Domestic stock markets edged higher during the week after the RBI lowered inflation forecast for year ending 31 March 2019 amid higher growth projection as part of its monetary policy review.
The Reserve Bank of India left its key policy rate steady at 6% for the fourth policy meeting on 5th April 2018, matching market expectations. Policymakers said once again the decision is consistent with the neutral stance of monetary policy aiming to achieve the medium-term inflation target of 4% (+/- 2%), while supporting growth.
Macroeconomic data, trend in global markets and start of Q4FY18 earnings season will dictate trend on the bourses in the week ahead.
On the global front, Asian stocks will on Monday, 9 April 2018, react to the US nonfarm payrolls data and US unemployment rate data for March 2018 which were unveiled on Friday, 6 April 2018.
The Indian Companies would start announcing Q4FY18 results from next week with IT major Infosys scheduled to declare results on Friday, 13 April 2018. VST Industries and Reliance Industrial Infrastructure will declare Q4 March 2018 results on Thursday, 12 April 2018.
On the macroeconomic front, the government will announce industrial production data for the month of February 2018 on Thursday, 12 April 2018. India’s industrial production rose by 7.5% year-on-year in January 2018.
On Thursday, 12 April 2018, the government will also disclose inflation data based on consumer price index (CPI) for March 2017. The all-India general CPI inflation dipped to four-month low of 4.44% in the month of February 2018, compared with 5.07% in January 2018.
Non-farm payrolls for the US economy rose 103,000 in the month of March 2018, while the unemployment rate came in at 4.1%. Expectations were for the unemployment rate to fall to 4%. Jobs grew a much higher 326,000 in the month of February 2018.
The US trade deficit widened to USD 57.6 billion in February 2018 from an upwardly revised USD 56.7 billion in the previous month and above market expectations of USD 57 billion. It is the biggest trade gap since October 2008 as both exports and imports reached a record high. The trade deficits narrowed with China and Canada but worsened with Mexico.
Russia’s gross domestic product grew by 0.9% (Y-o-Y) in Q4Fy17, easing from an upwardly revised 2.2% advance reported in the previous period. The weaker expansion was mainly due to a decline in manufacturing, mining and agriculture output.
The British economy grew by 0.4% during Q4Fy17, unrevised from the second estimate and following a 0.5% expansion in the previous period.
The current account deficit in the United Kingdom narrowed to 18.4 billion Pounds in Q4Fy17 from a downwardly revised 19.2 billion Pounds gap in Q3Fy17 and lower than market expectations of a 24 billion Pounds shortfall. It is the smallest current account deficit since the third quarter of 2012.
The German consumer price inflation is at 1.6% (Y-o-Y) in March 2018 from a 15-month low of 1.4% in the previous month, but below market consensus of 1.7%.
The German consumer price inflation is expected to pick up to 1.6% (Y-o-Y) in March 2018 from a 15-month low of 1.4% in the previous month, but below market consensus of 1.7%.
Consumer prices in Japan rose by 1.5% (Y-o-Y) in February 2018, after a 1.4% gain in the prior month while markets estimated 1.7%. It is the highest inflation rate since March 2015, due to a jump in cost of transport and a further increase in cost of food.
The Sensex and Nifty gained by 2% each on a weekly basis.
Hero MotoCorp gained 6.61% in the last week. The total sales for the Company rose 20% to 0.73 million units in March 2018 over March 2017. Hero MotoCorp clocked its highest-ever annual sales of 75,87,130 units in the financial year ended March 2018 (April 2017-March 2018), which translates to a double-digit growth of about 14% over the corresponding fiscal year ended March 2017 with sales of 66,64,240 units of two-wheelers.
IndusInd Bank rose 1.47% to Rs.1822 in the last week. IndusInd Bank announced collaboration with Samsung Electronics to enable its MasterCard and Visa Credit Card customers to use Samsung Pay. IndusInd credit card holders can now tap and pay at merchant outlets having Point of Sale (PoS) terminals using a wide range of Samsung Smartphones. Samsung Pay is a payments system which allows customers to simply tap and pay on the go using their registered IndusInd Bank Credit Cards.
Industry and Stock Specific trends
The sectoral indices closed in mixed territory last week. The S&P BSE Auto, PSU, Bankex, IT and Oil & Gas indices had gained by 5.62%, 2.16%, 2.42%, 1.1% and 1.43% respectively.
Indian rupee appreciated by 0.108% against USD, USD/INR pair closed at Rs. 64.97.
Jubilant FoodWorks Witnesses highest rise in turnover in Stock Derivatives
The Nifty Index futures witnessed rise in open interest by 14% for the April series as the March 2018 series witnessed expiry in the last week. There was fall in open interest for the May series in the last week by 12%. Implied volatility(IV) fell for put option and call option in the last week. Fall in IV for call and put option shows steady support for Nifty at present levels.
Jubilant FoodWorks witnesses rise in turnover in Stock Derivatives
Jubilant FoodWorks has witnessed rise in open interest in the stock future segment in the last week. Share price of Jubilant FoodWorks rose by 1% in last week. The company formed a joint venture with Golden Harvest QSR Ltd to launch Domino’s Pizza in Bangladesh. Domino’s has announced an Everyday value offer (EDVO) on regular sized pizza starting at Rs 99 each aimed at small group sizes of 2 customers.
The company said the Everyday Value price will help Domino’s Pizza in increasing pizza penetration across markets, especially in smaller towns. It will also help existing Domino’s customers to enjoy Domino’s pizzas more often and on more occasions, thus driving increased frequency of consumption.
Foreign Institutional Investors (FIIs) Derivative Statistics have shown rise in the open interest across Index Options, Stock futures, Index futures and Stock Options on a week on week basis.