- Zero maintenance charges
- Zero fees for demat account opening
- Volume based brokerage
Read More >
-
Weekly wrap-up: Market updates, news and insights for the week ending 03rd August
Publish date: 03rd August, 2018
News: Nifty bounces 116 points on Friday to close at all-time high of 11,361
Our perspective:
- The Nifty recovered most of the losses of Thursday with financials like Axis Bank, Yes Bank, ICICI Bank, HDFC, Kotak Bank and IB Housing driving the markets higher
- The sentimental worry for equity markets is that in 7 out of the last 10 years, Indian equity indices have given negative returns in the month of August. That could be an overhang.
Related reads
Stocks that took Sensex to a new high
Earnings Update on TCS and Reliance Industries
Market Strategy – Grin and bear it
An update on quarterly results
News: Monetary Policy Committee (MPC) raised repo rates by 25 basis points
Our perspective:
- The 25 basis points rate hike was the second hike in less than 2 months on the back of concerns that higher food and fuel prices could push inflation higher.
- However, with the RBI stance being maintained at Neutral, bond traders expect this hike to be front-ending of the full rate hike. INR reacted positively to the rate hike.
Related reads
Why the RBI hiked repo rates by 25 basis points
7 things to learn from RBI’s macroeconomic outlook
5 ways to read the RBI’s credit policy stance
6 assumptions that influence RBI’s monetary policy
News: Fed maintained status quo but Bank of England raised rates by 25 bps
Our perspective:
- US Fed opted to hold rates despite GDP growth coming in at 4.1% in the June quarter. Trump has favoured benign rates so that the GDP growth momentum is not lost.
- Bank of England surprised the street by hiking the reference rate by 25 bps to 0.75%. The vote was unanimous and raises concerns ahead of the BREXIT uncertainty for UK.
Related reads
Why the RBI hiked repo rates by 25 basis points
5 ways to read the RBI’s credit policy stance
6 assumptions that influence RBI’s monetary policy
News: Apple scaled the $1 trillion market capitalization mark during the week
Our perspective:
- That makes the first listed company in the world to cross $1 trillion market cap, of course, ignoring the very brief dalliance that Petro China had with the $1 trillion mark in 2007
- Apple has been the most valuable company for 7 years now and the record of 11 years was earlier held by GE. Ironically, GE today is a shadow of its former glorious self.
Related reads
How to go about value investing
5 investment lessons from Warren Buffet
News: The Cabinet approved the majority stake of LIC in IDBI Bank
Our perspective:
- The 51% stake in IDBI Bank will give LIC majority ownership in the bank as well as effective majority control over the operations of the beleaguered bank.
- LIC has also been looking for a banking license for a long time and a controlling stake in IDBI Bank gives LIC the effective leeway to operate as a bank in India.
Related reads
Latest earnings update on ICICI Bank
7 things to know about corporate governance
4 things to know about the Idea-Vodafone Merger
7 answers to your questions about Aditya Birla-Grasim merger
News: Core Sector growth for June came in sharply higher at 6.7%
Our perspective:
- The core sector growth is critical as it accounts for over 40% of the index of industrial production (IIP) and hence also impacts the manufacturing component of GDP.
- Interestingly, the big thrust to core sector growth came from sectors like cement, refinery products and coal. This also resulted in a 4% growth in electricity generation.
Related reads
6 assumptions that influence RBI monetary policy
CPI, IIP and the core inflation worries
Check out our forex insights and currency research
News: Indigo Airlines faced the brunt of oil prices with 97% fall in profits
Our perspective:
- The impact of weak pricing power in the light of competition and the rising price of ATF prices (linked to crude at $75/bbl) has triggered the sharp fall in the profits of Indigo.
- What could be worrying is that the spread between revenue and cost per average seat kilometre (RASK and CASK) has narrowed considerably in the last couple of months.
Related reads
Why we have a Buy call on Interglobe Aviation
5 factors when you invest in Airline companies
News: April-June fiscal deficit has touched 68.75% of the full year target
Our perspective:
- The good news is that the corresponding figure was 80% last year, which raises hopes that the government may be able to restrict fiscal deficit at 3.3% of GDP. Previously, the government used to spend heavily in the second half. Since last fiscal, the government has spread its annual spending across every quarter. That’s why the fiscal deficit figure looks very high as compared to the annual target.
- This will predicate on the government revenues (including GST) picking up sharply in the next few months. FII flows will have a critical role to play in bridging this deficit.
Related reads
Economic Data – 5 things that the numbers say
India’s food inflation problem
Core concerns over retail inflation
Economic Data – 5 things that the numbers say
News: India cuts down sharply on Iranian oil in the light of US sanction fears
Our perspective:
- This could be a disruption for companies like IOCL which are heavily reliant on Iran for their crude supplies into their refineries on the Western coast of India.
- The 12% lower loading of oil may be a conscious strategy to please the US but it could mean that India may forsake a very low cost source of reliable oil supply.
Related reads
6 effects of rising crude prices
3 reasons why rising oil prices bother India
5 ways falling oil prices impacts India
News: HCL Tech overtook Wipro on revenues and market capitalization
Our perspective:
- The first quarter revenues of $2.07 billion makes HCL Tech the 3rd largest player in the IT space in India behind TCS and Infosys in terms of size and market capitalization
- HCL Tech saw a lot of incremental growth coming from Mode-2 and Mode-3 clients and it has been a key value creator in the markets in the last 10 years since the US crisis
Related reads
4 things to know about TCS results
Infosys Q1 earnings – 5 things to know
Earnings update on HCL Tech | Wipro
Technology in a different league
What is SOTP valuation method?
News: IMD predicts normal monsoons for August and September this year
Our perspective:
- This prediction assumes significance considering that the private sector weather forecaster, SKYMET, has predicted weak rainfall in the months of August and September.
- However, in the last few years, IMD has a much better and reliable track record of giving a more accurate picture of monsoons, its intensity and its spread.
Related reads
CPI, IIP and the core inflation worries
7 things to learn from RBI’s macroeconomic outlook
News: Tatas may have to pay Rs.9000 crore to government over telecom business sale
Our perspective:
- The Department of Telecom has been holding back approval of such merger deals unless the past dues are cleared, which the Tatas are currently trying to negotiate
- While Bharti may not agree to pay the sum, if the deal does not go through then Tata Teleservices will have to be compulsorily wound down.
Related reads
4 things to know about the Idea – Vodafone merger
5 things to know about Reliance Jio’s impact on Indian telecom
Click here to go back 
