Indian Equity Summary-
· Optimism had rubbed its positive impact on the domestic market over the initial performance of Pfizer's Covid vaccine and the outcome of the US presidential election. Nifty and Sensex ended on a WoW basis in green and increased by ~4 percent. The government announced a series of stimulus initiatives, including credit support for stressed sectors, employment creation incentives and multiple measures for construction and housing, as boosters for the Covid hit economy under Aatmanirbhar Bharat 3.0, which boosted the market sentiment.
· Going forward, with the uncertainty due to US elections moving out of the way volatility will reduce substantially leading to money moving towards the riskier assets; domestic factors like ongoing Q2 corporate earnings season, 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 12500-13000 in the near term and trade with a positive bias.
Indian Debt Market-
· The Government bond prices ended flat on a WoW basis. The yield on the 10-year benchmark 5.77% 2030 paper settled at 5.88% on November 13 compared with 5.88% on November 06.
· Reserve Bank of India announces the auction of three Government of India 91day, 182 day and 364 day Treasury Bills for an aggregate amount of ₹16,000 to be conducted on 19th November,2020.
· CPI-based retail inflation came in at 77-month high of 7.6% YoY in Oct’20 as against 7.3% a month ago and 4.6% in Oct’19.
· We expect the 10 year benchmark yield to trade between 5.80-6.05% in near term.
Domestic News
· India's wholesale prices increased 1.48 percent from a year earlier in October 2020, after a 1.32 percent growth in the previous month. It was the third straight annual increase in prices and the strongest since February, as food prices remained elevated (6.37 percent vs 8.17 percent in September). Also, cost advanced faster for manufactured products (2.12 percent vs 1.61 percent). Meanwhile, those of fuel and power continued to plunge (-10.95 percent vs -9.54 percent).
· The Cabinet approved Rs 1.45 trillion Production-linked Incentive (PLI) Scheme for ten more sectors to attract investments, boost domestic manufacturing, enable companies to become part of the global Supply Chain and generate employment opportunities.
· India's economy is likely to have entered a technical recession in the first half of the financial year 2020-21 for the first time in its history. In the monthly bulletin, the Reserve Bank of India said the economy contracted 8.6 percent in the quarter ended September. With the second consecutive fall in gross domestic product, the economy entered a technical recession in the September quarter.
International News
· China's bank lending decreased in October after rising in the previous two months. Banks provided CNY 689.8 billion in new loans in October versus CNY 1.89 billion in September.
· US consumer price index was unchanged in October after rising by 0.2 percent in September. Economists had expected another 0.2 percent uptick.
· The dollar index erased most of the earlier losses to trade nearly flat around 92.7 on Monday as investor digest prospects of a working coronavirus vaccine and rising infections in the US. Moderna said its experimental vaccine is more than 94% effective in preventing coronavirus, in another positive sign that a working coronavirus vaccine may be available soon. Moderna joins Pfizer/BioNTech which announced last week a vaccine which is 90% effective.
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
