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18
November 2016
 |
| Weekly Indices (The Total Investment & Insurance Solutions) |
I had mentioned
in previous week’s closing report that Nifty and Sensex may continue to remain
under pressure. After a major fall in the first session of this week ended on
18th November, the stock market closed flat on Wednesday and Thursday. On
Friday, the indices showed an upward move however after around 1.20pm they again
started losing strength. It closed 2%-3% over Thursday’s close. The trends of
the major indices in the course of the week’s trading are given in the table
below:
The Total Investment & Insurance Solutions
The market sentiments on Friday were
affected by news from Europe and US. According to minutes of the European
Central Bank's (ECB) most recent meeting, policymakers were ready to boost
their €1.7 trillion stimulus again, if needed to ensure that Eurozone's economy
remains on its recovery path. The Total Investment & Insurance
Solutions
In the US, the Federal Reserve Chair
Janet Yellen's testimony has stressed the importance of central bank
independence in her first public remarks after Donald Trump's election victory
as new data showed the president-elect will inherit a strengthening economy.
The Federal Reserve chair told a congressional hearing on Thursday that an
increase in short-term interest rates could “become appropriate relatively
soon”, raising expectations of a rise at the Fed's next meeting in December. The Total Investment
& Insurance Solutions
There was news that the Indian
government may ban exchange of old Rs500 and Rs1,000 currencies in a few days
reasons being misuse of currency as well as use of multiple IDs by people to
exchange notes. Market anticipated the government to clarify the penalty
provisions for high value cash deposits. The Total Investment & Insurance
Solutions
Coming back to Indian stock markets,
on Monday, it was closed for Gurunanak Jayanti holiday. On Tuesday, the
benchmark indices closed 2% below over Friday’s close. Rupee depreciation on
the back of strong dollar and low crude oil prices, foreign fund outflows and
an anxiety over the impact of the demonetisation move plunged the equity
market. Data released on Tuesday showed a lower than expected wholesale price
index (WPI) for October. India’s annual rate of inflation based on wholesale
prices fell marginally to 3.39% for October from 3.57% for September 2016.
On Wednesday, market closed flat.
News from Asia showed that China's yuan weakened to an eight-year low as
expectations of higher US interest rates buoyed the dollar. US president-elect
Donald Trump threatened to label China a currency manipulator on his first day
in office and to slap punitive tariffs on Chinese imports. While back home,
there was news that Nasscom sees Indian IT-BPM industry to grow at 8-10% in the
financial year 2017, demonstrating sustained growth despite global headwinds. The Total Investment
& Insurance Solutions
On Thursday too, market closed on
lower levels. Market looked ahead for the possible rate hike by US Federal
Reserve's Chairman Janet Yellen. A hike in rate may lead foreign
portfolio investors (FPI) and funds away from emerging markets. This may also
affect the business margins of corporate sector, as access to capital from the
US will become more expensive. On the domestic front, the political bickering
over the government's demonetisation move and its impact on the winter session
of Parliament, too, eroded investors' confidence with it being adjourned. The Total Investment
& Insurance Solutions
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