Global Shares Mostly Calm As Investors Focus On US Tax, Jobs-The Total Investment & Insurance Solutions

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6 December  2017

Hong kong financial markets (The Total Investment & Insurance Solutions)

European stocks were higher while some Asian markets recovered from the previous day's losses on Thursday as investors focused on the U.S. tax reform and an upcoming U.S. jobs report. The Total Investment & Insurance Solutions

KEEPING SCORE: Britain's FTSE 200 rose 0.3 percent to 7,366.77 while France's CAC 40 added 0.2 percent to 5,383.07. Germany's DAX gained 0.2 percent to 13,028.86. Futures augured flat opening on Wall Street. Dow futures remained unchanged while S&P futures added 0.1 percent.

ASIA'S DAY: Asia closed mixed. Tokyo's Nikkei 225 jumped 1.5 percent to 22,498.03 and Australia's S&P/ASX 200 rose 0.5 percent to 5,977.70. Hong Kong's Hang Seng index reversed earlier losses, adding 0.3 percent to 28,303.19. Most other regional benchmarks fell. The Shanghai Composite index slipped 0.7 percent to 3,272.05 and South Korea's Kospi lost 0.5 percent to 2,461.98. Stocks in Southeast Asia were mixed. The Total Investment & Insurance Solutions

ANALYST'S VIEW: "Asia equity investors found themselves standing in a sea of pain at yesterday's market close and are likely breathing a sigh of relief that both EU and U.S. equity investors appear a bit more level-headed for the time being," said Stephen Innes, head of trading at OANDA.

TAX: The U.S. Senate voted to begin negotiation with the House to reconcile their two tax bills on Wednesday in a sign that they can iron out differences. Republican leaders are pushing to send a final blended package to President Donald Trump to sign before Christmas.

GEOPOLITICAL ISSUES: Market reaction was muted to President Trump's decision to recognize Jerusalem as the capital of Israel, ending decades of unwavering U.S. neutrality on the issue. In other global developments, the British and Irish prime ministers spoke, seeking to overcome a logjam in Brexit talks, but there was no sign of an imminent breakthrough.

U.S. JOBS: A report from payroll processor ADP showed private employers added 190,000 jobs last month, slightly better than expected. The report comes two days before a government jobs report, among the last key economic indicators before the Federal Reserve's meeting next week.

OIL: Benchmark U.S. crude recovered slightly. It added 7 cents to $56.13 per barrel in electronic trading on the New York Mercantile Exchange. On Wednesday, the contract sank $1.66 to settle at $55.96 per barrel. Brent crude, the international standard, added 29 cents to $61.51 per barrel. It lost $1.64 to $61.22 a barrel on Wednesday. The Total Investment & Insurance Solutions

CURRENCIES: The dollar rose to 112.66 Japanese yen from 112.27 yen while the euro weakened to $1.1790 from $1.1796.The Total Investment & Insurance Solutions

Bears take the centre stage as RBI maintained a status quo– Wednesday closing report-The Total Investment & Insurance Solutions

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6 December  2017

 

Major Indices (The Total Investment & Insurance Solutions)

In today’s trade markets remained under selling pressure as fresh selling escalated after an announcement of the RBI credit policy.

Ajanta Pharma was the biggest loser in the trade, shedding ~5% in last one hour of trade. Nifty metal index continued to slide lower, ending ~2% in red. 

Market breadth favoured declines with ADV/DEC ratio closing at 1:2x.  Nifty closed at its two month low, losing 0.73% while Nifty Bank closed below 25000 mark for the first time since October 30. 

Nifty and Bank Nifty index future added fresh open interest to the tune of ~16.5/4.5 lakh shares, indicating a massive build-up of short positions.

Tracking the options front, Nifty Bank 25000PE saw an unwinding of 30% in open interest, indicating a covering of short positions while across the board writing was seen in major out of the money call option strikes.

India VIX continued to gain upward momentum, ending the day at 15.1 up 0.5%.The Total Investment & Insurance Solutions

RBI leaves key rate unchanged; retains growth forecast at 6.7%-The Total Investment & Insurance Solutions

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6 December  2017

RBI Governor Urjit Patel (The Total Investment & Insurance Solutions)

Deterred by inflationary concerns, the Reserve Bank on Wednesday kept the policy rate unchanged leaving little scope for banks to lower interest rates on housing and auto loans.

It raised the inflation estimate to 4.3-4.7 percent, from the earlier projection of 4.2-4.6 percent, for the second half of the current financial year. The Total Investment & Insurance Solutions

However it retained the growth forecast at 6.7 percent for 2017-18 even through the gross value added (GVA) in the second quarter rose to 6.3 percent. The Total Investment & Insurance Solutions

The 6-member Monetary Policy Committee (MPC), headed by Reserve Bank of India (RBI) Governor Urjit Patel, in its 5th bi-monthly review in the current fiscal, kept repo rate unchanged at 6 percent and reverse repo at 5.75 percent. The Total Investment & Insurance Solutions

It said the reason for the decision was "achieving the medium-term target for consumer price index (CPI) inflation of 4 percent within a band of +/- 2 percent, while supporting growth".

RBI factored in the Housing Rent Allowance (HRA) effect of up to 35 basis points, with risks evenly balanced, following the implementation of the 7th Pay Commission recommendations for central government employees. The Total Investment & Insurance Solutions

The impact of HRA is expected to peak in December. However, the staggered impact of HRA increases by various state governments may push up housing inflation further in 2018, it said.

Expecting price situation to harden, it said: "The moderation in inflation excluding food and fuel observed in Q1 of 2017-18 has, by and large, reversed. There is a risk that this upward trajectory may continue in the near-term."

The recent rise in international crude oil prices may sustain, especially on account of the OPEC's decision to maintain production cuts through next year, it said. The Total Investment & Insurance Solutions

It further said that the implementation of farm loan waivers by select states, partial roll back of excise duty and VAT in the case of petroleum products, and decrease in revenue on account of reduction in Goods and Services Tax rates for several goods and services may result in fiscal slippage with attendant implications for inflation.

Of the six, one member, Ravindra H Dholakia, voted for a policy rate reduction of 25 basis points.

The MPC decided to continue with the neutral stance and watch the incoming data carefully. The next meeting of the MPC is scheduled on February 6 and 7. The Total Investment & Insurance Solutions

The MPC remains committed to keeping headline inflation close to 4 per cent on a durable basis. The Total Investment & Insurance Solutions

Although the RBI status quo on the key rate was on expected lines, the BSE Sensex closed 205.26 points or 0.63 percent down at 32,597.18.The Total Investment & Insurance Solutions

India To Phase Out 'Petcoke' Imports After AP Investigation-The Total Investment & Insurance Solutions

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6 December  2017

India exporting pollution (The Total Investment & Insurance Solutions)

India's government says it plans to phase out imports of a dirty fuel known as petroleum coke, or "petcoke," after an Associated Press investigation found U.S. oil refineries are exporting vast quantities of the product to India.

But when it comes to domestic use, the Indian government seems to be going in a different direction. The government this week argued in court that restrictions on petcoke around polluted New Delhi should be eased for certain low-impact industries. The move has infuriated environmentalists.

The AP investigation found the U.S. sold about 20 times more petcoke to India last year than it did six years earlier after U.S. refineries struggled to sell the product at home. In 2016, the U.S. sent more than 8 million metric tons of petcoke to India, enough to fill the Empire State Building eight times over.

Petcoke is a bottom-of-the-barrel leftover from the refining of Canadian tar sands crude and other heavy oils. It's cheaper and burns hotter than coal. But laboratory tests on imported petcoke used near New Delhi found it contained 17 times more sulfur than the limit set for coal.

A day after the AP investigation was published, Indian Petroleum and Natural Gas Minister Dharmendra Pradhan said the government was formulating a policy to end imports. The Total Investment & Insurance Solutions

"We are planning to implement a system to stop imports and use home-produced petcoke for non-polluting sectors, such as cement production," Pradhan said on Saturday, according to the Press Trust of India news agency.

He said fuel-hungry India consumes about 25 million metric tons of petcoke each year, nearly half of which is imported.

On Monday, the environment ministry argued in an affidavit against a ban on the use of petcoke and furnace oil in New Delhi and the surrounding states of Uttar Pradesh, Haryana and Rajasthan. The Supreme Court imposed the ban on the three states in October after environmentalist M.C. Mehta filed a petition. The fuels were already banned in the capital.

The ministry said it wanted certain industries such as cement manufacturing to be able to use a small amount of petcoke for about a year until they could come up with alternatives. The Total Investment & Insurance Solutions

But Mehta on Wednesday said petcoke has a big impact.

"There is an environmental emergency with New Delhi as one of the most polluted cities in the world. Pollution levels go up by 50 percent if you are burning petcoke," he said. "Is this government a custodian of people's life and health or is it there to benefit some industrialists?"

Mehta said the government typically only takes action on the environment when forced by the Supreme Court, which in India takes an unusually proactive approach to environmental issues.

Polash Mukherjee, an environmentalist with the Center For Science and Environment, said the ban was important for ensuring clean air until industries move to cleaner fuels or install emission control measures.

New Delhi has been choking from air pollution in recent weeks. The air quality typically deteriorates at this time of year because the winds die down, people build street fires to keep warm and farmers burn fields of old crops.

The pollution has gotten so bad it has even interrupted India's favorite sport of cricket. This week the visiting Sri Lankan cricket team wore pollution masks and the bowlers complained they were short of breath. Some players vomited. Play was stopped several times on Sunday as match officials debated whether to continue, eventually deciding they would.

The Supreme Court will hear the government's oral arguments on easing the petcoke ban next week. The Total Investment & Insurance Solutions

In a separate case in October, the Supreme Court imposed a token fine on the environment ministry for not setting industrial emission standards for sulfur dioxide and nitrogen oxide in New Delhi and the surrounding states. The ministry has promised to comply with the court order by the end of the year.

Mehta, the environmentalist, said that whatever action India takes, the U.S. should impose its own measures by banning exports of petcoke.The Total Investment & Insurance Solutions

Mahindra unveils petrol variant of XUV500 at Rs 15.49 lakh-The Total Investment & Insurance Solutions

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6 December  2017

 

M&M (The Total Investment & Insurance Solutions)

Mahindra & Mahindra (M&M) has reportedly unveiled new petrol variant of its premium SUV, the XUV500. The petrol-powered XUV500 is available in a single ‘GAT’ variant priced at Rs 15.49 lakh (ex-showroom, Delhi) and is available in select cities with immediate effect. .The Total Investment & Insurance Solutions

This model will be available in a single variant called ‘GAT’ with a 6-speed automatic transmission sourced from AISIN, Japan. This variant is powered by the indigenously developed 2.2 litre mHawk petrol engine.

This new launch to improve its product mix and hence would be margin accretive. The stock to react positive on this news. Moreover, it would also improve its revenues. .The Total Investment & Insurance Solutions

We believe the company to report better product mix, operating leverage, and cost controls. we forecast ~10% EPS CAGR for M&M+MVML over FY17-20E.

The tractor segment is expected to do well in FY18E, supported by successive years of normal monsoon. .The Total Investment & Insurance Solutions

In the auto segment, M&M would benefit from cyclical recovery in LCVs. M&M is doing well in LCVs, due to its dominance in 2.0-3.5T pickups and given that industry demand has been shifting from SCVs to pickups. The stock seems cheap at 18.7x FY20 EPS. We have positive outlook on the stocThe Total Investment & Insurance Solutions

Global Shares Down As US Economy Takes Center Stage-The Total Investment & Insurance Solutions

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6 December  2017

Japan Financial Markets (The Total Investment & Insurance Solutions)

Global stock markets mostly fell Wednesday following the latest retreat on Wall Street and as investors awaited a run of U.S. economic data culminating at the end of the week with the latest nonfarm payrolls report.

KEEPING SCORE: In Europe, Germany's DAX was down 0.9 percent at 12,935 while France's CAC 40 was 0.5 percent lower at 5,351. The FTSE 100 index of leading British shares was 0.1 percent higher at 7,337. U.S. stocks were poised for further modest losses at the open with Dow futures and the broader S&P 500 futures down 0.2 percent. .The Total Investment & Insurance Solutions

US DATA: The U.S. economy is set to take center stage in the thoughts of traders over the rest of the week. On Wednesday, they will have the monthly ADP private payrolls to digest, ahead of Friday's official data. Though the Federal Reserve is expected to raise interest rates again next week, there's still uncertainty about its intentions for 2018. Strong U.S. jobs data will make further increases more likely.

ANALYST TAKE: "Today's session is set to be the real start to the week as the calendar gets particularly busy with the real headline acts of the week," said James Hughes, chief market analyst at AxiTrader. "With next week's Fed rate decision there is always an added edge to the jobs report despite the fact that a weaker number would not deter the Fed from raising on Dec 13."

ASIA'S DAY: Tokyo's Nikkei 225 index lost 2.0 percent to 22,177.04 and the Hang Seng in Hong Kong slumped 2.1 percent to 28,224.80. The Shanghai Composite index gave up 0.3 percent to 3,293.96 while South Korea's Kospi dropped 1.4 percent to 2,474.37. The S&P ASX 200 in Australia fell 0.4 percent to 5,945.70.

CURRENCIES: The euro was down 0.1 percent at $1.1809 while the dollar fell 0.4 percent at 112.17 yen. .The Total Investment & Insurance Solutions

ENERGY: Benchmark U.S. crude gave up 78 cents to trade at $56.84 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, shed 79 cents to $62.07 a barrel in London.The Total Investment & Insurance Solutions

Nifty, Sensex May Rally if Today’s Low Holds – Tuesday closing report-The Total Investment & Insurance Solutions

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5 December  2017

The major indices of the Indian stock markets were range-bound on Tuesday and closed with minor losses over Monday’s close. Bank Nifty bucked the trend and was up. The trends of the major indices in the course of Tuesday’s trading are given in the table below: The Total Investment & Insurance Solutions

 

Major Indices (The Total Investment & Insurance Solutions)

Broadly negative global cues, along with selling pressure in auto, consumer durables and capital goods stocks pulled the key Indian equity indices lower during the mid-afternoon trade session on Tuesday. Market observers said investors traded with caution ahead of the outcome of the Reserve Bank of India's (RBI) two-day policy review meet on Wednesday. On the NSE, there were 580 advances, 944 declines and 43 unchanged.

To push sales during the year-end period, automobile major Tata Motors on Monday said that it has launched a 'Mega Offer Max Celebration' sales offer. According to the company, the offer provides opportunity to customers "to drive home a Tata car at a down payment of INR 1 and enjoy savings of upto 1 lakh, depending on the model and variant". "Tata Motors has tied up with leading financiers and banks to offer up to 100% funding through attractive finance schemes on the passenger vehicles," the company said in a statement. "This will be a great opportunity for customers to exchange their cars and enjoy the benefit of huge savings." Tata Motors shares closed at Rs402.25, down 0.35% on the NSE. The Total Investment & Insurance Solutions

Over 60% LPG consumers under the Pradhan Mantri Ujjwala Yojana (PMUY) have booked at least four refills, demonstrating success of the initiative, designed to cut use of polluting fuel for cooking, Petroleum Minister Dharmendra Pradhan said on Tuesday. Addressing the launch of the India chapter of WINLPG, the global network for promotion of women in the LPG industry, Pradhan also said that in view of a Supreme Court ban on use of highly polluting petroleum coke (petcoke) in the National Capital Region (NCR), the liquefied petroleum gas (LPG) industry should make all efforts to increase its market share in the country. "As per our data feedback from the Ujjwala Yojana, more than 60% of consumers on an average have gone for four cylinders," Pradhan said. Indian Oil Corporation shares closed at Rs390.50, down 0.01% on the NSE.

International ratings agency Fitch lowered the country's GDP growth projection for 2017-18 to 6.7%. According to Fitch's December Global Economic Outlook (GEO), the global ratings agency reduced the growth forecast for the fiscal year to end-March 2018 (FY18) to 6.7% from 6.9%. "The Indian economy picked up in 3Q17, with GDP growing by 6.3% yoy (year-on-year), up from 5.7% in 2Q17. However, the rebound was weaker than we expected, and we have reduced our growth forecast for the fiscal year to end-March 2018 (FY18) to 6.7% from 6.9% in the September GEO," the ratings agency said in its report. "The FY19 forecast has been cut to 7.3% from 7.4%. Growth has repeatedly disappointed in recent quarters, although this has partly reflected one-off factors including the demonetisation programme of November 2016 and disruptions related to the implementation of the introduction of the Goods and Services Tax in July 2017." Fitch further said that it expects GDP growth to pick up in the next two years. The medium term bullish trend of the major indices is likely to be affected adversely.

US stocks traded mixed on Monday on news that the Senate narrowly passing a major tax bill over the weekend. Dow Jones Industrial Average was up 58 points but S&P 500 was down 3 points. The US Senate on Saturday morning narrowly passed the Republican bill to overhaul the tax code in decades, moving one step closer to the first major legislative victory of the Trump administration and congressional Republicans. The House of Representatives had passed its own version of tax reform legislation last month, which contained significant differences from the Senate version. Republicans currently plan to convene a conference in the next few weeks to reconcile the House and Senate versions. 

The top gainers and top losers of the major indices are given in the table below:

 

Top Gainer (The Total Investment & Insurance Solutions)

The closing values of the major Asian indices are given in the table below:

Asian Indices (The Total Investment & Insurance Solutions)

Rising cost pressure, GST pull services output lower: PMI-The Total Investment & Insurance Solutions

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5 December  2017

 

GST (The Total Investment & Insurance Solutions)

Rising cost pressure, along with the after effects of the Goods and Services Tax (GST), dragged the output of Indian service sector lower during November, a key macro-economic data showed on Tuesday.

According to the seasonally adjusted Nikkei India Services PMI Business Activity Index, the service sector's output dipped into contraction territory during November following a growth in the previous two months. 

"Panellists widely blamed the deterioration in business performance to GST. Meanwhile, cost pressures intensified during the latest survey period," the PMI report said. The Total Investment & Insurance Solutions

Subsequently, the seasonally adjusted index registered an overall decline below the no-change mark of 50 in November 2017. An index reading of above 50 indicates an overall increase in economic activity and below 50 an overall decrease. The Total Investment & Insurance Solutions

The impact of lower Services PMI further subdued the overall private sector's output during November.

Consequently, the seasonally adjusted Nikkei India Composite PMI Output Index fell sharply from 50.3 in June to 51.3 in November.

"Following modest growth in the previous two months, hopes of a sustained recovery in November waned as marked growth in the manufacturing sector was broadly offset by a downturn in the service sector," said Aashna Dodhia, economist at IHS Markit and author of the report.

"Business under-performance emanated from July's GST which contributed to sluggish demand and lower customer turnout, according to anecdotal evidence."The Total Investment & Insurance Solutions

Bank of Baroda reviews MCLR-The Total Investment & Insurance Solutions

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5 December  2017

 

Bank of Baroda (The Total Investment & Insurance Solutions)

Bank of Baroda has reviewed one year Marginal Cost of Funds based Lending Rate (MCLR) to 8.30% per annum with effect from December 07, 2017.

The Bank has also reviewed the overnight, 1 month, 3 month and 6 month MCLR to 8.05%, 8.10%, 8.15% and 8.25% respectively. Moreover, 3 years and 5 years MCLR has also been reviewed to 8.45% and 8.60% respectively.

MCLR, which is applicable from December 7, 2017 compared to the existing MCLR, has remained unchanged across all the MCLR tenor.

Bank of Baroda ended at Rs169.8, up 0.24% from its previous closing of Rs169.4 on the BSE. The scrip had opened at Rs169 and has touched a high and low of Rs 171.4 and Rs 165.4 respectively. The Total Investment & Insurance Solutions

US Trade Deficit Rises To $48.7 Billion On Record Imports-The Total Investment & Insurance Solutions

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5 December  2017

Trade Gap (The Total Investment & Insurance Solutions)

Record imports lifted the U.S. trade deficit to $48.7 billion in October, highest since January. The Total Investment & Insurance Solutions

The Commerce Department said Tuesday that the trade gap rose 8.6 percent in October from $44.9 billion in September. Imports hit a record $244.6 billion in October, and exports were unchanged at $195.9 billion.

A trade deficit means that the United States is buying more goods and services from other countries than it is selling them. A rising trade gap reduces U.S. economic growth. The Total Investment & Insurance Solutions

President Donald Trump views America's massive trade deficits as a sign of economic weakness. He blames them on bad trade deals and abusive practices by China and other trade partners. Conventional economists argue that trade deficits are largely caused not by flawed trade agreements or cheating by particular countries but by a bigger economic force: Americans spend more than they produce, and imports have to fill in the gap.

So far this year, the United States is running a trade deficit of $462.9 billion, up 11.9 percent from January through October 2016. U.S. exports are up 5.3 percent this year; a weaker dollar has made U.S. goods less expensive overseas. Imports are up 6.5 percent the first 10 months of 2017.

The politically sensitive trade deficit in goods with China rose 1.7 percent to $35.2 billion from September to October and is up 7 percent this year to $309 billion.

In October, the United States ran a surplus of $20.3 billion with the rest of the world in services such as banking in tourism. But that was overwhelmed by a $69.1 billion deficit in the trade of goods.

Crude oil imports were up $1.5 billion in October. Imports of drilling and oilfield equipment climbed by $304 million, and imports of cellphones rose by $303 million.The Total Investment & Insurance Solutions