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Mon,23 Oct 2017

  • Indian equity markets closed in the red as investors refrained from taking major bets and cashed in on recent gains ahead of the long Diwali weekend. Investor sentiment got hurt by selling pressure in banking stock after a major company reported lower than expected quarterly net profit and increased its credit cost guidance, which indicated that the bad loan stress could continue for a few more quarters.

  • Key benchmark indices S&P BSE Sensex and Nifty 50 slipped 0.08% and 0.23% to close at 32,584.35 and 10,210.85, respectively. Moreover, S&P BSE Mid-Cap and S&P BSE Small-Cap closed flat.

  • On the BSE sectoral front, majority of the indices closed in the red. S&P BSE Telecom was the major loser, down 1.86%, followed by S&P BSE Bankex and S&P BSE Finance, which fell 1.79% and 0.86%, respectively. S&P BSE Healthcare and S&P BSE Teck slipped 0.80% and 0.67%, respectively. Meanwhile, S&P BSE Energy was the top gainer, up 2.50%, followed by S&P BSE Utilities and S&P BSE Oil & Gas, which rose 1.31% and 1.24%, respectively.

  • Among the 30-stock sensitive Sensex pack, Axis Bank was the major loser, down 9.52%, followed by ICICI Bank and Cipla, which slipped 3.96% and 3.26%, respectively. SBI and Lupin fell 2.77% and 1.66%, respectively.
Domestic Indices Performance   
  18-Oct-17 1D % Chg 1M % Chg 1Yr % Chg
Nifty 50 10,211 -0.23 0.57 17.66
S&P BSE Sensex 32,584 -0.08 0.50 16.16
S&P BSE Midcap 16,116 0.01 0.16 18.99
S&P BSE Smallcap 17,063 -0.02 1.37 28.50
S&P BSE Auto 24,950 -0.41 0.65 11.58
S&P BSE Bankex 27,187 -1.79 -3.51 21.68
S&P BSE CD 18,310 -0.57 -0.17 42.01
S&P BSE CG 17,462 -0.35 -5.23 16.59
S&P BSE FMCG 10,268 0.14 1.11 19.74
S&P BSE HC 14,171 -0.80 2.75 -13.02
S&P BSE IT 10,369 -0.35 2.55 0.84
S&P BSE Metal 14,674 -0.51 4.31 43.57
S&P BSE Oil 16,003 1.24 5.15 31.92
S&P BSE Power 2,270 1.21 -1.37 13.56
S&P BSE PSU 8,566 -0.08 -0.86 11.13
S&P BSE Realty 2,170 -0.09 -1.51 41.15
S&P BSE Teck 5,919 -0.67 3.49 5.36
VIX Index 12 -0.60 0.85 -20.62
  • Bond yields closed steady as market participants remained on the sidelines ahead of holidays later in the week. Market participants also looked ahead to Monetary Policy Committee’s Oct 2017 meeting minutes, due later in the day.

  • Yield on the 10-year benchmark paper (6.79% GS 2027) closed steady at 6.76%. During the session, bond yields traded in the range of 6.76% and 6.77%.

  • Banks’ borrowings under the repo window of the Liquidity Adjustment Facility (LAF) stood at Rs. 1,400 crore (gross) on Oct 18 compared with borrowings of Rs. 12,930 crore (gross) on Oct 17. Sale of securities under Reserve Bank of India’s (RBI) reverse repo window stood at Rs. 8,362 crore on Oct 17.
Daily Rates    
Key Rates (%) 18-Oct-17 Previous Close Year Ago
10 Yr Gsec 6.76 6.76 6.82
5 Yr AAA Corp Bond 7.17 7.19 7.31
3 Yr AAA Corp Bond 7.02 7.04 7.21
1 Yr AAA Corp Bond 6.82 6.83 7.07
3 Yr AA Corp Bond 7.57 7.59 7.69
1 Yr AA Corp Bond 7.25 7.26 7.46
12 Month CD 6.59 6.59 6.90
3 Month CD 6.19 6.19 6.53
CALL 5.97 5.99 6.23
CBLO 5.88 6.02 6.23

 

Institutional Flows     
(INR Cr) FII Flows MF Flows1
As on October 18,2017 Debt Equity Debt Equity
Purchases 1,351 4,508 6,822 1,915
Sales 843 4,761 2,914 1,631
Net 508 -252 3,908 284
MTD Net 12135 -3408 23731 5466

1 As on October 16, 2017

  • Straits Times - – The index inched up 0.17% following cues from most of the other regional peers. The U.S. Senate’s approval for FY18 budget resolution that will help to pursue tax-cut plans also acted as a catalyst.
  • Nikkei – The index gained 0.04% on expectations of a favourable outcome from Japan’s election. Weak yen and U.S. Senate’s approval for a budget resolution for the 2018 fiscal year that will help to pursue tax-cut plans, also helped gains.
  • Hang Seng – The index gained 1.17% following positive Chinese market. However, concerns over slower rate in China limited upside. Meanwhile, Hong Kong's unemployment rate held steady in the three months ended Sep 2017.
  • FTSE – The index remained unchanged. Optimism for U.S. tax reform after $4 trillion budget measure approval by the Senate and a slew of upbeat earnings reports boosted the gains. However, gains were capped by concerns over the situation in Spain.
  • Dow Jones - The index grew 0.71% after the Senate approved a $4 trillion budget measure. Rebound in existing home sales in Sep and gains by an industrial conglomerate major further added to the gains.
Global Indices Performance   
Global Indices 20-Oct-17 1D % Chg 1M % Chg 1Yr % Chg
Dow Jones 23,329 0.71 4.09 28.44
Nasdaq 100 6,629 0.36 10.97 37.17
FTSE  7,523 0.00 3.46 7.06
Straits Times 3,341 0.17 3.81 17.52
Nikkei 21,458 0.04 5.65 24.50
Hang Seng 28,487 1.17 1.28 21.87
Shanghai Composite 3,379 0.25 0.38 9.54
  • Gold prices fell after the U.S. Senate approved a budget blueprint for the 2018 fiscal year that will pave the way to pursue tax-cut plans.

  • Brent crude prices fell after a weekly report from the Energy Information Administration indicated that U.S. gasoline stockpiles rose for a fourth straight week.
Commodity Market    
Commodity (INR) 18-Oct-17 1D % Chg 1M % Chg 1Yr % Chg
Brent (1 barrel) (in $)* 58.38 0.46 0.24 16.50
Gold (10 gm) 29,611 -0.20 -0.38 -0.78
Silver (1 kg) 39,267 -0.42 -2.12 -6.79
Aluminium (1 kg) 137.05 0.00 3.59 23.47
Copper (1 kg) 457.35 -1.10 9.78 47.44

*As on 20-10-17

  • The Indian rupee closed almost flat against the greenback following losses in the domestic equity market and dollar demand from importers. However, further losses were restricted as market participants sold greenback ahead of a long weekend.

  • Euro fell against the U.S. dollar as market participants became optimistic over progress on U.S. tax reforms after the Senate gave its approval for a budget blueprint for the 2018 fiscal year.
Currency Market    
Currency 18-Oct-17 1D % Chg 1M % Chg 1Yr % Chg
USD/INR 65.06 0.22 1.61 -2.49
EURO/INR 76.54 0.16 0.07 4.07
GBP/INR 85.74 -0.34 -1.54 4.93
100 JPY/INR 57.93 0.10 0.63 -9.68
  • According to the minutes of the Monetary Policy Committee’s (MPC) meeting in Oct 2017, policymakers remained concerned that rising retail inflation may threaten the Reserve Bank of India’s (RBI) target of 4%. However, MPC were of the view that the slowdown in economic growth that was noted in the quarter ended Jun 2017 may be temporary in nature. As a result, MPC decided to wait for more data and assess the same.

  • The Department of Industrial Policy and Promotion (DIPP) has eased the mechanism for processing foreign direct investment (FDI) proposals. With immediate effect, it has discontinued the requirement of sending the applications to the department of revenue. The move aims at further promoting ease of doing business in the country to attract overseas inflows.

  • The Reserve Bank of India has asked banks to instantly pay the interest due on the gold deposited by individuals and institution under the Gold Monetisation Scheme (GMS).
Key Economic Indicators   
Indicators Current Previous
GDP 5.70% (Q1 FY'18) 6.10% (Q4 FY'17)
IIP 4.30% (Aug'17) 0.90% (Jul'17)
WPI 2.60% (Sep'17) 3.24% (Aug'17)
CPI 3.28% (Sep'17) 3.28% (Aug'17)

Since May-17, MOSPI has revised base year of IIP & WPI from 2004-05 to
2011-12, and for CPI from 2010 to 2012

Policy Rates    
Key Rates (%) Current Previous
Reverse Repo 5.75 5.75
Repo 6.00 6.00
CRR 4.00 4.00
SLR 19.50 19.50
Bank Rate 6.25 6.25
  • Reliance Industries with its partner BP Plc has submitted a $1.4-billion plan to the government as per which they will produce 7 million cubic metres a day of natural gas from KG-D6 deep-sea fields in the Bay of Bengal. As per the field development plan, the company will develop the “satellite fields” — D2, D6, D19 and D22 — in the gas-rich block along with two nearby gas fields D29 and D30.

  • UltraTech Cement has reported a net profit of Rs. 431.2 crore for the quarter ended Sep 30, 2017, down 28% YoY. Revenues grew 6% YoY to Rs. 6,571 crore.

  • Piramal Enterprises announced that it will raise Rs. 7,000 crore over the next few months. The company’s board had recently announced Rs. 5,000 crore qualified institutional placement (QIP) and would raise Rs. 2,000 crore via rights issue.

  • As per media reports, Flipkart is likely to acquire 8% to 10% stake in Future Lifestyle Fashions. The deal is expected to bring big boost to Flipkart’s subsidiary Myntra, which is aiming to become profitable at an EBITDA level by Mar 2018.
Upcoming Events  
Event Date
Money Supply 25-Oct-17
Forex Reserves 27-Oct-17
Index of Eight Core Industries  (Sep-17) 31-Oct-17

Source :ICRON Research

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