Dalal Street Investment Journal - July 09, 2019

8 DALAL STREET INVESTMENT JOURNAL I JULY 8 - 21, 2019 DSIJ. in^

I

ndian equities were warming up for

a major uptrend as global leaders

were chalking out ways to end trade

impasses and reach consensus on

various issues concerning

businesses at the G20 Summit. The

benchmark indices BSE Sensex and

Nifty50 gained 1.50 per cent each in the

past two weeks. Although it was a bumpy

ride upwards, most sectors advanced,

fuelled by the broad-based positive

sentiments among investors.

In the run-up to Modi Sarkar 2.0’s first

Union budget, broader markets have

started moving northwards. Following

the benchmark Sensex, the BSE Mid-cap

and BSE Small-cap indices gained 2.

per cent and 1.20 per cent, respectively,

this fortnight. Sectorally, BSE Realty

index gained a stupendous 9.16 per cent

on the back of budgetary expectations.

On the other hand, BSE Power index was

buzzing and was up by 6.55 per cent as

the government reiterated its

commitment to provide 24X7 power

supply to all and resolve the difference

between Union and state governments

and also outline a five-year plan to revive

the power industry. The other indices that

were gaining during the fortnight were

BSE Bankex, BSE Metal and BSE Auto,

which were up by 3.96 per cent, 2.22 per

cent and 3.38 per cent, respectively. The

only index that experienced selling

pressure was the BSE IT, which was down

by 2.09 per cent.

At the G20 Summit in Osaka, US

President Donald Trump and Chinese

Premier Xi Jinping met to signal a truce

between the two countries. The US and

China agreed to postpone additional

tariffs against each other, even as the two

economies struggle to live with existing

tariffs. But this truce was reason enough

for the international markets to stay in

the green. The US-based indices S&P 500

and Nasdaq gained 1.60 per cent and 1.

per cent, respectively, while the Dow

Jones was up close to a per cent during

the fortnight.

The European indices were also upbeat

as UK’s FTSE 100 was up by 0.73 per

cent, while the German DAX and the

French CAC 40 gained by 1.54 and 3.

per cent, respectively. Asian markets

gained significantly as world leaders

interacted with each other in Japan,

thereby helping businesses gain

confidence in the region’s growth story.

The Hang Seng gained by 3.80 per cent,

while the Japanese Nikkei gained 3.

per cent and the Shanghai Composite

was pretty excited during the fortnight

and gained more than 5 per cent.

Ahead of the budget, institutional

investors stayed away from the equity

markets. Participation by both foreign

institutional investors (FIIs) and

domestic institutional investors (DIIs)

was lacklustre. Both FIIs and DIIs were

net buyers to the tune of Rs. 693.35 crore

and Rs. 3,401.26 crore, respectively,

during the fortnight.

Another significant event was the OPEC

meeting in Vienna. The meeting came at

a time when the influence of OPEC’s

decision on the world economy is

dwindling. Gone are the days when

announcements from this mega oil cartel

would rattle economies across

Performance Of Indices

Sensex 39,046.34 39,686.50 1.

Nifty 11,691.50 11,865.60 1.

Mid-Cap 14,542.90 14,888.98 2.

Small-Cap 14,112.78 14,282.61 1.

Auto 17,730.58 18,124.53 2.

Bankex 34,064.38 35,214.72 3.

FMCG 11,380.33 11,364.48 -0.

IT 15,988.22 15,654.76 -2.

Metal 10,675.92 11,099.19 3.

Power 1,986.68 2,116.81 6.

Realty 2,069.02 2258.46 9.

01 st July

2019

Gain/Loss

(%)

18 th June

2019

Indices

Net Investment In Equity Markets (`/Cr)

01-July-19 -568.84 -50.

28-June-19 45.92 182.

27-June-19 200 196.

26-June-19 2419.91 -51.

25-June-19 56.67 377.

24-June-19 -1001.83 984.

21-June-19 -179.24 445.

20-June-19 -22.58 1241.

19-June-19 66.12 -104.

18-June-19 -322.78 181.

Total 693.35 3401.

Date FIIs DIIs

Dow Jones Ind 26,465.54 26,717.43 0.

S&P 500 2,917.75 2964.33 1.

NASDAQ 7,953.88 8,091.16 1.

FTSE 100 7,443.04 7,497.50 0.

DAX 12,331.75 12,521.38 1.

CAC 40 20,972.71 21,729.97 3.

Hang Seng 27,498.77 28,542.62* 3.

Nikkei 20,972.71 21,729.97 3.

Shanghai 2,890.16 3,044.90 5.

Indices

18 th June

2019

01 st June

2019

Gain/Loss

(%)

continents. Last week, OPEC inducted

Russia as its member. After the US and

Saudi Arabia, Russia is the world’s

third-largest oil producer. The member

nations for the first time signed a charter

of cooperation. Also, OPEC+ members

formalised and extended their existing

1.2 million barrel per day output cuts to

further support the elevated price of oil

for another nine months. However, the

effect of this output cut was a steep

decline in crude oil prices, reflecting the

slowdown in demand for oil. This is good

news for Indian equity markets as lower

crude prices bode well for the Indian

economy.

Market Watch

DS

Crude and Reforms to take

Markets Northwards

OPEC+ members formalised

and extended their existing

1.2 million barrel per day

output cuts to further

support the elevated price of

oil for another nine months.

However, the effect of this

output cut was a steep

decline in crude oil prices.

This is good news for Indian

equity markets as lower

crude prices bode well for

the Indian economy.

*data as on 28/06/2019 as exchange was closed on 01/07/19.