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A Week of Mixed Data and Mixed Sentiments
Insights

A Week of Mixed Data and Mixed Sentiments

A WEEK OF MIXED DATA AND MIXED SENTIMENTS

Stock markets in India opened the week on a somewhat positive note but were unable to sustain the positive momentum. Initial positive momentum gave way to heavy selling pressure as key benchmark indices wiped off initial gains to plummet into negative terrain. Weak macro-economic numbers coupled with fears of a slowdown in global growth kept gains at bay.

Macro-Economic Updates

On the macro front, Wholesale Price Index (WPI) for September 2018 rose by 0.7% to 120.8 (provisional) from 120.0 (provisional) for the previous month. The annual rate of inflation, based on monthly WPI, stood at 5.13% (provisional) for September 2018 (over September 2017) as compared to 4.53% (provisional) for the previous month and 3.14% during the corresponding month of the previous year. Additionally, the all-India general CPI inflation rose marginally to 3.77% in September 2018 (new base 2012=100), compared with 3.69% in August 2018. The corresponding provisional inflation rate for rural area was 3.34% and urban area 4.31% in September 2018 as against 3.41% and 3.99% in August 2018. The core CPI inflation declined to 5.82% in September 2018 compared with 5.95% in August 2018.

However, improving trade numbers gave some short-lived respite to the markets. India's merchandise trade deficit during April-September 2018 was reported at $94.32 billion. Trade deficit for September 2018 was at $13.98 billion, which is the lowest in the last 5 months, despite high oil prices.

Global Updates

The minutes of the Fed's September meeting, released earlier in the week, indicated that policy makers are prepared to forge ahead with increases and will likely hike rates again as early as December, as expected. This further reinstated the Central Bank’s hawkish stance. Meanwhile, US President Donald Trump continued his criticism of the Federal Reserve, calling it his biggest threat as it was raising rates too fast. Trump had previously said that the Fed has "gone crazy" and attributed last week's plunge on Wall Street to the US central bank.

Institutional Activity

Despite the markets inching lower, institutional activity has been mixed. Foreign institutional investors (FIIs) have net sold Indian equities worth INR 957.75 crore during the week. It is interesting to note that FIIs were small buyers of Indian equities in two of the sessions during the week. Domestic institutional investors continue to be net buyers and have net bought Indian equities worth INR 1011.11 crore, in the same time period.

Source:

www.nseindia.com

Bloomberg.com

INSIGHT OUT

Disclaimers: 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.

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