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Daily Updates
Mon,23 Apr 2018

  • Indian equity markets closed marginally lower after the minutes of the latest monetary policy meeting hinted that the policymakers could take a more hawkish tone beginning Jun 2018, thereby fueling expectations of a rate hike. This came amid concerns like increase in minimum support prices for farmers and high and volatile crude prices.

  • Weakness in Asian peers due to weakness in technology stocks added to the losses. However, losses were restricted after an Indian IT major posted better than expected results for the quarter ended Mar 2018 and announced 1:1 bonus.

  • Key benchmark indices S&P BSE Sensex and Nifty 50 slightly fell 0.03% and 0.01% to close at 34,415.58 and 10,564.05, respectively. S&P BSE Mid-Cap fell 0.44% and S&P BSE Small-Cap grew 0.02%.

  • On the BSE sectoral front, S&P BSE Utilities was the major loser down 1.22% followed by S&P BSE Realty that fell 1.07%. S&P BSE Bankex and S&P BSE Power fell 1.04% and 0.98%, respectively. S&P BSE Information Technology was the major gainer, up 4.80%, followed by S&P BSE Teck (3.89%), S&P BSE Telecom (0.54%) and S&P BSE Auto ( 0.17%).
Domestic Indices Performance
  20-Apr-18 1D % Chg 1M % Chg 1Yr % Chg
Nifty 50 10,564 -0.01 4.34 15.63
S&P BSE Sensex 34,416 -0.03 4.30 16.97
S&P BSE Midcap 16,799 -0.44 5.02 15.97
S&P BSE Smallcap 18,178 0.02 5.74 20.16
S&P BSE Auto 25,437 0.17 5.34 15.56
S&P BSE Bankex 27,855 -1.04 2.43 13.96
S&P BSE CD 22,570 0.00 5.23 45.45
S&P BSE CG 19,191 -0.88 4.14 10.32
S&P BSE FMCG 11,068 -0.08 7.85 18.85
S&P BSE HC 13,823 0.00 2.82 -9.51
S&P BSE IT 13,335 4.80 9.04 37.25
S&P BSE Metal 14,732 -0.65 9.22 32.47
S&P BSE Oil 14,334 -0.64 -1.94 0.50
S&P BSE Power 2,231 -0.98 4.42 -3.50
S&P BSE PSU 7,837 -0.88 0.18 -11.28
S&P BSE Realty 2,353 -1.07 1.92 25.41
S&P BSE Teck 7,026 3.89 6.91 28.22
VIX Index 13 -5.89 -17.11 11.92
  • Bond yields rose after the minutes of the Monetary Policy Committee’s latest meeting showed that it may adopt more hawkish stance in future. Rise in crude oil prices and rupee’s losses further weighed on investor sentiment.

  • Yield on the 10-year benchmark paper (7.17% GS 2028) rose 9 bps to close at 7.72% from the previous close of 7.63%. During the session, bond yields traded in the range of 7.65% and 7.80%.

  • Banks’ borrowings under the repo window of the Liquidity Adjustment Facility (LAF) stood at Rs. 17,282 crore (gross) on Apr 20 compared with Rs. 10,335 crore on Apr 19. Sale of securities under Reserve Bank of India’s (RBI) reverse repo window stood at Rs. 4,591 crore on Apr 19.

  • Banks borrowed Rs. 476 crore under the central bank’s Marginal Standing Facility on Apr 19 compared with Rs. 35 crore borrowed on Apr 18.
Daily Rates
Key Rates (%) 20-Apr-18 Previous Close Year Ago
10 Yr Gsec 7.73 7.63 6.88
5 Yr AAA Corp Bond 8.42 8.29 7.42
3 Yr AAA Corp Bond 8.25 8.06 7.33
1 Yr AAA Corp Bond 7.84 7.74 6.99
3 Yr AA Corp Bond 8.69 8.50 7.76
1 Yr AA Corp Bond 8.14 8.12 7.43
12 Month CD 7.43 7.40 6.70
3 Month CD 6.79 6.96 6.37
CALL 5.97 5.93 5.91
CBLO 6.01 5.93 6.07

 

Institutional Flows 
(INR Cr) FII Flows MF Flows1
As on April 20,2018 Debt Equity Debt Equity
Purchases 921 4,857 5,632 2,336
Sales 2,872 5,504 7,091 2,012
Net -1,951 -647 -1,459 324
MTD Net -3586 -4181 37640 4608

1 As on April 16,2018

  • Straits Times – The index lost 0.70% following cues from the other regional peers and overnight U.S. markets. Lower crude oil prices further dented sentiment.
  • Nikkei – The index moved down 0.13% following negative cues from overnight U.S. markets. Meanwhile, some of the economic data from Japan came in line with market expectations. Japan’s tertiary industry activity in Feb remained flat while overall consumer prices were up 1.1% over the year in Mar.
  • Hang Seng - The index fell 0.94% owing to weak cues from mainland Chinese markets. However, downside was restricted as Hong Kong's unemployment rate held steady in the three months ended Mar 2018.
  • FTSE - The index rose after seeing a range bound session. Absence of any major economic data at the end of the trading week, leaving market participants to focus on corporate financial results.
  • Dow Jones - The index fell following plunge in the technology sector. Technology sector dropped due to the fall in share price of a major U.S. technology company after an analyst warned of disappointing iPhone sales in the Jun quarter 2018.
Global Indices Performance
Global Indices 20-Apr-18 1D % Chg 1M % Chg 1Yr % Chg
Dow Jones 24,463 -0.82 -1.07 18.87
Nasdaq 100 6,668 -1.58 -3.17 22.49
FTSE  7,368 0.54 4.35 3.51
Straits Times 3,573 -0.70 1.71 13.88
Nikkei 22,162 -0.13 3.65 20.25
Hang Seng 30,418 -0.94 -3.59 26.44
Shanghai Composite 3,072 -1.47 -6.66 -3.17
  • Gold prices closed lower amid easing geopolitical concerns and as dollar gained against the euro. Gold prices closed at $1,334.72 per ounce, compared with the previous close of $1,345.18 per ounce.

  • Brent crude prices slipped amid news of an increase in the number of operating oil rigs in the U.S. indicating an expansion in U.S. output. Oil prices closed at $75.36 per barrel, compared with the previous close of $75.59 per barrel.
Commodity Market
Commodity (INR) 20-Apr-18 1D % Chg 1M % Chg 1Yr % Chg
Brent (1 barrel) (in $) 75.36 -0.30 15.51 50.15
Gold (10 gm) 31,298 -0.02 3.46 7.01
Silver (1 kg) 40,106 0.00 5.69 -4.14
Aluminium (1 kg) 162.55 -4.97 20.27 30.09
Copper (1 kg) 454.25 -0.68 2.79 25.95

 

  • The Indian rupee weakened against the greenback on growing possibility that the Monetary Policy Committee may adopt a more hawkish stance moving forward.

  • Euro weakened against the greenback on expectations that the European Central Bank will maintain status quo in a meeting due next week.
Currency Market
Currency 20-Apr-18 1D % Chg 1M % Chg 1Yr % Chg
USD/INR 66.02 0.35 1.25 2.14
EURO/INR 81.46 0.09 1.24 17.48
GBP/INR 92.73 -0.74 1.35 11.98
100 JPY/INR 61.40 0.29 0.11 3.45
  • Data from the Reserve Bank of India showed that India's foreign exchange reserves rose to $426.08 billion as on Apr 13, 2018, from $424.86 billion in the previous week due to surge in foreign currency assets. Foreign currency assets grew by $1.202 billion to $400.978 billion.

  • Union finance secretary announced that the proposed new single page Goods and Services Tax (GST) return filing system will be in place over the next three to six months. The ministerial panel had decided at a meeting on Apr 17, 2018, to roll out a new simplified model for GST return filing system in single-page. As per the simplified model, credit could be given on a provisional basis once the supplier uploads the sales invoice. This new proposed system is expected to ease the present problems.
Key Economic Indicators
Indicators Current Previous
GDP 7.20% (Q3 FY'18) 6.50% (Q2 FY'18)
IIP 7.10% (Feb'18) 7.40% (Jan'18)
WPI 2.47% (Mar'18) 2.48% (Feb'18)
CPI 4.28% (Mar'18) 4.44% (Feb'18)

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
  • According to media reports, Parag Milk Foods has acquired Danone's manufacturing facility in Sonipat, Haryana. The move will help Parag Milk Foods expand its footprint in the north and northeast India.

  • According to media reports, Ashok Leyland is expecting a 20% growth in its bus business in the current fiscal year, after witnessing a 23% decline last year. The company has plans to launch three buses this year, one in each quarter.

  • As per media reports, the proposed middle Kolab project in Odisha’s Koraput district could restrict water supply to the upcoming steel plant of the National Mineral Development Corporation (NMDC) in Chhattisgarh’s Bastar district.
Upcoming Events
Event Date
Index of Eight Core Industries (Feb 18) 2-Apr-18

Source :ICRON Research

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