Indian Markets will move on Q3 earnings of Tech majors and on economic data, CPI inflation for December 2016 and IIP for November 2016, which will be announced this week. Markets are also hopeful for tax sops that may be announced in the budget on 1st Feb. Any Government announcements will be closely watched and mood will swing if inferences can be made on any budgetary provisions.
Indian markets closed moderately higher last week following positive global cues. Reintroduction of H1B Visa Reform bill in the US congress by two law makers dragged S&P BSE IT index by 3%. Implied Volatility (IV) of call and put options rose last week and this trend is likely to continue till the announcement of Union Budget (1st February 2017). Five states (UP, Punjab, Manipur, Goa and Uttarakhand) go for elections post Budget session and any uncertainty in the election result can increase volatility in the Indian markets.
Demonetisation impact will be seen in Q3Fy17 earnings, this week Infosys, TCS, IndusInd Bank, Bajaj Corp, Gruh Finance will be posting their Q3Fy17 earnings.
Non-Farm Payrolls in the US increased by 156,000 in December of 2016, lower than upwardly revised 204,000 in November 2016 and below market expectation of 178,000. Job growth mainly occurred in health care and social assistance.
Total imports to the US rose by 1.1% (M-o-M) to USD 231 billion in November 2016, it’s the highest level since August,2016. Total exports of goods and services from the US declined 0.2% (M-o-M) to USD 185.83 billion in November 2016, it’s the lowest level since June 2016.
The Markit US Manufacturing PMI increased to 54.3 in December 2016 from a preliminary reading of 54.2 in November 2016. It is the highest value since March 2015, mainly boosted by rise in new manufacturing orders and production volumes and the fastest upturn in payroll numbers since June 2015. Manufacturing PMI in the United States averaged at 53.64 from 2012 until 2016.
New orders for manufactured goods in the US slumped 2.4% (M-o-M) in November 2016, following an upwardly revised 2.8% rise in October 2016 and worse than market expectations of a 2.2% fall.
Stocks of crude oil in the United States fell by 7.051 million barrels in the week ended 30th December 2016 and compared with market expectations of 2.152 million barrels drop. It was the biggest decrease since September2016. Meanwhile, gasoline stocks rose by 8.307 million, compared to expectations of a 1.786 million increase.
US equities closed on a higher note on 6th January 2016 with the technology sector among the best performers, after economic data showed wages in the US rose the most in seven years in December 2016,. On weekly basis, Dow Jones rose by 1.02%, Nasdaq rose by 2.56% and S&P 500 rose by 0.35%.
European markets reacted on a positive note to global cues. On weekly basis, DAX rose by 1.03% and FTSE rose by 1%.
Tesla has started battery cell production at giga factory, the manufactured cells which will be used to power Teslas’s energy storage products and the new model 3 sedans, have been jointly designed by Tesla and Panasonic. Share price of Tesla rose by 6% in last week.
Ford Motors will be cancelling a planned USD 1.6 billion factory in Mexico and will be investing USD 700 million at a Michigan factory due to criticism from President elect Mr. Donald Trump and on speculation of new tax reforms, which might be implemented this year. Share price of Ford rose by 4% last week, whereas, Mexican Peso tumbled by 1% on concerns of new US tax reforms.
The Sensex and the Nifty fell by 0.56% and 0.71% respectively in the last week.
Loan book of Commercial banks contracted by 2.3% in the third quarter compared to a growth of 2.7% in the same period a year ago.
The management of Exide Industries Ltd said company will be investing Rs. 3000 million in its West Bengal plant to expand the capacity for advanced motorcycle batteries. The company also opened its Rs 7000 million battery assembly facility in Halida to manufacture new batteries with Punched Grid technology (monopoly manufacturer in India). Share price of Exide rose by 4% in last week.
NMDC has raised Iron Ore prices by 6.7% to Rs. 125- 1985 a tonne, hike in prices is due to anticipation of an increase in steel prices. Share price of NMDC rose by 11% last week.
Spice Jet is planning to order 92 Boeing 737 jetliners and company is working aggressively to make its presence in international aerospace market. If this deal works out between Spice Jet and Boeing, it would cost USD 10 billion for Spice Jet to add 92 new 737 jetliners to its present 40 fleet. Share price of Spice Jet rose by 11% in 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, Auto,PSU and Oil & Gas indices have gained by 0.73%, 3.71%, 2.05% and 3.15% respectively. S&P IT index declined by 3%.
The Nifty Index futures saw fall in open interest by 9% for the January series. There was a rise in open interest by 53% for February series and March series by 200% in the last week. Implied volatility (IV) rose for put and call options in the last week. Rise in IV for call and put option shows unsteady support for Nifty at present levels.
YES Bank witnesses rise in turnover and Open Interest in Stock Derivatives
YES Bank entered a tie-up with Bajaj Electricals for vendor financing through Block Chain technology, the implementation of Block Chain technology will save 70% of costs for YES Bank. This technology also helps bank to clear short-term working capital loans to Bajaj Electricals’ vendors instantaneously as against present manual practices takes 4-5 working days. Share price of YES Bank and Bajaj Electricals rose by 9% and 5% respectively in last week.
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.
Indian rupee depreciated by 0.004% against USD, USD/INR pair is trading at 67.9522.
Mexican Peso depreciated by 1% on 6th January 2016 to 21.2190 after Ford and Toyota cancelled their new manufacturing units in Mexico due to criticism from US President elect Mr. Donald Trump and speculations on new tax policies.