Saturday, March 1, 2008
Weekly market Update as on 1st March 2008
|
|
| Equity markets witnessed dull activity during the week, which is contrary to what is generally witnessed in a derivatives expiry week. It was characterized by both lower volume and volatility as compared to the previous expiries. Markets did not get the much needed direction to trade, either from the policy statements or global cues. Key economic announcements by way of Railway budget, the economic survey and the Finance budget for 2008-09 were presented to the parliament during this week which did not enthuse the market participants as the benchmark indices lost over a 1.5% on budget day. |
|
|
|
|
Key Equity Indices |
|
|
Week at
Glance |
2/25/2008
|
2/26/2008
|
2/27/2008
|
2/28/2008
|
2/29/2008
|
Last week
|
Week on Week
% change |
| Sensex |
17650.57
|
17806.19
|
17825.99
|
17824.48
|
17578.72
|
17349.07
|
1.32%
|
| S&P CNX Nifty |
5200.70
|
5270.05
|
5268.40
|
5285.10
|
5223.50
|
5110.75
|
2.21%
|
| BSE IT |
3992.54
|
4062.67
|
3973.12
|
3967.40
|
3862.45
|
3918.28
|
-1.42%
|
| BSE PSU |
8308.37
|
8438.08
|
8471.05
|
8499.34
|
8484.16
|
8209.24
|
3.35%
|
| BANKEX |
10113.14
|
10189.48
|
10156.52
|
10073.91
|
10113.73
|
10150.22
|
-0.36%
|
|
|
Source : BSE & NSE |
|
|
Facts & Figures (Rs in Millions) |
|
|
|
Date
|
FII Flows in cash mkt
|
MF Flows in cash mkt
|
|
Date
|
FII
|
MF
|
|
22-Feb-08
|
-4538
|
-1636
|
|
25-Feb-08
|
7385
|
-1405
|
|
26-Feb-08
|
854
|
5259
|
|
27-Feb-08
|
3964
|
1925
|
|
28-Feb-08
|
-5293
|
6007
|
|
|
|
Source : SEBI, provisional data |
|
|
|
|
|
| Global factors, led by the U.S, will continue to cause more volatility in the global markets as well as Indian markets. There is bound to be collateral damage. India, though, has the potential to ‘decouple’ from the rest of the world eventually. Remember, decoupling based on relatively strong fundamentals, takes time. It is not something which happens, necessarily, in the short term. We continue to argue, as we have in the past, that two factors will drive Indian markets (a) continued economic and corporate profit growth and (b) a P/E re-rating due to qualitative changes in the Indian economy, companies and markets. |
|
|
|
| __________________________________________________________________________________________ |
|
|
|
| International
Central Bank actions
|
Bank
|
Action
|
Benchmark interest rate
|
|
|
|
Previous
|
Current
|
|
Central Bank of Malaysia
|
Rate unchanged
|
3.50%
|
3.50%
|
|
Central Bank of Hungary
|
Rate unchanged
|
7.50%
|
7.50%
|
| Central Bank of Israel |
Rate decreased
|
4.25%
|
3.75%
|
|
Central Bank of Thailand
|
Rate unchanged
|
3.25%
|
3.25%
|
| Central Bank of Poland |
Rate increased |
5.25%
|
5.50%
|
|
| Source: Bloomberg
|
|
| Economic Indicators |
|
|
|
Previous Week
|
Current Week
|
| US 10 year benchmark treasury |
3.74%
|
3.59%
|
| Crude oil WTI ($/barrel) |
99.15
|
102.43
|
Source: Bloomberg
Currency
|
|
Previous Week
|
Current Week
|
| INR |
40.05
|
40.02
|
| EUR |
1.48
|
1.52
|
| JPY |
107.07
|
104.20
|
Source: Bloomberg
Domestic
Liquidity
| Call rates range |
Previous Week
|
Current Week
|
| MIBOR range |
7.65-7.98
|
8.25-7.26
|
| LAF amount average (Rs crore) |
-16728
|
- 8975
|
Source: Bloomberg
Domestic interest rates
|
Previous Week
|
Current Week
|
| 3 month CP |
9.95%
|
10.00%
|
| 91 day T-bill |
7.35%
|
7.43%
|
| 5 year OIS |
6.98%
|
6.87%
|
| 10 year benchmark gilt |
7.70%
|
7.57%
|
Source: Bloomberg
Outlook of the Week
Lower than expected government borrowing program in the Union budget resulted in gilt as well as corporate bond yields declining by 5-7 bps. Going forward, the market is likely to trade in a range as it awaits further information on provisioning for Rs 60,000 crore for debt relief to distressed farmers. Also, the fact that impact of the 6th pay commission’s recommendations have not been provided for in the budget would impact market sentiment.
We expect systemic liquidity to improve before the advance tax outflow in mid-march on government expenditure and Forex intervention by RBI. Market participants have created higher cash provisioning anticipating tighter overnight rates in March and are awaiting cues from RBI as to the measures being adopted to contain excessive money market volatility that is traditionally the bane of money markets in the month of March. |
|
|
No comments yet.