Eq­uity mar­ket set­tles higher

Money Times - - Market Review - By Deven­dra A Singh

The BSE Sen­sex ad­vanced 311.09 points to set­tle at 31,524.68 and the NSE Nifty closed at 9,837.40 up 126.60 points for the week end­ing Fri­day, 18 Au­gust 2017.

On the macro-eco­nomic front, Con­sumer or re­tail in­fla­tion quick­ened to 2.36% in July 2017 com­pared with 1.46% in June as the de­cline in food prices slowed sharply. The July in­fla­tion num­ber is higher than the mar­ket’s ex­pec­ta­tions. Data re­leased showed whole­sale price in­fla­tion ac­cel­er­at­ing, re­vers­ing the trend seen in the past four months with food prices back on the rise. The Whole­sale Price In­dex rose 1.88% in July 2017 from a year ear­lier. Fur­ther, Whole­sale Food Prices in July 2017 rose 2.12% on year com­pared with a 1.25% fall a month ear­lier. Eas­ing price pres­sures gave the Re­serve Bank of In­dia (RBI) room to cut its main pol­icy rate by 25 ba­sis points to 6% ear­lier this month-the low­est since Novem­ber 2010. It was the first rate cut by an Asian cen­tral bank this year. But the RBI re­tained its neu­tral stance and warned that in­fla­tion could pick up again. The RBI ex­pects re­tail in­fla­tion could ac­cel­er­ate to 3.5% to 4.5% in Oc­to­ber-De­cem­ber 2017.

In his mid-year Eco­nomic Survey, Chief Eco­nomic Ad­viser (CEA), Arvind Subra­ma­nian had said there were down­side risks to the of­fi­cial growth fore­cast of 6.75-7.5% for the fis­cal year to March 2018. In­dus­trial out­put con­tracted 0.1% in June from a year ear­lier, data showed.

In his re­port, Dr. Subra­ma­nian said there was a con­sid­er­able scope for mone­tary eas­ing as the in­fla­tion was un­der­go­ing a struc­tural shift.

In­dia’s ex­port growth slowed to eight-month low of 3.94% in July 2017 while the trade deficit widened to $11.44 bil­lion on ac­count of high gold im­ports, data showed.

Trade deficit, how­ever, nar­rowed when com­pared to the pre­vi­ous month. In June, the gap stood at $12.96 bil­lion. In July 2017 it was the low­est in five months.

The coun­try’s over­seas ship­ments ag­gre­gated at $22.54 bil­lion in July 2017 against $21.68 bil­lion in the same month of last year show­ing a growth rate of 3.94%. It is the low­est ex­port growth since Novem­ber 2016 when ship­ments had ex­panded by 2.29%. There­after, the growth rate had risen to 27.59% in March be­fore it be­gan to de­cel­er­ate. A con­trac­tion in ex­port of phar­ma­ceu­ti­cals, gems & jew­ellery and ready-made gar­ments hit the over­all ex­port growth in July 2017.

Im­ports rose by 15.42% to $34 bil­lion in July 2017 from $29.45 bil­lion in the year-ago month due to rise in in­ward ship­ments of crude oil and gold.

Gold im­ports in­creased by 95% to $2.10 bil­lion in July 2017 against $1.07 bil­lion in the same month last year. Oil im­port was val­ued at $7.84 bil­lion in July 2017 an in­crease of 15% over the same month in 2016. Cu­mu­la­tive ex­ports dur­ing April-July 2017-18 rose by 8.91% to $94.75 bil­lion while im­port in­creased by 28.30% to $146.25 bil­lion, leav­ing a trade deficit of $51.5 bil­lion. En­gi­neer­ing goods, petroleum, chem­i­cals, marine prod­ucts were some of the sec­tors which con­trib­uted to the pos­i­tive growth dur­ing the month. On the global front, Ja­pan’s ex­ports rose 13.4% in July 2017 from a year ago helped by ex­ports of cars and automotive com­po­nents. It was the eighth straight monthly gain in ex­ports, data from Ja­pan’s Min­istry of Fi­nance showed. More­over, min­utes from the

Fed­eral Open Mar­ket Com­mit­tee’s July 2017 meet­ing re­leased on Wed­nes­day, 16 Au­gust 2017, showed that while some Fed mem­bers said they were wor­ried over the tight­en­ing la­bor mar­ket, oth­ers voiced concern over low in­fla­tion rates in USA. The min­utes also showed the cen­tral bank was pre­pared to trim its mas­sive bal­ance sheet, al­though the an­nounce­ment of a start date was left for an up­com­ing meet­ing. Key in­dex climbed on Mon­day, 14 Au­gust 2017 on buy­ing by traders. The Sen­sex surged 235.44 points (+0.75%) to set­tle at 31,449.03. In­dian stock mar­kets re­mained closed on Tues­day, 15 Au­gust 2017 on ac­count of In­de­pen­dence Day. Key in­dex gained on Wed­nes­day, 16 Au­gust 2017 on fur­ther buy­ing of stocks. The Sen­sex ended higher 321.86 points (+1.02%) to close at 31,770.89.

Key in­dex edged up hit­ting all-time clos­ing high on Thurs­day, 17 Au­gust 2017. The Sen­sex was up 24.57 points (+0.08%) to close at 31,795.46.

Key in­dex tum­bled on Fri­day, 18 Au­gust 2017 on a cor­rec­tion. The Sen­sex fell 270.78 points (-0.85%) to set­tle at 31,524.68.

For fu­ture events, na­tional & global macro-eco­nomic fig­ures will dic­tate global mar­kets move­ments and in­flu­ence in­vestors’ sen­ti­ment in the near fu­ture.

In­dian stock mar­kets will re­main close on Fri­day, 25 Au­gust 2017 on ac­count of Ganesh Chaturthi. On the mon­soon front, the progress of mon­soon rains will be closely watched by in­vestors. The rest of Au­gust’s & Septem­ber’s south­west mon­soon is crit­i­cal for the coun­try’s agri­cul­ture be­cause a con­sid­er­able part of na­tion’s farm­land is de­pen­dent on mon­soon for ir­ri­ga­tion.

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