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
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.
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.
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,
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.
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