Indian Equity Benchmark Indices' Returns FII and Mutual Fund

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Indian Equity Benchmark Indices' Returns FII and Mutual Fund January 16, 2015 Indian equity benchmark indices’ returns Indian equity market summary % change % change ■ The Indian equity market reversed the previous week’s loss and surged in Broad Indices Jan 16 for week for YTD the reported week; benchmarks CNX Nifty and S&P BSE Sensex rose 2.8% S&P BSE 100 8605.71 2.80 2.83 and 2.4% respectively. CNX Nifty 8513.80 2.77 2.79 CNX 500 6961.45 2.63 2.77 ■ The market was primarily boosted by the RBI’s unexpected decision to cut S&P BSE Sensex 28121.89 2.42 2.26 the repo rate by 25 bps to 7.75%. S&P BSE Midcap 10633.11 1.99 2.51 S&P BSE SMALLCAP 11309.93 1.00 2.01 ■ Rate sensitive counters such as realty, capital goods and banks benefitted % change % change the most from the RBI’s action; S&P BSE Realty, S&P BSE Capital Goods Sectoral Indices Jan 16 for week for YTD and S&P BSE Bankex rose 5.7%, 4.8% and 3.2% respectively. S&P BSE Realty Index 1619.87 5.74 4.17 ■ Sentiments were also optimistic ahead of the release of domestic CPI and S&P BSE CG 16200.2 4.77 4.91 S&P BSE FMCG 8154.12 4.07 4.99 IIP numbers; later, the numbers came in better-than-expected - cheering the S&P BSE Power 2132.41 3.47 1.91 investors. S&P BSE Bankex 22021.41 3.16 2.63 ■ Further gains were, however, restricted as shares of metal companies S&P BSE Auto 19326.3 2.61 3.73 S&P BSE CD 9924.61 2.23 2.59 plunged amid falling global commodity prices; S&P BSE Metal was the S&P BSE IT 10990.97 2.22 3.85 biggest sectoral decliner – down 4.2%. S&P BSE Healthcare 14894.27 1.38 1.37 S&P BSE Oil & Gas 9754.94 -0.86 -1.42 ■ The market was also weighed down by a sell-off in oil & gas companies due S&P BSE Metal 10052.67 -4.15 -6.51 to a persistent decline in oil prices; S&P BSE Oil & Gas lost nearly 1%. Source: BSE, NSE ■ Some weak cues across global markets, especially Switzerland’s unexpected decision to abandon its currency cap, pulled down the market FII and mutual fund investment vs. Nifty further. (FII/MF (Nifty) Inv Rs Cr ) ■ Meanwhile, the market ignored the WPI inflation numbers for December, 8600 2,000 1,500 which inched up to 0.11% from 0.00% in the previous month. 1,000 8400 500 0 Other major domestic news 8200 -500 -1,000 ■ The RBI reduced the policy repo rate under the liquidity adjustment facility -1,500 8000 -2,000 (LAF) by 25 basis points from 8% to 7.75% with immediate effect. Consequently, the reverse repo rate under the LAF stood adjusted at 1-Jan 2-Jan 5-Jan 6-Jan 7-Jan 8-Jan 9-Jan 13-Jan 12-Jan 14-Jan 15-Jan 17-Dec 31-Dec 16-Dec 18-Dec 19-Dec 22-Dec 23-Dec 24-Dec 26-Dec 29-Dec 30-Dec 15-Dec 6.75%, and the marginal standing facility (MSF) rate and the bank rate at FII Net Investment MF Net Investment Nifty 8.75% with immediate effect; it kept the CRR unchanged at 4%. Source: SEBI, NSE ■ India’s Index of Industrial Production came in at 3.8% in November vs -4.2% in October. FII and mutual fund weekly investment ■ India’s Consumer Price Index (CPI) rose to 5% in December vs 4.38% in Jan 9 – Jan 15 Rs Cr November. WPI-based inflation inched up to 0.11% in December from FII Inv (Equity) MF Inv (Equity) 0.00% in the previous month. Buy 24195 4706 Sell 22279 4018 ■ India's trade deficit declined to a 10-month low of $9.43 bn in December Net 1917 687 mainly on account of falling imports due to slump in crude oil prices. YTD -311 1733 ■ The World Bank expects India's growth to accelerate to 6.4% in 2015 and Source: SEBI then to 7% in each of the next two financial years, compared with an estimated 5.6% for the current year. Domestic macro indicators ■ The government has approved 12 FDI proposals totalling Rs 1,827 cr. Indicators Current Previous ■ The RBI has relaxed the norms for forex hedging for exporters and 5% 4.38% Monthly CPI Inflation (Dec-14) (Nov-14) importers by allowing them to book forward foreign exchange contracts in 0.11% 0.00% excess of 50% of the eligible limit. Monthly WPI Inflation (Dec-14) (Nov-14) ■ SEBI notified a stricter set of insider trading norms to check illicit -4.25% 2.81% IIP transactions in shares of listed firms by management personnel and (Oct-14) (Sep-14) 'connected persons'. 5.30% 5.70% GDP ■ At the Vibrant Gujarat Summit, over 21,000 separate investment intentions, (Jul-Sep 14) (Apr-Jun 14) worth Rs 25 lakh cr, were signed. Source: CRISIL Centre for Economic Research Indian debt market indicators Indian debt market summary Previous ■ Liquidity conditions were tight most of the week, with the overnight Indicators Jan 16 Trend Week borrowing rate hovering above the RBI’s repo rate. The demand for funds Call Rate 7.55% 8.10% rose as banks borrowed to meet mandatory reserve requirements. The 3 M CP 8.93% 9.06% liquidity deficit also tightened due to outflows towards payment of state 1 Yr CP 9.05% 9.15% development loans. The interbank call money rate ended at 7.55% on 3 M CD 8.39% 8.49% January 16 as against 8.05-8.10% on January 9. 1 Yr CD 8.53% 8.60% ■ The RBI conducted four overnight variable rate repo auctions for a total 5 Yr AAA 8.28% 8.57% notified amount of Rs 70,000 cr. The central bank also held a repo auction 1 Yr G-Sec 7.88% 8.28% of three-day tenor in the last session of the week for a notified amount of Rs 5 Yr G-Sec 7.74% 7.99% 10,000 cr. In addition, the banking regulator disbursed funds to the tune of 10 Yr G-Sec 7.71% 7.84% Rs 31,000 cr through two term repo auctions each of 14-day tenor. Repo 7.75% 8.00% ■ Government bond prices rose as the appetite for gilts improved after the Average Repo 19,334 12,024 RBI surprised the markets by slashing the benchmark repo rate by 25 bps to Volumes (Rs cr) 7.75% on January 15. The yield of the 10-year benchmark 8.40% 2024 CRR 4.00% 4.00% paper ended at 7.71% on January 16 as against 7.84% on January 9. $ 319.48 bn $ 319.24 bn Forex Reserves ■ The central bank’s interest rate cut outside its bi-monthly policy cycle (Jan 9) (Jan 2) boosted market sentiment and led to expectations of further rate cuts in the Source: CRISIL Fixed Income Database, RBI coming months. In its statement, the banking regulator attributed its move to the sustained decline in domestic retail inflation and the government’s Corporate bond spreads over G-Sec commitment towards fiscal consolidation. Spreads AAA AA+ AA AA- A+ ■ Bond prices also gained earlier in the week as a lower-than-expected rise in 3 Yr 0.39% 0.69% 0.96% 1.28% 1.57% Jan 14, December inflation numbers spurred further bond buying as it fuelled hopes 5 Yr 0.39% 0.75% 1.04% 1.37% 1.66% 2015 of an interest rate cut by the central bank. 10 Yr 0.36% 0.70% 1.18% 1.58% 1.92% ■ The rupee’s strength against the US dollar and the sharp fall in the US 3 Yr 0.45% 0.75% 1.02% 1.34% 1.63% Previous benchmark Treasury yields also provided support to gilt prices. 5 Yr 0.37% 0.73% 1.02% 1.35% 1.64% Week 10 Yr 0.37% 0.71% 1.19% 1.59% 1.93% ■ Profit sales in the last session of the week led to a minor bond price correction after the earlier rally. Source: CRISIL Fixed Income Database ■ The rupee ended the week at an over one month high against the US dollar 10-year benchmark G-Sec movement taking cues from favourable domestic events. 10-Year Benchmark G-Sec Yield 9.30% ■ At the start of the week, the rupee rose as banks sold the greenback prior to 9.05% the release of domestic CPI and IIP figures. 8.80% ■ Domestic share indices which ended the week higher on the RBI’s rate cut 8.55% and foreign banks’ dollar sales also aided the rupee’s gains. 8.30% 8.05% ■ However, a further rupee rise was prevented by the euro’s weakness 7.80% against several currencies including the US dollar and the Swiss franc. The 7.55% euro weakened against the Swiss franc after the Swiss National Bank decided to remove its control over the exchange rate and slashed the 7-Oct-14 7-Apr-14 5-Nov-14 9-Sep-14 17-Jul-14 7-May-14 interest rates to -0.75%. 20-Jan-14 24-Jun-14 16-Jan-15 11-Mar-14 12-Feb-14 12-Aug-14 28-Nov-14 23-Dec-14 30-May-14 ■ Demand for the greenback by corporates and importers also weighed on the Source: CRISIL Fixed Income Database local currency.
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