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After opening the day on a flat note, share markets in India witnessed choppy trades and are presently trading marginally higher. Sectoral indices are trading on a positive note with stocks in the oil & gas sector and metal sector witnessing maximum buying interest.
The BSE Sensex is trading up 28 points (up 0.1%) and the NSE Nifty is trading up 15 points (up 0.2%). The BSE Mid Cap index is trading up by 0.6%, while the BSE Small Cap index is trading up by 0.8%. The rupee is trading at 64.44 to the US$.
Indian share markets are scaling new highs every day. Just a few days back, the Sensex breached the 30,000 mark. This surely tell us that domestic stock markets have picked up steam. But does it mean that you rush and buy stocks? No.
It's very easy for investors to become overconfident when money starts to come in easily in a rising market. But that's when you need to be fearful...when everyone else is greedy.
Now here's a chart of the Nifty along with the India VIX (aka the 'Fear Indicator').
The India VIX is a good gauge of fear and greed in the markets: When VIX is at a low, market participants are greedy. When it's at a high, they are fearful.
Looking at the present levels, the India VIX is trading near its all-time lows. This depicts the market participants are greedy and thus one needs to be fearful.
So it's important to not get swayed by the prevalent buoyancy seen in the stock markets. Instead, one should look for the fundamentals of the business and the attractiveness of valuations before buying any stock. As the best thing to do in an overheated market can be to stay focused on the value and take comfort of the safest stocks.
Also, Apurva, editor at Daily Profit Hunter, has written on how one can balance risks and rewards when markets are at an all-time high.
In other news update, the Prime Minister's Office (PMO) recently conducted a meeting with representatives of private developers to review the progress of the affordable housing schemes under the government's 'Housing for All' initiative by 2022.
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In the meeting, the PMO discussed challenges faced by developers while launching and executing such housing projects, including high land cost and slow approval processes.
The meeting was attended by representatives of industry bodies National Real Estate Development Council (NAREDCO), The Confederation of Real Estate Developers' Associations of India (CREDAI), and MCHI-CREDAI apart from officials of the National Housing Bank.
One shall note that the affordable housing segment saw an increase in new launches in 2016 and has also made things merrier for housing financing companies.
However, there remain many challenges before India will see affordable housing picking up. These include high land prices and state-level taxes as well as lack of builders for affordable housing. Right now, the "Housing for All" initiative by the government still seems a distant dream.
For the above initiative to gain traction, the cost of constructing homes needs to fall. For this to happen, first and foremost, the cost of land in and around cities needs to fall.
For the cost of land to fall, the government needs to increase supply. This can be done by increasing the FSI allowed on buildings. Further, the government also needs to sell some of the land parcels that it owns in and around cities. This is essentially the land that it inherited from the British colonial administration.
Furthermore, as Vivek Kaul has stated before, there should be a formal rental market for the above initiatives to succeed. These will be the first few steps towards affordable housing and the government's dream of "Housing For All By 2022".
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