Global Economy
Mr. Donald Trump was elected as 45th President of United States of America, winning 306 electoral votes, against Mrs. Clinton 232 electoral votes. After the announcement of the U.S. Presidential election results, global markets shattered during initial trades, Nikkei fell by 6%, Hangseng fell by 4%, Sensex fell by 4%, Kospi fell by 3.65%, IPC Mexico fell by 5%.
Russia’s trade surplus fell by 22% (Y-o-Y) to USD 7.4 billion. Exports of Russia fell by 3% lowest since 2014. Imports rose by 7.9%. If the first nine months are considered of the fiscal year exports and imports of Russia fell by 24% and 4% respectively.
Industrial production in Mexico fell by 1.3% (Y-o-Y), mining sector fell by 9.7%, construction sector rose by 1%, manufacturing rose by 0.4%.
U.S. crude oil inventory rose by 2.4 million barrels as of 4th November 2016, following a 14.42 million jump in the previous period and above market expectations of a 1.33 million increase. Meanwhile, gasoline inventory decreased by 2.8 million barrels while markets were expecting a 1 million fall.
Hong Kong economy expanded by 1.9% (Y-o-Y) in the third quarter, mainly boosted by private spending and FIIs.
The Bank of Korea left its key interest rates at 1.25% at its November meeting. Policymakers told consumer prices in the economy will gradually rise, mainly due to the weakening effect of the low oil prices.
Global Market
Dow Jones saw biggest weekly gain since 2011, Dow rose by 5.51% in last week. S&P 500 rose by 3.8% in last week. American Indices closed on positive note due to Mr. Trump’s victory boosted with the expectation of better fiscal growth.
Samsung Electronics discontinued its Galaxy Note 7 last month due to explosive character issues, recently company also recalled 2.8 million units of washing machines with the same explosive characteristics. Share price of Samsung Electronics fell by appx 4%.
Indian Market
The Sensex and the Nifty fell by 1.67% and 1.62% in the last week.
Prime Minister Mr. Narendra Modi announces demonetisation of Rs 1000 and Rs 500 notes, making these notes invalid in a major assault on black money, fake currency and corruption.
The currency notes of Rs 1,000 and Rs 500 would be only paper, with no value, said the PM in his speech. They would cease to be legal tender from midnight of 9th November.
Citizens can deposit their demonetised 500 and 1000 notes in their bank account and withdraw new notes for their requirements. For the banks to be fully funded with the new currency notes may take time so it may take a few weeks for the exchange to take place.
Indian banks loans rose by 9.1% (Y-o-Y), as of 28th October 2016 outstanding loans are Rs. 74.12 trillion.
The combined Index of Eight Core Industries stands at 176.1 in September 2016, which was 5% higher compared to the index of September 2015. Its cumulative growth during April to September, 2016-17 was 4.6%.
Click here to read ‘IIP analysis”.
RBI made a net purchase of USD 4.6 billion from the spot market to meet the requirements of FCNR(B) deposits.
FDI activity into the country rose by 30% to USD 21.6 billion in the first half of the fiscal year.
Results Corner
Mahindra & Mahindra reported standalone Q2FY17 results, net profit up by 27% (Y-o-Y) to Rs. 11630 million. Revenue rose by 15% (Y-o-Y), vehicle exports up by 13%. Share price of M&M fell by 10%.
Bank of India reported Q2FY17 results, net profit stood at Rs. 1260 million vs Rs.11260 million loss in same period last year. Net interest income rose by 10% (Y-o-Y) to Rs. 27190 million, other income shot by 158% (Y-o-Y). Share price of Bank of India rose by 14% in last week.
Industry and Stock Specific trends
The sectoral indices closed in the mixed territory last week. The S&P Bankex, PSU and Oil & Gas indices have gained3.78%, 3.62% and 1.65% respectively. The S&P Auto and IT indices have lost by 5.72% and 5.47% respectively.
Derivatives
The Nifty Index futures saw rise in open interest by 1.56% for the November series. There was a rise in open interest by 26% & 92% for the December series and January series respectively in the last week. Implied volatility (IV) fell for put option and call option rose in the last week last week. Rise in IV of Nifty put and call option shows unsteady marginal support for Nifty at current levels.
SBI has witnessed rise in turnover and open interest in the stock futures segment.SBI share price rose by 11% in last week. SBI reported Q2FY17 result, net profit fell by 35% (Y-o-Y). Other Revenue rose by 36% (Y-o-Y) which helped bottom-line. Net interest income of SBI grew by 1.3% (Y-o-Y). Provisions for NPA’s have been doubled on Y-o-Y basis to Rs. 76690 million. Post-announcement of results share price fell by 3%.
Foreign Institutional Investors (FIIs) Derivative Statistics have shown rise in the open interest across Index Options, Stock Options and Stock Futures on a week on week basis. Index Futures have seen FIIs Derivative Statistics fell by 13% on a week on week basis.
Currency
Mexican Peso is considered as proxy for the U.S. Presidential election sentiment. Mexican Peso depreciated by 8.26% against USD on 9th November 2016, post declaration of Mr. Trump as the 45th President of United States of America. Mexican Peso depreciated by 22.52% against USD in the last one year, currently it is at 20.4908 MXN.
