January 3, 2017 by BizWhiz Admin in Economy Snapshot 0 comments 1270

Dear Colleagues,

I am pleased to attach the Economy / Market Snapshot covering all the major events in December, 2016.

One more year – 2016 – has ended. Year 2016 was a very challenging and surprising year. Too many events which were not expected or predicted happened and surprised the world. Brexit shook UK, Trump’s win in US elections shook the world, Modi’s demonetization move shook India, Jayalalitha’s death shook Tamil Nadu – list goes on. The current circus going in UP will see the election in the new year and an important election for Modi. Trump will assume office in January, 2017; Have to see how he is going to react to the several decisions of Obama taken in December. Today, we have entered into 2017 with a lot of hope and expectations.

Indian market was marginally down in December. It regained in the last two trading sessions and ended the year with positive gains. US and UK markets are at their peak; Japan went up while Hong Kong and China lost in December. IT stocks bounced in December with decent gains while Banks and Pharma companies lost in December. FII’s were net sellers pulling out Rs.7,800 crores from the Equity market and Rs.19,300 crores from the debt market – overall Rs.27,000 crores. However Mutual Funds pumped in Rs.6,200 crores in the Equity market and Rs.22,800 crores – overall Rs.29,000 crores neutralizing the selling of FII’s. Indian Rupee continued to be under pressure and almost touched Rs.68 mark but settled at Rs.67.92 at the end of the month. Gold and Silver prices came down by 3% while Crude prices went up by 9%.

India watched the PM’s speech last night expecting some more surprises; the speech ended without any major surprises; he recognized the pains of common people and promised to revive normalcy soon. Let us hope that the ATM’s are fully functional without queues in 2017 ! “Cashless” is a good initiative but imposing it under stress may not yield good results; India is a vast country with several practices for decades; Cleansing them overnight with tough measures with stick approach may not yield the desired results. A balanced action with “carrot and stick” approach can help India. Let us hope 2017 brings in cheers and happiness all around !

Wish you and your family a happy and prosperous New Year 2017!

Happy reading!

Regards
V Murali

General News

  • PM Modi in a nation wide address announces few measures for farmers, small traders, housing sector
    and women.
  • No new measures on demonetisation were included though PM acknowledged the inconveniences
    faced by people following the note ban.
  • PM Modi launched BHIM: Bharat Interface for Money, a new e-wallet app at the DigiDhan Mela.
  • Govt announced various measures to promote cashless transactions, including 0.75% discount on
    digital payments at petrol stations and lucky draws.
  • Service tax on card transactions up to Rs 2,000, tax for small traders and businesses with a turnover of
    up to Rs 2 crores on digital transactions were lifted.
  • Govt clarifies no tax on ancestral jewellery, purchase from disclosed income.
  • Income tax raids in Delhi, Chennai and other parts of the country yield large cache of black money,
    gold bars.
  • TN Chief Secretary P Rama Mohana Rao’s Chennai home raided by IT Officials, following which he was
    removed from the post.
  • Election Commission asks IT authorities to look into finances of 200 parties.
  • Rs 104 crores deposited in BSP’s party after note ban came under scanner.
  • Rahul Gandhi-led Congress delegation met Narendra Modi on farmers’ woes.
  • Winter Session of Parliament concluded with govt and opposition blaming each other for disruptions.
  • The Rights of Persons with Disabilities Bill, 2016 was passed by the Houses of Parliament.
  • Congress releases Sahara diaries targeting PM Modi.
  • Delhi former CM Sheila Dikshit junks Sahara diaries after her name appears in the list.
  • Delhi LG Najeeb Jung submits resignation; Former top IAS officer Anil Baijal appointed as Delhi LG.
  • Delhi Court dismisses petition asking for documents from Congress in the National Herald Case.
  • Govt to install laser walls at Indo-Pak border to thwart infiltration attempt.
  • Centre approves Rs 2,000 crores package for Pakistan occupied Jammu and Kashmir (POJK) refugees.
  • J Jayalalithaa, died on December 5, nearly three months after she was admitted for fever and
    dehydration.
  • O Paneerselvam sworn in as TN CM, late J Jayalalithaa’s aide Sasikala appointed AIADMK chief.
  • Severe cyclonic storm Vardah severely hit Chennai and its suburbs.
  • Fresh power play in UP as CM Akhilesh and Shivpal Yadav come up with their own list of candidates.
  • Akhilesh Yadav was expelled from the party and later taken back.
  • India’s most lethal missile Agni-V successfully tested.
  • Justice J.S. Khehar appointed as the 44th Chief Justice of India.
  • Outgoing Obama administration announces sanctions in retaliation for Russian election meddling.
  • Obama expels 35 Russian diplomats and closes two diplomatic compounds.
  • Russia shuts down American school, vacation house in Moscow in retaliation.
  • Donald Trump picks Exxon Mobil CEO Rex Tillerson for Secretary of State and Indra Nooyi to the
    President’s Strategic and Policy Forum.
  • White House also blocks new leases for oil and gas drilling in sections of the Arctic and Atlantic.
  • US President Barak Obama cancels 9/11-era registry for Muslims.
  • Syrian army retakes complete control of Aleppo in victory for President Bashar al-Assad.
  • Turkey, Russia agree on a ceasefire for the whole of Syria.
  • Former Portuguese Prime Minister Antonio Guterres sworn in as UN secretary-general.
  • New Zealand Prime Minister John Key resigns; Bill English becomes next Prime Minister.
  • Australia should be republic after Queen Elizabeth II’s reign, claimed Australian Prime Minister
    Malcolm Turnbull.
  • A Libyan plane with 118 on board hijacked, later hijackers surrender after releasing Libyan
    passengers.
  • Former Sri Lankan PM Ratnasiri Wickremanayake passed away.
  • Pakistan appoints Lt Gen Naveed Mukhtar as new ISI chief.
  • Pakistan frees 220 Indian fishermen as a goodwill gesture.
  • South Korea President Park impeached over corruption scandal.
  • Italian PM Matteo Renzi announces resignation after losing referendum.
  • French Prime Minister Manuel Valls quits to enter Presidential race; Bernard Cazeneuve appointed as
    French PM.
  • IMF chief Christine Lagarde faced trial in France over payout to a French businessman.
  • Christine Lagarde keeps IMF job, escapes penalty after negligence conviction.
  • Sushma Swaraj was named in the ‘Decision-makers’ category in the Global Thinkers of 2016 List
    compiled by the Foreign Policy magazine.
  • Vladimir Putin is world’s most powerful man, PM Modi in 9th spot: Forbes.
  • Donald Trump named as Time magazine’s person of the year.
  • Yoga makes it to UNESCO’s intangible cultural heritage list.
  • India beats England by an innings and 75 runs in the 4th test, wins the five-match series 4-0.
  • Virat Kohli (235) became the 1st Indian and the 5th batsman overall to score 3 double tons in a
    calendar year.
  • International Boxing Association grants full membership to Boxing Federation of India.
  • Mary Kom receives Legends Award and Vikas Krishnan AIBA Pro Boxing Best Boxer trophy at AIBA
    70th anniversary gala.
  • Virat Kohli named captain of the ICC ODI Team of the Year, R Jadeja and R Sharma also in the team.
  • R Ashwin named Test Cricketer of the year 2016 and Cricketer of the year.
  • India women’s team beat Pakistan by 17 runs to win Asia Cup T20 for the sixth time.
  • India beat Belgium 2-1 to win Junior Hockey World Cup title.
  • India beat hosts Sri Lanka by 34 runs to lift Under-19 Asia Cup.
  • Former World No.1 Ana Ivanovic retires from tennis at age 29.

Business News

  • RBI keeps repo rate unchanged at 6.25%; withdraws incremental CRR.
  • RBI cuts growth forecast to 7.1%, sees short-term disruption due to demonetisation.
  • Nearly 12 lakh crore old notes deposited in banks so far: RBI.
  • Demonetisation could push inflation to 14-month low: Reuters poll.
  • Asian Development Bank slashes India’s 2016 growth estimate to 7% from the previous 7.4%.
  • India overtakes Britain as the world’s sixth largest economy.
  • Global merger & acquisition deal tally hits $3.1 trillion mark in 2016: Report.
  • NusliWadia files a criminal defamation suit against Tata and other board members.
  • Tata Sons slaps legal notice on Cyrus Mistry for breach of confidentiality.
  • Tata Sons asks Cyrus Mistry to return documents with confidential info.
  • Salaries through banks ordinance gets President’s nod.
  • NITI Aayog, NASSCOM, Telcos announce 14444 helpline for digital payment queries.
  • Chitra Ramkrishna resigned as NSE MD and CEO; J Ravichandran took charge for interim period.
  • V.K. Sharma appointed LIC chief for five years.
  • Sachin Bansal and Binny Bansal chosen “2016 Asian of the Year – The Disruptors” by the Straits Times.
  • Indian origin Vivek Ramaswamy(24th) and Apoorva Mehta(31st) included in Forbes’ under 40 Richest
    Entrepreneurs list.
  • HDFC bank sacks 4 employees, including branch manager over unauthorised exchange of notes.
  • SBI saving accounts swell by Rs 1 lakh crore post demonetisation.
  • AU Financiers gets final licence from RBI to start small finance bank.
  • FM Arun Jaitley urges GST Council to adhere to roll-out calendar.
  • TCS, Deloitte Touche, EY and Tally Solutions among the 34 firms shortlisted for GST services.
  • Deutsche Bank to pay $7.2 billion to settle US subprime mortgage case.
  • Credit Suisse agrees to pay $5.3 billion to settle US mortgage case.
  • New Reliance Jio subscribers get free data and voice offer till March 31.
  • Existing Jio subscribers to be auto-migrated to the “Happy New Year” offer.
  • Interest rates on provident fund deposits slashed to 8.65% for FY17.
  • Morgan Stanley and Vanguard trims Flipkart’s valuation to $7.3 billion.
  • China’s per-capita touches $ 8000, 70% poverty eradicated.
  • Production in leather clusters down by 60% due to demonetisation: ASSOCHAM.
  • US fines Deloitte record $8 million over audit fraud in Brazil.
  • EU clears $26 billion Microsoft-LinkedIn deal.
  • Samsung wins over Apple in $399 million patent appeal.
  • Toyota Fortuner crosses 1 lakh sales milestone in India.
  • IOC, BPCL, HPCL join hands to set up India’s biggest oil refinery.
  • MoUs for 5 2G ethanol plants signed at Petrotech 2016.
  • Japan drags India to WTO against certain measures on imports of iron and steel products.
  • ED summons AirAsia India over alleged FEMA violation.
  • Canara Bank raises Rs 1,000 crores through issue of Basel III-compliant bonds.
  • Byju’s raises funds from World Bank arm, International Finance Corporation (IFC).
  • Global drug market to reach $1.5 trillion in 2021, up 33% from 2016 levels: Study.
  • Cipla to set up manufacturing facility for pharmaceuticals in Iran.
  • Yahoo says one billion accounts exposed in security breach in August 2013,
  • Facebook gets over 6,000 data requests from Indian government agencies in the first half of 2016.
  • Snapdeal launches Cash@Home service which delivers Rs 2,000 at the doorstep.
  • Pakistan lifts undeclared ban on Indian cotton imports.
  • US Fed raises key interest rate by 0.25%.
  • Online travel firm Yatra was listed on Nasdaq.

Market News

  • Indian markets marginally down last month; IT up by 3%; FMCG up by 1% while Auto neutral;
  • Pharma down by 7% and Bank Nifty down by 2%
  • FII’s net sellers of Rs.7,800 crores in the equity market and Rs.19,400 crores in Debt market; Indian
    mutual funds net buyers in both the markets
  • US, UK and Japan Markets significantly up last month;
  • Asian markets negative – Shanghai and Hangseng significantly down;
  • Major currencies did well against Indian Rupee; US $ hovering around Rs.68 a dollar.
  • Gold and Silver prices dropped.
WORLD INDICES
Indices 30-Dec 30-Nov % 1M 01- Jan % since
Jan
BSE 26,626 26,653 -0.10% 26,161 1.78%
NSE 8,186 8,225 -0.47% 7,963 2.80%
DOW 19,763 19,124 3.34% 17,425 13.42%
NASDAQ 5,383 5,324 1.12% 5,007 7.50%
FTSE 7,143 6,784 5.29% 6,242 14.43%
Nikkei 19,114 18,308 4.40% 19,034 0.42%
Hang Seng 22,001 22,790 -3.46% 21,914 0.39%
Straits Times 2,881 2,904 -0.80% 2,883 -0.07%
Shanghai 3,104 3,250 -4.50% 3,539 -12.31%
USD 67.92 68.38 -0.67% 66.23 2.55%
Euro 71.43 72.60 -1.61% 71.92 -0.68%
GBP 83.84 85.80 -2.28% 97.88 -14.34%
Yen/100INR 0.58 0.60 -2.66% 0.55 5.67%
Gold 27,445 28,385 -3.31% 26,320 4.27%
Silver 39,049 40,089 -2.59% 33,080 18.04%
Crude Brent $ 56.76 52.08 9.00% 37.28 52.25%
Crude Nymex $ 53.90 49.67 8.51% 37.09 45.31%
NIFTY SECTORAL INDICES
Sectors BANK NIFTY CNX IT CNX AUTO CNX FMCG CNX PHARMA
30-Dec 18,177 10,399 9,142 20,754 10,267
30-Nov 18,628 10,088 9,114 20,488 11,080
% 1M -2.42% 3.09% 0.31% 1.30% -7.34%
01- Jan 17039 11175 8328 20185 11980
% since Jan 6.68% -6.94% 9.77% 2.82% -14.30%

INDIAN TRADE( USD MILLION)
Exports 20,010
Imports 33,018
FDI 4,612
Government Bond 10Y 6.52%
GDP YoY 7.30%
Inflation Rate 3.63%
Forex Reserves $ M 359,670
IIP % 2.40%
INSTITUTIONAL TRADING ACTIVITY
Particulars FII (Rs.crore) MF (Rs.crore)
Equity -7,816 6,246
Debt -19,378 22,791
Total 1 M -27,194 29,037
Total Since Jan -17,106 376,642
Equity 15,781 44,611
Debt -32,887 332,031

Crude Oil Brent, Economy / Market Snapshot -December 2016

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