FIIs/FPIs have sold Indian equity shares worth Rs. 42 billion in January 2019 and bought shares worth Rs. 27 billion in February 2019 ( 01st February).
The Nifty Index futures witnessed sharp rise in open interest by 489% for the February series and rise in open interest by 34% for the March series. Implied volatility (IV) rose for put option and call option in the last week. Rise in IV for put option and fall in IV for call option shows unsteady support for Nifty at present levels.
Global Economy
The US unemployment rate rose to 4% in January 2019 from 3.9% in the previous month and slightly above market expectations of 3.9%. The number of unemployed increased by 241,000 to 6.54 million while employment fell by 251,000 to 156.69 million, following the 35-day partial government shutdown.
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 reaffirmed its position to be patient about further policy firming considering recent global economic and financial developments and muted inflation pressures.
Nonfarm payrolls in the US increased by 304,000 in January 2019, following a downwardly revised 222,0000 rise in December 2018 and easily beating market expectations of 165,000. Employment grew in several industries, including leisure and hospitality, construction, health care, and transportation and warehousing.
The China General Services PMI edged down to 53.6 levels in January 2019 from 53.9 levels in the previous month. The latest reading pointed to the weakest growth in the service sector since October 2018, mainly affected by weakening domestic demand and despite signs of progress in the China-US trade negotiations.
The Nikkei Japan Manufacturing PMI declined to 50.3 levels in January 2019 which was lower than December 2018 reading of 52.6 levels. It was the lowest reading since August 2016, as both output and new orders declined for the first time in two-and a-half years.
The number of Americans filling for unemployment benefits increased by 53,000 to 253,0000 in the week ending 26th January 2018 from the previous week’s revised level of 200,000. This is the highest level for initial claims since 30th September 2017 when it was 254,000.
US crude oil stocks increased by 0.919 million barrels in the week ending 25th January 2019, following a 7.97 million rise in the previous week and compared with market expectations of a 3 million gain.
Global Market
Wall Street closed mixed on Friday, as after the jobs report for January 2019 showed the economy added a better-than-expected 304K jobs, contrasting with some of index heavy weight stocks falling sharply following their quarterly earnings announcement. During the week, Dow Jones gained by 1.32%, Nasdaq surged by 1.50% and S&P 500 rose by 2.3%.
European stocks closed mixed on Friday, with household goods shares among the best performers amid new round of corporate earnings and after a no deal on trade talks between the US and China but setting up more meetings later this month. During the week, DAX declined by 1% and FTSE rose by 3.10%.
Indian Market
Sensex and Nifty gained by 1% each during last week.
The Nikkei India Manufacturing PMI increased to 53.9 levels in January 2019 from 53.2 levels in a month earlier and beating market expectations of 52.5 levels. Output rose the most since December 2017 and surpassed its long-run average, new orders expanded at the fastest rate in 13 months and new export orders grew for 15th straight month.
Cairn India Holdings, a subsidiary of Vedanta, bought a stake in Anglo American from Volcan Investments, a family trust of promoter Anil Agarwal. The investment was made in the December quarter, according to Vedanta’s earnings statement released. This move has created a conflict of related party transaction issue (weak corporate governance practice), as a result share price of Vedanta was down by 17% in last week.
Escorts plans capital expansion in the Rs.4000-4600 million range over the next couple of years, in increasing its capacity and also in its joint ventures in the tractor and construction equipment business.
Highlights of Budget Fy19-20:
- Minimum 14% revenue of GST to states by Central Govt.
- Recommendations to GST council for reducing GST rates for home buyers.
- Full Tax rebate upto 5 lakh annual income after all deductions.
- 600 billion for MANREGA.
- One lakh digital villages in next 5 years.
- More than Rs. 3 trillion allocated for Defence sector.
Sectoral Indices Trends:
The sectoral indices mostly closed in positive territory during last week. The S&P BSE PSU, Auto and Bankex had declined by 3%, 6% and 1% respectively. S&P BSE Oil & Gas and IT indices gained by 1% and 0.80% respectively.
SBI Witnesses highest rise in turnover in Stock Derivatives
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 gained by 1% in the last week. SBI reported Q3Fy19 results, net profit surged by 21% (Y-o-Y) to Rs. 39 billion and NII shot up by 40% (Y-o-Y) to Rs. 226 billion and total provisions declined to Rs. 86 billion. Gross non-performing assets during the quarter by Rs. 180 billion and improved from 10.35% of gross advances during Q3Fy18 to 8.7% during Q3Fy19. Management expects to recover Rs 360 billion from eight accounts including three power sector ones through National Company Law Tribunal (NCLT) recoveries in the final quarter.
Foreign Institutional Investors (FIIs) Derivative Statistics have shown fall in the open interest across Stock Options, Stock futures, Index futures and Index options on a week on week basis.
Currency
Indian rupee depreciated by 0.70% against USD, USD/INR pair closed at Rs. 71.475 in the last week.
