The World This Week - Jan 13 - Jan 18


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The World This Week - Jan 13 - Jan 18

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The World This Week - Jan 13 - Jan 18

  1. 1. The World This Week Jan 13 – Jan 18, 2014
  2. 2. Equity View: 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 this year. News: DOMESTIC MACRO:  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. GLOBAL MACRO EURO  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.
  3. 3. United States  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  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. Indices: Date Sensex Midcap Auto Bankex CD CG FMCG HC IT Metals O&G Power Realty Teck 13/01/14 21,134 6,591 12,037 12,590 5,686 9,561 6,588 10,177 9,585 9,556 8,741 1,592 1,357 5,276 14/01/14 21,033 6,570 11,980 12,507 5,656 9,501 6,558 10,245 9,521 9,422 8,748 1,587 1,338 5,243 15/01/14 21,289 6,582 12,126 12,707 5,614 9,689 6,597 10,243 9,588 9,526 8,781 1,599 1,356 5,276 16/01/14 21,265 6,574 12,024 12,681 5,613 9,713 6,544 10,184 9,642 9,693 8,753 1,600 1,359 5,267 17/01/14 21,064 6,487 12,028 12,481 5,548 9,689 6,548 10,166 9,396 9,635 8,775 1,590 1,327 5,147 -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: Date USD GBP EURO YEN 13/01/2014 14/01/2014 15/01/2014 16/01/2014 17/01/2014 61.52 61.59 61.53 61.35 0.27% Rupee Appreciated 101.48 101.09 100.73 100.21 1.26% Rupee Appreciated 84.11 83.99 83.84 83.52 0.70% Rupee Appreciated 59.49 58.99 58.77 58.78 1.21% Rupee Appreciated Crude (Rs. per BBL) Gold (Rs. Per 10gms) 6643 6567 6545 6598 6507 29495 29495 29402 29402 2.05% 0.32%
  4. 4. Debt: Tenor 1-Year 2-Year 5-Year 10-Year Gilt Yield in % (Friday) Change in bps (Week) 8.61 8.50 8.66 8.63 -4 0 -18 -13
  5. 5. Satadru Mitra Varun Goel Nupur Gupta Jharna Agarwal Kinjal Doshi 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 abovementioned 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”