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One Above - Markets notching up gains
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One Above - Markets notching up gains

It has been a choppy week on the bourses as benchmark indices oscillated between sharp gains and sharp losses, through the week to finally close with marginal gains. In line with global markets, domestic markets started the week on a negative note to trade with losses of nearly 1%. However, subsequent positive macroeconomic updates during the week changed investor sentiment and propelled the markets towards gains of over 2%. Trading sentiment got a boost amid a fall in global crude prices and a rising rupee. Markets got a further fillip after the government clarified on a tussle with the Reserve Bank of India and said that it respects and nurtures central bank's autonomy.

Macro-Economic Updates

On the macroeconomic front, manufacturing sector growth in India gathered momentum in October 2018 with the Nikkei India Manufacturing Purchasing Managers' Index (PMI) rising from 52.2 in September 2018 to 53.1 in October 2018. According to the survey, firms responded to stronger order inflows by scaling up production, input purchasing and employment. India's exports rose by 9.8%, in the financial year 2017-18, which is the highest rate of growth in six years. This positive growth in exports has taken place at a time when there is a lot of negative headwinds globally. Market participants were cheered by this and accordingly took to buying Indian equities. Additionally, the combined Index of Eight Core Industries stood at 127.20 in September 2018, which was 4.3% higher as compared to the index of September 2017. Its cumulative growth during April to September 2018-2019 was 5.5%. The Eight Core Industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).

Meanwhile, India climbed another 23 points in the World Bank's ease of doing business ranking to 77th place, becoming the top-ranked country in South Asia for the first time and third among the BRICS.

Global Updates

On the economic front, India and Japan signed a bilateral currency swap agreement on Monday, October 29, 2018, for up to $75 billion during Prime Minister Narendra Modi's visit to Tokyo. Under the arrangement, India can acquire dollars from Japan in exchange for rupees. The agreement would help bring greater stability to foreign exchange and capital markets in India. In the global commodities markets, Brent for January 2019 settlement was off 18 cents at $72.71 a barrel. The contract had fallen $2.15 a barrel or 2.87% to settle at $72.89 a barrel during the previous trading session.

Institutional Activity

October 2018 has been a tumultuous month on the bourses with foreign institutional investors (FIIs) aggressively selling Indian equities. FIIs have net sold Indian equities worth INR 29200 crores in October 2018 which is the highest net sell figure by the FIIs in the last 10 years. FIIs had net sold Indian equities worth INR 29447 crore in January 2008. Domestic institutional investors, on the other hand, have continued to shore up Indian equities and have net bought equities worth INR 26034 crores in October 2018.

Source:
www.nseindia.com
Bloomberg.com

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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