The markets last week closed with almost flat Nifty. Post making fresh lifetime highs last month, the
markets cooled off in the last week. Global data showed impressive unemployment numbers in the US
that should put to rest the concerns that their economic recovery is stalling. We expect this positive bias
to continue in the next few quarters without any reason to believe that the US economy is entering a
phase of slowdown and unsustainable economic recovery. As economic recovery continues to strengthen
we should see continued tapering and by the end of this year the QE III should almost come to an end.
We believe that any interest rate hike is unlikely before middle of 2015.
In the domestic markets, auto sales numbers for last month showed extremely muted results despite
excise rate cuts announced by government in the Interim budget. We believe that the slowdown in
consumption space is very strongly entrenched and could take a long time for its demand to come back.
The slowdown has been sharper in the 4-wheeler segment as the passenger car companies delivered
muted volume growth. The 2-wheeler sales were slightly better but companies like Bajaj Auto
disappointed. The numbers of Hero were slightly better than expected.
For the markets as whole, the Q4 results have seen a decent set of sales growth with revenue growth
~12% of companies which have declared results so far. The profit growth has come around 8-9% and we
expect a 10% profit growth in this quarter. The results have largely been in line with these expectations.
For FY 15 we expect an earnings growth rate of around 15% and revenue to be driven by both expansion
in margin and a reduction in interest liability as we go forward in the second half of this fiscal.
India’s core sector growth slowed to 2.5% in March from 7% in the same month a year ago, and
4.5% last month as output of crude oil, natural gas and fertilizer declined.
India's annual inflation rate based on the Consumer Price Index for Industrial Workers fell for the fourth
consecutive month in March to 6.70% from 6.73% in February and 11.44% a year ago.
FDI in India grew in February by 12.3% to $2.01bn, compared with $1.79bn in the same period last
The National Council of Applied Economic Research (NCAER) projects a 5.1-5.5% economic growth in
2014-15 for India.
Euro zone’s unemployment rate remains elevated at 11.8% in March, unchanged from February.
The annual rate of inflation in the euro zone rose to 0.7% in April from 0.5% in March.
UK’s GDP grew 3.1% on an annualized basis in Q1 2014 following a revised 2.7% gain in the
The US Fed cuts its bond buying program to $45bn from $55bn and decides to leave interest rates
unchanged at 0-0.25%.
US economy grew 0.1% in Q1 2014 after expanding 2.6% in Q4 2013.
The U.S. economy added 288,000 jobs in April, following an upwardly revised 203,000 jobs in March; the
unemployment rate fell to 6.3% in April, from 6.7% in the previous month.
China’s Manufacturing PMI edged up to 50.4 in April, compared with 50.3 in March.
Date Sensex Midcap Auto Bankex CD CG FMCG HC IT Metals O&G Power Realty Teck
28/04/14 22,632 7,438 13,483 14,964 6,638 12,462 6,809 10,795 8,781 10,377 9,582 1,742 1,481 4,925
29/04/14 22,466 7,406 13,323 14,774 6,650 12,369 6,752 10,790 8,775 10,097 9,545 1,722 1,475 4,913
30/04/14 22,418 7,323 13,372 14,707 6,517 12,118 6,763 10,757 8,752 9,981 9,548 1,687 1,397 4,880
02/05/14 22,404 7,357 13,303 14,691 6,553 11,903 6,757 10,858 8,847 9,840 9,552 1,681 1,400 4,922
-1.01% -1.09% -1.34% -1.83% -1.29% -4.49% -0.76% 0.58% 0.75% -5.17% -0.32% -3.48% -5.44% -0.06%
Commodities and Currency:
Date USD GBP EURO YEN
28/04/2014 60.5041 101.6892 83.621 59.17 6697 29999
29/04/2014 60.5253 101.7733 83.916 59.01 6542 29773
30/04/2014 60.3375 101.4515 83.306 58.93 6596 29773
01/05/2014 - - - - 6521 -
02/05/2014 60.225 101.6839 83.459 59.73 6502 29838
Tenor Gilt Yield in % (Friday) Change in bps (Week)
1-Year 8.56 -7
2-Year 8.68 8
5-Year 8.79 -6
10-Year 8.81 -7
Varun Goel Jharna Agarwal
Nupur Gupta Ridhdhi Chheda
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