Week ahead, the most important data in US will be inflation rate, retail trade, industrial production, housing data and the preliminary reading of Michigan consumer sentiment. Market participants will also be watching for China’s retail trade and industrial production. In domestic market, market participants will be watching for CPI, WPI, IIP, Q4 Current account deficit and balance of trade numbers. Sensex & Nifty would open on a positive note on Monday following positive global cues.
FIIs/FPIs have sold Indian equity shares worth Rs. 110 billion in the month of February 2018 and sold shares worth Rs. 3 billion till now in this month.
The Nifty Index futures witnessed rise in open interest by 2% for the March series. There was rise in open interest for April & May series in the last week by 83% & 76% respectively. Implied volatility(IV) fell for call option and rose for put option in the last week. Fall in IV for call and rise in IV for put option shows unsteady support for Nifty at present levels.
Non-farm payrolls in the US increased by 313,000 in February 2018, following an upwardly revised 239,000 in January 2018 and beating market expectations of 200,000. It is the highest increase in payrolls since July 2016. The US unemployment rate stood at 4.1% in February 2018, unchanged from the previous month’s 17-year low and slightly above market expectations of 4%.
The ECB held its benchmark refinancing rate at 0% on 8th March 2018 policy meeting as expected and reaffirmed that the net asset purchases are intended to run at a monthly pace of 30 billion Euros until the end of September, or beyond, if necessary. The deposit facility rate and the marginal lending facility rate were kept at -0.4% and 0.25%, respectively. The central bank dropped its commitment to increase the size of its QE program by removing the easing bias from its monetary policy message.
The German trade surplus increased to 17.4 billion Euros in January 2018 from 14.6 billion Euros in the same month a year earlier, as exports rose by 8.6% (Y-o-Y) to 107 billion Euros and imports grew by 6.7% (Y-o-Y) to 90 billion Euros.
The UK’s deficit on trade in goods and services widened by 0.6 billion Pounds to 3.074 billion Pounds in January 2018 from a downwardly revised 2.492 billion Pounds in the previous month, due primarily to an increase in goods imports including aircraft and cars from non-European countries and fuels from European countries.
Consumer prices in Mexico increased 5.34% (Y-o-Y) in February 2018, slightly below a 5.55% (Y-o-Y) rise in January 2018 and market expectations of 5.37%. Central bank of Mexico expects the inflation rate to drop to 3% levels by the end of 2018.
China unexpectedly reported a trade surplus of USD 33.74 billion in February 2018, compared to a USD 0.1 billion gap in the same month a year earlier while markets estimated a USD 2.3 billion deficit. Exports jumped by 44.5% (Y-o-Y) to USD 171 billion while imports rose 6.3% (Y-o-Y) USD 138 billion. The trade surplus with the US, China’s largest export market, narrowed slightly to USD 21 billion from 22 billion in January 2018.
Japan’s current account surplus widened to 0.607 JPY trillion in January 2018 from 0.095 JPY trillion in the same month a year ago and above market estimates of a surplus of 0.310 JPY trillion.
Stocks of crude oil in the US went up 2.408 million barrels in the week ended 2nd March 2018 after a 3.019 million increase in the previous period and below market expectations of a 2.723 million rise.
Wall Street closed in the green on Friday, extending gains from the previous session after the jobs report showed the US economy added 313,000 jobs in February 2018, the most since July of 2016 and comfortably beating expectations of 200,000, nudging the Nasdaq to a new record high. During the week, Dow Jones gained by 3.25%, Nasdaq advanced by 4.20% and S&P 500 jumped by 3.55%.
The Sensex and Nifty declined by 2.17% and 2.21% respectively on weekly basis.
Air-Conditioner makers such as Voltas, LG, Daikin and Godrej are expanding their production by up to 20% with warm temperature in west and south pushing demand by over 15% in February 2018 and MET office forecasting a harsh summer this year. This move will also have positive impact on Amber Enterprises as it has the highest market share in supplying electronic products to air-conditioner makers. Share price of Voltas and Amber Enterprises rose by 1% despite of broader market weakening.
JSW Energy acquired JSW Electric Vehicles Private Ltd. The JSW Electric Vehicles is part of diversification strategy of JSW Energy Ltd to foray into electric vehicles, energy storage systems and charging infrastructure. The acquired entity has been set up to manufacture electric motor vehicles, spare parts, engines, appliances and equipment, etc. Share price of JSW Energy fell by 2% in last week.
Our Twelve Stock “Strong Core” Portfolio has given a one-year return of 48% and has outperformed the benchmark Sensex by 35%.
On a weekly basis, Twelve Stock “Strong Core” Portfolio has declined by 2% in value and the Benchmark BSE Sensex has declined by 2.17%. The Portfolio outperformed the benchmark by 0.17%.
The Nineteen Stock “Strong Core” Portfolio has given a one-year return of 45% and has outperformed the benchmark BSE 500 by 30%.
On a weekly basis, the Nineteen Stock “Strong Core” Portfolio has declined by 2.03% in value and the Benchmark BSE 500 has declined 2.58%. The Portfolio outperformed the benchmark by 0.55%.
Our Shariah Twelve Stock “Strong Core” Portfolio has given one-year return of 59% and has outperformed the benchmark by 44%.
On a weekly basis, Shariah Twelve Stock “Strong Core” Portfolio has declined by 1.60% in value and the Benchmark Sensex has declined by 2.17%. The Portfolio outperformed the benchmark by 0.58%.
On a weekly basis, Ten Stock “Strong Core” Growth Portfolio has declined by 1.38% in value and the Benchmark Sensex has declined by 2.17%. The Portfolio outperformed the benchmark by 0.79%.
Our Global Ten Stock “Strong Core” Portfolio has given one-year return of 46% and has outperformed the benchmark S&P 500 index by 29%.
On a weekly basis, Global Ten Stock “Strong Core” Portfolio has gained by 4.60% in value and the Benchmark S&P 500 has gained by 3.55%. The Portfolio outperformed the benchmark by 1.05%.
Industry and Stock Specific trends
The sectoral indices closed in negative territory last week. The S&P BSE Auto, IT, PSU, Bankex and Oil & Gas index had declined by 2.28%, 0.30%, 3.88%, 2.58% and 3%.
Tata Steel Witnesses highest rise in turnover in Stock Derivatives
The Nifty Index futures witnessed rise in open interest by 2% for the March series. There was rise in open interest for and April & May series in the last week by 83% & 76% respectively. Implied volatility(IV) fell for call option and rose for put option in the last week. Fall in IV for call and rise in IV for put option shows unsteady support for Nifty at present levels.
Tata Steel witnesses rise in turnover in Stock Derivatives
Tata Steel has witnessed rise in open interest in the stock future segment in the last week. Share price of PNB fell by 10% in last week. A consortium of lenders including State Bank of India has approved the sale of bankrupt Bhushan Power and Steel to Tata Steel, pending the outcome of a legal challenge by Liberty House whose bid was rejected. Bhushan Power owes about Rs. 490 billion to the lenders. Tata Steel has reported its quarterly results in last month, net profit rose by 430% (Y-o-Y) to Rs. 12,900 million, revenue rose by 15% (Y-o-Y) to Rs. 334,500 million. Sudden jump in net profit is due to selling some unprofitable businesses in Europe and agreeing to tie up with Thyssenkrupp AG for the rest of the operations. Globally steel prices have rallied because of capacity cut down in China.
Foreign Institutional Investors (FIIs) Derivative Statistics have shown rise in the open interest across Index Options, Stock futures, Index futures and Stock Options on a week on week basis.
Indian rupee appreciated by 0.23% against USD, USD/INR pair closed at Rs. 65.07.