FIIs/FPIs have bought Indian equity shares worth Rs. 18 billion in February 2020 and sold shares worth Rs. 248 billion in March 2020.
The Fed in a dramatic move on Sunday the 15th of March cut its target rate by 50bps to a 0-25bps range, announced asset purchases of USD 400 billion in the coming weeks with a promise of more to come and pledged USD to foreign central banks to tide over a USD shortage. The Fed cited the economic impact of the Corona Virus will be deep and recovery uncertain.
The Nifty Index futures witnessed fall in open interest by 11% for the March series and rise in open interest by 11% for the April series. Implied volatility (IV) rose for call option and for put option in the last week. The rise in IV for call option and for put option shows unsteady support for Nifty at present levels.
The annual inflation rate in the US eased to 2.3% in February 2020 from 2.5% in January 2020 which was the highest rate since October 2018. Figures came slightly higher than market expectations of 2.2%.
The Euro Area industrial production rose 2.3% from a month earlier in January 2020, after falling by a revised 1.8% and compared to market expectations of 1.4% growth.
The European Central Bank (ECB) left the key interest rate on main refinancing operations steady at 0% during its March 2020 policy-meeting. ECB also announced a stimulus package aimed to inject money in the economy and support bank lending to small and medium companies. The package includes additional longer-term refinancing operations, more favourable terms for the targeted longer-term refinancing operations from June 2020 to June 2021, and additional net asset purchases of Euro 120 billion. The ECB will also relax the capital rules on banks.
The People’s Bank of China lowered the reserve requirement ratio by 50-100bps for banks.
The Bank of England unexpectedly cut the key interest rate by 50bps to 0.25% during an emergency monetary policy-meeting on 11th March 2020. The central bank said the rate cut will help to support business and consumer confidence at a difficult time, to bolster the cash flows of businesses and households, and to reduce the cost, and to improve the availability, of finance.
The number of Americans filling for unemployment benefits edged down by 4,000 to 211,000 in the week ended 7th March 2020 from the previous week’s revised level of 215,000 and compared with market expectations of 218,000.
Stocks of crude oil in the United States increased by 7.664 million barrels in the week ended March 6th of 2020, following a 0.785 million gain in the previous week and compared with market expectations of a 2.266 million gain, according to EIA Petroleum Status Report.
The US Indices closed in green on Friday and regained most of Thursday losses, as the Trump administration declared a national emergency over the coronavirus outbreak. The emergency status frees up to USD 50 billion to assist those affected by the outbreak. During the week, Dow Jones tumbled by 10.36%, Nasdaq declined by 8% and S&P 500 fell by 6%.
European stock markets closed in green on Friday, recovering from the biggest decline on record, after the EU responded to the coronavirus pandemic with a EUR 37 billion stimulus rescue package and relaxed European Union’s budget rules. Also, Germany pledged unlimited cash to businesses hurt by the virus. During the week, FTSE plummeted by 17% and DAX tumbled by 20%.
Oil prices dropped for the second straight session on Thursday, after WHO officially declared coronavirus a global pandemic, prompting President Donald Trump to ban all travel from Europe for 30 days. Oil prices have been facing huge pressure after Saudi Arabia started a price war by slashing pricing for its crude and threatening to boost oil production capacity to 13 million barrels per day. During the week, Brent Crude Oil declined by 25%.
S&P BSE Sensex & Nifty declined by 9.24% & 9.41% respectively during last week. On Friday opening session, Sensex & Nifty had hit lower circuit but however, indices witnessed biggest intra-day recovery as Sensex surged 4700 points from day’s low.
India’s trade deficit widened to USD 9.85 billion in February 2020 from USD 9.72 billion in the previous month but remained below market expectations of a USD 11.91 billion gap. Exports rose 2.91% and imports increased by 2.5%.
Consumer price inflation in India (CPI) eased to 6.58% in February 2020 from 7.59% in the prior month, and slightly below market expectations of 6.8%. The inflation rate fell for the first time in 7 months, as food & beverages prices declined.
Industrial production in India jumped 2% (Y-o-Y) in January 2020, following a revised 0.1% rise in December 2019 and beating market forecasts of a 0.7% increase. It is the biggest annual gain in industrial output in six months, due to a rebound in manufacturing.
India’s current account deficit narrowed sharply to USD 1.4 billion in October to December 2019 from USD 17.7 billion in the same period last year.
Sectoral Indices Trends:
The sectoral indices closed on a negative notes during last week. The S&P BSE Bankex, Oil & Gas, Auto, IT and PSU had declined by -9.68%, -11.47%, -10.11%, -13.58% and -11.1% respectively.
SBI witnessed rise in turnover in Stock Derivatives
SBI witnessed rise in open interest, share price of SBI declined by 10% during last week. Last week, SBI announced to pick up to 49% at not less than Rs 10 per share in YES Bank. To hold at least 26% stake in YES Bank for at least three years. RBI has authorised 24 billion shares of YES Bank for face value of Rs 2 each, which brings the authorised capital to 48 billion. SBI would be infusing Rs. 24.5 billion at Rs 10 per share for 49% stake.
Prior to last week, SBI gained momentum after the government had created a telecom fund in order to save Vodafone Idea from bankruptcy. SBI management reported 41% (Y-o-Y) rise in net profit as the asset quality showed good improvement. Gross bad loan declined to 6.9% from 7.53% a year ago. Net Interest income increased by 22% (Y-o-Y). Net NPAs stood at 2.65% compared with 3.95% during last year.
Foreign Institutional Investors (FIIs) Derivative Statistics have shown a rise in the open interest across Stock Options, , Index Options, Stock Futures, and Index Option on a week on week basis. Index Futures witnessed fall in open interest during last week.
Indian rupee appreciated by 0.22% against USD, USD/INR pair closed at Rs. 73.84 in the last week.