INVESTORS IN NO MOOD TO SHOP FROM THE SHARE BAZAAR!

Indian equity benchmarks posted their second consecutive weekly loss, falling nearly 2.8 per cent during the week as liquidity shortage and selloff by foreign investors weighed on investor sentiment. Both the benchmark domestic market indices have fallen over 8 per cent in October, wiping off nearly all gains of 2018.

Barring Realty all other sectoral indices are trading in red led by Pharma by 5.5 per cent. In broader markets, the S&P BSE MidCap fell 1.34 per cent to settle at 13,870, while the S&P BSE SmallCap declined 3.4 5 per cent to end at 13,597.

WORST F&O MONTH IN FIVE YEARS…

Since the start of the September series, the Nifty has declined 14 per cent — its worst two-month rolling return in seven years. In the September series, the index had declined 6 per cent and loss of nearly 8 per cent in October series. This was the worst performing month for derivatives since August 2013, when the index had declined 8.4 per cent. Meanwhile, rollover of Nifty contracts stood at 76 per cent, the highest since August 2016. In comparison, the Nifty rollover in the previous month was just 63 per cent. The market-wide rollover after the October series expiry was also high at 84 per cent.

WALL STREET EXTENDS TAILSPIN…

U.S. market indices closed with losses on Friday and it is yet another week in the red. The Dow Jones, S&P 500 and Nasdaq Composite are down by -3.4 per cent, -4.3 per cent and -4.5 per cent respectively. U.S. market is entering into correction territory as Nasdaq dropped 10 per cent from recent highs posted just over a month ago. While the S&P 500 has a loss of -6 per cent and the Dow Jones is down -4.5 per cent.

The U.S. economy grew by a 3.5 percent which is faster than expected by market in the third quarter as inflation was kept in check and consumer spending surged which released Friday.

GOLD PRICES HIT OVER 6-YEAR HIGH IN RUPEE…

Globally, gold was trading at USD 1,234 an ounce with a weekly change of 0.6 per cent. In the Indian market, gold of 99.99 and 99.5 per cent purity made a high of Rs. 32,625 and Rs. 32,475 per 10 gram, respectively in this week. This is the highest level since November 29, 2012 when the precious metal had closed at Rs. 32,940 per ten gram. Sentiments also got a boost on firming trend in overseas where gold traded at over three-month high as the dollar eased and equities slumped. Besides, weakness in the local currency and diversion of funds from falling equity markets also added to investor sentiments.

US CRUDE POSTS THIRD STRAIGHT WEEKLY LOSS…

Crude oil futures posted their third consecutive weekly loss on Friday as Saudi Arabia’s OPEC governor said the market may become oversupplied soon and after a slump in global equities clouded the outlook for demand. U.S. WTI crude ended this week down 2.2 per cent and has now tumbled about 12 per cent from its recent high of USD 86.74 in the start of October. Brent crude price fell by 2.7 per cent this week and is down 10.5 per cent from high of USD 86.74. Oil-marketing companies slashed the prices of petrol across the four metro cities for the ninth straight day on Friday.

COMING UP NEXT WEEK!

Speaking of the coming week, it’s fully packed with market-moving economic events, with the US Non-farm payroll and unemployment rate topping the list. Tighten your belts for another volatile week. The auto sales figures will be released for the month of October which will be an important factor to watch out for.

India’s Manufacturing PMI and infrastructure output numbers are ahead and will be seen crucially while the leads will also be taken from ICICI bank’s result.

Liquidity problems can lead to slower consumer spending and investment which needs to be addressed soon. Be ready for further volatility in the November series.



  • Lawang Sharma

    Well analysed Sir! 🙂
    And Sir the metal segment that is Gold(at its highest due to volatility) and futures and options are behaving the same way like it did during 2013 pre-election era! Seems the markets around this point in time perform goes into the bearish phase,including the Forex(USD/INR) , historic trends suggest that true.. aint it?

  • Lawang Sharma

    Well Analysed Sir! 🙂 🙂
    And Sir metals like Gold attains its peak during this volatility times and F&O too totally at its worst , investors losing confidence, happens this way only at this time around(pre-election phase) right? Markets totally go into the bearish phase always and the currency too(USD/INR).. historic trends suggest that… isnt it? 🙂

    • TMR Admin

      It cannot be concluded that way…You also have to consider the global markets. Plus we have the NBFC and Banking Crisis this time around. So it is more of a loss of confidence due to that than the election’s.