Week ahead, the most important events in US include FOMC minutes, non-farm payrolls, unemployment rate, wage growth and ISM PMI. In domestic market, key data point include Auto sales figure for the month of December 2017, in last week S&P BSE Auto index has gained by 0.70%.
FIIs/FPIs have bought Indian equity shares worth Rs. 197 billion in the month of November 2017 and sold shares worth Rs. 58 billion till now in this month. During the year, FIIs/FPIs have bought Indian equity shares worth Rs. 512 billion.
The Nifty Index futures witnessed rise in open interest by 206% for the January series. There was a rise in open interest by 80% for February series in the last week. Implied volatility(IV) rose for call option and put option in the last week. Rise in IV for call and put option shows steady support for Nifty at present levels.
Global Economy
Industrial production in Japan rose 0.6% (M-o-M) in November 2017, after a 0.5% increase in a month earlier and slightly above market consensus of a 0.5% gain.
The number of Americans filing for unemployment benefits was unchanged at 245,000 in the week ended 22nd December 2017, the same as in the previous period and slightly above market expectations of 240,000.
Stocks of crude oil in the US fell by 4.609 million barrels in the week ended 22nd December 2017, following a 6.495 million drop in the previous period and compared with market expectations of a 3.97 million decline. It marks the sixth consecutive week of falls.
Global Market
Wall Street closed in the red on the final trading session of 2017. On Friday, financial and healthcare stocks dipped as investors assessed the impact of new taxes for repatriated capital (conversion of offshore capital back to the currency of origin). During the week, Dow Jones declined by 0.14%, Nasdaq declined by 0.82% and S&P 500 declined by 0.42%. During the year Dow Jones, Nasdaq and S&P 500 gained by 24%, 27% and 18% respectively, compared to a 13%, 7.5% and 9.5% gain respectively in 2016.
The FTSE 100 jumped 65 points to close at a new record high of 7,688 on Friday, with mining stocks among the best performers, as signs of progress on Brexit negotiations with the EU boosted sentiment. During the year, the FTSE 100 gained 7.6%, compared to a 15% gain 2016.
The Nikkei 225 lost 19 points to 22765 on the last trading day of 2017. On the year, the benchmark stock index jumped 19.1%, following a 0.4% rise in 2016. It is the biggest yearly gain since 2013, mainly due to a surge during September-November amid improved global growth, high corporate profits, stronger domestic performance and political stability.
The Shanghai Composite gained 11 points to 3307 on the last trading day of 2017. During the year, the index jumped 6.6% after falling 12.3% in 2016. Investors increased their exposure to Chinese markets amid a stronger yuan, tighter financial regulations, better-than-expected economic performance and a recovery in global growth. In Hong Kong, the Hang Seng jumped 36% in 2017, compared to a 0.4% gain in 2016.
Indian Market
The Sensex and Nifty gained by 0.34% and 0.36% respectively in the last week. Sensex surged by 29%, compared to a 0.2% gain in 2016. Nifty surged by 30%, compared to a 0.28% gain in 2016.
India’s fiscal gap for the April-November 2017 period widened to Rs. 6 trillion from Rs.4.5 trillion in the same period a year earlier. The shortfall was equivalent to 112% of the government’s target for the whole financial year, compared with 86% in the same period last year. Total expenditure reached Rs. 14.79 trillion and revenues totalled Rs. 8 trillion. The government aims to reduce the fiscal deficit to 3.2% of the GDP in the current fiscal year that ends in March 2018, compared with 3.5% in the previous year
Portfolio Performance
Our model Twelve Stock “Strong Core” Portfolio has given a one-year return of 62% and has outperformed the benchmark Sensex by 34%.
On a weekly basis, Twelve Stock “Strong Core” Portfolio has gained by 2% in value and the Benchmark BSE Sensex has gained by 0.83%. The Portfolio outperformed the benchmark by 1.14%.
The Nineteen Stock “Strong Core” Portfolio has given a one-year return of 62% and has outperformed the benchmark BSE 500 by 26%.
On a weekly basis, the Nineteen Stock “Strong Core” Portfolio has gained by 2.36% in value and the Benchmark BSE 500 has gained 1.31%. The Portfolio outperformed the benchmark by 1.05%.
Our Shariah Twelve Stock “Strong Core” Portfolio has given one-year return of 77% and has outperformed the benchmark by 50%.
On a weekly basis, Shariah Twelve Stock “Strong Core” Portfolio has gained by 2.27% in value and the Benchmark Sensex has gained by 0.83%. The Portfolio outperformed the benchmark by 1.45%.
On a weekly basis, Ten Stock “Strong Core” Growth Portfolio has gained by 4.24% in value and the Benchmark Sensex has gained by 0.83%. The Portfolio outperformed the benchmark by 3.42%.
Our Global Ten Stock “Strong Core” Portfolio has given one-year return of 42% and has outperformed the benchmark S&P 500 index by 24%.
On a weekly basis, Global Ten Stock “Strong Core” Portfolio has lost by 1% in value and the Benchmark S&P 500 has lost by 0.42%. The Portfolio underperformed the benchmark by 0.58%.
Industry and Stock Specific trends
The sectoral indices closed in mixed territory last week. The S&P Auto and IT index rose by 0.67% and 1.28% respectively in last week. S&P PSU, Bankex and Oil & Gas indices fell by 1.52%, 0.43% and 1.32% respectively in last week.
Infibeam witnesses highest rise in turnover in Stock Derivatives
The Nifty Index futures witnessed rise in open interest by 206% for the January series. There was a rise in open interest by 80% for February series in the last week. Implied volatility(IV) rose for call option and put option in the last week. Rise in IV for call and put option shows steady support for Nifty at present levels.
Infibeam witnesses rise in turnover in Stock Derivatives
Infibeam has witnessed rise in open interest in the stock future segment in the last week. Share price of Infibeam fell by 13% in last week.
Reliance Communication also witnessed rise in in open interest in the stock future segment in the last week. Share price of Reliance Communication rose by 97% in last week. Reliance Jio announced it would buy wireless infrastructure assets of Anil Ambani’s Reliance Communications at a value of Rs.240 billion. As of 30th September, Reliance Communication has a debt of Rs. 450 billion. Reliance Communication(RCom) management mentioned that debt resolution involves RCom exiting SDR framework with no conversion of debt into equity and zero write-off by lenders and bond holders by March 2018. Under the new debt revival plan, upon completion of all transactions, the balance debt of RCom is expected to be Rs 60 billion. Share price of RCom surged by 190% in last one month.
Foreign Institutional Investors (FIIs) Derivative Statistics have shown fall in the open interest across Index Options, Stock futures, Index futures and Stock Options on a week on week basis.
Currency
Indian rupee appreciated marginally by 0.18% against USD, USD/INR pair closed at 63.92.
