• Markets continue to show a flattish trend for the past couple of weeks. This is an outcome of mixed
global news flows. Domestic news has not been interesting either. This goes without keeping into
consideration quarterly results.
• The minutes of the US Fed meeting showed that despite the count being in favour of keeping rates
steady, many members had opted for a rate hike.
• At the global front there is a set of nations that want to have softer rates where as developed nations want to have
harder rates. There is some divergence in this respect.
• The ECB kept its rates steady. Therefore once again the deposit rates are at -0.4%. The ECB has stated that it
wants to carry on the stimulus for extended periods of time but has not given any more specifics.
• China also came out with its growth numbers which stood within an agreeable range of 6.5-6.7%. Thus, the panic
of hard lending is no more.
• At the domestic end, last week the CPI came in at 4.3% against 5.05% and prior to that it was 6.07%. This
indicates that the trend has been southwards which is positive news. The quarterly earnings season that has just
begun is more important and that is where the whole focus will be.
• IT continues to disappoint whether it is Infosys, TCS, to some extent Wipro and Mindtree. HCL however could be
stated as one of the best performers among the IT pack.
• In certain sectors specific large caps like cement has been disappointing. Companies with nationwide spread
would not benefit unlike regional players. Therefore, in this quarterly result the regional players will come out with
good numbers. Ultratech is an exception because despite being a pan India player, we are bullish on this stock.
• Banking sector particularly the private sector banks and within private sector the new generation banks continued
to come up with strong numbers and we remain optimistic about it.
• After almost 30-35% rally over 6-8months markets gave a small correction of 5-7% and since then it has been
consolidating in the range of 8500-8700 nifty levels. If results surprise on the upside this range can very well be
broken and markets will resume a new uptrend. We continue to remain bullish with the long term point of view and
in the near term it is the results that will matter.
• The Indian government has proposed a 4 percent tax on gold under the proposed goods and services
tax. GST would harmonize a slew of state and federal levies into a national sales tax.
• The Reserve Bank of India is expected to take advantage of expectations that inflation will remain low in
the near-term and cut interest rates again early next year with an aim to boost already-solid growth a little
bit more. Inflation cooled to a 13-month low of 4.31 percent in September and it is expected to average
4.8 percent in the January-March quarter of 2017, just under the RBI's near-term target.
• The euro zone economy should continue to improve slowly, European Central Bank
President Mario Draghi said on 20th October, with inflation creeping up in the coming
months. But the risks are to the downside, he said, meaning performance is more likely to
be worse than better. Draghi said it was mainly economic events outside the euro zone
that would affect the economy "The economic recovery in the euro area is expected to be
dampened by subdued foreign demand," he told a news conference follwing the ECB's
decision to leave monetary policy unchanged."We will continue to act, if warranted by
using all the instruments available in our mandate," he said..
• The European Central Bank left ultra-loose monetary policy unchanged on Thursday but
kept the door open to more stimulus in December, firmly shooting down any talk of
tapering its 1.7 trillion euro asset-buying programme..
• The U.S. economy showed some signs of rising wage pressures in September and
early October but overall compensation growth remained modest, the Federal
Reserve said on 19th October, a further sign of the cloudy outlook facing Fed
policymakers as they mull a rise in interest rates. Policymakers have been keenly
watching for signs of increasing wage pressures spurred by an unemployment rate
that now stands at 5.0 percent.
• U.S. industrial production barely rose in September as a rebound in manufacturing
and mining output was offset by surprisingly weak demand for utilities, pointing to a
moderate acceleration in economic growth in the third quarter. Still, the mixed
report from the Federal Reserve on Monday suggested that the industrial sector
downturn has probably run its course. Gains in output are likely to be muted as the
sector remains constrained by the lingering effects of the dollar's past rally, a
collapse in oil prices and weak global demand.
• China's economy expanded at a steady 6.7 percent in the third quarter and looks
set to hit Beijing's full-year target, fuelled by stronger government spending, record
bank lending and a red-hot property market that are adding to its growing pile of
• China's economic growth is expected to cool to 6.6 percent this year and slow
further to 6.5 percent in 2017, even as the government keeps up policy support to
help ward off a sharper slowdown. The world's second-largest economy faces
nagging downward pressure due to slack global demand that has hurt its exports,
as well as risks from painful reforms to cut industrial overcapacity and a growing
pile of debt that some analysts fear could spark a financial crisis.
COMMODITIES AND CURRENCY
Date USD GBP EURO YEN Crude (Rs. per BBL) Gold (Rs. Per 10gms)
17-10-2016 66.78 81.31 73.37 64.12 3366.00 29738.00
18-10-2016 66.73 81.71 73.55 64.14 3335.00 29845.00
19-10-2016 66.71 81.79 73.21 64.4 3356.00 29957.00
20-10-2016 66.74 81.91 73.15 64.35 3442.00 30011.00
21-10-2016 66.89 81.96 72.98 64.4 3352.00 29950.00
-0.17% -0.80% 0.54% -0.44% 0.42% -0.71%
Tenor Gilt Yield in % (Friday) Change in bps (Week)
1-Year 6.57 -25
2-Year 6.57 -26
5-Year 6.73 -28
10-Year 6.85 -26
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