Weekly Market Update: Volatile week for NIFTY and Sensex

Date: 16/12/2018

Short Market Update: 5 states exit poll BJP-0, Resignation of RBI Governor, Depreciating Rupee, Higher India’s Industrial Production at 8.1%, Positive end for the markets with NIFTY up 1%.

On Friday, markets closed almost flat, with BSE Sensex up 33.29 points or 0.09% and closed at Rs 35,962.93, and NSE Nifty up 14 points or 0.13% at Rs 10,805.50. Even BSE Mid Cap and Small Cap closed almost flat. Midcap up by 29.25 points or 0.19% and closed at Rs 15,192.84. And, Small Cap up 4.07 points or 0.03% and ended at Rs 14,501.76.

With Assembly elections in 5 states and the rise in crude oil prices had a negative impact on this week’s opening. But, markets managed to bounce back during the week and ended on a higher note than previous weeks close. Strong domestic economic data and mixed global cues helped the positive ending.

Sensex rose 0.81% or 289.68 points this week and closed at Rs 35,962.93, while NIFTY was up by 1.04% or 111.75 points and closed at Rs 10,805.45.

The rupee depreciated 1.53% (Rs 1.09) against the dollar during the week.

Price Index in India

India’s WPI inflation fell from 5.28% in October to 4.64% in November 2018, this is attributed to lower fuel and power inflation and food deflation.

On the other hand, CPI inflation is at 2.33% in November compared to 3.4% in October. India’s industrial production (IIP) grew from 4.5% to 8.1% in October.

The resignation of RBI Governor

Urjit Patel, resigned from his post as RBI Governor citing personal reasons on 10th December. The backdrop for his resignation comes from the rift between the Finance Ministry and the RBI. Shaktikanta Das has been appointed as the 25th Governor of the Reserve Bank of India for a period of three years. He is an IAS Officer from 1980 batch and currently a member of the Fifth Finance Commission. He also represents India at the G-20 in the role of a sherpa.

Indian Oil Corporation buyback

The company announced that it would buy back shares worth Rs 4,435 crores, approx. 3.06% of equity shares at Rs 149 per share.

Highest Foreign Inflows for NBFCs

NBFCs have witnessed highest foreign inflows in eight months. This was a result of two-month sell-off, which turned overseas investors into net buyers of Indian equities. The foreign portfolio investors pumped in $352 million.

Offer for Sale norms eased by SEBI

SEBI relaxed regulations for OFS.

  • Expanded the number of companies that can avail OFS: Shareholders of companies with market capitalization of Rs 1,000 Crores or above can avail OFS. The threshold is calculated as the 6months daily average of market capitalization prior to the OFS.
  • Cancellation of offer: The sell may choose to cancel the offer if he fails to get sufficient demand from non-retail investors at or above the floor price on T day. Post-bidding, in full (both retail and non-retail) on T day and not proceed with an offer to retail investors on T+1 day.
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