F&O expiry, assembly elections, domestic and global macroeconomic data, trend in global markets, the movement of rupee against the dollar and crude oil price movement will dictate trend on the bourses in the near term.
Japan’s monthly balance of trade tumbled to a deficit of 449 billion yen ($3.95 billion) in October amid elevated trade tensions and ramped up pressure to cut its trade surplus with the US, data from the country’s finance ministry showed.
In US economic data, orders for US-manufactured durable goods fell by 4.4% in October, the largest decline in 15 months. Existing-home sales rose for the first time in six months, at a seasonally adjusted annual rate of 5.22 million in October, up 1.4% from September. The University of Michigan’s consumer-sentiment index fell to 97.5 in November from 98.6 in October.
Industrial production rose just 0.1% in October, the Federal Reserve reported. Compared to 12 months earlier, industrial production rose 4.1%.
The Reserve Bank of India’s (RBI) Central Board met on 19 November 2018, in Mumbai and discussed the Basel regulatory capital framework, a restructuring scheme for stressed MSMEs, bank health under Prompt Corrective Action (PCA) framework and the Economic Capital Framework (ECF) of RBI. The board decided to constitute an expert committee to examine the ECF, the membership and terms of reference of which will be jointly determined by the Government of India and the RBI.
The board also advised that the RBI should consider a scheme for restructuring of stressed standard assets of MSME borrowers with aggregate credit facilities of up to Rs 25 crore, subject to such conditions as are necessary for ensuring financial stability. The board, while deciding to retain the CRAR at 9%, agreed to extend the transition period for implementing the last tranche of 0.625% under the Capital Conservation Buffer (CCB), by one year, i.e., up to 31 March 2020. With regard to banks under PCA, it was decided that the matter will be examined by the Board for Financial Supervision (BFS) of RBI.
On the global front, the US Durable Goods Orders data for October 2018 will be declared on 21 November 2018. The Japan inflation rate for October 2018 will be declared on 22 November 2018.
The US Markit Composite PMI for November 2018 will be unveiled on 23 November 2018. On the same day, the US Markit Manufacturing PMI and US Markit Services PMI for November 2018 will also be unveiled.
Indian equity markets settled with modest losses in the truncated trading week after positing gains for prior three weeks. The Sensex settled a tad below the psychological 35,000 level. Indices settled lower on three of four trading days in the week.
In the week ended Thursday, 22 November 2018, the Sensex lost 476.14 points or 1.34% to settle at 34,981.02. The Nifty 50 index lost 155.45 points or 1.46% to settle at 10,526.75.
The BSE Mid-Cap index fell 117.47 points or 0.78% to settle at 14,880.34. The BSE Small-Cap index fell 135.05 points or 0.93% to settle at 14,350.83.
Infosys declined 4.61%. The company announced that it has completed the formation of a joint venture with Temasek, the global investment company headquartered in Singapore. Through this joint venture, Infosys will be a partner to Temasek in its digital transformation journey and further strengthen its footprint in South East Asia. The announcement was made after market hours on 16 November 2018.
The joint venture will provide Temasek and its other clients with solutions in advanced technologies including cloud, data and analytics, cybersecurity, digital experiences and AI. Additionally, employees of this joint venture will be able to access Infosys’ world class education and training capabilities, to advance their technological skills.
Yes Bank rose 2.22%. The bank announced that Rentala Chandrashekhar, independent director has tendered his resignation from the bank’s board, with immediate effect, due to personal reasons. The announcement was made after market hours on 19 November 2018.
Maruti Suzuki India rose 1.06%. The company announced during trading hours on 20 November 2018, that it has increased production of its model Vitara Brezza to reduce waiting period. The production of SUV Vitara Brezza has increased 10% to 94,000 units during April-October 2018-19 compared to same months last year. In 2017-18, Maruti Suzuki sold over 1.48 lakh units of Vitara Brezza.
Announcing the increased production and availability of Vitara Brezza, R.S. Kalsi, Senior Executive Director (Marketing and Sales), Maruti Suzuki India said that with the Suzuki Motor Gujarat plant operational at its full capacity of 2.5 lakh units annually in Gujarat, the company is able to increase the output.
On the political front, state assembly elections will be closely watched. Assembly elections in Madhya Pradesh and Mizoram will be held on 28 November 2018. Polling in Rajasthan and Telangana will be held on 7 December 2018. The election to the 90-member Chhattisgarh Assembly was held in two phases 12 and 20 November 2018. Counting of votes will be held across all the five states on 11 December 2018.
Sectoral Indices Trends:
The sectoral indices closed in negative territory during last week. The S&P BSE Auto, IT, Oil and Gas, Bankex and PSU indices declined by 0.6%, 4.1%, 1.5%, 1.1% and 2.3% respectively.
The Indian Rupee extended its recent gains and hit near 70.69 per US dollar in the week. Weakness in US dollar overseas and a firm equity market supported the INR.