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Daily Updates
Fri,17 Aug 2018

  • Indian equity markets closed in the red as deepening of tensions between U.S. and Turkey weighed on investor sentiment. Rupee’s continued fall and concerns over China’s slowing growth added to the woes.

  • Key benchmark indices S&P BSE Sensex and Nifty 50 fell 0.50% and 0.44% to close at 37,663.56 and 11,385.05, respectively. S&P BSE Mid-Cap and S&P BSE Small Cap fell 0.48% and 0.20%, respectively.

  • The overall market breadth on BSE was weak with 1170 scrips advancing and 1556 scrips declining. A total of 135 scrips remained unchanged.

  • On the BSE sectoral front S&P BSE Healthcare stood as the major gainer, up 0.96% followed by S&P BSE Information Technology that grew 0.58%. S&P BSE Utilities and S&P BSE Teck grew 0.39% and 0.38%. The major losers were S&P BSE Telecom and S&P BSE Power, falling 0.06% and 0.12%.
Domestic Indices Performance   
  16-Aug-18 1D % Chg 1M % Chg 1Yr % Chg
Nifty 50 11,385 -0.44 4.10 15.03
S&P BSE Sensex 37,664 -0.50 3.69 18.55
S&P BSE Midcap 16,164 -0.48 7.37 5.77
S&P BSE Smallcap 16,710 -0.20 5.82 7.03
S&P BSE Auto 24,272 0.30 0.44 1.19
S&P BSE Bankex 31,468 -0.64 6.68 14.13
S&P BSE CD 21,854 -0.96 12.21 24.01
S&P BSE CG 17,750 -1.05 1.24 2.87
S&P BSE FMCG 12,256 -0.16 6.96 22.20
S&P BSE HC 14,828 0.96 9.04 12.21
S&P BSE IT 15,016 0.58 3.57 46.32
S&P BSE Metal 12,663 -2.18 5.44 -2.08
S&P BSE Oil 14,788 -0.48 5.61 1.18
S&P BSE Power 1,964 -0.12 3.51 -13.69
S&P BSE PSU 7,631 -0.29 7.65 -10.11
S&P BSE Realty 2,118 -0.48 6.22 1.10
S&P BSE Teck 7,570 0.38 3.40 31.12
VIX Index 14 2.73 5.39 -4.16
  • Bond yields rose following weakness in domestic currency. Geopolitical risks and renewed concerns of widening of India’s current account deficit for Jul 2018 weighed on the rupee. Meanwhile, investors remained cautious ahead of the minutes of the third bi-monthly policy meeting that was scheduled post market hours.

  • Yield on the 10-year benchmark paper (7.17% GS 2028) rose 4 basis points to close at 7.86% as against previous close of 7.82%. During the session, bond yields traded in the range of 7.83% and 7.88%.

  • Banks’ borrowings under the repo window of the Liquidity Adjustment Facility (LAF) stood at Rs.5,221 crore (gross) on Aug 16 compared to a borrowing of Rs.12,550 crore on Aug 14. Sale of securities under the Reserve Bank of India’s (RBI) reverse repo window stood at Rs. 11,575 crore on Aug 14.
Daily Rates    
Key Rates (%) 16-Aug-18 Previous Close Year Ago
10 Yr Gsec 7.86 7.82 6.53
5 Yr AAA Corp Bond 8.70 8.65 7.40
3 Yr AAA Corp Bond 8.57 8.49 6.99
1 Yr AAA Corp Bond 8.28 8.24 6.90
3 Yr AA Corp Bond 9.09 9.03 7.71
1 Yr AA Corp Bond 8.76 8.73 7.84
12 Month CD 7.92 8.04 6.48
3 Month CD 7.19 7.17 6.19
CALL 6.44 6.37 5.84
CBLO 5.84 6.45 5.84

 

Institutional Flows     
(INR Cr) FII Flows MF Flows1
As on August 16,2018 Debt Equity Debt Equity
Purchases 638 3,942 7,656 1,977
Sales 741 4,314 5,037 1,962
Net -103 -371 2,619 15
MTD Net 5168 2409 6890 155

1 As on August 7,2018

  • Straits Times - The index fell 0.69% as heightening tensions between U.S. and Turkey and China growth concerns weighed sentiment down.
  • Nikkei - The index inched 0.05% down on weak overnight U.S. cues and a strong yen. Yen strengthened on global trade concerns.
  • Hang Seng - The index dropped 0.82% over concerns on slowing China growth.
  • FTSE - The index rose 0.78% as investor sentiment got boosted due to easing concerns over the turmoil in Turkey and hopes for a trade agreement between China and the U.S. Strong corporate earnings for quarter ended Jun 2018 further added to the gains.
  • Dow Jones - The index rose 1.58% as trade war concerns eased on news that China has accepted an invitation from the U.S. for a new round of trade talks to be held in late Aug 2018. Strong results for quarter ended Jun 2018 from major companies also added to the gains.
Global Indices Performance   
Global Indices 16-Aug-18 1D % Chg 1M % Chg 1Yr % Chg
Dow Jones 25,559 1.58 1.97 16.04
Nasdaq 100 7,374 0.27 0.22 24.62
FTSE  7,556 0.78 -0.58 1.66
Straits Times 3,212 -0.69 -0.65 -2.04
Nikkei 22,192 -0.05 -1.79 12.48
Hang Seng 27,100 -0.82 -5.04 -1.13
Shanghai Composite 2,705 -0.66 -3.87 -16.67
  • Gold prices managed to recover with the temporary pause in the recent U.S. dollar upsurge seen as one of the key factors of promoting some short-covering around the precious commodity.

  • Brent Crude prices showed signs of recovery in the light of optimism over resolution of the U.S. – China trade row, which has recently rattled the global crude oil demand outlook.
Commodity Market    
Commodity (INR) 16-Aug-18 1D % Chg 1M % Chg 1Yr % Chg
Brent (1 barrel) (in $) 68.40 1.23 -2.31 36.04
Gold (10 gm) 29,361 -0.61 -2.69 2.21
Silver (1 kg) 36,660 -2.22 -5.24 -3.89
Aluminium (1 kg) 140.30 -1.30 -3.84 5.25
Copper (1 kg) 412.55 -1.36 -1.45 0.62
  • The rupee fell against the U.S. dollar following wider than expected India’s trade deficit data for the month of Jul 2018. However, greenback sales by state-run banks restricted some of the losses.

  • The euro rose against the greenback as trade war concerns eased to some extent on news that a Chinese delegation will travel to the U.S. for trade talks. Euro rose further as concerns over Turkey’s currency crisis also eased as lira stabled against the U.S. dollar.
Currency Market    
Currency 16-Aug-18 1D % Chg 1M % Chg 1Yr % Chg
USD/INR 70.23 0.66 2.39 9.32
EURO/INR 79.97 0.34 -0.35 6.10
GBP/INR 89.37 0.15 -1.63 8.17
100 JPY/INR 63.35 0.72 3.82 9.21
  • According to Monetary Policy Committee’s third monetary policy meeting minutes, inflation risks remain because of factors such as MSP, crude oil, monsoon, and GST. RBI deputy governor said retail inflation could resume upward movement in Oct-Mar. All the members except one voted for hike in rates. All the members agreed to maintain the neutral stance. The committee feels there is uncertainty over domestic inflation and it needs to be carefully monitored in the next few months. Global developments are also a concern because rising trade protectionism poses risk to near-term and long-term global growth prospects.

  • According to the government, India's crude oil imports could increase by around $26 billion in FY19 as the rupee is lingering at record lows. The fall in rupee has made purchase of overseas oil costlier and will lead to increase in retail selling price of petrol, diesel and cooking gas (LPG). India imports more than 80% of its oil requirement and spent $87.7 billion on 220.43 million tonne imports of crude oil in FY18.
Key Economic Indicators   
Indicators Current Previous
GDP 7.70% (Q4 FY'18) 7.00% (Q3 FY'18)
IIP 7.00% (Jun'18) 3.90% (May'18)
WPI 5.09% (Jul'18) 5.77% (Jun'18)
CPI 4.17% (Jul'18) 4.92% (Jun'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 6.25 6.25
Repo 6.50 6.50
CRR 4.00 4.00
SLR 19.50 19.50
Bank Rate 6.75 6.75
  • Kotak Mahindra Bank is planning to open more than 100 branches by the end of FY19 to widen its network to 1,500 from the present 1,391. The bank is also setting up a branch in Dubai International Financial Centre. In the current network of the bank, 45% are in metros, 21% in urban and 34% n semi-urban and rural areas.

  • Maruti Suzuki India has announced a price increase across its models because of hike in input costs and adverse foreign exchange rates. The price hike will be by up to Rs 6,100 with immediate effect.

  • Oil and Natural Gas Corporation (ONGC) and Coal India top executives and finance ministry officials will hold an investor roadshow in the U.S. in the third week of Aug 2018. This is being done to prepare for probable sale of minor stakes in the two companies by the government, according to media reports as officials will engage with institutional investors. 
Upcoming Events  
Event Date
Index of Eight Core Industries (Jul 18) 31-Aug-18

Source :ICRON Research

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