The Sensex and the Nifty declined 2.96% and 2.82% respectively in the last week mainly due to concern on the expected hike in interest rate in the month of December by the Fed. Emerging market indices are witnessing a correction as rise in interest rates in the US economy is expected to drain liquidity to some extent from Brazil, Russia, India and China and redirect it to developed economies.
The slide for Indian stocks was triggered by increased possibility of an interest-rate hike from the US Federal Reserve at its next policy meeting in December 2015. After a hawkish statement from the Fed, the Fed-funds futures market is now pricing in 47% probability of an increase in US benchmark interest rate in December 2015, compared with a 34% chance before the announcement. The Fed kept its benchmark interest rate unchanged near zero after the conclusion of a two-day monetary policy meeting in the last week. The next monetary policy review from the Fed is scheduled on 15-16 December 2015.
The corporate earnings also were not very encouraging with slowdown in revenue growth for most of the large cap companies in the second quarter of FY 2015-16. Read our Monthly Market Movement Analysis for the month of November which analyses the effect of Q2FY16 corporate earnings for sectors.
The detailed results of the companies that declared results in the last week are given below in the Stock Gainers and Losers section of the article.
Portfolio and Sector Performance
Our model Twelve Stock Retirement Portfolio has given one-year returns of 21.69% and has outperformed the benchmark Sensex by 26.19%.
On a weekly basis, twelve stock portfolio has gained 1.25% in value and the Benchmark BSE Sensex has declined by 2.96%. The Portfolio has outperformed the benchmark by 4.21%.
The Nineteen Stock Portfolio has given one-year returns of 14.72% and has outperformed the benchmark BSE 500 by 14%.
On a weekly basis, nineteen stock portfolio has gained 0.17% in value and the Benchmark BSE 500 has declined 2.35%. The Portfolio has outperformed the benchmark by 2.52%.
The Global Ten Stock Model Retirement Portfolio has given a return of 17.67% and has outperformed the benchmark S&P 500 index by 17.79% since inception on 8th April 2015.
On a weekly basis, Global Ten Stock Model Retirement Portfolio has gained 2.65% in value and the Benchmark S&P 500 has gained by 0.2%. The Portfolio has outperformed the benchmark by 2.44%.
Industry and Stock Specific trends
The sectoral indices closed in negative territory last week. The S&P BSE Bankex, Auto, IT, PSU and Oil and Gas indices declined 3.44%, 1.3%, 0.54%, 3.92% and 2.91% respectively in the last week.
Stock Gainers and Losers
Maruti Suzuki stock rose 2% in the last week. The company’s net profit surged 42.1% to Rs 12256 million on 13.2% growth in net sales to Rs 135748 million in Q2 September 2015 over Q2 September 2014. Maruti attributed the strong financial performance to increase in sales volumes, material cost reduction initiatives and favourable foreign exchange movement.
Dr Reddy’s Laboratories stock rose 2% in the last week. On a consolidated basis, the company’s net profit rose 25.74% to Rs 72189 million on 11.25% increase in total income to Rs 40209.5 million in Q2 September 2015 over Q2 September 2014.
ICICI Bank stock declined 3% in the last week. ICICI Bank’s net profit rose 11.85% to Rs 30301.1 million on 8.17% growth in total income to Rs 161062.2 million in Q2 September 2015 over Q2 September 2014. The bank’s provisions and contingencies rose 10.9% to Rs 9421.6 million in Q2 September 2015 over Q2 September 2014. The bank’s provision coverage ratio stood at 57.4% as on 30 September 2015.
ICICI Bank’s net non-performing assets (NPA) stood at Rs 68280 million as on 30 September 2015, higher than Rs 64020 million as on 30 June 2015. The net NPA ratio stood at 1.47% as on 30 September 2015, higher than 1.4% as on 30 June 2015.
HDFC stock declined 6% in the last week. HDFC’s net profit rose 18.19% to Rs 16045.6 million on 12.13% rise in total income to Rs 74802.4 million in Q2 September 2015 over Q2 September 2014. On a consolidated basis, HDFC’s net profit rose 2.04% to Rs 21065.1 million on 7.61% rise in total income to Rs 125302.8 million in Q2 September 2015 over Q2 September 2014.
Larsen and Toubro stock declined 7% in the last week. L&T’s consolidated net profit rose 16% to Rs 9960 million on 11% rise in gross revenue to Rs 236050 million in Q2 September 2015 over Q2 September 2014. The company’s bottom line in Q2 September 2015 was boosted by exceptional item. There was an exceptional gain of Rs 3095.7 million in Q2 September 2015 on divestment of part stake in a subsidiary company and stake in an associate company. International revenue during Q2 was at Rs 76580 million and constituted 32% of the total revenue. L&T secured fresh orders worth Rs 286200 million at the group level in Q2 September 2015.
ITC stock declined 7% in the last week. ITC’s net profit rose 0.25% to Rs 24312.5 million on 1.32% decline in total income from operations (net) to Rs 89042.3 million in Q2 September 2015 over Q2 September 2014. ITC said that the company’s performance in Q2 September 2015 remained subdued due to unprecedented pressure on cigarette industry volumes in the country, lack of trading opportunities for the company in its agri-commodities business and sluggish demand environment in the FMCG industry.
Derivatives
The derivative market saw rise in open interest in Nifty futures by 1.36%. Nifty at the money call and put option volatility rose last week.
Market Update
The Rupee depreciated in the last week against the USD. FIIs were net equity sellers to the tune of USD 200 million in the last week of October 2015.
