Buy Motherson Sumi with a stoploss at Rs 322 and target of Rs 343.80

Jay Thakkar of Anand Rathi Securities

Buy Interglobe Aviation with a stoploss at Rs 1314 and target of Rs 1371

Buy Voltas with a stoploss at Rs 593 and target of Rs 627

Buy NIIT Technologies with a stoploss at Rs 819 and target of Rs 861

Buy Mindtree with a stoploss at Rs 794.50 and target of Rs 844

Shahina Mukadam, Independent Market Expert

Buy India Cements with a stoploss at Rs 154 and target of Rs 168

Buy Rallis India with a stoploss at Rs 225 and target of Rs 240

Buy NOCIL with a stoploss at Rs 185 and target of Rs 210

Sell Torrent Power with a stoploss at Rs 270 and target of Rs 258

This entry was posted in Market.