Contents Index Views SENSEX Index Movers BSE 200 Index Movers FII and MF Data SENSEX Movement Key Developments India Key Developments International Mutual Fund investments are subject to market risks, read all scheme related documents carefully. 2
Index Views Last Closing % Change Over 1 week 1 month YTD 1 year NIFTY 9,974 1.19 (1.39) 21.85 13.67 SENSEX 31,892 0.94 (2.10) 19.78 12.20 NSE MIDCAP 18,505 3.01 (0.04) 28.94 20.97 NSE 500 8,755 1.74 (0.65) 25.38 17.14 NIFTY JUNIOR 28,338 2.38 1.67 32.49 23.42 BSE SMALLCAP 16,130 3.09 0.34 33.90 28.03 BSE 200 4,364 1.62 (0.66) 24.30 16.07 *DOW JONES 21,948 0.76 (0.07) 11.06 19.16 *NASDAQ 6,429 2.51 1.03 19.42 22.98 NIKKEI 19,691 1.74 (1.47) 3.02 16.33 HANG SENG 27,953 1.58 1.50 27.06 20.68 SHANGHAI COMP 3,367 2.92 2.26 8.49 9.92 BSE OIL & GAS 15,247 2.60 7.06 25.48 38.83 BSE CAPITAL GOODS 17,413 1.47 (2.75) 27.43 15.20 BSE AUTO 24,148 2.55 (2.82) 19.20 9.33 BSE FMCG 10,201 1.82 0.99 25.46 15.39 BSE HEALTHCARE 13,391 1.24 (5.84) (9.08) (16.94) BSE TECH 5,703 0.18 (3.33) 3.72 0.13 BSE IT 10,046 0.25 (3.78) (1.27) (3.63) BSE BANK 27,625 0.62 (2.74) 33.14 21.82 BSE PSU 8,686 1.39 0.06 12.94 16.12 BSE REALTY 2,193 4.72 0.27 73.51 45.12 BSE METALS 13,531 3.65 7.80 33.85 35.70 BSE CONSUMER DURABLES 17,654 1.35 8.02 57.10 41.96 SOURCE : BLOOMBERG * DENOTES THURSDAY CLOSE 3
SENSEX Index Movers Last Price % Change Over 1 week 1 month YTD 1 year Bajaj Auto Ltd 2,919 6.74 3.39 10.81 (2.60) Dr Reddy's Laboratories Ltd 2,217 6.20 (8.63) (27.50) (28.43) Sesa Sterlite Ltd 314 5.33 11.47 45.33 84.69 Hindalco Industries Ltd 243 4.71 7.77 56.98 54.39 Hero MotoCorp Ltd 4,047 4.46 8.75 32.93 14.11 State Bank of India 278 (0.98) (10.07) 11.19 10.31 Coal India Ltd 238 (1.18) (5.49) (20.55) (29.49) Tata Consultancy Services Ltd 2,463 (1.29) (1.47) 4.29 (1.77) Mahindra & Mahindra Ltd 1,349 (1.96) (5.47) 13.88 (7.10) Bharti Airtel Ltd 422 (2.40) 1.44 38.35 35.97 SOURCE : BLOOMBERG BSE 200 Index Movers Last Price % Change Over 1 week 1 month YTD 1 year Central Bank of India 95 30.15 5.65 14.66 (10.80) Adani Enterprises Ltd 136 24.78 (2.54) 78.48 93.27 Adani Power Ltd 33 14.19 (2.25) 8.31 21.42 L&T Finance Holdings Ltd 199 13.77 14.59 127.22 104.74 Reliance Capital Ltd 858 10.62 18.60 98.97 - NHPC Ltd 29 (2.69) (3.67) 8.85 4.33 Gujarat State Petronet Ltd 187 (2.88) (1.76) 34.13 24.24 Bank of Baroda 138 (3.19) (15.23) (9.52) (14.21) Jubilant Life Sciences Ltd 696 (3.73) (2.60) 10.40 27.75 Shriram City Union Finance Ltd 2,043 (6.79) (12.83) 13.42 - SOURCE : BLOOMBERG 4
SENSEX LEVEL FII and MF Data (Week Ended 01.09.2017) Rs. Crores FII GROSS PUR 27,848.04 FII GROSS SELL 27,547.92 FII NET 300.12 FII MONTH T0 DATE NET (13,849.58) MF GROSS PUR 8,476.46 MF GROSS SELL 4,194.90 MF NET 4,281.56 MF MONTH T0 DATE NET 17,221.93 SOURCE: SEBI SENSEX WEEKLY 31900 31,892 31800 31,751 31700 31,730 31600 31,646 31500 31400 31,388 31300 8/28/2017 8/29/2017 8/30/2017 8/31/2017 9/1/2017 SOURCE : BLOOMBERG DATE 5
Key Developments India: The only economist who accurately predicted India s growth slump sees a bit more pain ahead. Gross domestic product will recover only slightly to 5.9 percent in July to September from the previous quarter s 5.7 percent, which was the slowest pace since 2014, predicts Hugo Erken, a senior economist at Rabobank International. Government data on Thursday showed consumption continued to fall under the impact of Prime Minister Narendra Modi s clampdown on cash and investment stayed sluggish. "The effects of the cash ban were likely to be felt for a few quarters," Erken. "The high level of non-performing assets is contributing to subdued private investments." The data will probably bruise Modi s administration, which is battling growing perceptions of the futility of its policy after a central bank report on Wednesday showed that demonetization didn t meet its targets. With private surveys indicating worsening business conditions following the July 1 roll out of a nationwide sales tax, the monetary authority may be pressured to keep interest rates lower for longer even as inflation accelerates. Governor Urjit Patel cut the benchmark repurchase rate this month to 6 percent from 6.25 percent to help meet an "urgent need" to boost investment. Minutes of the meeting show he s now counting on commercial banks to lower borrowing costs as the Federal Reserve s tightening limits room for policy easing. India s inflation is also rebounding from a record low in June, further closing the window. Modi s ability to stimulate the economy is limited because figures from the national auditor on Thursday showed the budget deficit touched 92 percent of the full-year target in the first four months of the year started April 1, compared with 74 percent for the same period last year. The outlook for consumption, long considered the main driver of the economy, is also bleak as a survey from Mastercard Inc. published this month shows that Indian consumers are no longer Asia s most optimistic. Meanwhile loan growth languishes near a two-decade low as companies staggering under bad debt, with factories operating at less than 75 percent of capacity, await evidence of a pickup in demand before they buy machinery or hire more workers. India s top investment-grade borrowers are making a shift from the nation s bank loan market to rupee corporate bonds as the central bank tries to ease the ballooning bad assets problem in the banking system. Rupee-denominated bond issuance from companies that are rated AAA to AA by CARE Ratings Ltd., Crisil Ltd. or ICRA Ltd. has surged to a record 3.48 trillion rupees ($55 billion) so far in 2017, 33 percent higher than in the same period for 2016, according to data compiled by Bloomberg. By contrast, bank credit rose only 6 percent, or 4.6 trillion rupee, in the period to Aug. 4, according to central bank data, as nonperforming assets at lenders approach 10 percent. The Reserve Bank of India began nudging banks last year to lower their exposures to corporate borrowers by setting provisions for lending beyond a stipulated limit, and last month the capital market regulator directed companies to notify stock exchanges, if they default on a bank loan from Oct.1. The RBI s pass-on of interest rate cuts works more smoothly for the bond market, which makes it an attractive proposition for higher-rated companies, according to CARE, India s second-largest ratings company. The RBI cut interest rates to the lowest since 2010 last month as it sought to resuscitate the economy still suffering from Prime Minister Narendra Modi scash clampdown at the end of 2016. With bad loans hindering banks ability to boost credit, the government recently cleared the way for more mergers among state lenders to strengthen weakened lenders. The NPA issue today has impinged on the ability of banks to lend more given the capital challenges which some banks face, according to CARE s managing director Rajesh Mokashi. More companies approaching the bond markets, coupled with increasing flow of savings into mutual funds augurs well for the market s healthy growth. There is still much work to do in developing India s local bond market, however, from an issuer s perspective. State-backed financial institutions could help by purchasing bonds with a longer tenor from better-rated borrowers, according to Prabal Banerjee, chief financial officer at conglomerate Bajaj Group. The bond market in India lacks depth, even though companies are always looking to switch from loans to bonds, Banerjee said. RBI needs to take measures to increase the maturity in the bond markets from an average three to five years now, to an average seven to nine years. 6
India s benchmark stock index advanced, led by a rally in drugmakers and automakers, as investors brushed aside a weaker-than-expected pace of economic growth in the last quarter. The S&P BSE Sensex and the NSE Nifty Index each rose at least 0.5 percent at the close in Mumbai, capping three weeks of gains. Drugmakers and automakers advanced the most among 19 BSE sub gauges. Dr. Reddy s Laboratories Ltd. raised the most since 2009 after a U.S. court ruled that it doesn t infringe on three Suboxone patents. Tata Motors Ltd. advanced the most in three months after its August sales rose 14 percent from a year ago. India s economy expanded at the slowest pace since 2014 in the three months through June, falling short of economists estimates, as companies and retailers pared inventories before the roll out of a nationwide sales tax. Investors are taking the low GDP print in their stride as these numbers were affected by the lingering effects of demonetization and disruption caused ahead of GST s roll out, Sageraj Bariya, sales manager at East India Securities Ltd. International: The bond market has long viewed America s supermarkets as a species apart from their deeply troubled peers in the retail sector. As conventional wisdom had it, grocers could resist the onslaught of e-commerce that was decimating industries such as clothing and electronics. After all, shoppers want to touch their avocados and see their T-bones. But now, just days after Amazon.com Inc. officially entered the grocery business, that confidence is shaken. The bonds that financed Apollo Global Management s purchase last year of upscale grocer Fresh Market plunged to new lows this week. The cost of buying contracts to protect against a default in Albertsons Cos. s debt has jumped. Bonds of Bi-Lo Holdings have lost almost half their value this year. Amazon, with its low prices and online convenience, has revolutionized retail and driven traditional rivals into bankruptcy. This week, the company completed its purchase of Whole Foods Market Inc. for $13.7 billion, raising the prospect that it will have the same impact on a grocery industry that was already starting to struggle. A price war has weighed on supermarket results, and the threat of e-commerce is raising concerns that the weakest won t survive. It s the fear factor of Amazon, said Mickey Chadha, an analyst at Moody s Investors Service. No retailer can under-price as long as Amazon can, make no money and get away with it. That s why people are scared. Ill-Timed Deal: When Apollo Global bought Greensboro, North Carolina-based Fresh Market for $1.4 billion last year, the grocery world seemed quite different. The chain, known for its fresh produce, had seen sales slow. To lure customers back to Fresh Market s roughly 170 stores, the private-equity titan was betting it could rely on its experience with previous -- and profitable -- investments in companies such as organic grocer Sprouts Farmers Markets. But Fresh Market is struggling for some of the same reasons that sent Whole Foods into the arms of Amazon. Mainstream competitors including Kroger Co. and Wal-Mart Stores Inc. have pushed deeper into sales of fresh produce and organic products. Supermarkets have opened so many stores that many analysts expect a shakeout. Before the Amazon deal, Fresh Market bonds traded as high as 91 cents on the dollar. Now they fetch less than 76 cents. Stock investors have already punished grocers. The day Amazon announced the Whole Foods deal, Kroger lost more than $2 billion in market value, and its shares have fallen more than 35 percent this year. U.S. regulators have turned to a top Goldman Sachs Group Inc. executive to help them deal with two of the most daunting issues confronting Wall Street: Brexit and new European rules that will upend banks research businesses. Alan Cohen, who spent 13 years as head of compliance at the New York-based bank, will join the Securities and Exchange Commission as a senior policy adviser to Chairman Jay Clayton, the agency said. Cohen s responsibilities will include advising the SEC on the U.K. s separation from the European Union and MiFID II, sweeping EU regulations that require brokers to charge for analysis rather than offering it as a free perk along with other services. Clayton, a former Sullivan & Cromwell partner whose clients included Goldman, faces increasing pressure from financial firms to ensure that U.S. banks can continue to sell their market analysis to European money managers once the revised MiFID takes effect in January. There is concern that the European rules conflict with U.S. regulations, and time is 7
running short for the SEC to come up with a solution. Goldman Ties: Tapping a Goldman executive could rekindle criticism that Clayton faced during his Senate confirmation hearing in March. Senate Democrats sought to lump Clayton in with top Trump administration officials who had deep Goldman ties, such as Treasury Secretary Steven Mnuchin, a former partner at the firm, and National Economic Council Director Gary Cohn, who was the bank s president before joining the White House. Democrats raised concerns that Clayton may be more focused on helping Wall Street than protecting mom-and-pop investors, which he rejected. Clayton, whose wife left a job at Goldman when he started at the SEC, has cast his prior work for financial firms as a strength for his new job. Cohen, a graduate of Rutgers law school, worked as an attorney at O Melveny & Myers for more than a decade before joining Goldman, the SEC said. Since stepping down as the bank s head of compliance in January, he s been advising its executive office, which includes communications, government affairs and investor relations. In addition to Brexit and MiFID II, the SEC said he will advise the agency on issues related to the clearing and settlement of derivatives. Goldman wasn t required to disclose Cohen s salary and bonuses, but regulatory filings leave clues to other parts of his compensation. During his time at the bank, Cohen received awards of restricted shares and stock options worth at least $43 million when they were granted. He s realized gains of at least $20 million on stock sales, and since 2009, he s collected another $4.36 million from investments in funds offered to Goldman employees, proxy statements show. NEWS SOURCE: BLOOMBERG CL04766 Risk Factor: Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Disclaimer: The article (including market views expressed herein) is for general information only and does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this information. This material provides general information on financial planning and comparisons made are only for illustration purposes. The data/ information used/disclosed in this material is only for information purposes and not guaranteeing / indicating any returns. Investments in mutual funds and secondary markets inherently involve risks and recipient should consult their legal, tax and financial advisors before investing. Recipient of this article/ information should understand that statements made herein regarding future prospects may not be realized. He/ She should also understand that any reference to the securities/ sectors/ issuers etc., in the document is only for illustration purpose and are NOT stock recommendations from the author or L&T Investment Management Limited, the asset management company of L&T Mutual Fund or any of its associates. Any performance information shown refers to the past should not be seen as an indication of future returns. The value of investments and any income from them can go down as well as up. 8