Indian equity benchmarks ended the passing week with marginal gains as traders opted to buy the valuable equities on Muhurat Trading 2018. Local bourses started the holiday truncated week on pessimistic note as traders remained cautious with private report stating that with global crude prices remaining elevated, the rupee is likely to be under pressure, and may touch the 76 levels against the US currency over the next three months. Traders shrugged off positive India’s services PMI data. India’s services sector activity signaled a solid and stronger improvement in business conditions in the month of October, aided by accelerating new work along with easing inflationary pressures. The seasonally adjusted Nikkei Services Business Activity Index rose to 52.2 in October from 50.9 in September. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services -- too improved to 53.0 in October from 51.6 in September. On the very next day markets gained marginally with a private report stating that the government has generated higher-than-expected revenues from customs duties, which may help it rein in the fiscal deficit within its FY19 target of 3.3% of gross domestic product (GDP). But, it was the Muhurat Trading which helped markets to garner maximum gains during the week, as traders turned bullish on the auspicious day. However, markets trim some of their profit on last day of trade as traders remained concerned about Moody’s Investors Service’s statement that Indian economy will expand 7.4% in 2018, but the growth will slow down to 7.3% in the next year as domestic demand tapers on higher borrowing cost due to rising interest rates. Market participants also remained cautious with a private report stating that unemployment rate in the country rose to 6.9% in October - the highest in two years. The estimated number of people employed during October 2018 was 397 million. BSE movement for the week The Bombay Stock Exchange (BSE) Sensex surged 146.90 points or 0.42% to 35,158.55 during the week ended November 09, 2018. The BSE Midcap index gained 55.47 points or 0.37% to 14,944.20 and Smallcap index surged 207.17 points or 1.43% to 14,671.85. On the sectoral front, S&P BSE Realty was up by 42.83 points or 2.49% to 1762.76, S&P BSE Healthcare was up by 129.98 points or 0.89% to 14692.79, S&P BSE Consumer Discretionary Goods & Services was up by 27.90 points or 0.77% to 3669.73, S&P BSE Auto was up by 149.83 points or 0.72% to 20845.20 and S&P BSE TECK was up by 50.18 points or 0.71% to 7100.90 were the top gainers on the BSE sectoral front while, S&P BSE Metal was down by 208.83 points or 1.60% to 12863.10, S&P BSE Consumer Durables was down by 186.66 points or 0.95% to 19512.03, S&P BSE Oil & Gas was down by 83.14 points or 0.61% to 13584.52, S&P BSE Power was down by 11.69 points or 0.59% to 1977.57 and S&P BSE Fast Moving Consumer Goods was down by 12.80 points or 0.11% to 11210.37 were the top losers on the BSE sectoral front. NSE movement for the week The Nifty surged 32.20 or 0.31% to 10,585.20. On the National Stock Exchange (NSE), Bank Nifty rose 69.35 points or 0.27% to 25,771.00, Nifty IT soared 156.55 points or 1.09% to 14,553.25, Nifty Mid Cap 100 increased 174.55 points or 1.00% to 17,605.50 and Nifty Next 50 was up 232.55 points or 0.86% to 27,367.45. FII transactions during the week Foreign Institutional Investors (FIIs) were net sellers in equity segment in the week, with gross purchases of Rs 15956.17 crore and gross sales of Rs 16281.20 crore, leading to a net outflow of Rs 325.03 crore. They also stood as net buyers in the debt segment with gross purchases of Rs 5918.95 crore against gross sales of Rs 1221.72 crore, resulting in a net inflow of Rs 4697.23 crore. In hybrid segment, FIIs stood as net buyers, with gross purchases of Rs 0.90 crore and gross sales of Rs 0.80 crore, leading to a net inflow of Rs 0.10 crore. Industry and Economy Warning of a credit squeeze for non-banking financial entities, global rating agency Moody’s Investors Service in its latest report has forecasted that India’s economic growth will slow down to 7.3% in 2019 and 2020 from 7.4% in 2018, as domestic demand tapers on higher borrowing cost due to rising interest rates. It said the greatest downside risk to India's growth prospects stem from concerns about its financial sector. Outlook for the coming week In the passing holiday truncated week, Indian markets ended in green, with Nifty and Sensex posting slight gains as global crude oil prices dropped and rupee appreciated. In the coming week, on the economy front, investors will be awaiting the release of Index of Industrial Production (IIP) data for the month of September on November 12. India’s industrial output slowed down to a three-month low of 4.3% in the month of August 2018. Traders will also be looking forward to the release of Consumer price index (CPI) and Wholesale price index (WPI) inflation data for the month of October on November 12 and November 14, respectively. India’s retail inflation inched up to 3.77% in the month of September 2018 and India’s WPI surged to 5.13% in September. Market-men will also be eyeing the meeting of Prime Minister Narendra Modi and US Vice President Mike Pence in the next week. Markets will also be reacting to various result announcements in the last leg of earnings season. In the coming week, Aurobindo Pharma, Bank of India, Britannia Industries, Coal India, Eicher Motors, Godrej Industries, Hathway Cable & Datacom, Hindustan Motors, Mro-Tek Realty, NCL Industries, NMDC, RCF, Shree Cement, UCO Bank, Union Bank Of India, Abbott India, Apollo Tyres, Ashok Leyland, Corporation Bank, DCM, Glenmark Pharmaceuticals, Grasim Industries, Hindustan Copper, Jindal Steel & Power, J.R. Foods, Mangalam Cement, NCC, Orient Bell, Viaan Industries, Central Bank of India, Cox & Kings, JK Lakshmi, Cement Mindteck, NHPC, NLC India, SSWL will be among many to announce their numbers. On the global front from the US, market-participants will first be eyeing Redbook on November 13, followed by CPI on November 14, Jobless Claims, Retail Sales, Import and Export Prices, Business Inventories, Fed Balance Sheet, and Money Supply on November 15 and finally Industrial Production, Quarterly Services Report (Advance), Baker-Hughes Rig Count, and Treasury International Capital on November 16. Top Gainers Yes Bank up by 21.16% was the top gainer on Nifty for the week - Yes Bank gained traction as traders opted to buy the stock after it fell sharply in last month. The Bank was under pressure after the Reserve Bank of India (RBI) had refused to grant more time to the bank's long serving CEO and MD Rana Kapoor and asked the private sector lender to appoint his successor latest by February 01, 2019. However, traders turned optimistic after its asset quality improved in second quarter of current fiscal year. Gross non-performing assets (NPA) declined to 1.60% in Q2FY19 as against 1.82% in Q2FY18.
Maruti Suzuki up by 10.08% was another top gainer on Nifty for the week - Maruti Suzuki India gained on reporting 6.5% rise in its production to 150,497 vehicles in October 2018, as compared to 141,269 vehicles in October 2017. Of total, the company manufactured 34,295 vehicles under mini segment (including Alto, Wagon R); 74,167 vehicles under Compact segment; 3,513 vehicles under Midsize; 22,526 units under Utility Vehicles segment; 13,817 units under Vans category and 2,179 vehicles under Light Commercial Vehicles (CV) segment (including super carry) in October 2018.
Top Losers Cipla down by 16.26% was the top loser of the week on Nifty - Cipla came under selling pressure after reporting lower-than-expected result for Q2FY18. The company posted 10.78% fall in its consolidated net profit at Rs 377.05 crore for the quarter under review as compared to Rs 422.59 crore for the same quarter in the previous year. Besides, total income of the company decreased marginally by 1.22% at Rs 4,144.47 crore for Q2FY19 as compared Rs 4,195.74 crore for the corresponding quarter previous year. Moreover, Net sales of the company declined 2% to Rs 4,011 crore year-on-year.
Technical viewpoints During the week, CNX Nifty touched the highest level of 10,619.55 on November 9 and lowest level of 10,477.00 on November 5. On the last trading day, the Nifty closed at 10,585.20 with weekly gain of 32.20 points or 0.31 percent. For the coming week, 10,501.62 followed by 10,418.03 are likely to be good support levels for the Nifty, while the index may face resistance at 10,644.17 and further at 10,703.13 levels. US Market The US markets traded jubilantly and settled with a gain of over massive gain on around three percent during the passing week, as traders shrugged off a report from the Institute for Supply Management showing a modest slowdown in the pace of growth in the service sector in the month of October. The ISM said its non-manufacturing index dipped to 60.3 in October after climbing to 61.6 in September, although a reading above 50 still indicates growth in the service sector. Street had expected the index to drop to 59.3. Last month, the ISM said the non-manufacturing index unexpectedly rose in September, reaching its highest level since the inception of the composite index in 2008. However, traders are looking to move money into safe havens ahead of the Federal Reserve's monetary policy announcement. The Fed is widely expected to leave interest rates unchanged, but the accompanying statement may shed additional light on the anticipated rate hike in December. Positive sentiment have been generated by a report from the Conference Board showing a continued increase in consumer confidence in the month of September. The Conference Board said its consumer confidence index rose to 137.9 in October from a downwardly revised 135.3 in September. Market participants had expected the consumer confidence index to drop to 136.3 from the 138.4 originally reported for the previous month. With the increase, the consumer confidence index reached its highest level since hitting 142.5 in September of 2000. Buying interest was generated in reaction to a report from payroll processor ADP showing stronger than expected private sector job growth in the month of October. ADP said private employment jumped by 227,000 jobs in October after surging up by a downwardly revised 218,000 jobs in September. The street had expected an increase of about 189,000 jobs compared to the addition of 230,000 jobs originally reported for the previous month. The stronger than expected job growth in October reflected the biggest increase in private sector employment since a jump of 241,000 jobs in February. Meanwhile, the Labor Department released a report showing a slight decrease in initial jobless claims in the week ended November 3. The report said initial jobless claims edged down to 214,000, a decrease of 1,000 from the previous week's revised level of 215,000. Street had expected jobless claims to dip to 213,000 from the 214,000 originally reported for the previous week. European Market European markets ended the passing week with mixed results, ahead of policy decision from the Federal Reserve. The start of the trading week was cautious, as Eurozone's investor sentiment eroded for a third consecutive month in November to its lowest level in two years. The survey data from Sentix showed that the Sentix investor confidence indicator dropped to 8.8 from 11.4 in October. Adding some anxiety, Eurozone's private sector expanded at the weakest pace in over two years in October as both manufacturing and services recorded slower rates of growth. As per latest survey data from IHS Markit, the composite Purchasing Managers' Index, or PMI, fell to 53.1 from September's 54.1. The reading was the lowest since September 2016. The flash reading for the composite PMI was 52.7. Besides, the UK service sector registered its slowest rate of expansion in seven months in October. As per survey results from IHS Markit and the Chartered Institute of Procurement & Supply, the services Purchasing Managers' Index dropped more-than-expected to 52.2 in October from 53.9 in September. The expected level was 53.4. However, the markets managed to recover from losses, after Germany's factory orders unexpectedly grew for a second straight month in September, led by domestic demand, suggesting improvement in the economic momentum ahead. The preliminary data from the Federal Statistical Office showed that manufacturing new orders rose a price, calendar and seasonally adjusted 0.3 percent month-on-month in September, following a 2.5 percent growth in August, which was revised from 2 percent. Separately, Germany's services sector expanded more-than-expected at in October, albeit at a slowest pace in three months. The survey data from IHS Markit showed that the services Purchasing Managers Index, or PMI, fell to 54.7 in October from September's eight-month high of 55.9. The latest reading was the lowest since July, but was above the flash estimate of 53.6. On the economic front, Eurozone's producer price inflation accelerated for a fifth straight month in September. The preliminary data from Eurostat showed that producer prices grew 4.5 percent year-on-year following a 4.3 percent increase in August, which was revised from 4.2 percent. While, UK house price inflation eased sharply in October to its lowest level since March 2013. The survey data from IHS Markit and Lloyds Banking Group unit Halifax showed that the Halifax house price index rose 1.5 percent year-on-year in the three months to October, which was sharply slower than the 2.5 percent increase in September. Meanwhile, Euro area retail sales were unchanged in September after growing in the previous month. According to the preliminary data from Eurostat, retail sales were flat on the month, while the street was looking for a modest 0.1 percent gain. Asian market All the Asian equity indices, barring Japanese Nikkei, ended in red during the passing week, after the Federal Reserve reiterated its hawkish stance and the populist government in Rome flatly dismissed the EU's more pessimistic outlook for the Italian economy, deepening a rift with the European Union. Chinese Shanghai remained the top loser, tumbling around three percent, as policymakers struggle to dispel stock market gloom with promises of tax cuts and more bank lending. Sentiments remained sluggish with data showing that Consumer prices in China rose 2.5 percent year-on-year in October. That was in line with expectations and unchanged from the September reading. Also, producer prices climbed an annual 3.3 percent - matching forecasts and slowing from 3.6 percent in the previous month. Traders also remained cautious with survey showing that China's private sector expanded at the weakest pace in more than two years in October with both services and manufacturing noting weaker performances. The Caixin composite output index fell to a 28-month low of 50.5 from 52.1 in September. However, Japanese Nikkei edged marginally higher, as the yen's fall against the dollar lifted export-oriented shares. Traders also took some support with data indicating that the value of core machine orders in Japan plunged 18.3 percent sequentially in September, coming in at 802.2 billion yen. That was well shy of expectations for a decline of 9.0 percent following the 6.8 percent increase in August. However, gains remained capped with data showing that the average of household spending in Japan was down 1.6 percent on year in September, coming in at 271,273 yen. That was well shy of expectations for an increase of 1.5 percent and down sharply from the 2.8 percent gain in August.
|