Month: November 2022

Nifty reclaims 18,000-mark as investors add risk

The Nifty reclaimed the 18,000 peak on Tuesday, closing above the mark for the first time since April, as stocks rallied for the fourth straight session.

Shrugging off concerns on inflation accelerating higher-than-expected to 7% in August and industrial output in July rising a slower-than-expected 2.4%, investors added risk sending the benchmark gauge up 133.70 points or 0.75% to settle at 18,070.05 points.

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In Asia, the Shanghai Composite Index gained nearly 0.1%, Japan’s Nikkei 225 advanced 0.3% and South Korea’s key Kospi index jumped 2.7%. However, Hong Kong’s benchmark Hang Seng index declined 0.2%.

Foreign portfolio investors (FPI) have been bullish on Indian equities in the past four weeks and continued to be buyers. FPIs invested `2,049.65 crore into domestic equities on Monday, according to data available on BSE. They have shopped for equities worth $8 billion since July, aided by a correction in commodity prices and India’s relatively strong macro fundamentals.India’s relative outperformance vis a vis other emerging markets has gained traction in recent weeks and the outperformance is now highest since the 1999-2000 period, according to Elara Capital. The benchmark 50-share Nifty is trading at a valuation of 19x its 12-month forward P/E as on September 7.

“India’s sustained growth momentum and the relatively benign inflation in the context of continued global disarray on account of tensions in Ukraine and the Taiwan straits, has attracted FPIs back to Indian equities,” said UR Bhat, director, Alphaniti Fintech.India is seen as the favourite among emerging markets because of the relative resilience of the rupee and forex reserves, as also relatively low levels of external debt, current account and fiscal deficits.The country’s weighting in the widely tracked MSCI EM index has shot up to about 14.49% now from 8.1% at the end of October 2020. The number of constituents in the MSCI EM Standard Index is now at 108 stocks versus 87 as of October 2020.Among the Sensex shares, Bajaj Finserve, IndusInd Bank, Bharti Airtel, Titan and Bajaj Finance were the main gainers. HDFC Bank, HDFC, Power Grid, L&T, ITC, Reliance, SBI and Infosys also closed in the positive territory.

TCS was the biggest loser among the Sensex pack, declining 0.37%.

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In the broader market, BSE MidCap advanced 0.32% to 26,252.08 points while BSE SmallCap gained 0.24% to 29,893.97 points.

Among the sectoral indices, FMCG rose 0.77%, Finance went up 0.85%, both Industrials and Metals gained 0.74%, Capital Goods went up 0.69% and Consumer Durables increased 0.66%.

On the other hand, Energy, Oil & Gas and Realty indices closed with losses. Brent crude rose to $95.15 per barrel in London. Gains in global equities also supported the local markets.

Global Markets: Wall Street keeps stocks down, dollar up on inflation

Wall Street and global stocks fell again on Friday, or barely recovered, with government bond yields pulling back from recent peaks and the dollar pushing ever higher, as higher-than-expected inflation continued to weigh on markets.

Fresh personal consumption expenditures (PCE) price index data, tracked by the US Federal Reserve as it considers more interest rate hikes, showed a rise of 0.3% last month after dipping 0.1% in July. Euro zone inflation also hit a record high of 10% in September, surpassing forecasts for a 9.7% rise, flash inflation data showed.

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The Dow Jones Industrial Average fell 0.65%, to 29,034.83, the S&P 500 lost 0.61%, to 3,618.17 and the Nasdaq Composite dropped 0.53%, to 10,681.01.

The declines Friday cap a week of global market turmoil in which recession fears already sapped stocks and currency markets were rocked by dollar strength.

Asian shares fell earlier on Friday, on track for their largest monthly loss since the start of the pandemic in 2020.

European shares saw some recovery, although they remained on track for a third consecutive quarter of losses as markets worried about the impact on global growth of central banks hiking interest rates to counter inflation. Europe’s STOXX 600 was last up 0.56%.

The MSCI world equity index, which tracks shares in 47 countries, fell 0.1%.

David Madden, market analyst at Equiti Capital, said a pullback in government bond yields enabled stocks to edge up, but this was unlikely to be the start of a longer recovery.

“The big picture hasn’t changed: yields are an upward trend, inflation is still really high, interest rates are set to continue on the path of higher rates,” he said.

Also read: Sensex, Nifty snap 7-day losing streak after RBI hikes repo rate; Nifty eyes 17700 with support at 16850

European government bond yields fell, with Germany’s 10-year yield down 10 basis points at 2.101%, compared to Wednesday’s peak of 2.352%, which was an 11-year high.

US Treasury yields also pulled back on Friday. The yield on 10-year Treasury notes was down 5.7 basis points to 3.690%; 30-year Treasury bonds fell 4.3 basis points to 3.650%.

Currency markets calmed, with the dollar index up 0.2% on the day, after hitting a 20-year high on Wednesday. The dollar index has risen more than 17% this year.

The British pound, which had been driven to all-time lows by a combination of dollar strength and the government’s plans for tax cuts funded by borrowing, fell 0.15% on the day. It is on track for its worst quarter versus the dollar since 2008 .

The Bank of England won’t raise interest rates before its next scheduled policy announcement on Nov. 3 despite a plummet in sterling but will make big moves in November and December, a Reuters poll found.

European Central Bank policymakers have also voiced more support for a large rate hike.

COMMODITIES Oil prices were on track for their first weekly gain in five on Friday, underpinned by the possibility that OPEC+ will agree to cut crude output when it meets on Oct. 5. But in morning trading US crude fell 1.17% to $80.28 per barrel and Brent was at $88.12, down 0.42% on the day.

Gold prices, which gained on Friday as the dollar weakened, were on course for their worst quarter since March last year as central banks worldwide stick with aggressive monetary policies.

Spot gold last rose 0.1% to $1,662.30 an ounce; US gold futures gained 0.54% to $1,667.40 an ounce.

Petrol, diesel sales jump in September as festival season approaches

Petrol and diesel sales in India jumped in September as economic activity picked up with the nearing festival season and the ending of the monsoon raised the demand, preliminary industry data showed. Petrol sales soared 13.2 per cent to 2.65 million tonnes in September when compared to 2.34 million tonnes of consumption in the same month last year. Sales were 20.7 per cent higher than Covid-marred September 2020 and 23.3 per cent more than pre-pandemic September 2019.

Demand was, however, 1.9 per cent lower than the previous month of August 2022. Diesel, the most used fuel in the country, posted a handsome 22.6 per cent rise in sales in September to 5.99 million tonnes when compared to the same month last year. Consumption was up 23.7 per cent over September 2020 and nearly 15 per cent higher than pre-Covid 2019.

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Industry sources said the ending of monsoon rains in most parts of the country and a pick up in agriculture season led to a rise in diesel demand. Rains usually restrict mobility and demand from the farm sector, which uses diesel in irrigation pumps and trucking. Also, the approaching festival season led to a pick-up in economic activity and a rise in demand.

Auto fuel sales had dipped in July and August owing to the monsoon and reduced demand. This dip had come after a surge in June that was supported by increased summer travel to colder areas of the country to escape from the heat and vacations during annual breaks at educational institutions. As the aviation sector opened up, India’s overall passenger traffic at airports inched closer to pre-Covid-19 levels.

Accordingly, jet fuel (ATF) demand jumped 41.7 per cent to 5,44,700 tonnes during September when compared to the same month last year. It was 81.3 per cent higher than September 2020 but nearly 12 per cent lower than pre-Covid September 2019.

The sources said while domestic air travel is back to pre-Covid levels, international traffic is lagging because of continued restrictions in some countries. With strong economic growth of 7 per cent, India’s oil demand has been rising steadily since the country eased pandemic lockdowns.

Cooking gas LPG sales were up 5.4 per cent year-on-year at 2.48 million tonnes in September. LPG consumption was 9.3 per cent higher than in September 2020 and 14.9 per cent more than in September 2019.

Month-on-month, the demand was up 4.26 per cent when compared to 2.38 million tonnes of LPG consumption during August, the data showed.

Critical Developments: India’s Concerns Over Naval Officers’ Verdict in Qatar

India has conveyed its profound dismay regarding the death penalty verdict rendered by the court in Doha, Qatar, to the eight former Indian Navy officials affiliated with the now-defunct Al Dahra company. This judgement as indicated by the Ministry of External Affairs, was delivered today.

In response to the news of this death penalty verdict, the Ministry of External Affairs statement affirming: “We are currently in contact with the family members and the legal team and are actively exploring all available legal avenues.” Furthermore, it was noted, “Our initial information suggests that the Court of First Instance in Qatar has issued a judgment pertaining to the eight Indian employees of the Al Dahra company.”

During a weekly briefing on October 19, 2023, the official spokesperson of the Ministry of External Affairs, Arindam Bagchi, responded to questions about the former naval officers. He revealed, “The case had its final hearing, the seventh hearing, earlier this month on October 3, 2023. We have been closely monitoring the proceedings in the Court of First Instance and anticipate a judgment later this month. Previously, our Ambassador and Deputy Chief of Mission met with the eight detainees on October 1 after being granted consular access.”

These eight officers are currently facing legal proceedings under Qatari law, with the seventh hearing of their case conducted on October 3rd in Doha. It should be recalled that the eight Indian naval veterans were apprehended by Qatar’s interior ministry on August 30, 2022. The Indian government has been providing judicial support to these veterans, with consular access being granted on October 1st.

India remains deeply concerned about the fate of these individuals and is committed to exhausting all available legal avenues in addressing this complex and sensitive matter.