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Daily Updates
Thu,19 Jul 2018

  • Indian Equity markets closed in the red after a no-confidence motion was moved by the opposition parties against the ruling government and was accepted by the Parliament. Weakness in rupee and decline in metal stocks due to slowdown in China’s GDP in the second quarter added to the losses. However, gains in oil & gas stocks due to fall in crude oil prices restricted the losses.

  • Key benchmark indices S&P BSE Sensex and Nifty 50 fell 0.40% and 0.25% to close at 36,373.44 and 10,980.45, respectively. S&P BSE Mid-Cap and S&P BSE Small Cap fell 1.27% and 0.95%.

  • The overall market breadth on BSE was weak with 1,743 scrips declining and 851 scrips advancing. A total of 133 scrips remained unchanged.

  • On the BSE sectoral front, S&P BSE Metal stood as the major loser, down 3.12% followed by S&P BSE Realty that fell 2.42%. S&P BSE Basic Materials and S&P BSE Telecom fell 1.89% and 1.85%. S&P BSE Auto and S&P BSE Industrials fell 1.36% and 1.23%. S&P BSE Oil & Gas stood as the major gainer, up 1.07% followed by S&P BSE Energy that grew 0.37%.

  • Among the 31-stock sensitive Sensex pack, ONGC was the major gainer, up 2.69%, followed by Asian Paint and HDFC that grew 0.98% and 0.91%, respectively. Tata Steel was the major loser, down 5.22%, followed by Tata MTR DVR and Vedanta Ltd. fell 3.90% and 3.02%, respectively.
Domestic Indices Performance   
  18-Jul-18 1D % Chg 1M % Chg 1Yr % Chg
Nifty 50 10,980 -0.25 1.67 11.74
S&P BSE Sensex 36,373 -0.40 2.32 14.70
S&P BSE Midcap 15,181 -1.27 -4.95 0.49
S&P BSE Smallcap 15,815 -0.95 -6.04 -0.02
S&P BSE Auto 24,137 -1.36 -3.18 -0.87
S&P BSE Bankex 29,721 -0.66 0.43 9.25
S&P BSE CD 19,645 -0.15 -3.60 23.66
S&P BSE CG 17,649 -0.24 -2.93 0.10
S&P BSE FMCG 11,261 -0.94 0.73 12.68
S&P BSE HC 13,689 -0.59 -4.35 -7.25
S&P BSE IT 14,470 -0.12 4.56 42.26
S&P BSE Metal 11,857 -3.12 -10.00 -1.72
S&P BSE Oil 14,462 1.07 -0.79 4.50
S&P BSE Power 1,896 -1.04 -5.86 -16.83
S&P BSE PSU 7,234 -0.27 -6.55 -14.80
S&P BSE Realty 1,963 -2.42 -9.95 -8.37
S&P BSE Teck 7,301 -0.31 2.36 26.94
VIX Index 14 6.69 10.52 19.08
  • Bond yields remained steady as profits taken by market participants nullified early gains that was led by the Central Bank’s declaration of bond purchase.

  • Yield on the 10-year benchmark paper (7.17% GS 2028) remained unchanged to close at 7.75% as against its previous close. During the session, bond yields traded in the range of 7.71% and 7.76%.

  • Banks’ borrowings under the repo window of the Liquidity Adjustment Facility (LAF) stood at Rs. 3,873 crore (gross) on Jul 18, compared with Rs. 4,158 crore (gross) borrowed on Jul 17. Sale of securities under the Reserve Bank of India’s (RBI) reverse repo window stood at Rs. 11,570 crore on Jul 17.

  • Banks borrowed Rs. 245 crore under the central bank’s Marginal Standing Facility on Jul 17 compared with borrowing of Rs. 925 crore on Jul 16.
Daily Rates    
Key Rates (%) 18-Jul-18 Previous Close Year Ago
10 Yr Gsec 7.75 7.75 6.46
5 Yr AAA Corp Bond 8.73 8.71 7.43
3 Yr AAA Corp Bond 8.59 8.57 7.08
1 Yr AAA Corp Bond 8.30 8.21 6.98
3 Yr AA Corp Bond 9.07 9.06 9.29
1 Yr AA Corp Bond 8.74 8.68 8.70
12 Month CD 8.00 7.98 6.60
3 Month CD 7.06 7.05 6.26
CALL 6.14 6.12 6.07
CBLO 6.22 6.23 6.18

 

Institutional Flows     
(INR Cr) FII Flows MF Flows1
As on July 18,2018 Debt Equity Debt Equity
Purchases 713 4,206 5,822 2,466
Sales 868 4,791 6,798 2,495
Net -155 -585 -976 -29
MTD Net -1671 -614 24622 3625

1 As on July 16,2018

  • Straits Times – The index moved up 0.03% as upbeat U.S. economic data boosted investors’ confidence in the global growth trajectory. However, lower crude oil prices and persisting trade tensions limited the upside.
  • Nikkei – The index gained 0.43% after the Federal Reserve in its testimony indicated a positive outlook for the U.S. economy. Upbeat U.S. economic data further boosted investors’ confidence in the global growth trajectory.
  • Hang Seng – The index fell by 0.23% on lower cues from mainland Chinese market. Worries over U.S. – China trade tension further weighed on the sentiments.
  • FTSE – The index grew 0.65% following weakness in Euro. Dollar has strengthened on upbeat comments by U.S. Federal Reserve’s (Fed) Chair in the testimony before Congress. Investors remained focused towards earnings results and Fed’s chairs’ second day of testimony.
  • Dow Jones - The index grew 0.32% following strong earnings results from some of the U.S. majors. Gains in transportation, financial and steel stocks boosted the indices.
Global Indices Performance   
Global Indices 18-Jul-18 1D % Chg 1M % Chg 1Yr % Chg
Dow Jones 25,199 0.32 0.85 16.80
Nasdaq 100 7,390 -0.19 1.91 25.68
FTSE  7,676 0.65 0.59 3.87
Straits Times 3,241 0.03 -2.51 -1.98
Nikkei 22,794 0.43 0.50 13.97
Hang Seng 28,117 -0.23 -7.23 6.00
Shanghai Composite 2,787 -0.39 -7.76 -12.56
  • Gold prices traded lower as greenback gained against the euro following U.S. Federal Reserve Chairman’s comments that increased the possibility of gradual rate hike by the Central Bank.

  • Brent Crude prices traded lower after a rise in U.S. crude inventories indicated increase in global supply.
Commodity Market    
Commodity (INR) 18-Jul-18 1D % Chg 1M % Chg 1Yr % Chg
Brent (1 barrel) (in $) 69.61 -1.00 -6.36 45.45
Gold (10 gm) 29,729 -1.05 -3.14 5.47
Silver (1 kg) 37,882 -1.67 -5.67 1.64
Aluminium (1 kg) 139.80 -2.98 -7.45 15.20
Copper (1 kg) 413.60 -1.05 173.82 7.00
  • The rupee tumbled to a one-week low against the greenback after the U.S. Federal Chief gave signals that the central bank would continue raising interest rates, which could further pressurize the Indian currency.

  • The euro fell for the second straight day against the greenback after the U.S. Federal Chief indicated that the central bank was on track to steadily hike interest rates.
Currency Market    
Currency 18-Jul-18 1D % Chg 1M % Chg 1Yr % Chg
USD/INR 68.57 0.39 0.79 6.58
EURO/INR 79.74 -0.45 1.12 7.54
GBP/INR 89.73 -0.87 -0.58 6.45
100 JPY/INR 60.65 -0.21 -1.46 5.68
  • As per media reports, central government employees and pensioners could get another salary hike as the government is going to change the index and base year for calculating dearness allowance (DA). Proposal is afloat to change the base year every six years to better reflect the increase in living expenses. DA was increased by 2% from Mar 2018 under the recommendations of the Pay Commission. Consumer price index for industrial workers (CPI-IW) is used to arrive at DA and the labour ministry is busy creating a new series of CPI-IW. DA is paid to government employees, public sector employees and pensioners to adjust the cost of living and is a percentage of the basic salary. 

  • In order to increase the returns of milk producers, the government has offered 10% incentive for dairy product exports. It is also thinking of including milk in mid-day meals. This comes as farmers have been protesting for an increase in the prices of milk and a Rs. 5 per litre government subsidy.
Key Economic Indicators   
Indicators Current Previous
GDP 7.70% (Mar'18) 7.00% (Dec'17)
IIP 3.20% (May'18) 4.80% (Apr'18)
WPI 5.77% (Jun'18) 4.43% (May'18)
CPI 5.00% (Jun'18) 4.87% (May'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
  • The government has said it will look into the disinvestment plan for Air India later after issues like oil prices and foreign exchange stabilise. The government’s plan to sell 76% stake in Air India and transfer management to private players could not fructify in May 2018.

  • According to media reports, Reliance Industries Ltd is planning to raise around Rs. 40,000 crore in fresh debt in 2018-19. The company is expanding into the consumer businesses.

  • The National Company Law Appellate Tribunal has reserved its order on Essar Steel bid by ArcelorMittal and Russia’s VTB Capital-backed Numetal. The petition was filed by ArcelorMittal and Numetal.
Upcoming Events
Event Date
Forex Reserves 20-Jul-18

Source :ICRON Research

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