The past year turned out to be quite constructive for Indian equity. Markets made fresh life time highs on
the back of improving domestic macros, supportive global equity and expected governance improvement
in India after next general elections. Sensex crossed the level of 21,200 after a gap of almost six years. FII
reaffirmed their commitment towards Indian equities with more than 20 billion dollars invested in 2013.
We see 2014 bringing a new bull cycle into existence. A good monsoon, strong export sector, continued
recovery in US & a stable Euro area are significant positives for equity markets. With domestic macroeconomic data also on the mend, we are aggressive buyers of Indian equity. We have a year- end Sensex
target of 24,800. With interest rates not expected to increase a lot, we have turned positive on interest
rate sensitive sectors like banks and automobiles. Public sector banks are trading at quite cheap
valuations and we expect significant outperformance from that space in the next two to three years. We
expect export oriented sectors like IT to continue to benefit from the significant rupee depreciation seen
India's annual consumer price inflation eased faster than expected to a three-month low of 9.87 percent in
December from 11.24 percent in November, on a moderation in vegetable prices
Exports of gold jewellery from India in December dropped 30.4 percent from a year ago to $443.19 million,
India's central bank said it would buy up to 100 billion rupees ($1.62 billion) of bonds via open market
operations on Jan 22.
The UK economy is expected to grow 0.6 percent per quarter through to the middle of next year, the end
of the forecast horizon and the highest forecasts to date.
Consumer prices in Germany, Europe's largest economy, rose 0.5 percent on the month in December, but
the annual inflation dropped to 1.2 percent from 1.6 percent in November.
The amount of insured U.S. municipal bonds fell last year to the lowest level since the financial crisis $12.08 billion.
The Fed's liabilities, which are a broad gauge of its lending to the financial system, rose to $4.029 trillion
from $3.986 trillion a week earlier. The Fed's third round of quantitative easing began in late 2011 when its
balance sheet was less than $3 trillion.
Manufacturing production in U.S. rose a stronger-than-expected 0.4 percent in December after an outsized 1.0 percent increase the prior month, as per Federal Reserve report.
China attracted a record $117.6 billion in foreign direct investment (FDI) in 2013. December's inflows
climbed 3.3 percent from a year earlier to $12.1 billion, extending an upward trend seen since March 2013.
Sensex Midcap Auto Bankex
13/01/14 21,134 6,591 12,037 12,590 5,686
6,588 10,177 9,585
14/01/14 21,033 6,570 11,980 12,507 5,656
6,558 10,245 9,521
15/01/14 21,289 6,582 12,126 12,707 5,614
6,597 10,243 9,588
16/01/14 21,265 6,574 12,024 12,681 5,613
6,544 10,184 9,642
17/01/14 21,064 6,487 12,028 12,481 5,548
6,548 10,166 9,396
-0.33% -1.58% -0.08% -0.87% -2.42% 1.33% -0.60% -0.11% -1.97% 0.83% 0.39% -0.09% -2.28% -2.44%
Commodities and Currency:
(Rs. per BBL)
(Rs. Per 10gms)
Gilt Yield in % (Friday)
Change in bps (Week)
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