FIIs/FPIs have sold Indian equity shares worth Rs. 124 billion in July 2019 and shares worth Rs. 26 billion in August 2019 (02nd August 2019) respectively.
The Nifty Index futures witnessed rise in open interest by 14% for the August series and in by 25% 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.
The Federal Reserve lowered the target range for the federal funds rate by 25 bps to 2-2.25% during its August policy-meeting, the first rate cut since the financial crisis, as inflation remains subdued amid heightened concerns about the economic outlook and ongoing trade tensions with China.
The ISM Manufacturing PMI in the US fell to 51.2 levels in July 2019 from 51.7 levels in the previous month, missing market expectations of 53.4. The latest reading pointed to the weakest pace of expansion in the manufacturing sector since August 2016 as production growth slowed sharply while the pace of job creation was near a three-year low.
Nonfarm payrolls in the US increased by 164,000 in July 2019, following a downwardly revised 193,000 in June 2019 and in line with market expectations.
The US trade deficit narrowed slightly to USD 55.2 billion in June 2019 from a revised USD 55.3 billion in the previous month and compared to market expectations of USD 54.6 billion. Exports dropped 2.1% and imports fell 1.7%.
The US unemployment rate stood at 3.7% in July 2019, unchanged from the previous month’s figure and in line with market expectations. The number of unemployed increased by 88,000 to 6.1 million while employment went up by 283,000 to 157.3 million.
The Bank of Japan left its key short-term interest rate unchanged at -0.1% at its July meeting and kept the target for the 10-year government bond yield at around 0%, as widely expected. Policymakers underlined that they would not hesitate to take additional easing measures if the economy loses momentum for achieving the central bank’s 2% inflation target.
The Jibun Bank Japan Services PMI was revised lower to 51.8 levels in July 2019 from a preliminary figure of 52.3 levels and compared to a final 51.9 levels in the previous month.
The Eurozone economy grew 0.2% (first estimate) on quarter in the three months to June 2019, easing from a 0.4% expansion in the previous period and matching market expectations.
The number of Americans filling for unemployment benefits increased by 8,000 to 215,000 in the week ended 27th July 2019 from the previous week’s revised level of 207,000 and compared with market expectations of 212,000.
Stocks of crude oil in the United States decreased by 8.496 million barrels in the week ended 26th July 2019, after a 10.835 million plunge in the previous week and compared with market expectations of a 2.588 million drop.
Wall Street closed in red on Friday led by sharp declines in tech stocks to book the worst week of 2019, as trade war fears and uncertainty about the Fed’s next move weighed deeply on market sentiments. In July, the US economy added 164,000 jobs matching expectations, with wages climbing by 3.2% on an annual basis (10 bps above consensus) . increasing inflationary pressures could halt further monetary easing. During the week, Dow Jones declined by 2.59%, Nasdaq plummeted by 4% and S&P 500 fell by 3%.
European shares finished sharply lower on Friday, after the trade war between US & China escalated. During the week, DAX plummeted by 4.5% and FTSE declined by 2%.
Oil prices edged higher on Thursday, after latest EIA data showed a much larger-than-expected drop in US crude inventories. During the week, Brent Crude Oil is up by 1.6%.
Sensex and Nifty declined by 1.20% and 1.18% respectively during last week.
India’s fiscal deficit widened to INR 4.32 trillion in April-June 2019-20 from Rs. 4.29 trillion in the same period of the previous fiscal year. Total government revenues increased 4% to Rs. 2.90 while total expenditure rose at a softer 2% to Rs. 7.22 trillion.
The IHS Markit India Manufacturing PMI rose to 52.5 levels in July 2019 from 52.1 levels in the previous month, as both output and new orders expanded a bit faster despite a slowdown in export sales amid subdued global trade flows. In addition, employment growth accelerated, while outstanding business increased for the first time in three months.
India’s infrastructure output grew 0.2 percent from a year earlier in June 2019, the least since November 2015, mainly due to a slump in production of oil & gas and cement sector related products.
Within three years of starting its commercial operations, Reliance Jio has become the country’s largest telecom operator with a subscriber base of 331.3 million, surpassing Vodafone Idea which on Friday reported a decline in its user base to 320 million by end of June 2019.
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 -3.67%, -3.44%, -5.55% and -3.44% respectively. S&P BSE IT gained by 0.60%.
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 declined by 10% during last week. SBI reported net profit of Rs. 23 billion in April-June 2019 period compared with loss of Rs. 49 billion in the same quarter last year. SBI’s profit in June quarter rose on account of lower provisioning for bad loans and higher interest income. Domestic credit growth for bank came in at 11.89% (Y-o-Y) led by both retail as well as high rated corporates. State Bank of India’s asset quality remained stable in the June quarter as its gross NPAs as a percentage of total advances were sequentially unchanged at 7.53% and Net NPAs rose slightly to 3.07% from 3.01% in the previous quarter.
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 0.029% against USD, USD/INR pair closed at Rs. 68.86 in the last week.