MARKETS EYEING MORE EARNINGS & KEY DATA

Indian equity benchmarks finally ended the week flat, the Sensex rose 147 points or 0.4 per cent to close the week at 35,158.55 points while the Nifty 50 was up 32 points or 0.3 per cent to end at 10,585.20 points, on a weekly basis.  Brent crude entered a bear market provided some relief to the rupee. The week also marked the end of the Samvat 2074 where Investors adopted a cautious approach ahead of a long Diwali break, and kept their positions restricted.

Samvat 2074 lacked cheer for Indian equity investors as the benchmark Nifty clocked a moderate gain of just 4 per cent – its lowest gains in three years. Nifty had posted a return of 17.6 per cent and 10.2 per cent in the previous two Samvat years and therefore the returns need to be seen in that light. Nifty IT index top the list of NSE sectoral indices with a gain of 32.2 per cent, followed by Nifty FMCG, which was up by 12.7 per cent. When it comes to the laggards, the Nifty Realty and Nifty Auto led the way by losing 23 and 17.4 per cent as the rapidly rising interest rates, slower economic momentum and rising crude oil prices made the sector less attractive to the investors.

NBFCS NEED RS 700 BN IN NOV TO REDEEM CPs

As many as 50 large NBFCs have debt repayments worth Rs 950 billion due in November, of which, Rs 700 billion are commercial papers (CPs) maturing. RBI is touted to use all its fire power to stabilize the structures and has infused Rs 360 billion in October and Rs 400 billion in November into the system via OMOs and opened line of credit for NBFCs via PSU banks. More such injections are expected over the next six months to bring in some sanity to system.

 

ANOTHER STRONG WEEK DESPITE FRIDAY SELL OFF IN THE US MARKETS…

Despite Friday’s losses, the US broader market ended the week in positive territory; thanks to the post-Election Day rally Wednesday. Investors cheered the possibility of gridlock in Washington as Democrats won control of the House while Republicans maintained a majority in the Senate. The Dow and S&P booked a return of more than 2 per cent, while the Nasdaq eked out a weekly climb of 0.7 per cent. U.S. Federal Reserve left interest rates unchanged; however keeping the door open to a fourth 2018 hike in December.

Despite the lower Treasury yields, the U.S. Dollar rose toward a 16-month high against a basket of currencies in reaction to the hawkish Fed decisions and a weaker Euro. The ICE U.S. Dollar Index settled at 96.928 on Friday, aiming for a 0.4% gain for the week, it’s fourth in a row.

 

U.S. OIL PRICES MARK LONGEST LOSING STREAK SINCE 1984…

U.S. crude prices fell Friday for a 10th consecutive session, which is longest losing streak in over 34 years, according to Refinitiv data. Preliminary data this week suggests U.S. production has hit an all-time high at 11.6 million barrels per day and its oil inventories up for 7th straight week. Crude futures benchmarks have slid about 20 per cent or more since peaking in early October.

U.S. WTI crude settled at USD 60.19 per barrel and Brent settled at USD 70.18 on Friday. Data from China added to the downward pressure, showing factory-gate inflation slowed for the fourth month in October on cooling domestic demand and manufacturing activity.

COMING UP NEXT WEEK!

In the week ahead, domestic inflation and Industrial Production data will impact the sentiment of the stock markets. Consumer Price Index (CPI) data for October and Index of Industrial Production (IIP) data for September will be released on Monday (November 12), and October wholesale price inflation (WPI) data on Wednesday (November 14).

While polling in Chhattisgarh is scheduled in two phases on November 12 and November 20, Madhya Pradesh and Mizoram would vote on November 28. Rajasthan and Telangana will go to vote on December 7.