Friday Round Up

20th December 2019

  • The Nifty closed the week with a gain of 1.53%. Markets opened with a bout of profit taking on Monday following the announcement of the expected US China deal. Volumes were low on Monday. Volumes and Nifty recovered on the subsequent three days. On Friday markets witnessed volumes of Rs.41800 cr, about 15% higher than average. This was helped by some basket buying by institutions in Bank stocks. Midcap and smallcap stocks underperformed during the week.

  • Moody's slashed India GDP forecast to 4.9% for FY20 citing weak consumption. WPI for November in India came in higher at 0.58% vs. 0.16% in October mainly due to higher food prices.

  • China reported encouraging economic data – Nov IIP up 6.2%, Retail Sales up 8%.

  • In UK, after the last week’s up move in the markets and currency, fears of hard Brexit post tough posturing by PM Johnson withered away some of the gains.  The Bank of England however maintained interest rates at its meeting even as UK inflation touched a three year low.

  • In Telecom the TRAI on Tuesday deferred the implementation of the zero-interconnect usage charges (IUC) regime by a year till January 1, 2021. This will benefit Bharti Airtel and Vodafone to some extent and later R Jio. 

  • The US threatened to escalate trade confrontation with the EU after temporarily settling with China.

  • In the US impeachment proceedings were commenced against Trump, House of Representatives passed the bill, however in the Senate, Republicans have a majority and the bill is unlikely to be passed.

  • The RBI began a process similar to “Operation Twist” by the US Fed to bring down the steepness of the interest rate curve by buying 10 year bonds and selling 1 year bonds. This could help in transmission of lower interest rates through the system. 

  • Unilever Plc (the parent of Hindustan Unilever) will miss its underlying sales target this year, the consumer goods giant warned on December 17. Unilever also struck a downbeat tone on its prospects for meeting its mid-term target for sales growth of 3-5% next year. Unilever's forecast implies it suffered its lowest fourth-quarter sales growth in more than a decade. Growth in South Asia - India, Bangladesh, Pakistan, Sri Lanka and Nepal - slowed to 5% this year, marking a "significant deceleration" from last year's 10% rise. Much of this was caused by a sharp slowdown in consumption in rural India, where growth for the first time is underperforming urban markets.

  • Nifty after convincingly breaching 12115 is now headed gradually towards 12800 over the next two months. Metals, Auto, Oil & Gas and Realty could participate the most while the other sectors could also rise mildly.

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