2. Equity View:
The markets last week were flattish with no major changes in the macro data points. Yes bank, ICICI bank
and Axis bank had announced their quarter earning results. Asset quality of all private sector banks has
come out to be good along with good Net interest margins and reduced NPAs. We expect that a strong
growth would be carried forward. The automobile industry is also working well due to the recent Excise
Cut.
On NASDAQ, biotech index corrected up to 20% with no major news related to data.
Improvement in economic growth in India will be protracted and modest in the coming times till a
broader policy framework for growth is put in place by the new government. CCI has cleared a lot of
projects but it will be a while before assets become operational and capacity utilization and profitability
ramps up. In the interim the result season will have a lot of explaining to do as markets move way ahead
and faster than the reflection of fundamentals in the underlying business operations. We are in a much
better position with our CAD set to shrink to around 2% of GDP vs ~5% of GDP last year which is driving
currency stability and INR appreciating to sub 60 levels which in turn is also driving FII flows. FII flows YTD
remain highest in the region at USD 3.6 Bn. One needs to be cognizant of the sustainability of the same as
exports (the primary driver of GDP growth in current times) slowed down in the month of February (3.7%
de-growth) and also as some of the measures to tackle the same are reversed and as growth picks up. We
remain focused on the export story of India arising out of better growth dynamics in developed
economies. Stance on consumption remains selective as low job growth, inflation and tepid economic
growth puts brakes on the pricing power of companies. We remain positive on sectors such as Pharma
and IT with our year end Sensex target of 24800.
News:
DOMESTIC MACRO:
India’s forex reserves rose by $2.8bn to $309.4bn during the week ended April 11
According to SEBI data, the total value of participatory note investments in Indian financial markets rose to
Rs 2.08 lakh cr at the end of March from Rs 1.73 lakh cr in the previous month.
RBI fixes the quantum of intervention through Market Stabilisation Scheme (MSS) for the current fiscal at
Rs 50,000 cr to manage liquidity.
Crisil pegs India's growth at an average of 6.5% over the next 5 financial yrs.
3. GLOBAL MACRO
EURO
Eurozone composite PMI rose to 54 in April from 53.1 in March.
UK’s public sector net borrowing fell to 6.7 bn pounds (YoY) in March following a downwardly
revised 8.8 bn pounds in February.
Euro zone consumer confidence unexpectedly rose to -8.7 in April, the highest since October 2007,
from -9.3 in March.
United States
US Fed Chair Janet Yellen says the Federal Reserve will keep its benchmark interest rates at exceptionally
low levels for a considerable time until employment and inflation reach healthier levels.
US new home sales dropped 14.5% in March to a seasonally adjusted annual rate of 384,000 from
February's upwardly revised 449,000.
US’ initial claims for state unemployment benefits rose 24,000 to a seasonally adjusted 329,000 for
the week ended April 19.
China
China’s HSBC manufacturing PMI for April came in at 48.3, slightly above from March.
Indices:
Date Sensex Midcap Auto Bankex CD CG FMCG HC IT Metals O&G Power Realty Teck
21/04/14 22,765 7,397 13,674 14,822 6,645 12,426 6,982 10,509 8,846 10,495 9,733 1,774 1,489 4,942
22/04/14 22,758 7,386 13,615 14,846 6,663 12,573 6,950 10,525 8,798 10,412 9,845 1,769 1,482 4,916
23/04/14 22,877 7,395 13,632 15,012 6,604 12,761 6,978 10,572 8,796 10,435 9,812 1,760 1,463 4,924
25/04/14 22,688 7,374 13,616 14,910 6,633 12,590 6,837 10,620 8,787 10,432 9,606 1,741 1,472 4,930
-0.34% -0.32% -0.43% 0.59% -0.17% 1.32% -2.07% 1.06% -0.67% -0.60% -1.30% -1.84% -1.11% -0.25%
Commodities and Currency:
Date USD GBP EURO YEN
Crude
(Rs. per BBL)
Gold
(Rs. Per 10gms)
21/04/2014 60.335 101.405 83.3835 58.85 6613 29472
22/04/2014 60.7147 102.0432 83.7695 59.25 6634 29625
23/04/2014 61.0683 102.7657 84.486 59.51 6634 29788
25/04/2014 61.1163 102.7059 84.522 59.73 6738 29904
-1.28% Rupee
Depreciated
-1.27% Rupee
Depreciated
-1.35% Rupee
Depreciated
-1.47% Rupee
Depreciated
1.86% 1.44%
4. Debt:
Tenor Gilt Yield in % (Friday) Change in bps (Week)
1-Year 8.63 3
2-Year 8.60 -10
5-Year 8.85 2
10-Year 8.89 3
5. Varun Goel Jharna Agarwal
Nupur Gupta Ridhdhi Chheda
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