FIIs/FPIs have sold Indian equity shares worth Rs. 124 billion in July 2019 and shares worth Rs. 121 billion in August 2019 (23rd August 2019) respectively.
The Nifty Index futures witnessed fall in open interest by 1% for the August series and rose by 34% for the September series. Implied volatility (IV) rose for put option and call option in the last week. Rise in IV for call option and put option shows unsteady support for Nifty at present levels.
Fed officials viewed their interest-rate cut as an adjustment that would help counter the effects on the outlook of weak global growth and trade policy uncertainty while promoting a faster return of inflation to the central bank’s target, minutes of the July meeting showed.
The IHS Markit US Services PMI declined to 50.9 levels in August 2019 from 53 levels in July 2019 and market consensus of 52.8 levels, a flash estimate showed. New orders increased at the weakest pace since March 2016, amid subdued demand conditions.
The IHS Markit Eurozone Services PMI increased to 53.4 levels in August 2019 from 53.2 levels in the prior month and beating market forecasts of 53 levels, a preliminary estimate showed.
ECB policymakers noted that the economic growth was likely to be weaker than initially thought this year and a package of stimulus measures would be more effective in combating the slowdown than a sequence of selective actions, minutes of the July meeting showed.
Japan’s consumer price inflation fell to 0.5% (Y-o-Y) in July 2019 from 0.7% in the previous month and in line with market expectations. It was the lowest inflation rate since March, amid a slowdown in food prices and a fall for the eighth consecutive month in cost of transport and communication. On a seasonally adjusted monthly basis, consumer prices rose by 0.1% in July, following a flat reading in the previous two months.
The Jibun Bank Japan Services PMI jumped to 53.4 levels in August 2019, the highest level since October 2017, from 51.8 levels in the previous month, a preliminary estimate showed. Output, new orders and new export orders all increased at faster rates. In addition, employment growth accelerated, while backlogs of work were unchanged.
The number of Americans filling for unemployment benefits decreased by 12,000 to 209,000 in the week ended 17th August 2019 from the previous week’s revised level of 221,000 and beating market expectations of 216,000.
Stocks of crude oil in the United States fell by 2.732 million barrels in the week ended 16th August 2019, after a 1.58 million rise in the previous period and compared with market expectations of a 1.889 million decrease.
US stocks closed sharply lower on Friday, amid a renewed tariff battle between Washington and Beijing as US President Trump said he will respond further to China’s retaliatory tariffs and ordered American companies to find alternatives to China. During the week, Dow Jones declined by 1%, Nasdaq fell by 1.80% and S&P 500 slipped by 2.25%.
European equities reversed early gains to trade in the red on Friday, after Beijing announced it will implement retaliatory tariffs on USD 75 billion worth of US goods from September. During the week, DAX gained 0.42% and FTSE fell by 0.31%.
Stocks in the Asia-Pacific region closed mostly higher on Friday, after China said it would boost disposable income and stabilize employment while Hong Kong unveiled a stimulus package to help avert a recession. During the week, Nikkei 225 declined by 1.30%, Shanghai Composite gained by 2% and Kospi fell by 0.52%.
Gold prices edged up as much as 1% to USD 1513.3 per ounce on Friday, after Fed Chair Powell speech regarding weaker global economic growth, geopolitical uncertainty and escalating trade tensions between Washington and Beijing.
Sensex and Nifty declined by 1.74% and 2% respectively during last week.
Finance minister, in a much-needed relief to the foreign portfolio investors, (FPI) has withdrew the enhanced tax surcharge on foreign investors. The government has also announced that no angel tax would be imposed on start-ups and their investors if registered with the DPIIT. Additional stimulus measures include:
- Government upfront release of Rs 700 billion additional lending and liquidity of around Rs 5 trillion by providing upfront Capital to PSBs.
- Banks to issue improved transparent One Time Settlement policy to benefit MSME and retail borrowers in settling their overdues.
- Credit support for purchase of houses, vehicles, consumption goods.
- NHBs to provide additional liquidity support to HFCs for Rs. 200 billion.
Sectoral Indices Trends:
The sectoral indices mostly closed in negative territory during last week. The S&P BSE Bankex, Oil & Gas, PSU and Auto indices had declined by -4.53%, -2.67%, -5.01% and -0.11% respectively. S&P BSE IT gained by 3.15%.
ICICI Bank Witnesses rise in turnover in Stock Derivatives
ICICI Bank has witnessed rise in open interest in the stock future segment in the last week. Share price of ICICI Bank declined by 7% during last week. Last week, management have guided for 30% (Y-o-Y) increase in retail loan disbursement in the state of Karnataka for Fy20. For Q1Fy20, bank reported 27% (Y-o-Y) to Rs. 77.37. Improvement in asset quality as its gross NPAs as a percentage of gross advances declined 232 bps to 6.49%, and the net NPA ratio stood at 1.77%, down 242 bps from a year ago.
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 depreciated by 0.503% against USD, USD/INR pair closed at Rs. 71.513 in the last week.