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The World This Week
Apr 28 – May 03, 2014
Equity View:
The markets last week closed with almost flat Nifty. Post making fresh lifetime highs last month, the
markets...
 UK’s GDP grew 3.1% on an annualized basis in Q1 2014 following a revised 2.7% gain in the
previous quarter.
United State...
Debt:
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
Disclaimer
The information and views presented here are prepared by K...
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The World This Week Apr 28 to May 03

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The World This Week Apr 28 to May 03

  1. 1. The World This Week Apr 28 – May 03, 2014
  2. 2. Equity View: 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. News: DOMESTIC MACRO:  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 year.  The National Council of Applied Economic Research (NCAER) projects a 5.1-5.5% economic growth in 2014-15 for India. GLOBAL MACRO EURO  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.
  3. 3.  UK’s GDP grew 3.1% on an annualized basis in Q1 2014 following a revised 2.7% gain in the previous quarter. United States  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  China’s Manufacturing PMI edged up to 50.4 in April, compared with 50.3 in March. Indices: 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 Crude (Rs. per BBL) Gold (Rs. Per 10gms) 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 0.46% Rupee Appreciated 0.01% Rupee Appreciated 0.19% Rupee Appreciated -0.94% Rupee Depreciated -2.91% -0.54%
  4. 4. Debt: 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
  5. 5. Varun Goel Jharna Agarwal 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”

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