Macro Data Hurts Indian Equities

The bellwether Indian equity indices, Sensex and Nifty, closed the fortnight marginally in the negative, posting losses of 0.04 per cent and 0.22 per cent respectively. The gains added earlier on the back of a favorable set of corporate numbers and hopes of a trade deal between the US and China got rolled back later with a rise in CPI inflation to 4.62 per cent for the month of October 2019 being among the reasons to instill bearishness in the market. The inflation print came in at a 16-month high and it was on account of a surge in food inflation. Further, the industrial output declining by 4.3 per cent for the month of September vs a 1.4 per cent decline in the previous month also contributed to bearish sentiments. This however does raise hopes of the central bank going accomodative with interest rates and this shall likely aid the equity markets in gaining some ground. Among sectoral performances metal, FMCG and power stocks led the pack of losers with the BSE Metal, BSE FMCG and BSE Power indices correcting by 3.89 per cent, 3.63 per cent and 3.56 per cent respectively. The BSE IT index lost 1.41 per cent during the period. Among the gainers were realty (BSE Realty index: +2.95 per cent) and banking (Bankex: +2.74 per cent) stocks. The realy sector stocks derived strength from the government’s approval of Rs25,000 crore bailout fund to finance 1,600 stalled housing projects. 

Foreign Portfolio Investors (FPIs) were net buyers in Indian equities to the tune of Rs11278.92 crore during the period under coverage while Domestic Institutional Investors (DIIs) were net sellers by Rs4636.43 crore for the same period. 

Gold closed lower at USD 1466.55 per ounce as on 17th Nov.’19 vs USD 1509.35 per ounce on 4th Nov.’19, a decline of 2.84 per cent during the period. Crude Oil surged from USD 62.13 per barrel on 4th Nov.’19 to USD 63.30 per barrel on 15th Nov.’19, a gain of 1.88 per cent during the said period. 

The INR strengthened against the USD from 70.78 (4th Nov.’19) to 71.94 (18th Nov.’19). 

Among global equities DJIA, S&P 500, and Nasdaq rose 2.09 per cent, 1.42 per cent and 1.38 per cent, respectively. In Europe, the FTSE 100 declined 0.84 per cent while the DAX and CAC 40 gained 0.54 per cent and 1.81 per cent respectively. The Hang Seng, Nikkei and Shanghai closed the fortnight with a change of -3.14 per cent, +2.48 per cent, -2.23 per cent, respectively