Consumer prices in the United States grew by 1.6% (Y-o-Y) in October 2016, up from a 1.5% rise in September 2016 and in line with market expectations. It is the highest inflation rate since October of 2014, boosted by infra and energy, while food prices declined for the second month. FOMC chair Yellen said that Fed rate hike will be relatively sooner due to strong economic data.
Consumer prices in Eurozone grew by 0.5% (Y-o-Y) in October 2016, up from a 0.4% rise in September 2016and in line with market expectation. It was the highest inflation rate since June 2014, boosted by higher cost of food at restaurants and cafes, rents and tobacco. Core inflation which excludes energy, food, alcohol and tobacco was recorded at 0.8% for the third straight month.
The Bank of Japan said it would buy an unlimited amount of government bonds between one and five years left to maturity at a fixed price on 17th November 2016. It is the first time the central bank unveiled such operation which is part of its yield curve control program launched in the September monetary policy meeting. Bank of Japan wanted to keep the 10-year bond yield around 0%.
Retail sales in Russia are down by 4.4% (Y-o-Y) in October 2016, down from a 3.6% drop in September 2016and worse than market expectations of 2.9% slump. Sales declined at a faster pace for food (-5.4% from -4.4% in September) and non-food (-3.4% from 2.8% in September).
Consumer prices in Canada increased 1.5% (Y-o-Y) in October 2016, up from a 1.3% rise in September and in line with market expectation. Higher transport and infra prices boosted inflation while food prices declined for the first time since January 2000.
Mexico central bank raised its key interest rate by 0.5% to 5.25% in an attempt to rescue the nation’s currency, which fell every day. In last week, Mexican Peso depreciated against USD by 11.44%. It is the third time this year that Mexico central bank has raised interest rates, including a hike in September in response to Trump’s surge in the polls ahead of the U.S.election.
Major U.S. indices slumped on 18th November 2016, led by declines in health care companies and consumer goods manufacturers. On weekly basis, Dow fell by 0.04%, S&P 500 rose by 1.6% and Nasdaq fell by 0.2%.
The Sensex and the Nifty fellby 2.49% and 2.68% in the last week.
Exports grew for the second month in a row, zooming by 9.6% (Y-o-Y) to USD 23 billion in October 2016. Major exports are seen in shipment of jewellery and engineering products. Gems and jewellery rose by 22% (Y-o-Y) and engineering products rose by 14% (Y-o-Y). Trade deficit for the month October 2016 stood at USD 10.16 billion.
Petroleum Ministry asked RIL to pay USD 1.55 billion to ONGC for producing gas from KG basin well which is connected to ONGC, post this announcement of penalty charge RIL’s Canada partner Niko Resources is planning to exit its 10% stake in KG basin. Share price of RIL fell by 1.50%.
IL&FS is planning to raise Rs. 3400 million masala loan bonds from Canada’s EDC, company management said the proceeds will be used for refinancing the existing debt of some of its infrastructure projects and to support fresh projects.
NHPC reported 28% (Y-o-Y) jump in net profit to Rs. 15546 million, revenue grew by 2.5% (Y-o-Y). NHPC management also mentioned that the company is planning to raise Rs. 22500 million through issuance of V series corporate bonds on private placement basis. Share price of NHPC grew by 0.50% in last week.
Petronet LNG reported 82% (Y-o-Y) jump in net profit to Rs. 4600 million, company has processed highest ever natural gas of 189 trillion British Thermal units which is up by 20% (Y-o-Y). Share price of Petronet LNG rose by 9% post announcement of results.
Our model Twelve Stock Retirement Portfolio has given a one-year return of 21.02% and has outperformed the benchmark Sensex by 18.40%.
On a weekly basis, Twelve Stock Portfolio has lost 2.73% in value and the Benchmark BSE Sensex has lost 2.49%. The Portfolio underperformed the benchmark by 0.24%.
The Nineteen Stock Portfolio has given a one-year return of 12.02% and has outperformed the benchmark BSE 500 by 6.02%.
On a weekly basis, the Nineteen Stock Portfolio has lost 1.66% in value and the Benchmark BSE 500 has lost 3.10%. The Portfolio outperformed the benchmark by 1.44%.
Our Global Ten Stock Model Retirement Portfolio has given one-year return of -8.07% and has underperformed the benchmark S&P 500 index by 12.51%.
On a weekly basis, Global Ten Stock Model Retirement Portfolio has gained 0.73% in valueand the Benchmark S&P 500 has gained by 0.83%. The Portfolio underperformed the benchmark by 0.10%.
Industry and Stock Specific trends
The sectoral indices closed in the negativeterritory last week. The S&P Bankex,Auto,PSU and Oil & Gas indices have lost 3.88%, 3.42%, 0.41% and 0.59%respectively. S&P IT index remained flat in last week.
The Nifty Index futures saw rise in open interest by 5.40% for the November series. There was a rise in open interest by 57% & 52% for the December series and January series respectively in the last week. Implied volatility(IV)fell for put option and call option rose in the last week last week. Rise in IV of Nifty put shows unsteady marginal support for Nifty at current levels due to investors have either taken heavy put positions or would have hedged their long positions.
SBI has witnessed rise in turnover and open interest in the stock futures segment. SBI reported Q2FY17 result, net profit fell by 35% (Y-o-Y). Other Revenue rose by 36% (Y-o-Y) which helped bottom-line. Net interest income of SBI grew by 1.3% (Y-o-Y). Provisions for NPA’s have been doubled on Y-o-Y basis to Rs. 76690 million. Post-announcement of results the share price fell by 3%.
Foreign Institutional Investors (FIIs) Derivative Statistics have shown rise in the open interest across Index Options, Index Futures, Stock Options and Stock Futures on a week on week basis.
The dollar index appreciated for the 10th straight trading day to 101.3 on 18th November 2016, hitting a fresh high since March of 2003. Trump’s victory, strong economic data and after FOMC Chair Yellen signalled on 17th November the Fed could raise rates next month. The DXY changed +2.37% during the last week, +3.54% during the last month.
Indian Rupee depreciated against USD by 1.59%.