We are pleased to present to you our monthly market commentary and outlook for the forthcoming month. The ‘StockAxis’ Market Intelligence’ is a quick update on the markets for the month gone by and our view for the next month. Use our sharp and crisp synopsis to continue building your wealth!
Global Trends
- President Donald Trump puts North Korea back on a list of state sponsors of terrorism, a designation that allows the United States to impose more sanctions and risks inflaming tensions over Pyongyang’s nuclear weapons and missile programs.
- Moody’s Investors Service upgraded India’s sovereign credit rating for the first time in nearly 14 years , saying continued progress on economic and institutional reforms would boost the country’s growth potential.
- India’s imports of African crude oil in October plunged to their lowest in over four years, as per the ship tracking data. India, the world’s No.3 oil consumer is increasingly turning to cheaper supplies from the United States and Middle Eastern countries.
- World carbon emissions are set to rise 2% this year to a new record, it has been roughly flat from 2014-16, but will increase this year mainly due to a rise in China after a two-year decline.
- The Federal Reserve kept interest rates unchanged and pointed to solid U.S. economic growth and a strengthening labor market.
- Zimbabwe President Robert Mugabe stands down after 37 years in charge. His resignation was submitted on 21st November 2017.
Domestic Trends
- November's Nikkei/IHS Markit Services Purchasing Managers' Index fell to 48.5 which is lowest since August 2017. The index in October 2017 was 51.7.
- India’s Gross Domestic Product (GDP) growth rate rose to 6.3% for the second quarter of the FY 2018. The economy’s growth rate picked up after falling for five consecutive quarters. GDP growth had reduced to 5.7% for the July-September quarter. Sector that registered growth of over 6% for the July-September quarter were manufacturing, electricity, gas, water supply and other utility services, trade, hotels, transport, communication and services related to broadcasting. In contrast, the agriculture sector grew by 1.7%.
- PMI (Purchase Managers Index) for manufacturing reached 52.6 in November 2017 compared with 50.3 in the previous month.
- Retail inflation jumps to 7 Month high of 3.6% in October 2017.
- Auto sales defied the usual post-festive season slump to grow by double digits in November, helped by the low base in the year-ago period on account of the government’s demonetization drive. The top five passenger car makers Maruti Suzuki India Ltd, Hyundai Motor India Ltd, Tata Motors Ltd, Mahindra and Mahindra Ltd and Toyota Kirloskar Motor Pvt. Ltd collectively sold 234,226 units in November 2017, up 15.12% from a year ago.
- India's fiscal deficit at the end of October 2017 hit 96.1% of the budget estimate for 2017-18, mainly due to lower revenue realization and rise in expenditure. During the same period of 2016-17, the deficit stood at 79.3% of the target.
Market Trends
- The markets reached all-time high on 6th November, 2017 touching 10,490.45 with the Moody’s upgrading Indian rating by a notch and surge in India’s ranking in the World Bank’s ease of doing business creating an overall positive sentiment.
- FIIs recorded a net outflow from the Indian stock markets to the tune of Rs. 13,514.78 crores in November 2017 against a net outflow of Rs. 7,826.53 crores in October 2017.
- On the last day of trading in November 2017, the Nifty closed at 10226.55 down by 108.75 points over the previous month-end.
- The Nifty 50 P/E ratio was at 26.16 at end-November 2017.
Highlights
- The good: Higher GDP growth rate, increase in Auto sales.
- The bad: The markets may face volatility at least for the time being due to upcoming Gujarat elections, increase in fiscal deficit to 96.1% of the budgeted target.
StockAxis’ Outlook for December 2017
Going ahead, the focus of the markets will be on Fed’s move, development related to Brexit, snap elections in Germany as well as on the oil prices. OPEC’s move to tighten global supplies may continue to keep oil prices on an uptrend. Domestically, markets are likely to focus on the outcome of Gujarat elections.
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