FIIs/FPIs have bought Indian equity shares worth Rs. 22 billion in the month of July 2018 and Rs. 23 billion in August 2018.
The Nifty Index futures witnessed rise in open interest by 8% for the August series. There was rise in open interest for September & October series in the last week by 22% & 51% respectively. Implied volatility (IV) rose for put option and fell for call 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.
Global Economy
US annual inflation rate rose at 2.9% in July 2018, unchanged from the previous month and slightly below market expectations of 3%. Still, inflation remained at its highest level since February 2012.
The US budget deficit widened sharply to USD 77 billion in July 2018 from USD 43 billion in the same month of the previous year, slightly below market expectations of USD 77.8 billion. Outlays jumped 10% to USD 302 billion while receipts dropped 3% to USD 225 billion.
The UK economy expanded at 1.3% (Y-o-Y) in Q2Fy18, little-changed from a six-year low of 1.2% in the previous period and matching market expectations.
The total UK trade deficit narrowed by 1.28 billion Pounds to 1.86 billion Pounds in June 2018 from an upwardly revised 3.14 billion Pounds in the previous month. Exports increased 2.7% to GBP 52.41 billion and imports rose 0.2% to GBP 54.27 billion.
The Japanese economy expanded at 0.5% (Y-o-Y) in Q2Fy18, after a 0.2% contraction in the previous period and beating market consensus of a 0.3% growth. It was the strongest growth rate since the September 2017, boosted by a strong rebound in household consumption and a faster rise in business spending.
Japan’s current account surplus widened to JPY 1.17 trillion in June 2018 from JPY 0.93 trillion in the same month a year ago and slightly below market estimates of a JPY 1.19 trillion surplus.
China’s inflation rose to a four-month high of 2.1% (Y-o-Y) in July 2018 from 1.9% in the previous month and above market consensus of 1.9%. Still, inflation remained well below the Chinese government’s target of around 3% for 2018.
China’s trade surplus narrowed sharply to USD 28.05 billion in July 2018 from USD 44.85 billion in the same month a year earlier and far below market consensus of USD 39.33 billion. Imports jumped 27.3% to a near record high while exports rose at a softer 12.2%.
Russia’s economy expanded at 1.8% (Y-o-Y) in Q2Fy18, following a 1.3% expansion reported in the previous period, a preliminary estimate showed. It was the seventh straight quarter of growth after two years of contraction driven by services on the back of the FIFA World Cup, in particular the hotel, transport and restaurant sectors.
Russia’s trade surplus widened by 77.6% to USD 15.56 billion in June 2018 from USD 8.76 billion in the same month a year earlier, but still below market expectations of a USD 15.85 billion surplus. Exports climbed 23.8% on year to USD 36.57 billion while imports rose only by 1.1% to USD 21.02 billion.
The number of Americans filling for unemployment benefits decreased by 6,000 to 213,000 in the week ending 04th August 2018 from the previous week’s upwardly revised level of 219,000. It compares with market consensus of 220,000.
Stocks of crude oil in the US fell by 1.351 million barrels in the week ended 03rd August 2018, following a 3.803 million rise in the previous week and compared with market expectations of a 3.367 million decrease.
Global Market
Wall Street closed in red on Friday, as the Turkish lira dropped as much as 20% against the USD after President Trump tweeted that the US will double steel and aluminium tariffs on Turkey. During the week, Dow Jones declined by 0.59%, Nasdaq gained by 0.35% and S&P 500 fell by 0.25%.
European stock markets closed deep in red on Friday with bank shares among the worst performers on concerns about their exposure to Turkey as the lira slumped by 20%. During the week, FTSE gained by 0.10% and DAX slid by 1.52%.
Oil prices fell sharply on Wednesday after China said it would slap additional import duties of 25% on USD 16 billion worth of US goods, including oil and diesel, in response to US fresh tariffs on Chinese imports. Data showing China’s crude purchases in July were the third-lowest this year also weighed on prices of Crude Oil. During the week, Brent Crude Oil declined by 0.55%.
Indian Market
The Sensex and Nifty gained by 0.83% & 0.60% respectively on weekly basis.
India’s industrial production jumped by 7% (Y-o-Y) in June 2018, following an upwardly revised 3.9% growth in the previous month and easily beating market expectations of a 5.2% advance.
Hindustan Unilever signed an agreement to acquire the Adityaa Milk-branded ice cream and frozen desserts business. This acquisition is along HUL’s strategic intent to strengthen its position in the ice cream and frozen dessert market in the country.
Dilip Buildcon has received order from Punjab State Power Corporation (PSPCL) in relation to the contract for selection of mine developer-cum-operator (MDO) of Pachhwara Central Coal Mine in Rajmahal Coalfield, District Pakur, Jharkhand, worth Rs.321 billion for a tenure of 55 years.
Sectoral Indices Trends:
The sectoral indices closed mostly in positive during last week. The S&P BSE Auto, Bankex and IT indices had gained by 0.47%, 2.15% and 0.54% respectively. S&P BSE Oil & Gas and PSU index had declined by 0.73% and 0.31% respectively in last week.
SBI Witnesses highest rise in turnover in Stock Derivatives
The Nifty Index futures witnessed rise in open interest by 8% for the August series. There was rise in open interest for September & October series in the last week by 22% & 51% respectively. Implied volatility (IV) rose for put option and fell for call 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.
SBI witnesses rise in turnover in Stock Derivatives
Titan has witnessed rise in open interest in the stock future segment in the last week. Share price of SBI declined by 1.6% in last week. SBI management had reported Q1Fy19 results, net interest income surged by 24% (Y-o-Y) to Rs. 217 billion and net interest margin stood at 2.95%. SBI reported a loss of Rs. 48 billion due to MTM provisioning of Rs. 70 billion (because of rising bond yields) and also Rs. 18 billion towards increased wages. Gross NPAs rose to 10.69% of total advances in the June quarter, from 9.97% a year earlier, and 10.91% in the March quarter. SBI management expects to turn profitable in Q3Fy19.
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.
Currency
Indian rupee depreciated by 0.81% against USD, USD/INR pair closed at Rs. 69.095 in the last week.
