- The GDP data for the first quarter of the fiscal year showed stronger growth of 5.7% compared to expectations, led by recovery in manufacturing and industry. GDP growth for the full fiscal year is estimated between 5.5-6%. - Key economic indicators like IIP and inflation are expected to show continued positive momentum in the coming months. - Overall, signs point to a strengthening economic recovery in India as various steps are taken by the government to boost infrastructure and industry.

1. The World This Week
August 25 – August 30, 2014

2. Equity View:
The GDP data released on Friday last week showed better results than expected by most of the analysts. FYQ1 GDP growth of 5.7% was mainly due to recovery in manufacturing and industrial sector. We expect the recovery to continue to strengthen in the coming quarters and believe the GDP growth for FY15 to be ranging between 5.5-6%. This would be a significant recovery from 4.6% observed last year. IIP and Inflation number to be released in the second week of this month should also show a positive traction. We believe that the IIP number would range between 3.5-4% for last month and CPI Inflation below 8% along with WPI below 5.5-6%. Overall seasonal deficit of monsoon is 17-18% which is lower than expectations. Although there is a marginal dip in the area under cultivation when compared with last year, there is nothing substantial to impede agricultural activity for the year. The agricultural GDP growth for the fiscal should be between 2-2.5% which is a fall in growth from previous year however it is positive and any reduction would be compensated by the increase in manufacturing activity. The services sector continues to show good traction and we expect its growth to stay around 7%.
We believe that economic recovery is beginning to get firmer every day as there are a lot of steps being taken by the government on infrastructure and industries to ensure a durable recovery.
The next key trigger for the market remains global cues. In the last couple of weeks, the US Federal Reserve has given no sign that they are in a rush to hike interest rates so we believe that global factors also remain benign atleast at this point in time.
News:
DOMESTIC MACRO:
 Government notifies liberalised foreign direct investment (FDI) norms for the Railways, permitting 100% FDI through automatic route in several areas, including high speed trains.
 Rating agency Moody's expects India’s GDP to grow at 5.1% in the first quarter (April-June) of the current fiscal; also expects foreign currency bond issues in India for non-financial firms to touch a record high of $13-$14 bn in 2014
 Indian economy grew 5.7% in the quarter ended June, compared with 4.6% in the previous quarter.
 India's fiscal deficit in the first four months of the current financial year was Rs 3.25 lakh cr, or 61.2% of the full-year target; the deficit was 62.8% during the comparable period in the previous fiscal year.
GLOBAL MACRO
EURO
 Eurozone consumer price index came in at 0.3% in August on an annual basis, compared with 0.4% in July.

3.  Euro zone economic confidence index fell to 100.6 in August, the lowest score since December, from 102.1 in July.
United States
 The US economy expanded 4.2% in Q2 2014 according to the second estimate, higher than the previous estimate of 4%, following a contraction of 2.1% in Q1 2014.
 US pending home sales rose 3.3% in July after a 1.3% decrease in June
 US durable goods orders surged by a seasonally adjusted 22.6% in July following an upwardly revised gain of 2.7% in June
China
 China’s final HSBC/Markit Purchasing Managers' Index (PMI) retreated to 50.2 in August, roughly in line with a preliminary reading of 50.3.
Indices:
Date
Sensex
Midcap
Auto
Bankex
CD
CG
FMCG
HC
IT
Metals
O&G
Power
Realty
Teck 25/08/14
26,437
9,281
17,106
17,938
9,111
14,774
7,243
13,254
10,044
12,291
11,053
2,080
1,786
5,579 26/08/14
26,443
9,259
17,111
17,896
9,141
14,650
7,308
13,403
10,068
12,384
10,976
2,052
1,785
5,580 27/08/14
26,560
9,327
17,250
17,990
9,199
14,703
7,347
13,398
10,143
12,358
11,068
2,040
1,761
5,614 28/08/14
26,638
9,299
17,294
18,004
9,181
14,913
7,402
13,357
10,086
12,253
11,185
2,042
1,727
5,594
0.76%
0.19%
1.10%
0.36%
0.77%
0.94%
2.19%
0.77%
0.41%
-0.31%
1.19%
-1.84%
-3.27%
0.28%
Commodities and Currency:
Date USD GBP EURO YEN Crude (Rs. per BBL) Gold (Rs. Per 10gms) 25/08/2014 60.43 100.12 79.74 58.01 6182 27625 26/08/2014 60.50 100.33 79.91 58.24 6203 27831 27/08/2014 60.47 100.15 79.65 58.17 6201 27742 28/08/2014 60.47 100.35 79.86 58.27 6211 27923 29/08/2014 - - - - 6196 - -0.08% Rupee Depreciated -0.24% Rupee Depreciated -0.15% Rupee Depreciated -0.45% Rupee Depreciated 0.23% 1.08%

4. Debt:
Tenor Gilt Yield in % (Friday) Change in bps (Week) 1-Year 8.69 2 2-Year 8.51 5 5-Year 8.62 5 10-Year 8.57 4

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”