Indian Equity Summary-
· The week concluded on a positive note for the domestic equity market while the banking index once again outperformed the benchmark indexØ and concluded the week with the gains of 4%. On the back of strong FII fund inflows and optimistic hints from global markets, Nifty ended ~2 percent higher. The feelings of market participants were strengthened by reports that the government is open to more stimulus steps to support the corona virus-hit economy. The government is planning to boost demand, including spending on infrastructure and a potential package for the hospitality sector with more stimulus measures.
· Going forward, global factors like development on the US elections front, US /China relations , and domestic factors like start of the Q2Ø corporate earnings season 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 11700-12,200 in the near term. Markets may consolidate within a wider range, demonstrating clearly that a sideways movement is more probable than an outright reversal.
Indian Debt Market-
· The Government bond prices ended higher on a WoW basis. The yield on the 10-year benchmark 5.77% 2030 paper settled at 5.84% on OctoberØ 23 compared with 5.94% on October 16.
· CPI inflation for September 2020 rose sharply to a high of 7.34% YoY compared to 6.7% in August 2020, driven by a sharp rise in food inflationØ even while core inflation fell slightly .
· The central bank had decided to conduct OMOs in SDLs as a "special case" during the current financial year with an aim to improve liquidity andØ facilitate efficient pricing.
· We expect the 10 year benchmark yield to trade between 5.70-6.0% in near term.Ø
Domestic News
· SEBI allowed exchanges dealing with agri-commodity derivatives to utilise the fund created for farmers and FPOs for reimbursementØ of mandi tax and charges incurred by them on storage and transportation of goods.
· The Centre has informed the Supreme Court that the difference in the compound interest and simple interest charged for six monthsØ of moratorium period on eight categories of loans worth up to ₹2 crore will be paid back to borrowers by November 5, 2020.
· Franklin Templeton Mutual Fund has said its six shut schemes have received Rs 8,302 crore from maturities, pre-payments andØ coupon payments since closing down in April.
· India's power consumption grew 11.45 per cent to 55.37 billion units (BU) in the first half of October this year, mainly driven byØ buoyancy in industrial and commercial activities. his year, mainly driven by buoyancy in industrial and commercial activities. Power consumption in the country was recorded at 49.67 BU during October 1-15 last year
International News
· U.S. Weekly Jobless Claims Drop To 787,000, Coming In Well Below Estimates. The Labor Department said initial jobless claims fellØ to 787,000, a decrease of 55,000 from the previous week's revised level of 842,000.
· The dollar index ended lower around 92.8 on Friday as investors digest the latest presidential debate and stimulus talks. Joe BidenØ and Donald Trump had the last debate before the presidential election on Thursday and the Democrat continues to lead the polls.
· SØ&P Global Ratings changed on Friday 23 October 2020 Italy’s sovereign credit rating outlook to stable from negative and affirmed the debt grade at BBB.
· The IHS Markit US Composite PMI increased to 55.5 in October 2020 from 54.3 in the previous month, a flash estimate showed. TheØ reading pointed to the fourth successive expansion in private sector activity and the sharpest since February last year.
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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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