Dear Colleagues
I am pleased to attach the Economy / Market Snapshot covering all the major events in September, 2018.
September was one of the worst months for the Indian markets. It fell by 6%; Nifty went below the 11,000 mark and Sensex has come down to 36,000 levels. On the sectoral indices, Auto lost about 13%, Bank Nifty and FMCG about 10% and Pharma by 4%. IT was neutral. FII’s pulled out Rs.17,800 crores from both the equity and debt market while Indian Mutual Funds pumped in Rs.24,000 crores.
A rapid downgrade of ILFS by ICRA from AAA to D resulting in downward revision of NAV in some of the liquid / debt funds including DSP Blackrock triggered redemption pressure on DSP Blackrock. In order to meet the obligations, DSP Blackrock resorted to sell one of its portfolio paper of Diwan Housing Finance Limited at a steep discount creating a panic in the market resulting in a swing of 1000 points on a single day in Sensex. All round selling in all financial companies took place. Similarly, RBI had cut the term of the Yes Bank’s CEO, Mr Rana Kapoor resulting in Yes Bank losing about 29% in a single day and 40% last month. Sentiments turned negative in a matter of two weeks with the markets tumbling from the peak. ILFS in their Shareholders meeting has come out with a plan for infusion of funds. LIC, its largest shareholder with a stake of 25% has also pledged to support ILFS. First time, we could see the NAV of several of the liquid funds have come down eroding the principal due to the default / provisioning on account of the ILFS issue.
Globally, DOW continued its upward journey crossing the 26,000 mark with a gain of 2% last month. Japan market went up by 5% while China market went up by 4%. Indian Rupee crossed the Rs.72 mark and closed at Rs.72.44 to 1 US $. Gold gained by 1% and Silver gained about 5%. Crude went up by 7% last month with price crossing $ 80 a barrel.
With the retirement of the Chief Justice of India, we saw several important and sensitive cases were decided last month. News channels have become very busy in analyzing the pros and cons of these judgements. First signs of confrontation between India and Pakistan after Imran Khan has become the PM has surfaced with India cancelling the meeting between the Ministers of External Affairs on the sidelines of UN Council meeting. With the quarterly results coming in October coupled with the nervousness of the financial sector of the Indian market, we have to see how October is going to pan out. Elections in some of the key states will be held in December and the Parliament elections will be held in early next year if not preponed will add to the nervousness of the market. Let us hope that the festive season change the mood of the markets in October 2018.
Happy reading!…….
Regards
V Murali
General News
- SC declares Aadhaar as constitutionally valid; needed for PAN, but not mandatory for bank accounts, mobile services, schools.
- SC to hold hearing on Ayodhya case from 29th Oct ‘18 by a 3-member bench.
- SC lifts ban on entry of women of all ages into Sabrimala Temple.
- Defence Minister Nirmala Sitharaman and Foreign Minister Sushma Swaraj host their counterparts Jim Mattis and Sushma Swaraj for the India-US 2+2 dialogue.
- India, US ink Communications Compatibility and Security Agreement; discuss cross-border terrorism and H-1B visa issue.
- National Security Advisor Ajit Doval meets top officials of the Trump Administration in Washington.
- President Ram Nath Kovind embarked on a 3-nation tour to Cyprus, Bulgaria and the Czech Republic.
- Vice President M Venkaiah Naidu was on 8-day visit to Serbia, Malta, Romania.
- Sushma Swaraj, Russia’s Deputy PM Yuri Borisov review progress in bilateral cooperation in Moscow.
- Afghan President Ghani holds talks with PM Modi on ways to further boost bilateral cooperation.
- Defence Ministry approves procurement of military equipment and weapons worth ₹9,100 crores.
- Govt releases ₹400 crore to 10 states having International Borders for developing forward areas.
- Bharat Bandh called by Congress and Left parties against spiralling fuel prices evokes mixed response.
- Poll panel removes NOTA option from Rajya Sabha elections.
- Justice Ranjan Gogoi to succeed Justice Dipak Misra as Chief Justice of India.
- Cabinet approves ordinance making triple talaq punishable offence.
- Arvind Kejriwal launches door step delivery of 40 public services in Delhi.
- Telangana CM K Chandrashekar Rao dissolves assembly, calls for early polls.
- Goa cabinet rejig: Manohar Parrikar to continue as CM, two ailing ministers dropped.
- SC allows live streaming, video recording of court proceedings, directs for framing of rules.
- SC asks states to comply with its order to deal with cow vigilantism, mob lynching.
- Supreme Court scraps 158-year-old adultery law.
- UK court to deliver its verdict on Vijay Mallya’s extradition case on December 10.
- ISRO spy case: All accused in the case acquitted of all charges, scientist awarded ₹50 lakh for wrongful arrest; probe ordered against the cops.
- Bhima Koregaon arrests: SC extends house arrest order for activists.
- ISRO successfully launches 2 earth observation satellites for UK.
- Sikkim gets its first airport and the country its 100th at Pakyong.
- PM Modi launches ‘Swachhata hi seva movement’ as part of Swachh Bharat mission.
- Cabinet approves remuneration hike of Accredited Social Health Activist scheme, Anganwadi workers.
- Venkaiah Naidu, Mohan Bhagwat attend Swami Vivekananda’s 125th Chicago speech anniversary.
- Hardik Patel ends his indefinite fast over reservation after 19 days.
- Poll strategist Prashant Kishor joins Bihar Chief Minister Nitish Kumar’s Janata Dal (United).
- Over 1,400 lives lost due to rains, floods so far this monsoon: Home Ministry.
- Trump inks his administration’s first trade deal with South Korea on the sidelines of the UN meet.
- Iranian President Rouhani slams US for ‘authoritarian’ foreign policy, calls on Trump to return to talks.
- Canada not making concessions needed for a NAFTA deal: US.
- Expect India to cut oil imports from Iran to zero by November: US.
- US to start deportation process of foreigners with expired visa from Oct 1.
- North Korea celebrates its 70th anniversary as a nation with military parade.
- Leaders of North and South Korea meet in Pyongyang for 3rd summit.
- Turkey, Russia agree on demilitarized zone in Syria’s Idlib.
- Japan conducts first submarine drill in disputed South China Sea.
- Chinese President Xi Jinping promotes ‘Belt and Road’ as Africa growth tool.
- Japan’s PM Shinzo Abe wins ruling party leadership vote, heads for an extended 3-year term.
- No-deal Brexit preferable to EU offer: Theresa May.
- US cancels $300 million in aid to Pakistan over lack of action against Taliban.
- Arif Alvi sworn in as Pakistan’s 13th President.
- Islamabad Court suspends Nawaz Sharif, Maryam Nawaz’s jail term in Panama papers case.
- Maldives Opposition leader Ibrahim Mohamed Solih wins presidential election with 58.3% vote.
- Indonesia calls for international help to deal with quake-tsunami that killed at least 832 people.
- Nearly 40 dead in Carolinas as Florence brings ‘epic’ floods.
- Typhoon Jebi: Japan hit by strongest storm in 25 years, prompting evacuations.
- Asian Games 2018: India finishes 8th with 69 medals – 15 gold, 24 silver and 30 bronze.
- Virat Kohli, Mirabai Chanu conferred with Rajiv Gandhi Khel Ratna Award. 20 athletes conferred with the Arjuna Award including javelin thrower Neeraj Chopra, sprinter Jinson Johnson and Hima Das.
- ISSF World Championships: Hriday Hazarika, junior women’s team strike twin golds in 10m air rifle events; Ankur Mittal wins double trap gold.
- India vs England: England clinch five-match series 4-1.
- Asia Cup: India pip Bangladesh in another last-ball thriller to win title for 7th time.
- Virat Kohli surpasses MS Dhoni, becomes first Indian to score 4000 runs as Test captain.
- India continues to be at the No.1 position, England grabs fourth spot in the ICC Test team rankings.
- England’s highest Test run-scorer Alastair Cook retires from international cricket.
- James Anderson claims 564th wicket to become 4th highest wicket-taker in Test cricket.
- US Open 2018: Japan’s Naomi Osaka stuns Serena Williams to clinch maiden Grand Slam title; Novak Djokovic beats Juan Martin Del Potro to win his 3rd US Open title.
- Kenyan Eliud Kipchoge sets new marathon world record in Berlin.
- Croatia’s Luka Modric beats Ronaldo & Salah to win FIFA best Player of the year award.
Business News
- Govt proposes merger of Bank of Baroda, Dena and Vijaya Bank.
- Finance Ministry gives in-principle nod for share buyback in 13 PSUs.
- Indian rupee recovers after continuous fall against US Dollar and crashing below the 72-mark.
- Finance ministry announces a series of measures to boost capital inflows and to curb the rupee fall.
- Depreciating rupee and expensive crude oil pushes fuel prices to record high.
- Andhra Pradesh, Rajasthan, West Bengal and Karnataka cut petrol and diesel prices.
- Govt approves ₹4,500-crore package to sugar industry; to provide transport subsidy to mills for export.
- Cabinet clears new telecom policy to attract $100 billion investments, create 4 million jobs by 2022.
- Govt raises import duties on 19 major items to curtail widening current account deficit.
- Finance Ministry relaxes norms for import of exported electronic goods for repairs.
- Government raises ethanol price for blending in petrol by 25%.
- RBI eases cash requirement rules for banks, assures of liquidity support.
- SEBI defers Oct 1 deadline for extension of trading hours; caps Mutual Fund expense ratio at 2%.
- NSE ties up with London stock exchange for dual listing of masala, foreign currency bonds.
- Over-optimistic bankers, growth slowdown responsible for NPAs: Former RBI Guv Raghuram Rajanx.
- Council forms 7-member panel to find model for funding disaster relief.
- RBI cuts short Rana Kapoor’s term as Yes Bank CEO & MD to Jan 2019, stock price sinks 40% in a week.
- Bank of India invites bids for stake sale in 3 associate companies.
- Govt begins consolidation of regional rural banks, to bring down tally to 36.
- IndusInd Bank gets all regulatory approvals to acquire IL&FS Securities Services.
- India Post Payments Bank enters bancassurance tie-up with Bajaj Allianz Life Insurance.
- Kerala floods: Cochin airport files insurance claims worth ₹3.4 billion.
- Paytm Money enters mutual funds domain with SIPs starting at ₹100 with 8,50,000 users.
- Debt mutual funds see redemptions of ₹6,800 crores in August on weak rupee, rise in oil prices.
- RBI begins special audit of IL&FS after delay in repayment of inter-corporate deposits.
- TCS becomes 2nd firm to hit ₹8 lakh crore market capitalisation mark.
- Amazon becomes second US company to hit $1 trillion in market cap.
- Cisco signs pact with BSNL and Niti Aayog to boost technology.
- GDP growth accelerates to over 2-year high of 8.2% in Q1.
- India Manufacturing Purchasing Managers’ Index slows down to 51.7 in August from 52.3 in July.
- August WPI eases to 4-month low at 4.53% from 5.09% in July and 3.24% in August’17.
- India’s exports grew by 19.21% to $27.84 billion, imports up by 25.41% in August; trade deficit at $17.4 billion.
- Iraq replaces Saudi Arabia as India’s top oil supplier in August.
- US Federal Reserve raises interest rates by 25 bps, sees at least three more years of growth.
- US – China trade war escalates with tariff impositions from both sides.
- WTO cuts world merchandise trade forecasts for 2018 to 3.9% from 4.4% and 2019 to 3.7% from 4%.
- China’s August trade surplus with US widens to record $31 billion.
- Passenger sales decline 2.46% in August, car sales down 1%, commercial vehicles up 29.56%: SIAM.
- Traders launched 90-day rath yatra protesting retail FDI and Walmart-Flipkart deal.
- Infosys directed to pay Rajiv Bansal an outstanding severance of ₹12.17 crores plus interest.
- Wipro bags over $1.5 billion deal from US-based Alight Solutions.
- BSNL signs deal with Softbank, NTT to roll out 5G, IoT service.
- Reliance Jio adds more than 1 crore users, Airtel 3.1 lakh subscribers while Idea sees a big decline.
- Suzuki exits China after dissolving tie-up with Changan Automobile.
- Renault Nissan Mitsubishi Alliance signs in-car tech deal with Google.
- Air India gets ₹2100 crore govt guaranteed borrowing.
- Reliance Infra wins ₹200-crores arbitration against NHAI.
- Tata Steel signs a definitive agreement to acquire Usha Martin.
- Netflix partners Hathway Broadband in India; Tata Elxsi extends pact with Airtel Digital TV.
- Aurobindo Pharma buys parts of Sandoz US from Novartis for $900 million.
- Manipal Group, TTK Group to jointly hold 51% stake in CignaTTK Health Insurance.
- Life Healthcare sells entire 49.7% stake in Max Healthcare for $293 million.
- Godrej Consumer Products Ltd sells its UK business to JZ International for over ₹310 crores.
- Facebook’s Sheryl Sandberg, Twitter’s Jack Dorsey testify before US Congress.
- Ola founders seek CCI nod for hiking stake in cab aggregator.
- Zomato delists hundreds of FSSAI non-compliant restaurants.
- Visa, Mastercard reach $6.2 billion settlement over card-swipe fees.
- Samsung opens its biggest store worldwide in Bengaluru.
- Apple unveils iPhone XS, iPhone XS Max, iPhone XR ; discontinues iPhone – SE, 6s, 6s Plus, and X.
- E-commerce firms to collect 1% tax at source from October 1.
- Oyo raises a $1 billion from Softbank to fuel expansion plans, firm now valued at $5 billion.
- Anshula Kant appointed as MD of SBI; Prashant Kumar appointed as Deputy MD as CFO.
- Amitabh Chaudhry appointed CEO & MD of Axis Bank; HDFC LIFE appoints Vibha Padalkar as MD, CEO.
- Padmaja Chunduru assumes charge as Indian Bank’s managing director and CEO.
- Alibaba Group’s CEO Daniel Zhang to succeed Jack Ma as Chairman next year.
- WhatsApp appoints grievance officer for India.
- Elon Musk out as Tesla chair, remains CEO in $40 million SEC settlement.
| WORLD INDICES | |||||
|---|---|---|---|---|---|
| Indices | 28-Sep | 31-Aug | % 1M | 01-Jan | % since Jan |
| BSE | 36227 | 38645 | -6.26% | 33813 | 7.14% |
| NSE | 10930 | 11681 | -6.42% | 10436 | 4.74% |
| DOW | 26458 | 25965 | 1.90% | 24719 | 7.04% |
| NASDAQ | 8046 | 8110 | -0.78% | 6903 | 16.56% |
| FTSE | 7510 | 7432 | 1.05% | 7688 | -2.31% |
| Nikkei | 24120 | 22865 | 5.49% | 22765 | 5.95% |
| Hang Seng | 27789 | 27889 | -0.36% | 29919 | -7.12% |
| Straits Times | 3257 | 3213 | 1.36% | 3403 | -4.29% |
| Shanghai | 2821 | 2725 | 3.53% | 3307 | -14.69% |
| USD | 72.44 | 70.99 | 2.04% | 63.68 | 13.77% |
| Euro | 83.89 | 82.29 | 1.95% | 76.48 | 9.69% |
| GBP | 94.54 | 91.97 | 2.80% | 86.06 | 9.86% |
| Yen/100INR | 0.64 | 0.64 | -0.13% | 0.56 | 13.08% |
| Gold | 30508 | 30129 | 1.26% | 29123 | 4.76% |
| Silver | 38600 | 36701 | 5.17% | 39176 | -1.47% |
| Crude Brent $ | 82.72 | 77.42 | 6.85% | 67.13 | 23.22% |
| Crude Nymex $ | 73.25 | 69.80 | 4.94% | 60.62 | 20.83% |
| NIFTY SECTORAL INDICES | |||||
|---|---|---|---|---|---|
| Sectors | BANK NIFTY | CNX IT | CNX AUTO | CNX FMCG | CNX PHARMA |
| 28-Sep | 25120 | 15838 | 9590 | 29758 | 9972 |
| 31-Aug | 28062 | 15811 | 11009 | 32912 | 10391 |
| % 1M | -10.48% | 0.17% | -12.89% | -9.58% | -4.03% |
| 01-Jan | 25318 | 11566 | 11891 | 26686 | 9618 |
| % since Jan | -0.78% | 36.94% | -19.35% | 11.51% | 3.68% |
| INDIAN TRADE(USD MILLION) | |
|---|---|
| Exports | 27840 |
| Imports | 45240 |
| FDI | 1981 |
| Government Bond 10Y | 8.02% |
| GDP YoY | 8.20% |
| Inflation Rate | 3.69% |
| Forex Reserves $ M | 401790 |
| IIP % | 6.60% |
| INSTITUTIONAL TRADING ACTIVITY | ||
|---|---|---|
| Particulars | FII (Rs.crore) | MF (Rs.crore) |
| Equity | (7924) | 7905 |
| Debt | (9859) | 16118 |
| Total 1 M | (17783) | 24023 |
| Total Since Jan | (56556) | 261663 |
| Equity | (7924) | 81471 |
| Debt | (48632) | 180192 |
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