FIIs/FPIs have bought Indian equity shares worth Rs. 252 billion in December 2019 and bought shares worth Rs. 121 billion in January 2020.
The Nifty Index futures witnessed fall in open interest by 520% for the February series and 41% for the March series. Implied volatility (IV) rose for put option and for call option in the last week. Rise in IV for put option and IV for call option signifies unsteady support for Nifty at present levels.
The Federal Reserve left the target range for its federal funds rate unchanged at 1.5%-1.75% on 29th January 2020 as expected, stating the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation returning to the 2% objective.
The Eurozone economy expanded 1% (Y-o-Y) in Q4Fy19, easing from a 1.2% growth in the previous three-month period and missing market expectations of 1.1%.
Industrial production in Japan rebounded 1.3% in December 2019 after declining 1% in the previous month, well above consensus of 0.7%.
The Jibun Bank Japan Manufacturing PMI was at 48.8 levels in January 2020, compared to a flash figure of 49.3 levels and a final 48.4 levels in the previous month.
Stocks of crude oil in the United States increased by 3.548 million barrels in the week ended 24th January 2020, after a 0.405 million drop in the previous week and against market expectations of a 0.482 million increase, according to EIA Petroleum Status Report.
Wall Street closed deeply in red on Friday as coronavirus fears grow and the US declared the coronavirus a public health emergency. On the corporate side, Caterpillar reported weaker than expected earnings and issued disappointing full-year guidance. During the week, Dow Jones declined by 2.53%, Nasdaq fell by 1.80% and S&P 500 decreased by 0.70%.
Shanghai composite index declined more than 8% during Monday morning trade, as market participants returned to trade after an extended holiday amid escalating fears over coronavirus outbreak that has claimed over 350 lives in China so far and affecting over 16,600.
Eurozone GDP growth slowed to a near seven-year low as the economies of France and Italy contracted unexpectedly caused European markets close on a negative note during last week. FTSE declined by 4% and DAX declined by 4.40% during last week.
Oil prices fell 1% on Friday, falling nearly 4% in the week as the global growth outlook deteriorates.
Domestic equity markets are at risk of falling on weak corporate earnings, the threat of further economic slowdown due to the outbreak of deadly coronavirus and as the outcome of Union Budget 2020 didn’t really cheer up market sentiment. Market participants in India were expecting a strong stimulus from the government in order to stem the current economic slowdown and removal of LTCG which was introduced in Union Budget 2018. Sensex & Nifty closed 2.5% down post Budget session. However, new changes in Union Budget 2020 Include:
- The dividend distribution tax shifted to individuals instead of firms.
- Introduced new slabs and reduced the tax rate for different slabs for an individual income up to Rs 15 lakh per annum, if a taxpayer opts for foregoing exemptions and deductions. The new tax regime will be optional, and the taxpayers will be given the choice to either remain in the old regime with exemptions and deductions or opt for the new reduced tax rate without those exemptions.
- 100 more airports to be developed by 2025 to support UDAN scheme.
- Rs. 100 trillion has been allocated to the development of the infrastructure sector in India over the next five years.
India’s infrastructure output rose 1.3% (Y-o-Y) in December 2019, rose the most since July 2019, after a downwardly revised 0.6% drop in the previous month.
Sectoral Indices Trends:
The sectoral indices closed on negative note during last week. The S&P BSE Oil & Gas, IT, PSU, Bankex and Auto had declined by 4.15%, 2.45%, 4.30%, -1.08% and -1.48% respectively.
SBI witnessed rise in turnover in Stock Derivatives
SBI witnessed rise in open interest, share price of State Bank of India declined by 1.2% during last week. SBI management reported 41% (Y-o-Y) rise in netprofit as the asset quality showed good improvement. Gross bad loan declined to 6.9% from 7.53% a year ago. Net Interest incomeincreased by 22% (Y-o-Y). Net NPAs stood at 2.65% comparef with 3.95% during last year.
Foreign Institutional Investors (FIIs) Derivative Statistics have shown a fall in the open interest across Stock Options, Stock Futures, Index Option, and Index Futures on a week on week basis.
Indian rupee depreciated by 0.30% against USD, USD/INR pair closed at Rs. 71.54 in the last week.