FIIs/FPIs have sold Indian equity shares worth Rs. 175 billion in August 2019 and shares worth Rs. 20 billion in September 2019 (till 13th September 2019).
The Nifty Index futures witnessed fall in open interest by 2% for the September series and rise by 115% for the October series. Implied volatility (IV) fell for put option and call option in the last week. Fall in IV for call option and put option shows unsteady support for Nifty at present levels.
The US annual inflation rate fell to 1.7% in August 2019 from 1.8% in the previous month and below market consensus of 1.8%, as food prices and a range of other goods continued to increase while energy deflation deepened sharply.
The US budget deficit narrowed to USD 200 billion in August of 2019 from USD 214 billion in the corresponding month of the previous year and compared with market expectations of a USD 195 billion gap. Federal spending fell 1% on the year while receipts rose 4%.
China’s industrial production increased by 4.4% (Y-o-Y) in August 2019, missing market consensus of 5.2%, and after a 4.8% gain in the previous month. This was the weakest yearly growth in industrial output since February 2002 on the back of escalating trade dispute with the US and sluggish domestic demand.
Industrial production in the Euro Area declined 2% from a year earlier in July 2019, following a 2.4% fall in the previous month and compared to market expectations of 1.3% drop.
The ECB left its main refinancing operations rate unchanged and lowered the deposit interest rate by 10bps to -0.5% during its September meeting. Policymakers also approved a new round of bond purchases at a monthly pace of 20 billion Euros as from 1st November 2019, in as an attempt to boost growth and inflation amid global trade tensions and Brexit uncertainty. The ECB lowered its GDP forecasts to 1.1% in 2019 (vs 1.2% previously estimated) and 1.2% in 2020 (vs 1.4%).
The number of Americans filling for unemployment benefits increased by 1,000 to 217,000 in the week ended 31st August 2019 from the previous week’s revised level of 216,000 and compared with market expectations of 215,000.
Stocks of crude oil in the United States decreased by 4.771 million barrels in the week ended 30th August 2019, after a 10.027 million plunge in the previous week and compared with market expectations of a 2.488 million drop.
Wall Street indices traded little changed on Friday, as easing trade fears were reinforced with China saying it will exclude commodities from the US such as pork and soybeans from additional tariffs. Meanwhile, US retail sales beat expectations in August as consumers hit auto showrooms and online shopping maintained momentum. During the week, Dow Jones increased by 1.57%, Nasdaq gained by 0.89% and S&P 500 rose by 0.62%.
Stock markets across the Asia-Pacific region closed deep in green on Friday on the back of renewed trade optimism ahead of a new round of US-China talks and ECB’s new stimulus measures. On weekly basis, Nikkei 225 surged by 4%, Hangseng rose by 2.50% and Kospi gained by 2%.
European stock markets closed in the green on Friday, boosted by hopes that the US and China would reach a trade agreement and the UK would avoid a no-deal Brexit. On weekly, DAX gained by 2.26% and FTSE rose by 1.17%.
Oil prices jumped more than 10% on 16th September 2019 as an attack on Saudi Arabia’s oil facilities during the weekend raised concerns about global oil supplies. State oil giant Aramco said the attack, which hit the world’s biggest petroleum-processing facility, cut output by 5.7 million barrels per day. Meanwhile, US President Trump said on Sunday he authorized the release of oil from the Strategic Petroleum Reserve, if needed to keep the markets well-supplied.
Sensex and Nifty gained by 1.10% and 1.19% respectively during last week.
India’s retail price inflation rate edged up to 3.21% (Y-o-Y) in August 2019 from the previous month’s 3.15%, missing market expectations of 3.30%. Inflation remained below the Reserve Bank of India’s medium-term target of 4% for the 13th consecutive month, despite recent cuts in interest rates. The Index of Industrial Production (IIP) rose by 4.3% in July, against 1.2% in the previous month.
Havells India management said it will double the manpower at its manufacturing facility in Northeast within two years as it aims to touch Rs 10 billion sales revenue from the region. The company’s Changsari plant in Assam, which manufactures MCBs and switch disconnectors, produces 120 million poles annually against its installed capacity of 360 million. The company is increasing its output due to strong demand and hopes to utilise full capacity of the plant in the next two years.
Sectoral Indices Trends:
The sectoral indices mostly closed in positive territory during last week. The S&P BSE Bankex, Oil & Gas, PSU and Auto indices had gained by 3.40%, 2.01%, 2.75% and 3.70% respectively. S&P BSE IT declined by -1.76%.
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 6% during last week. Reliance Industries have also witnessed rise in open interest during last week. Last week, company has announced new Gigafiber plans for Indian broadband users. Jio is targeting 20 million homes and 16 million enterprises across 1,600 towns and aims to complete the roll-out in 12-18 months. On the other hand, Sunil Mittal-owned Bharti Airtel has a current subscriber base of 2.3 million and 10 million home pass. Also, Reliance Industries is planning to go through a structural change and has plans of reducing debt from balance sheet.
Foreign Institutional Investors (FIIs) Derivative Statistics have shown rise in the open interest across Stock Options, Index options and Index futures on a week on week basis. However, Stock Futures witnessed fall in open interest.
Indian rupee depreciated by 0.914% against USD, USD/INR pair closed at Rs. 70.985 in the last week.