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Daily Updates
Fri,22 Jun 2018

  • Indian equity markets remained under pressure during the session, with brief stance of recovery, due to lack of any positive triggers on the domestic front. The minutes of the Monetary Policy Committee’s (MPC) latest policy meeting held early this month gave no indication of policymakers’ stance on future rate hikes, citing uncertainties on oil and food prices. Weak global cues neutralised the risk appetite of investors as China continued to retaliate against U.S. protectionist move in form of tariff hikes on Chinese goods imports.

  • Key benchmark indices S&P BSE Sensex and Nifty 50 fell 0.32% and 0.29% to close at 35,432.39 and 10,741.10, respectively. S&P BSE Mid Cap and S&P BSE Small Cap fell 0.53% and 0.79%, respectively.

  • The overall market breadth on BSE was weak with 1,793 scrips declining and 808 scrips advancing. A total of 132 scrips remained unchanged.

  • On the BSE sectoral front, barring S&P BSE Energy and S&P BSE Oil & Gas, all the indices closed in the red. S&P BSE Telecom was the major loser, down 1.61%, followed by S&P BSE Healthcare and S&P BSE Capital Goods, which fell 1.11% and 1.09%, respectively. S&P BSE Metal and S&P BSE Basic Materials fell 0.98% and 0.97%, respectively.

  • Among the 31-stock sensitive Sensex pack, Mahindra & Mahindra was the major loser, down 2.11%, followed by ONGC and Power Grid, which fell 1.90% and 1.88%, respectively.
Domestic Indices Performance
  21-Jun-18 1D % Chg 1M % Chg 1Yr % Chg
Nifty 50 10,741 -0.29 2.13 11.50
S&P BSE Sensex 35,432 -0.32 2.36 13.26
S&P BSE Midcap 15,768 -0.53 0.84 6.17
S&P BSE Smallcap 16,528 -0.79 -2.47 5.30
S&P BSE Auto 24,555 -0.90 2.82 2.22
S&P BSE Bankex 29,596 -0.38 2.58 10.54
S&P BSE CD 20,125 -0.84 -4.63 25.59
S&P BSE CG 17,771 -1.09 -2.86 1.01
S&P BSE FMCG 11,040 -0.58 -1.81 7.52
S&P BSE HC 14,114 -1.11 11.25 0.34
S&P BSE IT 13,632 -0.12 3.09 37.41
S&P BSE Metal 12,964 -0.98 -3.25 15.68
S&P BSE Oil 14,445 0.60 0.92 5.42
S&P BSE Power 1,988 -0.91 -4.59 -11.10
S&P BSE PSU 7,573 -0.85 -0.65 -10.03
S&P BSE Realty 2,158 -0.51 -2.92 2.50
S&P BSE Teck 7,023 -0.31 2.49 26.41
VIX Index 12 2.26 -13.62 14.04
  • Bond yields fell for the fifth consecutive day following decline in global crude oil prices ahead of a meeting between the members of the Organization of the Petroleum Exporting Countries Jun 22.

  • Yield on the 10-year benchmark paper (7.17% GS 2028) dropped 5 bps to close at 7.77% from the previous close of 7.83%. During the session, bond yields traded in the range of 7.76% and 7.81%.

  • Banks’ borrowings under the repo window of the Liquidity Adjustment Facility (LAF) stood at Rs. 24,136 crore (gross) on Jun 21, compared with Rs. 19,796 crore (gross) on Jun 20. Sale of securities under the Reserve Bank of India’s (RBI) reverse repo window stood at Rs. 4,692 crore on Jun 20.

  • Banks borrowed Rs. 250 crore under the central bank’s Marginal Standing Facility on Jun 20 compared with that of Jun 19 when banks borrowed Rs. 300 crore.
Daily Rates
Key Rates (%) 21-Jun-18 Previous Close Year Ago
10 Yr Gsec 7.77 7.83 6.43
5 Yr AAA Corp Bond 8.69 8.71 7.50
3 Yr AAA Corp Bond 8.56 8.58 7.26
1 Yr AAA Corp Bond 8.32 8.28 7.05
3 Yr AA Corp Bond 8.83 8.87 7.90
1 Yr AA Corp Bond 8.61 8.60 7.75
12 Month CD 8.04 8.10 6.66
3 Month CD 7.12 6.89 6.35
CALL 6.24 6.24 6.10
CBLO 6.29 6.28 6.23

 

Institutional Flows 
(INR Cr) FII Flows MF Flows1
As on June 21,2018 Debt Equity Debt Equity
Purchases 1,233 3,829 8,921 2,366
Sales 2,553 6,203 8,268 1,876
Net -1,319 -2,374 653 490
MTD Net -7743 -6666 23309 3941

1As on June 19,2018

  • Straits Times - The index moved down 0.48% tracking regional peers and overnight U.S. markets. Investors remained cautious of a key meeting between OPEC and non-OPEC countries on raising global crude supply.
  • Nikkei – The index gained 0.61% on weaker yen after taking positive cues from overnight U.S. market. Investors also remained optimist over an upcoming meeting between OPEC and non-OPEC countries.
  • Hang Seng – The index fell 1.35% after taking cues from the mainland Chinese market. Investors also remained concerned over renewed global trade tensions. However, speculation of monetary policy easing by the People’s Bank of China limited the downside.
  • FTSE - The index declined following the Bank of England (BoE) policy meeting that led to a rally in the British pound, which pressured stocks. BoE’s committee witnessed rise in members seeking an interest rate hike. Policymakers also set out new guidance on when to consider reducing the quantitative easing programme.
  • Dow Jones - The index fell partially due to lingering concerns about the trade dispute between the U.S. and China. Uncertainty about the outcome of OPEC’s meeting on Friday, further dampened sentiments. Smaller than expected increase in the U.S. leading economic index in May, further increased losses.
Global Indices Performance
Global Indices 21-Jun-18 1D % Chg 1M % Chg 1Yr % Chg
Dow Jones 24,462 -0.80 -2.21 14.25
Nasdaq 100 7,217 -0.87 4.52 24.82
FTSE  7,556 -0.93 -3.85 1.46
Straits Times 3,300 -0.48 -7.00 3.07
Nikkei 22,693 0.61 -1.34 12.68
Hang Seng 29,296 -1.35 -6.21 14.02
Shanghai Composite 2,876 -1.37 -10.52 -8.88
  • Gold prices fell on concerns over rise in interest rates in the U.S. after the Federal Reserve chairman hinted that the bank will continue to raise rates.

  • Brent crude prices fell on expectations that the Organization of the Petroleum Exporting Countries (OPEC) and Russia might come to a consensus to raise output in the upcoming meeting.
Commodity Market
Commodity (INR) 21-Jun-18 1D % Chg 1M % Chg 1Yr % Chg
Brent (1 barrel) (in $) 72.61 -1.33 -8.47 66.31
Gold (10 gm) 30,437 -0.50 -1.44 6.55
Silver (1 kg) 39,392 -0.23 -0.14 3.41
Aluminium (1 kg) 147.75 -0.37 -4.74 22.61
Copper (1 kg) 456.40 -0.31 -0.57 25.71
  • The rupee rose against the U.S. dollar following selling of the greenback by exporters and intervention by the Reserve Bank of India. The rupee rose 0.13% to close at 67.98 per dollar from the previous close of 68.07 per dollar.

  • The euro rose against the greenback after Philadelphia Fed business conditions index fell in Jun 2018. However, gains were capped after the initial jobless claims for the week ended Jun 16 fell unexpectedly.
Currency Market
Currency 21-Jun-18 1D % Chg 1M % Chg 1Yr % Chg
USD/INR 68.20 0.16 0.16 5.56
EURO/INR 78.79 -0.04 -1.42 9.52
GBP/INR 89.58 -0.02 -2.00 9.87
100 JPY/INR 61.61 -0.34 0.75 6.10
  • According to minutes of Monetary Policy Committee’s second monetary policy meeting for FY19, interest rate increase in Jun 2018 reflects rising inflation due to high oil prices. Members raised concerns over rising inflationary pressures. The members who had voted for rate hike in Jun 2018 kept the stance as “neutral” as they chose to wait for more clarity on the inflationary impact of government’s decision to increase minimum purchase price of food grains and the direction of oil prices.

  • As per a notification by the finance ministry, the government has decided to raise customs duty on several goods, including Bengal gram, lentils and artemia, along with certain kind of nuts, iron and steel products, apples, pears, flat rolled products of stainless steel, other alloy steel, tube and pipe fittings, and screws, bolts and rivets. The import duty hike would be effective from Aug 4, 2018.

  • The time for the announcement of price band for initial public offers (IPOs) has been cut to two days from five days by the Securities and Exchange Board of India (SEBI).
Key Economic Indicators
Indicators Current Previous
GDP 7.70% (Q4 FY'18) 7.00% (Q3 FY'18)
IIP 4.90% (Apr'18) 4.60% (Mar'18)
WPI 4.43% (May'18) 3.18% (Apr'18)
CPI 4.87% (May'18) 4.58% (Apr'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 6.00 6.00
Repo 6.25 6.25
CRR 4.00 4.00
SLR 19.50 19.50
Bank Rate 6.50 6.50
  • According to the president of Tata Motors, the company is looking to launch around 50 commercial vehicles in FY19, similar to the last year, to solidify its position in the segment. Also, the company aims to save close to Rs. 1,900 crore in the fiscal, similar to the last fiscal, by way of enforcing cost-saving measures.

  • Finnish telecom gear maker Nokia said it has inked a five-year global IT infrastructure and application services deal with Indian IT firm HCL Technologies. The financial terms of the deal were not disclosed.

  • Arvind Ltd is looking to grow its own brand under the Arvind umbrella from the current Rs. 400 crore to Rs. 1,000 crore in the next 4-5 years. According to the company’s chief executive officer, the key growth driver of Lifestyle fabrics for the knits and wovens division, will come in from fabrics as well as the ready to wear segment.
Upcoming Events
Event Date
Index of Eight Core Industries (May 18) 2-Jul-18

Source :ICRON Research

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