Bulls which woke up later part of the week, helped Indian equity benchmarks to end with a gain of over a percent. Markets started the week on pessimistic note with Moody’s Investors Service’s statement that the steps announced by the government to aid MSMEs and the measures being planned to support farmers will increase the risk of fiscal slippage and push deficit to 3.4 per cent of GDP in the current financial year. The government budgeted the fiscal deficit for the current financial year at 3.3 per cent of the GDP. Markets extended southward journey for next two days on report that the Income Tax Department launched searches at 74 places in Tamil Nadu in connection with a tax evasion probe against some real estate groups and a retail store chain in the state. Investors also took note of a report that the Income Tax Department has confiscated assets worth Rs 6,900 crore till now as part of its action under the anti-benami transactions law. Traders shrugged off the RBI’s latest data report that FDI during the previous fiscal grew 18 per cent to Rs 28.25 lakh crore. As per data, FDI increased by Rs 4,33,300 crore, including revaluation of past investments, during 2017-18 to reach Rs 28,24,600 crore in March 2018 at market value. However, traders turned optimistic and markets pared all of their early losses after SBI Research’s latest report indicated that the government is likely to meet the fiscal deficit target this year and pegged fiscal deficit at Rs 6.72 trillion or 3.2% of GDP for FY20, assuming a moderate nominal GDP growth of 11.7%. It added that the fiscal gap will be met at the budgeted 3.3 percent for FY19. Markets extended gains on final day of the week as investors welcomed individual tax exemptions and sops in the farm sector announced in the interim Budget. Some support also came with report that the Nikkei India Manufacturing PMI rose to 53.9 in January from 53.2 in December. BSE movement for the week The Bombay Stock Exchange (BSE) Sensex surged 443.89 points or 1.23% to 36,469.43 during the week ended February 01, 2019. The BSE Midcap index losses 40.44 points or 0.28% to 14,641.38, while Smallcap index slipped 49.75 points or 0.36% to 13,950.45. On the sectoral front, S&P BSE Information Technology was up by 649.61 points or 4.39% to 15433.98, S&P BSE TECK was up by 310.99 points or 4.28% to 7585.37, S&P BSE Consumer Discretionary Goods & Services was up by 78.78 points or 2.26% to 3558.84, S&P BSE Consumer Durables was up by 461.72 points or 2.20% to 21412.99 and S&P BSE Auto was up by 361.00 points or 1.94% to 18985.17 were the top gainers on the BSE sectoral front, while S&P BSE Metal was down by 192.88 points or 1.80% to 10542.63, S&P BSE Oil & Gas was down by 131.22 points or 0.95% to 13633.78, S&P BSE Finance was down by 35.02 points or 0.60% to 5802.55 and S&P BSE PSU was down by 10.50 points or 0.15% to 6846.55 were the top losers on the BSE sectoral front. NSE movement for the week The Nifty surged 113.10 or 1.05% to 10,893.65. On the National Stock Exchange (NSE), Bank Nifty was down by 29.35 points or 0.11% to 27,085.95, Nifty Mid Cap 100 decreased 22.25 points or 0.13% to 16,990.25 and Nifty Next 50 lost 40.10 points or 0.15% to 26,828.20. On the other side, Nifty IT was up by 685.05 points or 4.56% to 15,724.30. FII transactions during the week Foreign Institutional Investors (FIIs) were net buyers in equity segment in the week, with gross purchases of Rs 35521.98 crore and gross sales of Rs 32150.66 crore, leading to a net inflow of Rs 3371.32 crore. They also stood as net sellers in the debt segment with gross purchases of Rs 4911.84 crore against gross sales of Rs 5268.42 crore, resulting in a net outflow of Rs 356.58 crore. In hybrid segment, FIIs stood as net buyers, with gross purchases of Rs 4.65 crore and gross sales of Rs 1.42 crore, leading to a net inflow of Rs 3.23 crore. Industry and Economy SBI Research in its latest report has stated that the government is likely to meet the fiscal deficit target this year and pegged fiscal deficit at Rs 6.72 trillion or 3.2% of gross domestic product (GDP) for next fiscal year (2019-20), assuming a moderate nominal GDP growth of 11.7%. It added that the fiscal gap will be met at the budgeted 3.3 percent for FY19. Outlook for the coming week The passing week Indian equity markets ended in positive terrain with gains of over a percent as traders took encouragement with Piyush Goyal announcing full tax rebate upto income of 5 lakh rupees for individual tax payers; Standard deduction raised to 50,000, a hike of 10,000 for salaried class. On the economy front, investors would be eyeing Nikkei Services PMI data for the month of January which will be released on February 5. The Nikkei India Services PMI dropped to 53.2 in December of 2018 from November's 4-month high of 53.7 amid a stagnation in new export work. In the coming week, traders would be awaiting the Reserve Bank of India (RBI) sixth bi-monthly monetary policy statement for 2018-19 which will be announced on February 7. Street expects the RBI would cut interest rate. With softer retail and wholesale price-based inflation, the RBI is likely to change its policy stance to ‘neutral’ from ‘calibrated tightening’ in the February policy. In a result heavy season lots of major companies like, Central Bank of India, Jindal Steel & Power, J.K.Cement, Relaxo Footwears, Godrej Agrovet, Grindwell Norton, IDBI Bank, Lumax Industries, Satin Creditcare Network, Syndicate Bank, Exide Industries, Tata Investment Corporation, Whirlpool Of India, Welspun India, ACC, BHEL, Bombay Dyeing, Dish TV India, GAIL (India), Hindustan Petroleum Corporation, Inox Leisure, Marico, Mangalore Refinery & Petrochemicals, Punjab National Bank, Reliance Infrastructure, Sobha, Suven Life Sciences, Tata Chemicals, Tata Global Beverages, Tech Mahindra, Torrent Power, United Bank Of India, V-Mart Retail, Adani Ports And Special Economic Zone, Adani Power, JSW Steel, Lupin, Manappuram Finance, Muthoot Finance, Tribhovandas Bhimji Zaveri, Zydus Wellness, Adani Enterprises, Adani Green Energy, Arvind, Aurobindo Pharma, Bajaj Electricals, Britannia Industries, Cadila Healthcare, Endurance Technologies, Eros International Media, MRF, SAIL, Tata Motors, BPCL, Mahindra & Mahindra, NHPC. On the global front from the US, traders will first be eyeing, Factory Orders on February 4, followed by International Trade, Redbook, PMI Services Index, ISM Non-Mfg Index on February 5, Productivity and Costs, MBA Mortgage Applications on February 6, Jobless Claims, Consumer Credit, Fed Balance Sheet, Money Supply on February 7 and finally Wholesale Trade and Baker-Hughes Rig Count on February 8. Top Gainers HCL Technologies up by 10.29 % was the top gainer on Nifty for the week - HCL Technologies gained traction on reporting 25.24% in its consolidated net profit at Rs 2,605 crore for third quarter ended December 31, 2018 as compared to Rs 2,075 crore for the same quarter in the previous year. The company also expressed confidence in meeting the higher end of its 9.5-11.5 per cent revenue growth guidance for FY2019. Besides, total consolidated income of the company increased by 21.06% at Rs 15,833 crore for Q3FY19 as compared Rs 13,079 crore for the corresponding quarter previous year.
Axis Bank up by 8.08% was another top gainer on Nifty for the week - Axis Bank gained after reporting immense profit numbers for the third quarter of FY19, which is the bank’s highest net profit in the last 11 quarters. The bank posted over 2-fold jump in its net profit at Rs 1,680.85 crore for the quarter under review as compared to Rs 726.44 crore for the same quarter in the previous year. The bottom-line of the bank was supported by healthy growth in core and non-core income. Besides, total income of the Bank increased by 26.66% at Rs 18,130.42 crore for Q3FY19 as compared Rs 14,314.63 crore for Q3FY18.
Top Losers Zee Entertainment Enterprises (ZEEL) down by 18.31% was the top loser of the week on Nifty - ZEEL came under pressure with report that the promoters of the company are considering selling up to a 25% stake to a strategic partner. As per the report, negotiations were on with three prospective foreign strategic investment entities. The promoters are willing to give a bit more than 20% stake and the maximum would be 25% to a strategic investor. As part of an earlier plan, Chairman Subhash Chandra and his family had announced that they were willing to sell up to 50 per cent of their stake in ZEEL.
Yes Bank down by 13.83% was another top loser of the week on Nifty - Yes Bank senior group president and head - retail and business banking Pralay Mondal has tendered his resignation. Rana Kapoor reigned as the Managing Director and Chief Executive of Yes Bank on January 31. Besides, Yes Bank reported lower-than-expected result for the quarter ended December 31, 2018. The bank posted 6.97 percent fall in its net profit at Rs 1,001.85 crore, as compared to Rs 1076.87 crore in a year ago period.
Technical viewpoints During the week, CNX Nifty touched the highest level of 10,983.45 on February 1 and lowest level of 10,583.65 on January 29. On the last trading day, the Nifty closed at 10,893.65 with weekly gain of 113.10 points or 1.05 percent. For the coming week, 10,657.05 followed by 10,420.45 are likely to be good support levels for the Nifty, while the index may face resistance at 11,056.85 and further at 11,220.05 levels. US Market The US markets ended higher during the passing week after the Fed announced its widely expected decision to leave interest rates unchanged and indicated the central bank will remain patient regarding further rate hikes. The Fed said following a two-day meeting it has decided to maintain the target range for the federal funds rate at 2.25 to 2.50 percent. The accompanying statement included some notable changes from last month, including dropping a reference to the Fed's plan for further gradual rate increases. The central bank also removed a sentence describing the risks to the economic outlook as roughly balanced. Besides, Strong earnings from Boeing and Apple also boosted the markets. Meanwhile, traders were watching developments between the US and China as officials there attempted to forge the framework toward a resolution of tariff disputes in the final day of this round of negotiations. On the economic front, after reporting first-time claims for U.S. unemployment benefits at their lowest level in nearly 50 years in the previous week, the Labor Department released a report showing a significant rebound in initial jobless claims in the week ended January 26th. The report said initial jobless claims surged up to 253,000, an increase of 53,000 from the previous week's revised level of 200,000. Street had expected jobless claims to rise to 215,000 from the 199,999 originally reported for the previous week. With the much bigger than expected increase, jobless claims reached their highest level since hitting 254,000 in September of 2017. Meanwhile In its first report since the end of the government shutdown, the Commerce Department showed new home sales in the U.S. rebounded sharply in the month of November. The report released showed new home sales soared by 16.9 percent to an annual rate of 657,000 in November after plunging by 8.3 percent to a revised rate of 562,000 in October. Street had expected new home sales to rise to a rate of 560,000 from the 544,000 originally reported for the previous month. Reflecting several negative factors, the National Association of Realtors (NAR) released a report unexpectedly showing a continued decrease in U.S. pending home sales in the month of December. NAR said its pending home sales index tumbled by 2.2 percent to 99.0 in December after falling by 0.9 percent to a downwardly revised 101.2 in November. The continued decline in pending home sales surprised participants, who had expected the index to climb by 0.5 percent. A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale. European Market European markets ended the passing week on higher note, despite a mixed batch of economic data. The key indices made a sluggish start of the week, as Germany's Ifo business confidence indicator dropped at a faster-than-expected pace in January and fell below 100 for the first time since May 2016. The survey results from the Ifo Institute showed that the Ifo business climate index dropped to 99.1 from 101 in December. Adding some worries, Eurozone's economic sentiment weakened for a seventh month in a row in January to its lowest level in over two years, driven by a sharp deterioration in industrial confidence caused by the lingering uncertainties linked to Brexit, global trade tensions and political threats such as protectionism. As per survey data from the European Commission, the economic sentiment indicator fell to 106.2 from December's 107.4. The latest reading was the lowest since November 2016, when it was 105.6. But, most of the regional markets pared their losses during the week to end higher, after Italy's consumer confidence strengthened in January for the first time in three months. The survey data from the statistical office ISTAT showed that the consumer confidence index rose to 114 from 113.2 in December. All sub-indexes improved in January. Besides, French consumer confidence rose more-than-expected in January, after decreasing in December, amid a sharp improvement in expectations. The survey data from the statistical office INSEE showed that the consumer sentiment index rose to 91 in January from 86 in December. In November, the reading was 91. Traders remained optimistic as Eurozone's economy maintained its growth momentum in the fourth quarter of 2018. GDP grew 0.2% from the third quarter, when the economy expanded at the same pace. Year-on-year, GDP was up 1.2% in the fourth quarter, matching expectations. For the full year 2018, GDP growth was 1.8%. On retail sales data front, preliminary data from the Federal Statistical Office showed German retail sales declined sharply in December, falling 2.1% year-on-year, after a 1.9% increase in November. The latest decrease was the biggest since a 3% slump in September. Further, a report from INE showed retail sales in Spain grew at a seasonally and calendar-adjusted 0.8% year-over-year in December. That was slower than the 1.1% rise in November. On the employment front, Spain employment grew at a faster annual pace in the fourth quarter of 2018. The preliminary data from the statistical office INE showed that employment rose by 2.98%, or 566,200 persons, year-on-year in the fourth quarter, after climbing 2.51% in the previous three months. Asian market Asian equity indices ended the weekly trade mostly in green terrain, on the back of positive cues from Wall Street after the US Federal Reserve left interest rates unchanged, as widely expected, and said it would be patient in lifting borrowing costs. However, gains were limited as weak manufacturing data from China as well as lingering trade tensions offset upbeat corporate earnings results from the US. Investors also awaited cues from the latest US jobs report. Japanese Nikkei edged marginally higher, as the yen's fall against the dollar lifted export-oriented shares. Traders took some support with government data showing that the unemployment rate in Japan fell to the lowest level in 26 years in 2018 as businesses sought to hire more workers amid a deepening labor shortage. However, gains remained capped with data showing that Japanese manufacturing activity grew at the slowest pace in 29 months in January as export orders shrank sharply, adding to signs that the U.S.-China trade war is inflicting more pressure on the slowing global economy. Chinese Shanghai surged by over half a percent, as the Chinese government stepped up its efforts to boost growth and as Beijing and Washington cracked on with trade negotiations. Traders overlooked a private survey showed that China's factory activity continued to weaken last month, providing the latest evidence of a prolonged economic slowdown. The Caixin/Markit PMI dropped to 48.3 in January from 49.7 in the previous month. Also, a private survey showed that China's manufacturing activity contracted more than expected in January, reinforcing fears of a slowdown in the world's second-largest economy.
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