The Germany economy expanded by 0.2% in the third quarter of 2016, slowing from 0.4% expansion in the second quarter of 2016. It was the weakest quarter of growth posted by Germany since third quarter of 2015. The GDP of Germany expanded by 1.5% (Y-o-Y) and it was below the expectation of the market. DAX index grew marginally by 0.30% in the last week.
The British economy expanded by 0.5% in the third quarter of 2016, slowing from 0.7% expansion in second quarter of 2016. GDP of UK expanded by 2.3% (Y-o-Y), it is the biggest gain since second quarter of 2015. FTSE index grew by 1% in the last week.
Consumer prices in Japan increased by 0.1% (Y-o-Y) in October 2016. After eight months Japan, has witnessed rise in consumer prices mainly due to increase in food prices. Core consumer prices which doesn’t include food, decreased by 0.4% (Y-o-Y). NIKKEI index rose by 2.30% in the last week.
Hong Kong trade deficit rose by 25.5% (Y-o-Y) to HKD 37.20 billion, as exports fell by 1.8% (Y-o-Y) and imports rose by 0.5% (Y-o-Y). For the first ten months of the year, trade deficit was at USD 341 billion, imports and exports fell by 2.9% and 2.5% respectively. HANGSENG rose by 1.70% in the last week.
Fitch Ratings has downgraded its outlook for South Africa’s sovereign credit rating to negative from stable on 25thNovember 2016 and affirmed the country’s long-term foreign credit rating at ‘BBB-‘, saying political risks have increased. The South African Reserve Bank left its benchmark repo rate on hold at 7% at its November 2016 meeting.
The Mexican economy expanded by 1% (Q-o-Q) in the third quarter of 2016, in line with market estimates. On yearly basis, Mexican economy expanded by 2%, slowing from 2.6% rise in the second quarter. Mexican current account deficit decreased by 12% to USD 7.5 billion. For the first ten months of the year, trade deficit was at USD 23.09 billion, 2.9% of GDP.
The Central bank of Columbia left its key benchmark rates at 7.75% for the fourth consecutive time on November policy meet. The economy expanded at a 7-year low of 1.2% in the third quarter of 2016 while inflation slowed for the third month to 6.48%.
OPEC oil ministers will meet on 30th November 2016, likely to agree their first output cut since the 2008 financial crisis. Oil prices have been trading at historic record lows due to oversupply of crude in the market. Brent crude oil is currently trading at USD 47.
Major U.S. indices closed on record highs on 25th November 2016 amid lower oil prices and strengthening USD. On weekly basis, Dow rose by 1.51%, S&P 500 rose by 1.18% and Nasdaq rose by 1.45%. Stocks have mostly rallied since the Nov. 8 election outcome. Investors see President-elect Donald Trump’s promises of tax cuts, higher spending on infrastructure and less regulation as beneficial to certain industries, including banking, industrials and healthcare.
The Sensex and the Nifty rose by 0.63% and 0.50% in the last week.
RBI has imposed 100% Incremental CRR on banks starting this fortnight beginning 26th November 2016, will immediately impound around Rs 3 trillion of liquidity. Banks are lent over Rs 5 trillion through reverse repo to the RBI of which, reverse repos maturing in the next one week is around Rs 2.5 trillion. Banks can also exchange old notes for immediate credit for CRR with the RBI. Bank stocks will get hit as banks have to pay interest on deposits while they do not receive interest on CRR.
Click here to read our analysis on “Incremental CRR”
Sun Pharma has acquired Russian drug maker Biosintez for USD 60 million deal, which is 85% stake in the Russian firm. This deal will help Sun Pharma to increase the current market Share in Russia by 70%. Share price of Sun Pharma rose 5% in the last week.
Axis Bank is planning to raise Rs.18000 million through issuing unsecured non-convertible debentures of face value worth Rs. 1 million each.
Dilip Buildcon has won Rs. 1980 million worth highway contract in Andhra Pradesh. The company management said the project will be implemented in EPC mode and project is likely to get completed in 18 months. Dilip Buildcon share price rose by 10% in last week.
Adani Enterprises management announced that it is executing the construction of two major solar projects in Australia each with an output of 100-200 MW and they are likely to be finished by next year. The Company also mentioned that it is planning to develop renewable energy projects in Australia with a capacity of 1500 MW in next five years.
Shree cement is planning to buy major stake in Odisha-based Shiva Cement Ltd. The promoters of Shiva Cement Ltd have hired bankers to sell major stake in the company, Shree cement have a preliminary bid at Rs. 15 per share which is 66% premium to the current market price. Share price of Shiva cement rose by 14% in the last week.
Spice jet reported 103% (Y-o-Y) increase in net profit to Rs 589 million, revenue grew by 35% (Y-o-Y). This is the seventh consecutive profitable quarter for Spice Jet after it recovered from near shut down in December 2014. Share price of Spice Jet rose by 6% in the last week.
Our model Twelve Stock Retirement Portfolio has given a one-year return of 14.28% and has outperformed the benchmark Sensex by 12.90%.
On a weekly basis, Twelve Stock Portfolio has gained 1.82% in value and the Benchmark BSE Sensex has gained 0.63%. The Portfolio outperformed the benchmark by 1.19%.
The Nineteen Stock Portfolio has given a one-year return of 13.81% and has outperformed the benchmark BSE 500 by 9.16%.
On a weekly basis, the Nineteen Stock Portfolio has gained 1.18% in value and the Benchmark BSE 500 has gained 0.7%. The Portfolio outperformed the benchmark by 0.48%.
Our Global Ten Stock Model Retirement Portfolio has given one-year return of -6.55% and has underperformed the benchmark S&P 500 index by 12.44%.
On a weekly basis, Global Ten Stock Model Retirement Portfolio has gained 0.33% in valueand the Benchmark S&P 500 has gained by 0.39%. The Portfolio underperformed the benchmark by 0.07%.
Industry and Stock Specific trends
The sectoral indices closed in the mixed territory last week. The S&P Bankex, Auto, PSU and Oil & Gas indices have lost 2.49%, 2.19%, 0.82% and 0.02%respectively. S&P IT index rose by 6.62% in last week.
The Nifty Index futures saw rise in open interest by 552% for the December series. There was a rise in open interest by 53% for January series in the last week. February series witnessed open interest of 27450 contracts in last week. Implied volatility(IV) fell for put option and call option in the last week. Fall in IV shows steady support for Nifty at present levels.
Vedanta has witnessed rise in turnover and open interest in the stock futures segment. Vedanta share price rose by 8.5% in last week. Board of directors of Vedanta Ltd approved to raise Rs. 3000 million through issues of secured redeemable non- convertible debentures of face value Rs. 1 million each. The tenure of the NCDs is 3 years and 5 months from the date of allotment. CRISIL has assigned AA-/stable rating to the NCDs.
Foreign Institutional Investors (FIIs) Derivative Statistics have shown fall in the open interest across Index Options, Index Futures, Stock Options and Stock Futures on a week on week basis
The INR is down by 3.58% against the USD since 8th November 2015. The INR is trading at a level of Rs 68.835 as of 24th November 2016 below its all-time low levels of Rs 68.80 to the USD seen in August 2013. The reason for the INR fall is the expected trade policies of the President Elect, Donald Trump, Fed rate hike expectations in December 2016 and the sharp fall in the value of the Chinese Yuan, which is down by 2% since 8th November and is trading at eight year low levels against the USD.
Click here to read our analysis on INR.