Mar­ket par­tic­i­pants book prof­its

Money Times - - Market Review - By Deven­dra A Singh

The Sen­sex tum­bled 371 points to set­tle at 33314.56 while the Nifty closed at 10321.75 fall­ing 130.75 points for the week end­ing Fri­day, 10 Novem­ber 2017.

On the macro-eco­nomic data, In­dia’s ser­vice sec­tor's re­cov­ery fol­low­ing the im­ple­men­ta­tion of the GST gath­ered pace as the sec­tor ob­served a faster rise in ac­tiv­ity. Nikkei In­dia Ser­vices Pur­chas­ing Man­agers’ In­dex (PMI) showed mar­ginal growth of the sec­tor. The head­line fig­ure gained from 50.7 in Septem­ber 2017 to 51.7 in Oc­to­ber 2017. The Nikkei Com­pos­ite Out­put In­dex was up from 51.1 in Septem­ber 2017 to 51.3 in Oc­to­ber 2017. Aashna Dod­hia, an econ­o­mist at IHS Markit, said that the re­cov­ery from the im­ple­men­ta­tion of the GST in July was sus­tained in the pri­vate sec­tor in Oc­to­ber, mainly ra­di­at­ing from ser­vice providers as growth in man­u­fac­tur­ing was rel­a­tively sub­dued. More­over, the ser­vice sec­tor re­ported the fastest rise in new busi­ness since June. These key growth in­di­ca­tors re­mained rel­a­tively muted.

She also said, “Al­though the de­gree of busi­ness con­fi­dence fell to the weak­est since June 2017, ser­vice providers re­tained an op­ti­mistic out­look re­gard­ing busi­ness ac­tiv­ity over the com­ing 12 months whilst the labour mar­ket was fur­ther re­in­forced as firms raised their pay­roll num­bers over the month”.

On the price front, the ser­vice sec­tor ex­pe­ri­enced fur­ther up­ward cost pres­sures as the rate of in­fla­tion quick­ened to the joint-fastest since April 2016. The com­pos­ite PMI was at the high­est since June 2017, sup­port­ing the IHS

Markit fore­cast that the coun­try’s GDP is on track to ex­pand at 6.8% in FY18, the re­port added.

The Nikkei In­dia Man­u­fac­tur­ing PMI fell from

51.2 in Septem­ber 2017 to 50.3 in Oc­to­ber 2017, which in­di­cates a broad stag­na­tion in the health of the man­u­fac­tur­ing sec­tor dur­ing Oc­to­ber. At the sec­toral level, im­prove­ments in con­sumer goods negated de­te­ri­o­ra­tions in in­vest­ment and in­ter­me­di­ate goods. The down­ward move­ment in the head­line in­dex was partly driven by stag­na­tion in new busi­ness. Mean­while, new ex­port or­ders for In­dian goods re­duced in Oc­to­ber 2017. The rate of con­trac­tion was the fastest since Septem­ber 2013.

The 10-year bench­mark G-Sec yield rose sharply to 6.88% as on 31 Oc­to­ber 2017, from the low of 6.41% as on 24 July 2017, driven by var­i­ous fac­tors such as in­creas­ing like­li­hood of a rate hike by the US Fed­eral in De­cem­ber 2017, a slow­ing GDP growth in In­dia that led to spec­u­la­tion re­gard­ing a fis­cal stim­u­lus pack­age and a po­ten­tial slip­page rel­a­tive to the GoI's fis­cal deficit tar­get for FY18. The rise in oil prices since Q2FY18, which may widen the cur­rent ac­count deficit and weaken the INR, cou­pled with the an­nounce­ment of Pub­lic Sec­tor Banks re­cap­i­tal­i­sa­tion pro­gramme, also added to the hard­en­ing of yields. More­over, the pro­vi­sional fig­ures of Di­rect Tax col­lec­tions rose in Oc­to­ber 2017. Net col­lec­tions are at Rs.4.39 lakh crore, 15.2% higher than the net col­lec­tions in the pre­vi­ous cor­re­spond­ing pe­riod. Net Di­rect Tax col­lec­tions rep­re­sent 44.8% of the to­tal Bud­get Es­ti­mates of Di­rect Taxes for FY18 (Rs.9.8 lakh crore). Gross col­lec­tions (be­fore ad­just­ing for re­funds) have grown 10.7% to Rs.5.28 lakh crore dur­ing April-Oc­to­ber 2017. Re­funds amount­ing to Rs.89,507 crore were is­sued dur­ing April 2017 - Oc­to­ber 2017.

World Bank Pres­i­dent, Jim Yong Kim said, “In­dia's eco­nomic growth is go­ing through an aber­ra­tion caused by tem­po­rary dis­rup­tions in prepa­ra­tion for the GST and will get cor­rected in the near fu­ture”. He added that the GST will have a pos­i­tive im­pact on the econ­omy.

“There has been a de­cel­er­a­tion in the first quar­ter, but we think that is mostly due to tem­po­rary dis­rup­tions in prepa­ra­tion for the GST, which by the way is go­ing to have a hugely pos­i­tive im­pact on the econ­omy.

We think that the re­cent slow­down is an aber­ra­tion which will cor­rect in the com­ing months, and the GDP growth will sta­bilise dur­ing the year. We have been watch­ing care­fully, as PM

Modi has re­ally worked on im­prov­ing the busi­ness en­vi­ron­ment and so we think all of those ef­forts will pay off as well”, Kim added.

Key in­dices ended flat on

Mon­day, 6 Novem­ber 2017.

The Sen­sex gained 45.63 points (+0.14%) to close at 33731.19 (a his­toric record clos­ing high) while the Nifty was down 0.7 points (0.01%) to close at 10451.80.

Key in­dices cor­rected on

Tues­day, 7 Novem­ber 2017, on profit-book­ing by FIIs on global cues. The Sen­sex tum­bled 360.43 points (1.07%) to close at 33370.76 while the Nifty fell 101.65 points (-0.97%) to close at 10350.15.

Key in­dices plunged on Wed­nes­day, 8 Novem­ber 2017, on ex­tended sell­ing of eq­ui­ties by for­eign funds. The Sen­sex tanked 151.95 points (-0.46%) to set­tle at 33218.81 and the Nifty was down 47.00 points (-0.45%) to close at 10303.15.

Key in­dices ended flat on Thurs­day, 9 Novem­ber 2017, on mod­est buy­ing of eq­ui­ties. The Sen­sex edged higher by 32.12 points (+0.10%) to close at 33250.93 while the Nifty was up 5.80 points (+0.06%) to close at 10308.95. Key in­dices set­tled higher on Fri­day, 10 Novem­ber 2017, on pos­i­tive buy­ing by traders. The Sen­sex was up 63.63 points (+0.19%) to set­tle at 33314.56 while the Nifty was up 12.80 points (+0.12%) to close at 10321.75. Events like na­tional and global macro-eco­nomic fig­ures as well as the earn­ings sea­son will dic­tate the move­ment of the mar­kets and in­flu­ence in­vestor sen­ti­ment in the near fu­ture.

On the in­fla­tion data, the gov­ern­ment is sched­uled to re­lease data based on WPI and CPI for ur­ban and ru­ral In­dia for Oc­to­ber 2017 by mid-Novem­ber 2017.

The gov­ern­ment will re­lease other macro-eco­nomic fig­ures for Septem­ber 2017 this week. The Chi­nese gov­ern­ment is sched­uled to un­veil the in­dus­trial pro­duc­tion data for Oc­to­ber 2017 on Tues­day, 14 Novem­ber 2017.

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