The World This Week - September 23 - September 27, 2013
The World This Week
September 23 – September 27, 2013
As we’re all aware, U.S. Federal Reserve’s Chairman Mr. Ben Bernanke’s term is scheduled to end around
first week of January 2014. Ms. Janet L Yellen, the current Vice Chairwoman of the Board of Governors of
the Federal Reserve System; is expected to become the next Fed chief. A formal announcement regarding
the same should happen somewhere in the next two weeks.
As far as the domestic events are concerned, soon we will see the beginning of Q2 FY14 earnings season.
We expect sectors like IT, FMCG, Pharmaceuticals and Telecom to deliver very strong results this quarter.
Selectively, Private Sector Banks and Automobiles are also expected to deliver decent earnings. A lot of
Public Sector Banks will show sharp cut in the bond portfolios because of the turn up in the bond yields.
Also, there has been no revival in the CAPEX cycle and we also expect the Capital Goods and the Real
Estate space to deliver muted figures.
In terms of Macroeconomic data points, Auto Sales numbers which would be coming up in the next few
days would drive the equity markets. We expect the four wheeler sales number to stay muted. We have
had a good monsoon this season and expect agricultural auto sales to look better as tractor sales during
this time would go up and we believe that Auto companies would tap this opportunity. Soon we would
also be seeing the beginning of the festive season and in the next few months we would expect good
festive sales as far as two wheeler companies are concerned.
Also, Infrastructure sector data would also be released shortly. We believe that CAPEX expansion activity
continues to be really soft and there are no signs of any revival in that space. So we expect the sector
data to continue to disappoint.
Inflation continues to stay at elevated levels considering the fact diesel and the petrol prices have gone
up in the recent past. Higher Fuel and Food Price Inflation are expected to take the headline inflation
numbers further upwards when the WPI numbers would be released next. The WPI numbers which
would be released in the second week of the October are expected to be around 6%.
The current account deficit, which hit a record high in the last fiscal year, is expected to rise in the
June quarter from the previous three-month period before easing due to sharp fall in gold imports
and improving exports. In a bid to narrow the gap, which has been fuelled by heavy oil and gold
imports and sluggish exports, the government increased the gold import duty three times this year
to 10 percent.
India-Africa trade has crossed USD 70 billion in 2012 and is expected to reach USD 100 billion by
In Cyprus there have been 25% pay cuts. 40% increase in unemployment. Europe may be
recovering but Cyprus is still battling for survival. Markit's Euro zone preliminary PMI measure
jumped to 52.1 in September from last month's 51.5, its highest since June 2011 and beating
expectations for a reading of 51.9.
In U.S, payrolls rose by 180,000 workers, the most since April, after a 169,000 gain the prior month.
US manufacturing purchasing manager’s index (PMI) retreated to 52.8 this month from 53.1 in
August, indicating expansion. The Fed surprised markets last week by postponing a reduction of its
$85bn-a-month bond-buying programme, while downgrading its growth forecasts.
The Chinese flash HSBC PMI climbed to 51.2 this month from 50.1 in the month of August, hitting a
high not seen since March.
A free-trade zone in Shanghai, China's economic hub has been launched as the world's second-
biggest economy prepares to test long-awaited economic reforms. Eighteen sectors, ranging from
finance to shipping, will have regulations loosened in the zone.
Date Sensex Midcap Auto Bankex CD CG FMCG HC IT Metals O&G Power Realty Teck
23/09/2013 19,901 5,605 11,073 11,631 5,956 7,807 6,935 9,259 7,882 8,659 8,595 1,512 1,231 4,478
24/09/2013 19,920 5,610 11,190 11,598 5,970 7,888 6,936 9,279 7,846 8,572 8,563 1,524 1,228 4,457
25/09/2013 19,856 5,616 11,182 11,489 5,949 8,003 6,858 9,397 7,850 8,673 8,446 1,552 1,221 4,481
26/09/2013 19,894 5,628 11,192 11,495 5,890 8,053 6,896 9,476 7,829 8,721 8,350 1,565 1,213 4,471
27/09/2013 19,727 5,622 11,162 11,284 5,829 7,938 6,926 9,472 7,835 8,581 8,362 1,547 1,195 4,459
-0.87% 0.30% 0.80% -2.98% -2.14% 1.69% -0.13% 2.31% -0.60% -0.90% -2.71% 2.28% -2.93% -0.43%
Commodities and Currency:
Date USD GBP EURO YEN
(Rs. per BBL)
(Rs. Per 10gms)
23-09-2013 62.52 100.25 84.67 63.17 6798 29489
24-09-2013 62.65 100.46 84.59 63.32 6762 29554
25-09-2013 62.69 100.27 84.45 63.57 6807 29902
26-09-2013 62.22 100.05 84.10 62.84 6791 30030
27-09-2013 61.81 99.49 83.42 62.66 6796 29818
Tenor Gilt Yield in % (Friday) Change in bps (Week)
1-Year 9.28 35
2-Year 8.67 -2
5-Year 8.78 1
10-Year 8.71 14
Satadru Mitra Varun Goel Jharna Agarwal
Abbas Naheed Kinjal Mehta
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