The outcome of the RBI’s monetary policy meeting in the week ahead would dictate the trend for the domestic equity indices. India’s stock market remains shut on Monday, 2 October 2017 on account of Gandhi Jayanti.
The RBI’s bimonthly monetary policy decision is scheduled to be announced on 4th October 2017. The central bank had cut policy repo rate by 25 basis points to 6% after its last monetary policy meeting in August, reducing the key policy rates for the first time in this fiscal year.
The Sensex and the Nifty declined 2% each amid persistent selling of funds by foreign institutional investors (FIIs), weakness in rupee against the dollar and worries of an imminent rate hike in the United States before the year-end as a part of trimming the USD 4.5 trillion balance sheet it built up after the recession.
Higher interest rates in the developed economies may lead to pulling out of FIIs from the emerging markets’ assets and divert the same in search of higher yields. FIIs have sold stocks worth a net Rs.147.60 billion in the secondary equity markets in September 2017.
Global Market and Economy
In the US, Federal Reserve Chairwoman Janet Yellen cautioned against moving too slowly on interest rates. Yellen said there is a risk that the labor market could become overheated, causing an inflation problem down the road.
Among economic data in US, orders for durable goods rose 1.7% in August, beating forecasts for a 1% rise. The National Association of Realtors’ pending home sales index fell 2.6% to 106.3 in August, the group said. That was the lowest reading since January 2016 and put the index 2.6% lower than its level a year ago.
Japanese Prime Minister Shinzo Abe ordered his cabinet to compile new economic stimulus measures in a package worth around 2 trillion yen ($17.80 billion) by the end of the year.
Japanese manufacturing activity expanded in September at the fastest pace in four months. The Markit/Nikkei Japan Manufacturing Purchasing Managers’ Index (PMI) rose to a seasonally adjusted 52.6 in September from a final 52.2 in August.
The Eurozone Markit PMI Composite data for September is slated to release on Monday, 2 October 2017. Eurozone retail sales data for the month of August will be announced on Wednesday, 4 October 2017. US nonfarm payrolls data for the month of September will be released on Friday, 6 October 2017.
Indian Market
The Sensex and Nifty lost 2% and 1.76% respectively in the last week.
L&T announced that its construction division won orders valued at Rs.21.70 billion across various business segments.
Bharti Airtel announced the deployment of India’s first state of the art Massive Multiple-input Multiple-output (MIMO) technology which is a key enabler for 5G networks.
Dr Reddy’s Laboratories received an Establishment Inspection Report (EIR) for Formulation Srikakulam Plant (SEZ) Unit I, Andhra Pradesh from the US drug regulator after the audit.
Godrej Agrovet, promoted by Godrej Industries is coming up with an initial public offer aggregating upto Rs 2.9151 billion and an offer for sale (OFS) by Godrej Industries aggregating upto Rs 3 billion and upto 12.3 million equity shares by V-Sciences Investments Pte. The price band for the IPO has been fixed at Rs 450-460 per share. The IPO opens on 4 October and closes on 6 October 2017.
MAS Financial Services is coming up with an initial public offer (IPO) aggregating to Rs 4.60 billion comprising of a fresh issue of shares by the company aggregating up to Rs.2.33 billion and an offer for sale (OFS) of shares aggregating up to Rs 2.2704 billion by the selling shareholders. The price band for the IPO has been fixed at Rs 456-459 per share. The issue opens on 6 October and closes on 10 October 2017.
Portfolio Performance
Our model Twelve Stock “Strong Core” Portfolio has given a one-year return of 33% and has outperformed the benchmark Sensex by 22%.
On a weekly basis, Twelve Stock “Strong Core” Portfolio has lost by 0.63% in value and the Benchmark BSE Sensex has lost by 2%. The Portfolio outperformed the benchmark by 1.37%.
The Nineteen Stock “Strong Core” Portfolio has given a one-year return of 34% and has outperformed the benchmark BSE 500 by 17%.
On a weekly basis, the Nineteen Stock “Strong Core” Portfolio has lost 0.43% in value and the Benchmark BSE 500 has lost 1.62%. The Portfolio outperformed the benchmark by 1.19%.
Our Shariah Twelve Stock “Strong Core” Portfolio has given one-year return of 45% and has outperformed the benchmark by 32%.
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Our Global Ten Stock “Strong Core” Portfolio has given one-year return of 28% and has outperformed the benchmark S&P 500 index by 11%.
On a weekly basis, Global Ten Stock “Strong Core” Portfolio has gained 0.86% in value and the Benchmark S&P 500 has gained by 0.68%. The Portfolio outperformed the benchmark by 0.18%.
