FIIs/FPIs have bought Indian equity shares worth Rs. 172 billion in February 2019and bought shares worth Rs. 56 billion in March 2019 (till 08th March 2019). Dovish global central banks and increasing market expectations of the current government re-elected in May polls will drive Sensex & Nifty higher, before any profit booking happens just before elections.
The Nifty Index futures witnessed rise in open interest by 2.4% for the March series and rise in open interest by 31% for the April series. 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.
Nonfarm payrolls in the US increased by 20,000 in February 2019, following an upwardly revised 311,000 rise in January 2019 and well below market expectations of 180,000. It is the lowest reading since February 2017, mainly due to fall in construction employment while jobs were added in professional and business services, health care, and wholesale trade.
The US unemployment rate fell to 3.8% in February 2019 from 4% in the previous month and below market expectations of 3.9%. The number of unemployed persons decreased by 300,000 to 6.2 million.
The US trade deficit widened to USD 59.8 billion in December 2018 from an upwardly revised USD 50.3 billion in the previous month and compared with market expectations of a USD 57.9 billion gap. It is the largest deficit since October 2008 as exports declined and imports recovered.
The European Central Bank held its benchmark refinancing rate at 0% on 7th March 2019 and pushed out the timing of its first-rate hike in nearly eight years to 2020 at the earliest. Also, the central bank announced a new series of quarterly Targeted Long-Tern Refinancing Operations to be launched in September 2019, aiming to preserve favourable bank lending conditions and the smooth transmission of monetary policy and reaffirmed it will keep reinvesting cash from maturing bonds for an extended period.
Exports from China tumbled 20.7% (Y-o-Y) to USD 135.24 billion in February 2019, the most since February 2016 and far worse than market expectations of a 4.8% decline, amid weakening global demand, ongoing trade tensions with the US and a series of Lunar New Year holidays, which started in early February 2019.
The Japanese economy advanced 0.5% (Q-o-Q) in the December quarter 2018, better than the preliminary estimate of a 0.3% expansion and recovering from a downwardly revised 0.6% contraction in previous quarter.
The number of Americans filling for unemployment benefits decreased by 3,000 to 223,000 in the week ending 2nd March 2019 from the previous week’s revised level of 226,000. It compares with market expectations of 225,000.
US crude oil stocks increased by 7.069 million barrels in the week ended 1st March 2019, after an 8.647 million drop in the previous week and well above market expectations of a 1.2 million gain. It is the biggest gain in oil inventories since the week ended 18th January 2019.
Wall Street closed modestly in the red on Friday, paring most of the early losses triggered by a much weaker-than-expected US jobs report and China trade data. During the week, Dow Jones declined by 2.21%, Nasdaq fell by 2.5% and S&P 500 slipped by 2.60%.
European stock markets closed in the red on Friday, tracking losses on Wall Street, as investors sentiment was hit by a much weaker-than-expected US jobs report and China trade data. On Thursday, the ECB slashed the Eurozone economic growth to 1.1% from 1.7%. During the week, FTSE fell marginally by 0.04% and DAX declined by 1.25%.
Stock markets across the Asia-Pacific region closed deep in the red on Friday, amid concerns about the softening global economy after China’s data showed exports fell 20.7% from a year earlier in February 2019, far worse than market expectations of a 4.8% decline, and imports dropped 5.2%, compared to forecasts of a 1.5% decrease. Selling also was fuelled by the lack of progress in US-China trade negotiations. During the week, Nikkei 225 index declined by 2.70%, Hangseng index fell by 2% and Shangai Composite index declined by 1%.
Oil prices fell more than 3% on Friday on a worsening global economic outlook after data showed US jobs growth almost stalled in February 2019, Chinese imports and exports declined last month and the ECB warned of continued weakness in the European economy. During the week, Brent Crude Oil price gained by 1.03%.
Sensex and Nifty gained by 1.70% and 1.60% during last week.
Hindalco Industries management is looking at a Capex of around Rs 20 billion for the next fiscal year. Most of the envisaged expenditure will be on ramping up the capacity. For the current fiscal year company has Capex of Rs. 13 billion. Share price of Hindalco Industries declined by 2% during the last week.
Sectoral Indices Trends:
The sectoral indices closed mostly in positive territory during last week. The S&P BSE Oil & Gas, PSU, Auto and Bankex had gained by 2.67%, 3%, 2% and 2.5% respectively. BSE IT Index declined by 2% during the last week.
SBI Bank rise in turnover in Stock Derivatives
SBI Bank has witnessed rise in open interest in the stock future segment in the last week. Share price of SBI Bank gained by 4% in the last week
Wipro also witnessed rise in open interest in the stock future segment, share price of Wipro declined by 7% in the last week. Promoter group which owns 74% of shares in Wipro had sold 0.30% through block deals which lead to share price plunging 5% on Friday. The board of directors of Wipro, at their meeting held on 18th January 2019, had recommended the issue of bonus equity shares in the proportion of 1:3 (one equity share for every three equity shares held). On 7th March 2019, the record date the share price has been adjusted according to the bonus issue.
Foreign Institutional Investors (FIIs) Derivative Statistics have shown rise in the open interest across Stock Options, Index futures, Index options and Stock futures on a week on week basis.
Indian rupee appreciated by 1.379% against USD, USD/INR pair closed at Rs. 70.019 in the last week.