FIIs/FPIs have sold Indian equity shares worth Rs. 42 billion in January 2019and bought shares worth Rs. 20 billion in February 2019 (till 22nd February). FIIs have turned buyers on expectations of the Fed keeping rates on hold and ending its balance sheet drawdown.
The Nifty Index futures witnessed fall in open interest by 4.6% for the February series and rise in open interest by 54% for the March series. Implied volatility (IV) fell for put option and call option in the last week. Fall in IV for put option and call option shows steady support for Nifty at present levels. However, volatility is expected to spurt as the expiry of F&O contracts will be settled in this week.
The Federal Reserve held the target range for the federal funds rate at 2.25-2.5% during its first policy meeting of 2019 and minutes reaffirmed its position to be patient about further policy firming considering recent global economic and financial developments and muted inflation pressures.
Japan logged a trade deficit of JPY 1415 billion in January 2019, compared to a JPY 948 billion shortfall a year earlier and market expectations of a JPY 1011 billion gap. It is the fourth consecutive monthly gap and the widest since March 2014, as exports declined 8.4%, while imports edged down 0.6%. Exports to China declined by 17%.
Japan’s consumer price inflation inched lower to 0.2% (Y-o-Y) in January 2019 from 0.3% in the previous month and in line with market expectations. It was the lowest inflation rate since October 2017, amid further decreases in prices of food, transport and housing. On a monthly basis, consumer prices rose by 0.3% in January, following a 0.2% drop in December 2018.
The Nikkei Japan Manufacturing PMI declined to 48.5 levels in February 2019, compared to January’s final 50.3 levels and market expectations of 50.4 levels, a preliminary estimate showed. The latest reading pointed to the first monthly contraction in manufacturing since June 2016.
The current account surplus in the Euro Area narrowed to EUR 33 billion in December 2018 from EUR 46 billion in the same month of the previous year.
The IHS Markit Eurozone Composite PMI increased to 51.4 levels in February 2019 from the previous month’s final 51 levels and above market expectations of 51.1 levels, a preliminary estimate showed. Service sector activity rose at the fastest pace in three months amid an improving picture in Germany and stabilisation in France, while manufacturing production decreased the most since June 2013.
Wall Street closed in the green on Friday, as investors were optimistic regarding trade negotiations between China and US. President Trump met with Chinese Vice President Liu He, with reports pointing to a late-March meeting in Florida and a USD 1.2 trillion commitment from China to buy US goods. Both sides agreed to extend high-level negotiations in Washington for two more days. During the week, Dow Jones gained by 0.58%, Nasdaq by 0.72% and S&P 500 by 1%.
Sensex and Nifty gained by 0.17% and 0.62% during last week. Indices had witnessed a continuous 9 -day fall as the index heavy IT stocks declined sharply and also fears that India may respond to a deadly attack on CRPF convoy last week.
Vodafone Idea is planning to raise about Rs 200 billion from its proposed stake sale in mobile tower firm Indus Tower and monetisation of optical fibre assets. The country’s largest telecom operator plans to use the funds for lowering its debt, which stood at Rs.1236 billion at the end of 2018. The company had earlier announced its plan to sell 11.15% stake held by the Aditya Birla Group in Indus Towers as well as 1.56 lakh kilometres of optical fibre assets.
Tech Mahindra has received an approval from its board to conduct its first ever buyback of shares worth up to Rs 19 billion at Rs 950 a share (which is 15% higher than Friday’s closing price). The company would buy back 20 million shares under this plan, which is 2.10% of its total paid-up capital base.
Sectoral Indices Trends:
The sectoral indices mostly closed in positive territory during last week. The S&P BSE Oil & Gas, PSU, Auto and Bankex had gained by 4.29%, 3.62%, 1.89% and 0.40% respectively. S&P BSE IT index declined by 1.74% in last week.
Kotak Mahindra Bank rise in turnover in Stock Derivatives
Kotak Mahindra Bank has witnessed rise in open interest in the stock future segment in the last week. Share price of Kotak Mahindra Bank declined by 4% in the last week. Kotak Mahindra Bank share price declined by 3% on 22nd February 2018 after ING Group had sold 1.2% stake in open market at an average price of Rs. 1232 (Source :Bloomberg). On Q3Fy19 results front, Kotak Mahindra Bank reported 17% (Y-o-Y) growth in net profit and net interest income increased by 15% (Y-o-Y) to Rs. 26 billion. Percentage of gross non-performing assets (GNPAs) on a standalone basis was 2.17% against 2.22% in the March quarter and 2.58% in the same period last year.
Foreign Institutional Investors (FIIs) Derivative Statistics have shown rise in the open interest across Stock Options and Stock futures on a week on week basis. Index futures and Index options witnessed fall in open interest during last week.
Indian rupee appreciated by 0.33% against USD, USD/INR pair closed at Rs. 71.102 in the last week.