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Hope at the end of the 7 month long tunnel!

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Hope at the end of the 7 month long tunnel!

It has been a positive week on the bourses as positive macros and strong buying interest by foreign institutional investors (FIIs) gave a fillip to investor sentiment. Strong macros in the form of a firm rupee, soft oil prices and modest gains in global markets came together and influenced market direction. While the Indian rupee acquired strength to trade below 70 levels for the first time in three months during the week, crude oil prices softened and failed to hold above the USD 60 mark. The benchmark Sensex held firmly above the 35500 mark while the Nifty held strong above 10600 levels. Despite markets trading in the positive zone, investors were a bit cautious as they kept an eye on the ongoing G-20 summit where leaders from across the globe are set to discuss key issues. Futures & Options expiry of the November series coupled with the ongoing state elections contributed to market volatility and ensured that there was a lid on intraday gains.

Macro-Economic Updates

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 69.835, compared with its close of 70.625 during the previous trading session. It breached the 70 level for the first time in three months. So far this month, FIIs have poured in around USD 900 million of funds in equity and debt segment keeping the momentum positive for the Indian currency. In the global commodities markets, Brent for January 2019 settlement was down $1.15 at $57.61 a barrel. The contract fell $1.45 a barrel or 2.41% to settle at $58.76 a barrel during the week. India imports majority of its crude requirements and a decline in crude eases concerns on fiscal deficit, inflation and gives more room for the government to boost growth through spending on infrastructure. Towards the end of the week, the Reserve Bank of India (RBI) relaxed rules for non-banking financial companies (NBFCs) to sell or securitise their loan books. This had a negative impact on banking stocks.

Political Update

On the political front, state assembly elections are being closely watched. Assembly elections in Madhya Pradesh and Mizoram took place during the week on 28th November 2018. Polling in Rajasthan and Telangana will be held on 7 December 2018. The election to the 90-member Chhattisgarh Assembly was held in two phases 12 and 20 November 2018. Counting of votes will be held across all the five states on 11 December 2018.

Global Update

Despite trading mostly higher during the week, global shares trended lower on the last trading day of the week as the G-20 summit unfolded. Investors grew cautious ahead of the all-important meeting between US President Donald Trump and Chinese leader Xi Jinping at the G-20 summit later over the weekend. Soft industrial growth in China gave a further fillip to concerns around a trade conflict between the United States (US) and China. During the week, US stocks surged, spurred by remarks from Fed Chairman Powell who said he considers the central bank's benchmark interest rate to be near a neutral level. The comments were viewed by investors as a retreat from his stance in early October when he had said that the central bank "may go past neutral, but we are a long way from neutral at this point, probably."

Institutional Activity

Institutional activity has been robust with both foreign institutional investors (FIIs) and domestic institutional investors (DIIs) turning net buyers of Indian equities, during the week. FIIs have net bought Indian equities worth INR 2659 crore since 26th November 2018. DIIs have net bought Indian equities worth INR 1026 crore, in the same time period. For the month of November 2018, FIIs have been net buyers of Indian equities to the tune of INR 5266.73 crore. This is the first time that FIIs have turned net buyers since March 2018.

 

 

Source:

www.nseindia.com

www.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.

 

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