FIIs/FPIs have bought Indian equity shares worth Rs. 339 billion and Rs. 899 billion in March 2019 and April 2019 (till 5th April ) respectively.
The Nifty Index futures witnessed fall in open interest by 4% for the April series and by 8% for the May series. Implied volatility (IV) fell for call option and put option in the last week. Fall in IV for call option and put option shows steady support for Nifty at present levels.
Global Economy
Nonfarm payrolls in the US increased by 196,000 in March 2019, following an upwardly revised 33,000 rise in February 2019 and beating market expectations of 180,000. Notable job gains were seen in health care and in professional and technical services. Employment growth averaged 180,000 per month in the first quarter of 2019, compared with 223,000 per month in 2018.
The US unemployment rate came in at 3.8% in March 2019, unchanged from the previous month’s figure and in line with market expectations. The number of unemployed persons decreased by 24,000 to 6.2 million while employment dropped by 201,000 to 156.7 million.
The IHS Markit US Services PMI was revised higher to 55.3 levels in March 2019 from a preliminary reading of 54.8 levels and compared to the previous month reading of 56 levels.
The Nikkei Japan Services PMI came in at 52 levels in March 2019, little-changed from the previous month’s 52.3 levels and slightly below market consensus of 52.1 levels.
ECB officials agreed that interest rates should remain at current levels until the end of 2019, with some debate about shifting the forward guidance to March 2020 instead, on the back of weaker than expected economic data, uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets, minutes of the March 2019 meeting showed.
China’s foreign exchange reserves rose by USD 9 billion from a month earlier to USD 3.099 trillion in March 2019, beating market expectations of USD 3.095 trillion. It was the fifth straight month of increases and marking the biggest exchange reserve since September 2018 amid growing optimism over US-China trade negotiations.
The number of Americans filling for unemployment benefits fell by 10,000 to 202,000 in the week ending 30th March 2019 from the previous week’s revised level of 212,000 and compared with market expectations of 216,000.
Stocks of crude oil in the United States increased by 7.238 million barrels in the week ended 29th March 2019, following a 2.8 million gain in the previous week and compared with market expectations of a 0.425 million decline.
Global Market
Wall Street closed moderately higher on Friday, as US nonfarm payrolls increased by 196,000 in March 2019, following an upwardly revised 33,000 rise in February 2019 and beating market expectations of 180,000. Meantime, the jobless rate stayed at 3.8% to match consensus. During the week, Dow Jones gained by 1.91%, Nasdaq surged by 3% and S&P 500 rose by 1.50%.
Major European shares closed in green territory, buoyed by stronger-than-expected Germany’s industry output growth in February 2019 and a solid job creation during March 2019 in the US. During the week, FTSE gained by 2.31 and DAX surged by 4.10%.
Indian Market
Sensex and Nifty gained by 1.33% and 1.50% during last week.
The Reserve Bank of India lowered its benchmark interest rate by 25bps to 6% during its April policy-meeting as widely expected. It is the second rate cut so far this year. Policymakers said that the decision is consistent with the objective of achieving the medium-term target of 4% (+/- 2 percent) while supporting growth.
Click here to read our analysis on “Bond Markets to Search for Yields- RBI April 2019 Policy Review”.
The Nikkei India Services PMI dropped to 52 levels in March 2019 from 52.5 levels witnessed in the previous month and below market consensus of 52.5. The latest reading pointed to the weakest expansion in the services sector since September 2018, as output growth eased to a six-month low mainly driven by a slowdown in new business.
The Nikkei India Manufacturing PMI dropped to a six-month low of 52.6 levels in March 2019 from 54.3 levels in the preceding month and missing market expectations of 53.9. Both output and new orders expanded the least in six months and new export order growth eased.
Reliance Industries has initiated its plan to deleverage its balance sheet, RJio has completed the transfer of its optic fibre cable and tower infrastructure to two infrastructure investment trusts (InvITs). All major players in Telecom industry has kicked off with their respective strategies to make their balance sheet less debt heavy.
Sectoral Indices Trends:
The sectoral indices mostly closed in negative territory during last week. The S&P BSE Oil & Gas, PSU and Bankex indices had declined by 3%, 1.50% and 1.14% respectively. BSE Auto and IT indices gained by 2.70% and 1.80% respectively.
SBI Witness 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 declined by 1.5% in the last week. Prior to last week, SBI had proposed to fund Rs. 15 billion into debt heavy Jet Airways as a temporary cashflows to run operations. However, bank is keen on tapping global airline companies for the stake sale in Jet Airways.
Reliance Industries also witnessed rise in open interest in the stock future segment in the last week. Share price of Reliance Industries declined by 1%. Last week, Reliance Jio acquired 87% stake in AI chatbot firm Haptik Infotech for Rs. 7 billion.
Foreign Institutional Investors (FIIs) Derivative Statistics have shown marginal rise in the open interest across Stock Options, Index futures, Index options and Stock futures on a week on week basis.
Currency
Indian rupee appreciated by 0.24% against USD, USD/INR pair closed at Rs. 69.23 in the last week.
