Weekly Market View – 15th February 2020

Indian Market Outlook:

Key benchmark indices ended the week with minor gains as fears of coronavirus affecting global growth weighed on investor sentiment. In its latest update, China’s National Health Commission said it had recorded 121 new deaths and 5,090 new coronavirus cases on the mainland on Feb. 13, taking the accumulated total infected to 63,851 people. In the week ended on Friday, the Sensex rose 115.89 points or 0.28 % to settle at 41,257.74 .The Nifty 50 index rose 15.10 points or 0.12% to settle at 12113.45. BSE mid cap and small cap underperformed the key benchmark indices as the the BSE Mid Cap Index fell 242.61 points or 1.53% to settle at 15662.10 while the BSE small Cap index fell 1.06% to settle at 14682.65.FIIs bought equities worth Rs.11.31 crore over the week while DIIs sell Rs.792.91 crore. The Supreme Court ruling on telecom players instructing them to pay dues by March 17 will impact the asset quality of banks having decent exposure in the sector. Banks stocks will be under pressure given high inflation and RBI is unlikely to cut rates in the near-term. Earnings season ended mixed as economic slowdown impacted the revenue growth of the companies; however, an improvement was seen in operating performance.US President Donald Trump will make his first official visit to India later this month, capping weeks of speculation on the trip that is expected to witness deepening of defence cooperation and signing of a trade pact.

Latest Spot Price (in US $)

Global Weekly Events

Domestic Economy Indicators

Economic News:

• Index of Industrial Production (IIP), contracted by 0.3 per cent in December after a rebound of 1.8 per cent in November. The country’s factory production growth contracted in three of the last four months, indicating a persistent structural slowdown in the economy. The latest contraction, however, was much lower than the 4.3 per cent decline in September, which was steepest fall in last eight years. Adding to the woes, India’s retail inflation based on Consumer Price Index (CPI) also rose for the sixth straight month in January, spiking to 7.59 per cent from 7.35 per cent in December.
• Adding to the woes, India’s retail inflation based on Consumer Price Index (CPI) also rose for the sixth straight month in January, spiking to 7.59 per cent from 7.35 per cent in December. The earlier high was recorded in April 2019, when the WPI inflation stood at 3.18 per cent. During January this year, the rate of price rise for food articles stood at 11.51 per cent as against 13.24 per cent a month earlier. Inflation in the vegetable category stood at 52.72 per cent, while onion prices spurted by a whopping 293 per cent, followed by potato at 87.84 per cent.

 Industry News:

• The Supreme Court on Friday came down heavily on both telecom companies and the telecom department (DoT) over non-payment of adjusted gross revenue (AGR) dues of Rs 1.47 lakh crore. A three-judge bench headed by Justice Arun Mishra issued showcause notices to the managing directors and directors of the errant companies asking why contempt proceedings should not be initiated against them. The apex court further said the managing directors of the telecom companies would need to appear in person before the bench at the next hearing on March 17 if the dues were not paid.
• RBI Governor Shaktikanta Das on Saturday said the central bank will have internal discussions in case there are any issues arising out of the Supreme Court order regarding adjusted gross revenue (AGR) dues to be paid by telecom companies. On Friday, the Supreme Court threatened contempt proceedings against top executives of Bharti Airtel Vodafone Idea and other telecom firms for failing to comply with its directive to pay an estimated Rs 1.47 lakh crore in past dues. Das did not offer any specific comments about the order, which might have ramifications on banks in terms of their exposure to the financially-stressed telecom companies.

  Company News:

• Bharti Airtel stands to lose if Vodafone Idea (VIL) collapses under the weight of its adjusted gross revenue (AGR) dues of more than Rs 53,000 crore. Without VIL, Bharti Airtel would lose out on benefits of shared towers infrastructure, which could lead to an increase of at least 15% in network and customer servicing costs and hinder its ability to offer affordable tariffs to consumers in future.
• Hero MotoCorp Friday said that the disruption in supply of components from China on account of the outbreak of coronavirus (Covid-19) will impact planned production in the ongoing month. Hero, however, clarified wholesale dispatches to dealers will remain unaffected during this period.
• SpiceJet has posted a 21 per cent increase on annual basis in its net profit for the quarter ended December 31, 2019. The carrier reported the net profit of Rs 77.96 crore for the quarter under review, as opposed to Rs 64.44 crore in the year-ago period.b SpiceJet saw its total revenue from operations grow to Rs 3,656.36 crore during Q3 FY20, up 46.92 per cent from Rs 2,488.57 crore in Q3 FY19.

Global News:

• The death toll from a coronavirus outbreak in mainland China rose to 1,523 as of the end of Friday, after 143 people died over the course of the day, the country’s National Health Commission said on Saturday morning. The number of new deaths in central Hubei province, at the epicenter of the coronavirus outbreak, rose by 139 as of Friday. China is confident the coronavirus epidemic will be over soon and that the impact will be only temporary on its economy, which will rebound strongly, Qin Gang, China’s vice minister of foreign affairs said on Saturday.
• S. job openings unexpectedly slumped, falling to a two-year low in December, which could reflect weaker demand for hiring as an increasing share of the population joins the workforce. The number of available positions decreased by 364,000 to 6.42 million, according to the Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS, released Tuesday. That compares to the median forecast for a modest gain to 6.93 million. The quits rate held at 2.3% for a fourth month.

  (Source: Economic Times, Business Today, Business Standard, Investing, Moneycontrol)

Forthcoming Corporate Actions (17^th February to 22^th February)

Source: BSE, Elite wealth Research

Upcoming Board Meetings (17^th February to 22^th February)

Source: BSE, Elite wealth Research 

 DISCLOSURE IN PURSUANCE OF SECTION 19 OF SEBI (RA) REGULATION 2014

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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