US and China released positive economic data last week and this data helped equity markets across the globe close positive to flat week on week. US consumer confidence index for October 2012 printed at the highest level since February 2008 while manufacturing index for October rose more than forecast. The US economy added higher than estimated 171,000 jobs in October against a revised 148,000 jobs in September 2012. China’s manufacturing index moved higher in October and came into positive territory indicating that the worst may be over for the country.
The better than expected economic data for the US helped the US Dollar higher. The USD rose against the Euro and the Yen despite worries of the economic effects of “Hurricane Sandy”. US presidential elections will get over this week and will help stabilize markets that are usually worry about election uncertainties.
Indian equities shrugged off RBI rate cut disappointment to close positive week on week. The Sensex and Nifty chose to look at the positive data coming from US and China to record gains last week. The Sensex and Nifty will have to wade through domestic political issues, strengthening US Dollar and postponement of rate cuts to trend higher.
The derivative markets suggest that markets are not positioned for aggressive moves in either direction i.e. up or down. Nifty index near month futures open interest moved up marginally while Nifty index near month option implied volatility closed marginally down week on week. Nifty index derivatives will look to the Diwali week to position for any strong directional moves.
The Indian Rupee closed marginally higher week on week despite negative implications of the RBI policy. The INR will stay in a narrow range with a tendency to trend down given the overall USD strength.
Select gainers and losers in BSE 500 last week.
Contributed by research associate Ketan Verma
TTK Prestige launched hybrid combi cook-top.
Titan Industries came up with strong Q2 result, 22% growth in net profit led by all time high jewellery margins.
Software major Wipro Limited posted better than expected results as the company recorded a 17% YoY increase in revenues at Rs 10,657 crore and net profit recorded a growth of 24% YoY at Rs 1,611 crore for the second quarter of this fiscal. The company also declared that it is demerging its consumer business into a separate unlisted company.
Union Bank net profit jumped 57% in its Q2 result to Rs 554 cr, which was backed by improved asset quality.
Gujarat Fluorochemicals is down due to very weak Q2 result, the company has reported 42% fall in net profit.
Bharat Electronics Ltd stock has plunged this weak due to disappointing Q2 result, the company has reported a fall of 35.83% in net profit to Rs 802.15 million for the quarter ended Sept 30, 2012 as compared to Rs 1,250.1 million in the same period last year.
Bharat Forge reported a fall in its revenue and profit due to slowing demand from the automotive and industrial sectors. With few signs of any significant recovery in the near term in India and overseas, the next two quarters will be challenging for the country’s largest exporter of auto components.