The unemployment data of US ticked up from 4.9 in August to 5% in September. US employers added 156,000 jobs in September, which is 31% lower than last year. Last year US employers added 229,000 jobs at a robust pace.
China’s PMI (Purchasing managers index) is at 50.40 for September month, it was identical with August month PMI figure. After a significant pick-up in March, China’s official PMI slipped, falling below 50 in July before showing expansion in August.
China’s foreign exchange reserves fell for a third straight month in September. Forex reserves fell to $3.166 trillion from $3.185 trillion in August.
Saudi Arabian Monetary Agency, central bank of Saudi Arabia has announced “supportive monetary policy” by infusing 5.3 billion USD of fixed deposits to banks on behalf of government entities.
Due to low oil prices the Saudi economy is grappling. Hence, central bank of Saudi Arabia stepped up to support lenders which will improve economic condition of the country.The Saudi index for banking shares climbed 1.3 percent when central bank announced about the supportive monetary policy.
Apple Inc to pay more than 309 million USD in damages as ordered by the federal jury in Texas for using Virtnex Holding Corp patented internet security technology without permissions. Nonetheless, Apple share price rose by appx 0.35% in last week.
The share price of Twitter is down by approximately 17% in last week mainly due to the fact that the internet giant, google declared that it is no longer interested in for bids of twitter. Twitter lost 2 billion USD market capitalization last week.
Last month Yahoo said at least 500 million of its accounts were hacked in 2014. Based on Yahoo’s statement Verizon Communications is pressing for a 1 billion USD discount off its pending 4.8 billion USD agreement to buy Yahoo. Verizon Communication share price fell by 3% last week.
The Sensex and the Nifty rose by 0.70% and 1% in the last week.
RBI entered a new era with the first MPC (Monetary Policy Committee) meet on the 3rd and 4th of October 2016 finishing with a Repo Rate cut of 25bps taking the Repo Rate to 6.25% from 6.5%, the lowest level seen since November 2010. All six members of the MPC voted unanimously in favour of the Repo Rate cut of 25bps. RBI’s outlook on the domestic economy is positive with many of its high frequency indicators showing positive trends though global economic weakness will keep GDP growth at 7.6%.
Click here to read our report on RBI policy
India’s core sector growth rose by 3.2% mainly due to rise in steel production and uptick in the cement industry. Steel production rose by 17% to 37 month high, while cement was up by 3.1% compared with a 1.4% rise in July. Increase in cement output implicitly means increase in infrastructure activities.
Indian two wheeler auto market had witnessed stellar Y-o-Y growth. Hero Motorcorp posted 11% (Y-o-Y) growth, Honda posted 31% (Y-o-Y) growth, TVS Motors posted 34% (Y-o-Y) growth, Bajaj Auto posted 23% (Y-o-Y) growth. TVS Motors and Bajaj Auto share price rose by 5% and 1.2% respectively in last week.
The telecom spectrum auction was held from 1st to 6th October 2016 and as many as seven telecom service providers (TSPs) participated in it. Bharti Airtel, Vodafone, Idea Cellular, Reliance Communications, Tata Teleservices, Aircel and Reliance Jio were in the fray for frequencies that are crucial for next-generation telecom services.
India’s largest spectrum sale ended on 6th October with the government raising Rs. 657 billion in revenue. Auction revenue missed the target of Government which was estimated Rs. 980 billion.
Click here to read our report on the spectrum auction.
ONGC and Oil India are making losses on natural gas production after government cut rates for the fourth consecutive time. Price of natural gas produced by ONGC, Oil India and Reliance Industry was cut to 2.5 USD per mmBtu. With this cut, selling price of natural gas is lower than their production cost which leaves the gas companies in losses.
Reliance Defence has announced JV (joint venture), Dassault Reliance Aerospace Pvt.Ltd, with French- aircraft maker Dassault Aviation. This will benefit Reliance defence from Rs. 245 billion seven year deal. The company is expecting to start manufacturing in 12 months’ time. Reliance Defence share price rose by appx 5% after the news hit the market last week.
Kotak Mahindra Bank acquired BSS Microfinance for Rs. 1.39 billion in an all cash deal. This acquisition will help the bank to tap lower end of the customer base and also helps the bank to meet PSL (priority sector lending) targets, as BSS Microfinance loan book qualifies for PSL. As of now BSS microfinance had loans of Rs. 4.83 billion.
Tata Motors owned JLR reported a 28% increase (Y-o-Y) in retail sales and Jaguar Brand sales rose by 70% (Y-o-Y). Tata motors share price rose by 4.10% in last week.
On 5th October 2015 Tata Steel has allotted 8.15%, unsecured, redeemable non-convertible debentures (NCDs) having face value of Rs.1 million each and total aggregating to Rs.10 billion on a private placement basis.
Mahindra & Mahindra has raised Rs. 4.75 billion through bond market, M&M had offered 7.57% yield with 10-year maturity corporate bond. This will increase their leverage ratio and also affects net profit margin due to increase in finance costs. Share price of M&M fell by 2.15% last week.
South Indian Bank posted Q2FY17 results, total income increased by 5% (Y-o-Y), net profit increased by 18.4% (Q-o-Q). Net NPAs (non-performing assets) of the bank rose to appx 3%, up from 1.56% a year ago. Share price of South Indian Bank is up by 7% in last week.
Tata Steel management has announced that the sales rose by 12% (Y-o-Y) for the Q2FY17. For the first six months of FY17 sales grew by 6%(Y-o-Y). Share price of Tata Steel rose by7.5% in the last week.
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Industry and Stock Specific trends
The sectoral indices closed in the positive territory last week. The S&P Bankex, PSU, Auto and Oil & Gas indices gained by 0.49%, 3.71%, 2.78% and 6.19% respectively in the last week.
Tata Steel has witnessed rise in turnover and open interest in the stock futures segment. The Stock price of Tata Steel rose by7.5% in the last week. The Nifty Index futures saw fall in open interest by 3.28% for the October series. There was a rise in open interest by 43% and 227% for the November and December series respectively.
The pound fell to a 31-year low against the dollarafter U.K. Prime Minister Theresa May on 2nd October 2016 set a March deadline to begin exiting the EU and indicated that maintaining its privileged access to the country’s largest trading partner was a lower priority than controlling immigration. The U.K. currency has dropped 14% against the dollar and 13% versus the euro since the June 23 vote to leave the EU.