The World This Week Apr 14 to Apr 18


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The World This Week Apr 14 to Apr 18

  1. 1. The World This Week Apr 14 – Apr 18, 2014
  2. 2. Equity View: Both the indices viz., Nifty and Sensex hit their fresh lifetime highs after closing 0.2% up from last week. The recent research reports and opinion polls indicate clear majority of the NDA and markets are excited of that prospect. We continue to hold a positive stance with markets going into the elections. Though the economy has bottomed out, no significant signs of revival are visible. We would need to see some more data points like cement and auto sales number to conclude whether there has been an actual uptick. IIP continues to be in the negative territory for quite some time and inflation both – CPI and WPI, continues to be elevated with slightly higher than expected data in the last month. We expect a gradual inch up in the inflation from now till September considering an expectation of food and vegetable prices to pick up. One of the reasons for the same is monsoons which are expected to be below normal for this year. However this is the first forecast thus there might be some revision going forward but as of now, Ecologists all across the world have been sharing ideas about the El Nino effect which can create some disturbance in the rainfall in some parts of the world this year. The advantage in India is the poll season due to which there is going to be some stimulus into the economy. The various forecasts estimate 0.4-0.5% of the GDP to be spent on the elections across all political parties and institutions, which should act as buffer for economic growth to fall further in this year. In terms of company results, IT sector has come up with decent set of numbers with HCL Tech, TCS and Wipro witnessing better than expected results. Though Infosys faces growth issues we expect pressure in the short term. Broadly, IT is expected to deliver ~15-20% annualized returns from this point of time. Tech Mahindra, TCS and Infosys remain our top picks.
  3. 3. News: DOMESTIC MACRO:  Crisil says a decisive mandate in the ongoing general elections could help India grow at an average of 6.5% over the next five financial years.  India’s conference board leading economic index for March rose 0.2% in March, following a 0.4% fall in February.  India’s forex reserves rose by $2.8bn to $309.4bn during the week ended April 11. GLOBAL MACRO EURO  Euro zone’s consumer price index rose 0.9% (M-o-M) in March following a 0.3% rise in February. United States  US Fed Chair Janet Yellen says the Federal Reserve will keep its benchmark interest rates at exceptionally low levels for a considerable time until employment and inflation reach healthier levels.  US initial claims for state unemployment benefits ticked up 2,000 to a seasonally adjusted 304,000 for the week ended April 12. China  China’s industrial production expanded by 8.8% in March from an average growth of 8.6% in the January- February period.
  4. 4. Indices: Date Sensex Midcap Auto Bankex CD CG FMCG HC IT Metals O&G Power Realty Teck 15/04/14 22,485 7,312 13,284 14,386 6,638 12,187 6,877 10,483 9,026 10,062 9,612 1,769 1,511 5,008 16/04/14 22,277 7,233 13,197 14,370 6,565 11,886 6,920 10,431 8,801 10,080 9,543 1,736 1,452 4,901 17/04/14 22,629 7,339 13,495 14,626 6,617 12,075 7,009 10,504 8,907 10,267 9,714 1,767 1,493 4,951 0.64% 0.37% 1.58% 1.66% -0.31% -0.92% 1.93% 0.20% -1.31% 2.04% 1.05% -0.07% -1.18% -1.15% Commodities and Currency: Date USD GBP EURO YEN Crude (Rs. per BBL) Gold (Rs. Per 10gms) 14/4/2014 59.95 99.36 82.15 58.13 6252 - 15/4/2014 60.26 100.70 83.27 59.14 6271 29234 16/4/2014 60.22 100.78 83.29 58.91 6252 29440 17/4/2014 60.38 101.63 83.57 59.20 6249 29497 18/4/2014 - - - - - - 0.72% depreciation 2.28% depreciation 1.73% depreciation 1.84% depreciation -0.05% 0.90% Debt: Tenor Gilt Yield in % (Friday) Change in bps (Week) 1-Year 8.60 -3 2-Year 8.70 -1 5-Year 8.83 -13 10-Year 8.85 -9
  5. 5. Jharna Agarwal Varun Goel Nupur Gupta Ridhdhi Chheda Disclaimer The information and views presented here are prepared by Karvy Private Wealth (a division of Karvy Stock Broking Limited) or other Karvy Group companies. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended here may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned here, investors may please note that neither Karvy nor any person connected with any associated companies of Karvy accepts any liability arising from the use of this information and views mentioned here. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above- mentioned companies from time to time. Every employee of Karvy and its associated companies are required to disclose their individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Stock Broking Ltd. The information given in this document on tax are for guidance only, and should not be construed as tax advice. Investors are advised to consult their respective tax advisers to understand the specific tax incidence applicable to them. We also expect significant changes in the tax laws once the new Direct Tax Code is in force – this could change the applicability and incidence of tax on investments Karvy Private Wealth (A division of Karvy Stock Broking Limited) operates from within India and is subject to Indian regulations. Karvy Stock Broking Ltd. is a SEBI registered stock broker, depository participant having its offices at: 702, Hallmark Business plaza, Sant Dnyaneshwar Marg, Bandra (East), off Bandra Kurla Complex, Mumbai 400 051 . (Registered office Address: Karvy Stock Broking Limited, “KARVY HOUSE”, 46, Avenue 4, Street No.1, Banjara Hills, Hyderabad 500 034) SEBI registration No’s:”NSE(CM):INB230770138, NSE(F&O): INF230770138, BSE: INB010770130, BSE(F&O): INF010770131,NCDEX(00236, NSE(CDS):INE230770138, NSDL – SEBI Registration No: IN-DP-NSDL-247-2005, CSDL-SEBI Registration No:IN-DP-CSDL-305-2005, PMS Registration No.: INP000001512”