November 24, 2016 by BizWhiz Admin in Economy Snapshot 0 comments 1956

Dear Colleagues,

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

Indian markets did not go up as expected on the eve of Diwali. FII’s were net sellers in the market – Rs.4000 crores in Equity market and Rs.6000 crores in the Debt market. Global weakness, fear of increase in interest rates in US, mixed corporate results, nervousness due to the outcome of the US elections, news at the TATA’s etc derailed the market. All the three presidential debates in the US are over now with Hilary Clinton expected to win. However the recent announcement of FBI commencing a probe on the e mail issues is a shocker to the Clinton group. Similarly, the issues at the TATA group came to the centerstage with the sudden removal of Mr Cyrus Mistry from the post of Chairman. Mr Mistry’s e mail to the Board was leaked which raised several issues of corporate governance. The response from Tata Sons came immediately rubbishing the claims. Without going into the merits, this issue is not seen well globally that too at the Tata Group.

Results of IT companies were upto the mark but the guidance they gave brought down the IT stocks. Results of some of the banks were not to the expectations. Some of the public sector bank stocks have gone up significantly in the last 3 months anticipating a turnaround in the NPA’s and the provisioning thereof. Gold and Silver prices fell sharply; Crude prices went up resulting in increase of petrol and diesel prices in India. UP elections will be closely watched with the infighting in the ruling party, SP.

Indian won the Kabaddi World Cup again ! India also won the Asian Hockey Championship Trophy ! Of course, India won the Cricket series against New Zealand.

Happy reading!

Regards
V Murali

General News

  • PM Modi and Russian President Vladimir Putin signed a total of 16 MoUs. Announcements to boost
    ties in sectors like trade and investment, hydrocarbons, space and smart cities were made.
  • India, Russia agree to build world’s costliest gas pipeline worth $ 25 billion; finalise agreement on
    units 5,6 at Kudankulam.
  • GST: Centre proposes tiered rate structure with rates varying from 4% for precious metals to 26% plus
    cess on sin goods; No decision yet on GST rates as States oppose cess.
  • Army submits video evidence of Sep 29 surgical strikes to the government.
  • India-Pakistan border to be sealed by December 2018: Home Minister Rajnath Singh.
  • Around 20 LeT militants were killed in surgical strikes carried out by the Indian army.
  • Pak spy racket: A Pakistan High Commission officer has been asked to leave India over alleged
    espionage; 3 others arrested.
  • Government offers to buy 200 foreign combat jets – if they’re Made-In-India.
  • Indo-Swiss agreements on visa, immigration signed.
  • PM Modi dedicates to the nation, 3 hydro electric projects with a generating capacity of 1,732 MW in
    Himachal Pradesh.
  • India, Myanmar sign 3 MoUs for cooperation in insurance, power and banking.
  • India’s exposure to US Govt securities crosses $123 billion in July; India 3rd after China and Brazil.
  • ISRO’s GSAT-18 satellite launched by European Ariane from the spaceport of Kourou in French Guiana.
  • SC raps govt for not appointing judges; accused the govt of bringing the judicial institution to a
    grinding halt.
  • Family feud continues in Samajwadi Party as Mulayam Singh backs Shivpal Yadav.
  • With Jayalalitha in hospital, AIADMK rejects Opposition’s calls for interim CM.
  • O.Panneerselvam chairs the cabinet meeting after he took over the portfolios of Jayalalithaa.
  • Odisha SUM Hospital fire tragedy claims 22 lives; Chairman Manoj Nayak surrenders.
  • Thane: Police detain over 500 call centre employees for scamming US citizens; FBI join probe.
  • Transactions worth Rs 30 crores identified in call centre scam.
  • Karnataka starts releasing water from KRS dam.
  • Bengaluru residents oppose steel flyover that will cost Rs 1,800 crores and 800 trees; 73% in Bengaluru
    want Steel Bridge, says CM after protests. Court Stays the construction;
  • Telangana gets 21 new districts, taking the total number to 31 in the state.
  • Rs 5 lakh-cr investments announced at this year’s Global Investors Summit: Shivraj Singh Chouhan.
  • Rohit Vemula’s dalit status not established, says Commission; gives clean chit to Union Ministers Smriti
    Irani and Bandaru Dattatreya.
  • Irom Sharmila launches political party, to contest 2017 Manipur polls.
  • Cabinet gives nod for setting up IIM in Jammu.
  • UK to start EU exit process before end of March: Theresa May.
  • Paris climate pact, ratified by 72 countries, to enter force on November 4: UN.
  • Portugal’s former PM Antonio Guterres set to become the next UN secretary general.
  • US elections: CNN poll says Clinton wins all three presidential debates.
  • Mike Pence and Tim Kaine also faced off at the US Vice-Presidential debate.
  • Hurricane Matthew, the fiercest Caribbean storm in almost a decade, hammers Haiti and Cuba.
  • UN votes to launch talks on nuclear weapons ban; India abstains from voting.
  • Russia voted out of UN Human Rights Council.
  • UN lights up for Diwali for the first time; Barack Obama celebrates Diwali, lights first-ever diya in Oval
    Office.
  • Thailand’s King Bhumibol Adulyadej, the world’s longest reigning monarch died at the age of 88.
  • Yoshinori Ohsumi (Medicine), David J. Thouless, F. Duncan Haldane and J. Michael Kosterlitz
    (Physics), Jean-Pierre Sauvage, J. Fraser Stoddart and Bernard Feringa (Chemistry), Juan Manuel
    Santos (Peace), Oliver Hart and Bengt Holmstrom (Economics) and Bob Dylan (Literature) were
    awarded the Nobel Prizes.
  • India wins the Test Series 3 – 0 and ODIs 3 – 2 against New Zealand.
  • Virat Kohli becomes 1st Indian test captain to score 2 double centuries; his 2nd double century in Test
    cricket.
  • Pakistan vs West Indies: Pakistan wins the One Day series 3-0; lead the Test Series 2-0.
  • England tour of Bangladesh: England wins the One Day Series 2-1, lead the 2 Test Series by 1-0.
  • SC dismisses BCCI plea to review Lodha panel recommendations.
  • Kabaddi World Cup: India beat Iran to win third consecutive title.
  • Hockey: India beat Pakistan 3-2 to win Asian Champions Trophy.
  • Sania Mirza completes 80 consecutive weeks as World No.1 in women’s double ranking.
  • Indian football team jumps 11 places to be 137th in the latest FIFA rankings; team’s best in over 6yrs.

Business News

  • RBI Monetary Policy Panel cuts Repo rate by 25 bps to 6.25%; eyes CPI inflation at 5% by March 2017.
  • Tata Sons replaces Cyrus Mistry as Chairman; Board names Ratan Tata as the interim Chairman.
  • Cyrus Mistry writes mail to Board, terms his removal unprecedented.
  • Ralf Speth, CEO of Jaguar Land Rover, and N. Chandrasekaran, CEO & MD of TCS appointed as
    additional Directors on the Tata Sons Board.
  • Tata Sons, AirAsia face legal challenge in SC over grant of aviation permits.
  • Cyrus Mistry lost board’s confidence, allegations malicious: Tata Sons.
  • MakeMyTrip buys Ibibo Group’s India travel business for $720 million.
  • Docomo sues Tatas in US court, seeks $1.17 billion in damages it won in the London Court of
    Arbitration.
  • AT&T acquires Time Warner for $85 billion.
  • Facebook to join Reliance Jio, Amazon in the IPL digital rights bid.
  • Dr Reddy’s Labs forays into Colombia with its portfolio of medicines for cancer patients.
  • Cipla signs deal to set up first biosimilar unit in South Africa at a cost of nearly $91 million.
  • Spectrum auction fetched Rs 65,789 crore, instead of the Rs 5,60,000 crore set by the TRAI. Only 965
    MHz of the total 2,354.55 MHz of spectrum was sold, which is around 40%.
  • GSTN to borrow Rs 250 crores as working capital and Rs 550 crores as long-term loan to meet GST
    infra building cost.
  • Essar Global to repay ICICI Bank and Axis Bank using a $2.4 billion bridge loan from Russia’s VTB
    Group.
  • SBI says over 6 lakh debit cards being replaced on security breach fears.
  • Finance ministry seeks report from RBI and National Payments Corporation of India (NPCIL) on the
    debit cards row.
  • Anil Ambani’s Reliance Group forms JV with Dassault for Rafale jets.
  • Chinese Yuan inducted into IMF currency basket.
  • Tesla Motors collaborates with Panasonic to make solar-energy components for SolarCity Corp.
  • Reliance Jio claims it created a world record by enrolling 16 million users in 1st month.
  • Apple, Samsung take battle to US Supreme Court over the design of the iPhone; Apple wins lawsuit,
    Samsung to pay $119.6 million.
  • Trai suggests Rs 3,050 crore penalty on Airtel, Idea, Vodafone for violating quality of service rules on
    the Reliance Jio issue.
  • Verizon pushes for $1 billion discount on Yahoo deal on the wake of its accounts being hacked.
  • UK inflation records its sharpest jump in more than 2 years in September; inflation rose to 1.0% from
    0.6% in August.
  • Indian arm of British oil giant, BP Plc, gets licence to sell jet fuel in India.
  • Shanghai Gold Exchange to allow foreign bourses to use yuan gold price for derivatives.

Q2 results

  • Canara Bank Q2 net profit down 32% YoY to Rs 357 crores.
  • Kotak Mahindra Bank Q2 standalone profit jumps 42.8% to Rs 813.3 crores; Net interest income grew
    by 18.9% YoY to Rs 1,995.3 crores.
  • IDBI Bank Q2 profit plunged 53.5% YoY to Rs 55.5 crores; gross NPA jumped to 13.05% from 11.92%.
  • HDFC Bank Q2 profit rises 20.4% YoY to Rs 3,455.3 crores.
  • Axis Bank’s Q2 Net Profit tanks 83.1% to Rs 319 cr YoY; Provisions at Rs 3,623 cr vs Rs 707 cr on YoY.
  • IndusInd Bank Q2 net profit up 25.75% to Rs 704 crores, gross NPAs at 0.9%.
  • Yes Bank reports a 31.5% jump in net profit at Rs 801.54 crores for the 2nd quarter ended Sept 30.
  • Vijaya Bank Q2 profit up 34% YoY to Rs 154.5 cr, Net interest income grew by 19.5% to Rs 827.8cr YoY.
  • LIC Housing Finance Q2 profit rises 20.16% to Rs 494.76 crores.
  • TCS Q2 net profit rises 4.5% to Rs 6,603 crores from the quarter ended June. EBITDA margins
    expanded to 26% in Q2FY17 against 25.1% in Q1FY17.
  • Infosys Q2 profit up 6.1% at Rs3,606 cr; cut its annual forecast for the 2nd time to 8-9% growth this yr
  • HCL Tech Q2 net beats estimates, Q2 net profit grows 16.7 percent to Rs 2,014 crores.
  • Wipro Q2 profit up 0.9%, Q3 dollar revenue guidance disappoints.
  • Tech Mahindra Q2 net profit drops 19.3% to Rs 643.4 crores; Revenue in dollar terms increased 3.6%
    and in constant currency grew by 5%.
  • HUL Q2 profit rises 11.5% YoY to Rs 1095.6 crores, EBITDA increased 5% YoY to Rs 1,404.62 crores.
  • ITC Q2 net profit up 10.4% YoY at Rs 2,500 crores; Cigarette volume rose by 7.1% to Rs 8,530 crores.
  • Dr Reddy’s Laboratories’ Q2 consolidated net profit plunged 60.1% YoY to Rs 308.9 crores.
  • Bharti Airtel’s Net Profit declined marginally to Rs 1,461 cr; Revenue during the quarter Rs 24,671.5 cr
  • Reliance Industries beats Street estimates, reports Rs 7,704 crores profit for Q2.
  • ONGC reports 6.27% YoY rise in Q2 net profit at Rs 4,974.92 cr, approves bonus issue in the ratio
    of1:2.
  • Maruti Suzuki Q2 net rises 60.2% YoY to Rs 2398 cr, Revenue grew by 29.3% to Rs 20,296.8 crores.
  • TVS Motor Company Q2 net profit up 33.4% YoY to Rs 177 crore; Total sales grew over 20% on a YoY
    basis to Rs 3,726 crores.

Market News

  • Indian markets marginally up; Global sentiments, fear of interest rate hike by US, mixed quarterly
    results dampened the Diwali spirit
  • Banks and Pharma moved up while IT and FMCG came down; Auto neutral
  • FII’s net sellers by about Rs.10,000 crores both in equity and debt markets
  • US markets down; UK market neutral; Tokya and Shanghai up; Hong Kong down
  • UK Pound dropped by 6% to Rs.81.42; US $ to INR stable at Rs.66.79
  • Gold down by 3%; Silver down by 9%
  • Crude marginally moved up and currently around $ 50
WORLD INDICES
Indices 31-Oct 30-Sep % 1M 01- Jan % since
Jan
BSE 27,942 27866 0.27% 26,161 6.81%
NSE 8,638 8611 0.31% 7,963 8.47%
DOW 18,142 18308 -0.91% 17,425 4.12%
NASDAQ 5,189 5312 -2.31% 5,007 3.63%
FTSE 6,954 6899 0.80% 6,242 11.40%
Nikkei 17,425 16450 5.93% 19,034 -8.45%
Hang Seng 22,935 23297 -1.56% 21,914 4.66%
Straits Times 2,814 2869 -1.94% 2,883 -2.39%
Shanghai 3,100 3005 3.19% 3,539 -12.40%
USD 66.79 66.61 0.27% 66.23 0.85%
Euro 73.36 74.73 -1.83% 71.92 2.00%
GBP 81.42 86.61 -5.99% 97.88 -16.82%
Yen/100INR 0.64 0.66 -2.92% 0.55 16.00%
Gold 30,082 31155 -3.44% 26,320 14.29%
Silver 42,541 46781 -9.06% 33,080 28.60%
Crude Brent $ 50.37 49.75 1.25% 37.28 35.11%
Crude Nymex $ 49.52 47.87 3.46% 37.09 33.51%
NIFTY SECTORAL INDICES
Sectors BANK NIFTY CNX IT CNX AUTO CNX FMCG CNX PHARMA
30-Oct 19,524 10,083 10,049 21,482 11,636
30-Sep 19,286 10,292 10,029 21,542 11,461
% 1M 1.23% -2.04% 0.19% -0.28% 1.53%
01- Jan 17039 11175 8328 20185 11980
% since Jan 14.58% -9.77% 20.65% 6.43% -2.87%

INDIAN TRADE( USD MILLION)
Exports 22881
Imports 31220
FDI 4876
Government Bond 10Y 6.89%
GDP YoY 7.10%
Inflation Rate 4.31%
Forex Reserves $ M 367140
IIP % -0.40%
INSTITUTIONAL TRADING ACTIVITY
Particulars FII (Rs.crore) MF (Rs.crore)
Equity -4122 8106
Debt -6046 24241
Total 1 M -10169 32346
Total Since Jan 47688 319770
Equity 42042 23567
Debt 5646 296204

Crude Oil Brent, Economy / Market Snapshot -September 2016

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