Weekly Market View – 8th February 2020

Indian Market Outlook:

Domestic stock markets rallied this week with benchmark indices clocking gains of nearly 4 per cent after the February 1 Budget announcements triggered their worst single-day fall in at least 17 months. In the week ended on Friday, the Sensex rose 1406.32 points or 3.54% to settle at 41,141.85. The Nifty 50 index rose 436.50 points or 3.74% to settle at 12098.35. Broader markets outperformed as the BSE Mid Cap Index rose 785.06 points or 5.19% to settle at 15904.71 while the BSE small Cap index rose 3.46% to settle at 14840.33. FIIs sell equities worth Rs.983.55 crore over the week while DIIs bought Rs.2276.66 crore. Hinting at further monetary policy easing going forward, the central bank emphasised on financial stability and announced several temporary measures in a bid to boost credit growth. It allowed banks to do away with the need to set aside extra cash reserves against incremental lending individuals and to micro, small and medium enterprises (MSMEs). On the macro front data on consumer price index, whole sale price index, industrial production, and auto sales data from industry body SIAM will be monitored closely for more insight on the health of the economy. Globally, the prospect of the coronavirus outbreak threatening world economic growth may weigh on the domestic markets going forward.

Latest Spot Price (in US $)

Global Weekly Events

Domestic Economy Indicators

Economic News:

• The six-member monetary policy committee (MPC) on Thursday decided to keep its short-term lending rate — repo rate rate — unchanged at 5.15 per cent in the sixth bimonthly policy review of the ongoing financial year. The central bank raised its CPI inflation forecast for March quarter to 6.5 per cent and for the first half of FY21 to 5-5.4 per cent. It pegged FY21 GDP growth at 6 per cent against 6-6.5 per cent estimated by Economic Survey relased on Januay 31.
• The Reserve Bank of India (RBI) will begin the first tranche of its long-term repo operations on February 17 with three-year repo of Rs 25,000 crore, followed by another on February 24 for an equal amount. The operations date is announced a day after the RBI’s monetary policy wherein it said long-term repos aggregating up to Rs 1 lakh crore will be conducted in tranches from mid-February to ease liquidity in the system. The RBI move is aimed at providing cheaper money to banks at the repo rate and, thus, improve liquidity in the banking system.

  Industry News:

• Shares of housing finance companies rose after the Reserve Bank of India (RBI) permitted the extension of project loans for commercial real estate. The Monetary Policy Committee (MPC) of the RBI also said there will be no downgrade of commercial realty loans if delays are genuine. RBI, in its sixth bi-monthly policy resolution, decided to permit extension of date of commencement of commercial operations (DCCO) of project loans for commercial real estate, delayed for reasons beyond the control of promoters, by another one year.
• Industry body TAIPA on Thursday said it is disappointed that the Union Budget did not outline any relief measures for the telecom sector which is facing financial stress. Tower and Infrastructure Providers Association (TAIPA) said the industry had been hoping for support from Budget on the alignment of DoT-issued Right of Way (RoW) Rules in every state, which has been pending for the last three to four years.

   Company News:

• With the export of its first parcel of IMO 2020 grade Very Low Sulphur Fuel Oil (VLSFO) from Kochi to Singapore, Bharat Petroleum has become the first oil marketing company to export this cleaner shipping fuel from the country. The tanker MT Alnic MC carrying the first parcel of 15 TMT VLSFO to Singapore was flagged off by Cochin Port Trust Chairperson M Beenafrom the Cochin Port on Friday.
• Mahindra & Mahindra (M&M) on Saturday reported a 73 per cent year-on-year decline in its net profit after tax (PAT) at Rs 380 crore for the third quarter ended December 31, 2019, due to one-time impairment provision. The company had posted a net profit of Rs 1,396 crore in the same quarter last year. Total revenue fell by 6 per cent to Rs 12,120 crore in Q3 FY20, compared to Rs 12,893 crore in the corresponding quarter of the last year. The operating margin improved to 14.8 per cent as against 13.2 per cent in the same period last year.
• Drug firm Cipla on Saturday said it has acquired four brands from Wanbury Ltd to strengthen its presence in the women’s health segment. While Cipla did not provide any financial details of the acquisition, as per a regulatory filing by Wanbury, it has received up to Rs 88.60 crore for the sale of the brands to Cipla. Cipla has acquired the four brands namely CPink, CDense, Productiv and Folinine to further strengthen its presence in the women’s health segment.

Global News:

• The new coronavirus epidemic in mainland China is almost certain to become more deadly than SARS on Saturday as the death toll passed 700, health experts warned of mask shortages and more cases were confirmed on a quarantined Japanese cruise ship. The number of new infections in China’s Hubei province, the epicentre of the outbreak, rose on Friday from a day earlier, Chinese health officials said, reversing two days of declines and showing the difficulty of predicting the epidemic’s peak.
• The Wall Street pulled back from record levels on Friday, as investors assessed the U.S. employment report that showed jobs growth accelerated in January but included a downward revision to some previous numbers. Nonfarm payrolls increased by 225,000 jobs last month, the Labor Department’s data showed, much higher than 160,000 jobs additions expected by economists polled by Reuters. The economy created 514,000 fewer jobs between April 2018 and March 2019 than originally estimated, suggesting job growth could significantly slowdown this year.

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

Forthcoming Corporate Actions (10^th February to 15^th February)

Source: BSE, Elite wealth Research

Upcoming Board Meetings (10^th February to 15^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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