Indian Equity Summary-
Ø In the
past week, Indian Markets encountered highly volatile movements and settled in
a negative territory with losses of more than 2 percent week on week, taking
cues from global stock market which remained cautious as rising coronavirus
virus in America and Europe, the delay in the second US stimulus package has
made investors wary of the situation. As the Tug of War between bulls and bears
kept the markets shaky on the basis of mixed signals from the global front,
Nifty indices saw trade in a wider range from 11550-11950. We expect
uncertainty to grip the market in the coming sessions, as well as in the
aftermath of the U.S. election.
Ø Going
forward, global factors like development on the US elections front, US /China
relations , and domestic factors like ongoing Q2 corporate earnings season,
supreme court moratorium decisions and FII/DII inflows and USD/INR rates ; will
continue to dictate the trend of the domestic equity market. We expect the
trading range for Nifty between 11600-12,200 in the near term. However, the
index may resume its bearish bias if it breaches and sustains below 11600-11650
levels in future sessions.
Indian Debt Market
Ø The
Government bond prices ended lower on a WoW basis. The yield on the 10-year
benchmark 5.77% 2030 paper settled at 5.88% on October 29 compared with 5.84%
on October 23.
Ø Reserve
Bank of India announces the auction of Government of India Treasury Bills for
INR16,000cr on Wednesday, November 04, 2020
Ø The
Government of India has announced the Scheme for grant of ex-gratia payment of
difference between compound interest and simple interest for six months to
borrowers in specified loan accounts (1.3.2020 to 31.8.2020) (the ‘Scheme’) on
October 23, 2020, which mandates ex-gratia payment to certain categories of
borrowers by way of crediting the difference between simple interest and
compound interest for the period between March 1, 2020 to August 31, 2020 by
respective lending institutions.
Ø We expect
the 10 year benchmark yield to trade between 5.80-6.05% in near term.
Domestic News
Ø India’s
eight infrastructure sectors drifted closer to expansionary territory in
September as contraction narrowed to 0.8 per cent. The production of eight core
sectors had contracted 5.1% in September 2019. The decline in output during the
month under review was the lowest since March.
Ø India's
fiscal deficit widened to INR 9.139 trillion in April-September 2020-21 from
INR 6.515 trillion in the corresponding period of the previous fiscal year.
That was equivalent to 114.8 percent of the government’s budget estimate for this
financial year, much higher than 92.6 percent a year earlier
Ø The Indian
rupee touched 74.5 against the US dollar, the weakest level since August 25th,
as rising coronavirus cases across the globe, fresh lockdowns in Europe and
uncertainty surrounding the US November election spooked investor appetite for
risk assets.
International News
Ø France’s
economy rebounds 18.2% in the third quarter: Statistics office. Nevertheless,
economic output was “sharply lower than it had been before the crisis,” with
GDP down by 4.3 percent on a year-on-year basis, the statisticians calculated
in preliminary data.
Ø Coronavirus
second wave douses hopes of German economic recovery. Analysts from financial
information service Factset have predicted a rebound of 7.4 percent in July to
September after a plunge of almost 10 percent during the second quarter
Ø British
Prime Minister Boris Johnson announced a second national lockdown in England
starting Thursday as coronavirus cases surge.
Ø US real
Gross Domestic Product (GDP) increased at an annual rate of 33.1 percent in the
third quarter of 2020.In the second quarter, realGDP decreased 31.4 percent.
Economists had expected GDPto soar by 31.0 percent
Ø European
Central Bank left its key interest rates and massive stimulus unchanged citing
a highly uncertain outlook amid a resurgence in the Covid19 pandemic, and
hinted at a move in December .when the latest set of macroeconomic projections
will be available.
Disclaimer
The information and views
presented here are prepared by Karvy
Private Wealth (a division of Karvy Stock Broking Limited) or other Karvy
Group companies. The information contained herein is based upon sources that we
consider reliable. We, however, do not vouch for the accuracy or the
completeness thereof. This material is for personal information and we are not
responsible for any loss incurred based upon it. Karvy Private Wealth is only a
distributor of securities and financial market products
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