Weekly Market View – 14 December 2019

Indian Market Outlook:

Key benchmark indices rallied on the back of positive developments globally such as easing US-China trade tensions and a sweeping win by Boris Johnson’s Conservative Party in the UK elections, which boosted risk appetite.The market remained positive despite concerns of rising inflation and weakness in growth indicators.In the week ended on Friday, the Sensex rose 564.56 points or 1.4 % to settle at 41,009.71. The Nifty 50 index rose 165.20 points or 1.39% to settle at 12,086.70.Foreign portfolio investors (FPIs) bought equities worth Rs.129.71 crore over the past five trading sessions while domestic institutional investors invested Rs.1848.35crore. On the macro front WPIfor November 2019 will be announced on 16 December 2019. Going forward, Global cues, and macroeconomic data, crude oil price movement will be watched in the week ahead.After Boris Johnson won the UK election by a bigger majority, the market will keenly await the date on Brexit, which is most likely to happen by January 31 now. Fortunes of many Indian companies with exposure to the EU markets will now rest on this deal.Additionally, the GST Council meeting next week will also keep Dalal Street under pressure, as there are expectations of possible tax hikes on certain goods and service If tax rates rise, the market may witness corrections from current levels.

Latest Spot Price (in US $)

Global Weekly Events

Domestic Economy Indicators

Economic News:

• Industrial activity contracted for the third consecutive month in October by 3.8%, driven by a fall in activity across sectors, according to official data released on Thursday. Separate data showed that retail inflation had surged to a 40-month high of 5.54% in November, driven by rising food inflation.This combination of contraction in industrial activity and rising inflation has led experts to fear that India is entering a phase of stagflation (a situation in which there is persistent high inflation combined with stagnant or declining demand).
• India’s trade deficit in November narrowed to $12.12 billion as against the deficit of $17.58 billion a year before, the trade ministry has said. Oil imports at $11.06 billion were 18.17 per cent lower compared to $13.52 billion in November 2018.Non-oil imports fell 10.26 per cent to $27.04 billion compared to $30.14 billion in November 2018.Net exports fell 0.34 per cent to 25.98 billion as compared to $26.07 billion in November 2018.

  Industry News:

• Rating agency Credit Analysis and Research has revised the outlook for auto sector to stable-to-negative for the remaining part of 2019-2020 fiscal. During April – November period of FY’20, the overall automobile sales reported the sharpest decline of 13.2 per cent on year-on-year during the last five years on the back of price hikes in passenger vehicles and two wheeler segments due to new safety norms, higher insurance costs, higher ownership costs, liquidity crisis in the NBFC sector.
• The central board of Reserve Bank of India discussed the policy for cooperative banks and non-banking financial companies during its meeting on Friday. The matter was taken up at the 580th meeting of RBI’s central board in Bhubaneswar chaired by Governor Shaktikanta Das. “The Board’s discussions focussed on issues related to urban cooperative banks, extension of Enforcement Policy and Framework to cooperative banks and NBFCs,” the central bank said in a statement.

Company News:

• Global steel giant ArcelorMittal has initiated payment for acquisition of debt-ridden Essar Steel for Rs 42,000 crore, sources said on Friday. The decks for acquisition of Essar Steel by LN Mittal-led company was cleared by the Supreme Court last month. “Payment from ArcelorMittal has started flowing and entire payment is expected to be cleared in a day or two.” ArcelorMittal has arranged the entire amount of Rs 42,000 crore which is likely to be transferred to State Bank of India, the lead banker to take control of Essar Steel under the Insolvency and Bankruptcy Code.
• Suresh Narayanan, Chairman and MD, Nestle India, during Business Today Mindrush event 2019 on Friday, said the company was in the process of setting up its ninth Maggi noodles factory in Gujarat, where it would invest over Rs 700-800 crore. He also talked about selling 2,000 Nescafe machines over the last few quarters and this happened not in metros but 600 towns.
• Shares of Tata Motors continued gaining momentum for the third straight session on Friday, surging over 15 per cent on the Bombay Stock Exchange (BSE), after its British arm Jaguar Land Rover (JLR) reported a consistent improvement in China sales for the fifth consecutive month in November. The rally was also attributed to victory of British Prime Minister Boris Johnson in the UK election, which renewed hopes that the Brexit could happen by January 2020. A confirmation on Brexit would end uncertainty for Tata Motors as a big chunk of their business is based in the UK.

Global News:

• In his first speech after a landslide victory in the UK General Election, Prime Minister Boris Johnson on Friday called for closure on Brexit and vowed to work “round the clock” to repay the trust of the voters in what he has branded will be a “one-nation people’s government”. Johnson emerged on to the steps of 10 Downing Street as Prime Minister of a majority Conservative Party government after winning a landslide victory in the UK General Election.
• The US and China announced Friday that they reached a phase-one trade deal but provided little detail on what exactly will be part of the agreement. As part of the deal, the US will halve its 15% tariff on about $120 billion in Chinese goods. It will also suspend indefinitely planned duties that were set to take effect on Sunday that would have covered consumer favorites such as smart phones and laptops. That leaves roughly $250 billion taxed at 25% and $120 billion that will be subject to a 7.5% duty once the agreement takes effect.

(Source:Economic Times, BusinessToday, The Hindu)

Forthcoming Corporate Actions (16^thDecember to 20^th December)

Source:BSE, Elite wealth Research

Upcoming Board Meetings (16^thDecember to 20^th December)

Source: BSE, Elite wealth Research

Major Economy Indicators

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Elite Wealth Advisors Limited does/does not do business with companies covered in its research reports. Investors should be aware that the Elite Wealth Advisors Limited may/may not have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as read more

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