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Weekly wrap-up: Market updates, news and insights for the week ending 03rd May, 2019
Publish date: 03rd May, 2019
NEWS: NIFTY AND SENSEX CLOSE VOLATILE WEEK ON TEPID NOTE
Perspective:
- Nifty remained volatile through the week which was not surprising with the VIX continuing to hover around the 24 mark and the election outcome fast approaching.
- The week has been marked by weakness in IT stocks and pressure on FMCG stocks on top line growth concerns and weak rural demand for FMCG products.
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News: BRENT CRUDE RETREATS MORE THAN $5/BBL AFTER TOUCHING 2019 PEAK
Perspective:
- Brent crude had touched its 2019 peak last week at $75.60/bbl. However, record output from the US and a sharp rise in inventories led to crude prices tapering towards $70/bbl.
- The big questions still remain over the sanctions on Iran and Venezuela. In both the cases, the sanctions could constrain global supply and give support to oil prices.
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NEWS: FOURTH QUARTER COULD SEE GDP SLOWDOWN; FINANCE MINISTRY
Perspective:
- The Finance Ministry has hinted in its Monthly Economic Report that the March quarter GDP could come under pressure due to weak private consumption
- Apart from the liquidity crisis, investments have also weakened ahead of elections and that could impact the March quarter GDP. Actual growth will be announced on May 31st.
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NEWS: DEBT FUND DECISIONS COULD COME UNDER CLOSER SCRUTINY BY SEBI
Perspective:
- The hint came from SEBI after some debt funds had to postpone their FMP redemptions due to liquidity crunch at a major industrial group in India.
- SEBI has expressed concerns about debt schemes funding promoters through the NCD route when they are not regulated like banks on capital adequacy and NPA recognition.
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NEWS: BANKS CAN WRITE OFF THEIR IL&FS GROUP DUES AS PER NCLAT
Perspective:
- Earlier, NCLAT had asked banks not to make provisions for their IL&FS exposure as it was under government directed restructuring under a temporary board.
- However, post objections from the RBI, the NCLAT has allowed banks to write off loans given to IL&FS and group companies. IL&FS owes creditors close to Rs.97,000 crores.
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NEWS: NSE HINTS AT LEGAL ROUTE ON SEBI ORDER; SHAREHOLDERS SAY NO
Perspective:
- This pertains to the disgorgement order on NSE to the tune of Rs.700 crore in addition to a ban on accessing capital markets for a period of 6 months on the co-location issue.
- Shareholders of NSE are keen to close out the case amicably so that NSE can come out with an IPO subsequently and provide an exit route for equity investors.
NEWS: NBFC DEFAULTS AND DOWNGRADES SPIKES SHORT TERM RATES
Perspective:
- According to a report in the ET, short term borrowing rates of CPs and CDs had spiked by nearly 15 bps due to the recent downgrades and higher risk perception
- The bigger worry for markets is that NBFCs have nearly Rs.200,000 crore of CPs maturing in the month of May and rollovers could be a challenge as per the ET report.
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NEWS: GST COLLECTIONS FOR APRIL 2019 TOUCH AN ALL-TIME RECORD
Perspective:
- April GST collection of Rs.113,865 crore was the best monthly GST collection since it was launched in July 2017, although it is still below this year’s monthly target of Rs.1.30 lakhs
- The previous year had seen a GST shortfall of close to Rs.1 trillion but the GST Council expects improvement this year as most of the GST rate cuts may be out of the way.
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By: Sandhya Kannan, Head – Content
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