FIIs/FPIs have sold Indian equity shares worth Rs. 100 billion in the month of May 2018 and sold shares worth Rs. 5.16 billion till now in this month.
The Nifty Index futures witnessed rise in open interest by 8% for the May series. There was rise in open interest for June & July series in the last week by 83% & 33% respectively. Implied volatility(IV) fell for put option and call option in the last week. Fall in IV for call option and put option shows steady support for Nifty at present levels.
Non-farm payrolls in the US increased by 223,000 in May 2018, following a downwardly revised 159,000 in April 2018. It is the highest reading in 3 months, beating market expectations of 189,000. Employment continued to trend up in several industries, including retail trade, health care, and construction. Unemployment rate fell to 3.8% in May 2018 from 3.9% in the previous month, and below market expectations of 3.9%. It was the lowest rate since April 2000, as the number of unemployed decreased by 281,000 to 6.07 million and employment rose by 293,000 to 155.47 million.
The unemployment rate in the Eurozone decreased slightly to 8.5% in April 2018, following an 8.6% in March 2018 and compared with market expectations of 8.4%.
The IHS Markit US Manufacturing PMI came in at 56.4 level in May 2018, little-changed from the preliminary estimate and April’s final 56.5 level.
The IHS Markit UK Manufacturing PMI rose to 54.4 level in May 2018 from the previous month’s 17-month low of 53.9 level, and well above market expectations of 53.5 level.
The IHS Markit Eurozone Manufacturing PMI fell to 55.5 level in May 2018 from 56.2 levels in April 2018, matching the preliminary estimate. The reading pointed to the slowest expansion in the manufacturing sector since February 2017 as output, new orders, employment and backlogs of work eased.
The Nikkei Japan Manufacturing PMI came in at 52.8 level in May 2018, slightly above the preliminary reading and compared to 53.8 level in April 2018.
The Nikkei South Korea Manufacturing PMI rose to 48.9 level in May 2018 from 48.4 level in the previous month and marking the third straight month of contraction in manufacturing activity. Consumer prices in South Korea increased by 1.5% (Y-o-Y) in May 2018, following a 1.6% rise in the previous month. Figure came slightly below market consensus of 1.6%, mainly due to a slowdown in cost of housing & utilities and food & non-alcoholic beverages.
Stocks of crude oil in the U.S. declined by 3.62 million barrels in the week ended 25th May 2018, after a 5.778 million rise in the previous period and compared with market expectations of a 0.4 million decline.
The number of Americans filing for unemployment benefits decreased by 13,000 to 221,000 in the week ending 26th May 2018 from the previous week’s unrevised level of 234,000 and below market expectations of 234,000.
Wall Street closed in green on Friday, despite trade war concerns, as a stronger-than-expected jobs report for May 2018 boosted sentiment. Non-farm payrolls in the U.S. increased by 223,000 in May 2018, following a downwardly revised 159,000 in April 2018 and above market expectations of 189,000. The jobless rate dropped to 3.8%, reaching its lowest level since April 2000. During the week, Dow Jones declined by 0.48%, Nasdaq surged by 1.6% and S&P 500 gained by 0.40%.
Corporate profits in the U.S. increased by 5.9%, to USD 1,872 billion in the QFy18, following a 1.7% advance in the previous period and missing market expectations of 6% (due to one-time tax payment).
European stock markets closed in green on Friday boosted by rally on Wall Street and despite trade war concerns, after news that Italy’s two biggest political parties reached an agreement to form a coalition government and Spain’s parliament voted to oust Prime Minister Mariano Rajoy following a corruption scandal. During the week, FTSE declined by 0.36% and DAX slumped by 1.65%.
The Sensex and Nifty gained by 0.86% each on weekly basis. Shares of auto companies Maruti Suzuki India and Bajaj Auto gained after posting higher monthly sales for May 2018. Bajaj Auto’s sales rose nearly 30% to 407,044 vehicles in May 2018. Maruti Suzuki’s total sales jumped by 26% to 172,512 vehicles in May 2018.
The Indian economy expanded 7.7% (Y-o-Y) during Q4Fy18, higher than a downwardly revised 7% in the previous quarter and beating market forecasts of a 7.3%. It is the strongest growth rate in seven quarters as manufacturing and investments grew at a faster pace.
India’s fiscal deficit narrowed to INR 1.52 trillion in April 2018 from INR 2.06 trillion in the same period of the previous fiscal year. The budget gap was equivalent to 24.3% of the government’s target for the whole financial year, compared with 37.6% last year.
The Nikkei India Manufacturing PMI fell to 51.2 level in May 2018 from 51.6 in the preceding month and below market consensus of 51.5 level. Growth in output, new orders and employment softened while business sentiment dropped from the previous month’s nine-month high.
Industry and Stock Specific trends
The sectoral indices closed in mixed territory last week. The S&P BSE Bankex, PSU, Oil & gas and Auto indices had gained by 0.81%, 1.14%, 2.91% and 1.84% respectively. S&P BSE IT had declined by 1.65% respective in last week.
HDFC Bank Witnesses highest rise in turnover in Stock Derivatives
The Nifty Index futures witnessed rise in open interest by 693% for the June series. There was rise in open interest for July series in the last week by 271%. Implied volatility(IV) fell for call option and rose for put option in the last week. Fall in IV for call option and rise in IV for put option shows unsteady support for Nifty at present levels.
HDFC Banks witnesses rise in turnover in Stock Derivatives
HDFC Bank has witnessed rise in open interest in the stock future segment in the last week. Share price of HDFC Bank gained by 4% in last week. Trading window for FIIs to trade in HDFC bank has opened in last week. RBI had lifted (2017) curbs on fresh buying by FIIs in HDFC Bank as their total stake fell below the limit of 74%. As a result, to FIIs buying the share price of HDFC bank shot up by 4% and touched all-time high. On earnings front, HDFC bank reported 21% (Y-o-Y) in net profit to Rs. 47 billion and net interest income (NII) increased by 18% (Y-o-Y) to Rs. 106 billion.
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.
Indian rupee appreciated by 1.58% against USD, USD/INR pair closed at Rs. 67.18.