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Indian Markets move above Trade War
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Indian Markets move above Trade War

Indian Markets Move Above Trade War

Stock markets in India traded the week on a positive note as domestic as well as Asian developments gave a fillip to investor sentiment. Both the benchmark Sensex and the Nifty scaled record highs during the week and despite giving up some gains, traded at elevated levels. However, profit booking trickled in at higher levels and dragged the indices marginally lower, on the last trading session of the week. Investors also adopted a note of caution ahead of the June, 2018 IIP (Index of Industrial Production) data, to be announced later today.

Macro-Economic Developments

During the week, the International Monetary Fund (IMF) cautioned about the inflation and rate regime in the country. The IMF reportedly said that India's central bank will need to gradually tighten monetary policy further due to rising inflation, driven mainly by higher oil prices and a falling rupee. The IMF expects that the average inflation is likely to rise to 5.2% in 2018-2019 from a 17-year low of 3.6% in the previous fiscal year. It said that inflationary pressures were also exerted by a pick-up in domestic demand and recent hike in procurement prices of major crops by the government, as it seeks to win support from farmers ahead of national elections next year.

Global Developments

Global shares traded on a cautious note as the ongoing trade war tensions between the United States and China weighed on investor sentiment. In the latest round of tariff clashes, the Chinese Ministry of Commerce announced a 25% tariff on $16 billion worth of American goods. The 333 goods being targeted by China include vehicles such as large passenger cars and motorcycles. The announcement came after the US Trade Representative's office released a finalised list of $16 billion worth of Chinese goods that will be hit with tariffs, taking effect on 23 August 2018. The latest US list brings the total amount of Chinese goods facing a 25% tariff to $50 billion.

Institutional Activity

Markets have traded the week on a firm clip with positive institutional activity. Foreign institutional investors (FIIs) have net bought Indian equities worth INR 1502.84 crore since 6th August, 2018. Domestic institutional investors, on the other hand, were near the flat line and net sold Indian equities worth INR 156.37 crore, in the same time period.

Source: 

www.nseindia.com 

Bloomberg.com

The material contained herein has been obtained from publicly available information, internally developed data and other sources believed to be reliable, but BNP Paribas Asset Management India Private Limited (BNPPAMIPL) makes no representation that it is accurate or complete. BNPPAMIPL has no obligation to tell the recipient when opinions or information given herein change. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. This information is meant for general reading purpose only and is not meant to serve as a professional guide for the readers. Except for the historical information contained herein, statements in this publication, which contain words or phrases such as 'will', 'would', etc., and similar expressions or variations of such expressions may constitute 'forward-looking statements'. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. BNPPAMIPL undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date thereof. The words like believe/belief are independent perception of the Fund Manager and do not construe as opinion or advise. This information is not intended to be an offer to sell or a solicitation for the purchase or sale of any financial product or instrument. The information should not be construed as an investment advice and investors are requested to consult their investment advisor and arrive at an informed investment decision before making any investments. The Trustee, Asset Management Company, Mutual Fund, their directors, officers or their employees shall not be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages arising out of the information contained in this document. Mutual Fund investments are subject to market risks, read all scheme related documents carefully before investing

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