FIIs/FPIs have bought Indian equity shares worth Rs. 22 billion in the month of July 2018 and worth Rs. 24 billion in August 2018.
The Nifty Index futures witnessed rise in open interest by 4% for the August series. There was rise in open interest for September & October series in the last week by 52% & 20% respectively. Implied volatility (IV) rose for call option and fell for put option in the last week. Fall in IV for put option and rise in IV for call option shows unsteady support for Nifty at present levels.
Global Economy
Euro area annual inflation rate was confirmed at 2.1% in July 2018, up from 2% in the previous month and the highest since December 2012. Main upward pressure came from energy and services, while food prices rose at a softer pace.
The Eurozone current account surplus narrowed slightly to EUR 28.5 billion in June 2018 from EUR 28.9 billion in the same month of the previous month, and well above market expectations of EUR 23.2 billion.
The Euro Area trade surplus narrowed to EUR 22.5 billion in June 2018 from EUR 25.7 billion in the same month a year earlier, well above market expectations of EUR 18 billion. Imports rose 8.6% and exports increased 5.7%.
Japan recorded a trade deficit of JPY 231 billion in July 2018, compared to a JPY 407 billion surplus in the same month a year ago and to market consensus of a JPY 50 billion gap. Exports rose by 3.9% to JPY 6.75 trillion, down from a 6.7% rise in June 2018 and below expectations of a 6.3% gain. Imports jumped 14.6% to JPY 6.98 trillion, up from a 2.6% growth in June 2018 and slightly above market consensus of a 14.4% rise.
UK annual inflation rate rose to 2.5% in July 2018 from a 1 year low of 2.4% in June 2018 and in line with market expectations. Cost rose at a faster pace for transport, recreation & culture, housing & utilities, and food.
The unemployment rate in the UK fell to 4% in the three months to June 2018, below market consensus of 4.2%.
The number of Americans filling for unemployment benefits dropped by 2,000 to 212,000 in the week ending 11th August 2018 from the previous week’s upwardly revised level of 214,000. Jobless claims fell for the second straight week to its lowest level since the week ending in 14th July 2018.
Stocks of crude oil in the US rose by 6.805 million barrels in the week ended 10th August 2018, following a 1.351 million decline in the previous week and compared with market expectations of a 2.499 million decrease.
Global Market
Wall Street closed modestly in the green on Friday, as trade tensions eased after China said it will hold trade talks with the US later this month. During the week, Dow Jones surged by 1.41%, Nasdaq declined by 0.29% and S&P 500 gained by 0.52%.
Indian Market
The Sensex and Nifty gained by 0.37% & 0.21% respectively on weekly basis.
India’ annual inflation rate eased to 4.17% in July 2018 from a downwardly revised 4.92% in the previous month, and below market expectations of 4.51%. Still, inflation remained above the RBI’s medium-term target of 4%.
Click here to read our analysis on “ INR Fall, Markets and Policy Makers are Showing Maturity- Economic Data Analysis August 2018”.
Wholesale prices in India rose by 5.09% in July 2018, after a 5.77% increase in the prior month. Figure came in below market estimates of 5.24%, as prices of food fell sharply while cost of manufactured products and fuel increased faster.
India’s trade deficit widened to USD 18.02 billion in July 2018 from USD 11.45 billion in the same month a year earlier. It was the largest trade gap since May 2013, as imports jumped 28.81% to USD 43.79 billion, boosted by higher purchases of petroleum, crude & products and Gold. Exports rose at a softer rate of 14.32% to USD 25.77 billion.
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 0.37%, 0.59% and 2.78% respectively. S&P BSE Oil & Gas and PSU index had declined by 2.19% and 1.45% respectively in last week.
SBI Witnesses highest rise in turnover in Stock Derivatives
The Nifty Index futures witnessed rise in open interest by 4% for the August series. There was rise in open interest for September & October series in the last week by 52% & 20% respectively. Implied volatility (IV) rose for call option and fell for put option in the last week. Fall in IV for put option and rise in IV for call option shows unsteady support for Nifty at present levels.
SBI witnesses rise in turnover in Stock Derivatives
SBI has witnessed rise in open interest in the stock future segment in the last week. Share price of SBI declined by 0.6% in last week. 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.
Sun Pharma also has witnessed rise in open interest in the stock future segment in the last week. Share price of Sun Pharma gained by 12% in last week. Sun Pharma management reported better than expected Q1Fy19 results. Net profit surged by 131% to Rs. 9820 million, revenue grew 16% (Y-o-Y) to Rs.72240 million. India sales witnessed a jump of 22% (Y-o-Y) to Rs. 21520 million.
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 1% against USD, USD/INR pair closed at Rs. 69.79 in the last week.
