Weekly Recap Weekly Note

Indian Market Week that went by February 23, 2017

Weekly Close Points %

The broad indices cheered this past week as Sensex
Sensex 28,893 231 0.8 rose over 200 points to hit 29,000 for the 1st time
since September 8, 2016. Nifty hit a milestone today
Nifty 8,940 61 0.7
with its 23-month high closing. The market
Nifty Bank 20,887 200 1.0 capitalisation of companies trading on BSE reached a
new peak of Rs 118.04 trillion. 5 stocks on the
Nifty50 gained over 50% during this period. Index
Developed Markets heavyweights - BPCL jumped 83.98%, Yes Bank
soared 69.57%, Maruti Suzuki gained 65%, Eicher
Weekly Close Points % was up 54.92% and ZEEL surged 51.38% in the 23-
Dow Jones 20,776 33 0.2 month period.

Nasdaq 5,861 (5) (0.1) On Nifty, the week’s rally was frontlined by the
telecom, IT and housing finance sectors. Telecom
S&P 500 2,363 (3) (0.1)
was the leading gainer on back of consolidation in
Hang Seng 24,107 (39) (0.2) the sector. Bharti Airtel surged 4.8% on acquisition
of Telenor India. Idea Cellular jumped over 7% after
a media report indicated that SoftBank is likely to
Nifty Gainers % Nifty Losers % pick up stake in the proposed merged entity with
Vodafone but the fund denied any such investments.
IDEA 11.2 Hindalco (2.9)
RIL 11.2 NTPC (2.5) RIL zoomed over 10% this week after Chairman
Mukesh Ambani announced new tariff plans for its
BPCL 7.6 Eicher (2.5) telecom arm Jio. The stock touched Rs 1200-mark for
Axis 6.4 Ambuja (1.5) the first time since May 19, 2009. Analysts were of
the opinion that Jio was only one part of the RIL
share price valuation, RIL’s $ 40 billion investments
in oil & gas projects will provide the required
Sector Gainers % Sector Losers % impetus to the stock performance in days to come.
Energy 5.2 Utilities (0.6) IT sector saw positive buying after the EU said it is
IT 1.4 Healthcare (0.5) ready to accommodate more Indian IT professionals
and denounced any form of protectionism in global
Telecom 1.4 trade. This came as a relief, amid anxiety in India
over Donald Trump administration's possible
clampdown on H1B visa.
Date FII (Cr) DII (Cr)
Housing Finance Companies (HFC) sector has been in
22-Feb-17 (259) 918 the euphoric zone lately. HFCs moved up to 2.5% in
21-Feb-17 (1,436) 1535 today’s trade after SEBI eased the norms for debt MF
investment in HFCs. Debt mutual funds can now
20-Feb-17 (433) 828 invest up to 15% of their total net assets in housing
finance companies.
Weekly Recap Weekly Note

Rollover Analysis

Markets were on a hot streak, as Nifty breached its 52-week high on the last day of the February F&O
expiry series. BankNifty index outperformed Nifty Index by a whopping 3.3% as option writers in both the
indices were taken for a toss throughout the series. Call option writers were among the biggest loser's as
the short covering in 8700, 8800 & 8900CE strike helped Nifty regain its lost territory for the first time since
September 2016. Long gamma positions were the flavor of the series.

After four months of continuous selling, FII's finally turned positive on Indian markets posting a buying
figure to the tune of ~Rs 7300 crore in the cash segment. Long/Short ratio of Index Futures was above 2x
for almost entire series, leading to big surge in indices.

Rollovers of Nifty/BankNifty stood at 73%/60% (2.2cr/2.75 lakh shares) as against 73%/61% (1.91cr/20 lakh
shares) previous expiry. Rollovers and the cost of carry in percentage terms for Nifty are higher than its
previous 3-month average while in BankNifty they are lower than its previous 3-month average.

Based on the mentioned data, a rangebound start to the new series can be expected. On the options front,
March series starting with maximum calls base at 9000 strike (3.3mn shares) and maximum put base at
8500 strike (3.1mn shares).

Who Did What…

 Action Construction - India Opp Growth Fund - Pinewood Strategy sold 1.0m shares.
 Just Dial - GEF LP Class D Series bought 405k shares.
 Surana Inds - Indiastar (Mauritius) sold 292k shares.
 Karur Vysya Bank - Reliance Small cap fund bought 4.4m shares. Reliance Growth Fund 6.9m shares.
Warhol sold 16.4m shares.
 Bodal Chemicals - Janus Consolidated Finance - 1.0m shares. Rakeshbhai Ravjibhai Patel sold 1.0m
shares.
 Lypsa Gems & Jewel - Nomura Singapore bought 125k shares.
 Sundaram Multi Pap - LTS Inv sold 2.2m shares.

Upcoming Events

 February 23: Maharashtra BMC election results, US Core durables goods order, US Pending Home Sales.
 February 28: Federal Fiscal Deficit, Infrastructure Output (YoY), GDP quarterly, US GDP Price Index, US
GDP (QoQ), CB Consumer Confidence.
 March 1: Nekkei Markit Manufacturing PMI, M3 money Supply, ISM Manufacturing PMI, US Crude oil
Inventories.
 March 2: CPI Feb (YoY), Eur Unemployment rate (Jan).
 March 3: Services PMI, Bank loan growth, Deposit growth, ISM Manufacturing PMI.
Weekly Recap
Weekly Note
Media News

 The government will begin 5% stake sale in Bharat Electronics to raise about Rs16bn.
 Tata Motors and Volkswagen Group are to be at an advanced stage of finalising a partnership that can
have a wide-ranging impact on India and other emerging markets.
 The Cabinet Committee on Economic Affairs has approved Rs 57.24 bn by SJVN Limited in the 900MW
Arun-III hydropower project in Nepal.
 Maruti Suzuki India (MSI) is investing another Rs 19 bn till March 2019 on enhancing the R&D
centre in Rohtak for cutting time of new product development and to expand infrastructure for
evaluating vehicles' safety.
 Tata Consultancy Services' (TCS') board of directors has approved a proposal to buyback up to 56.1m
equity shares of the company for an aggregate amount not exceeding Rs 160 bn.
 NTPC's Power Management Institute will soon impart training to state discom staff across the country
for capacity building under the Integrated Power Development Scheme.
 Polaris, which entered into a joint venture with Eicher Motors for a personal vehicle Multix, is relooking
at its India strategy with the venture failing to take off as planned.
 Havells India Limited announced its board has approved the acquisition of Lloyd Consumer Durable
Business Division (Lloyd Consumer). The acquisition is proposed to be executed at an enterprise value
of Rs16bn on a debt free, cash free basis subject to closing adjustments.
 The International Monetary Fund (IMF) foresees India’s economic growth rebounding to 7.2% next
fiscal, up from the projected 6.6% in 2016-17 after demonetisation.

Global Moves

 The US Dollar traded close to 1-month highs on Thursday, as the minutes of the Federal Reserve’s most
recent policy meeting failed to deliver a clear message on the pace of future rate hikes. US Dollar
traded in tight ranges against the Yen and the Euro, moving back above $ 1.05 against the single
currency.
 US dollar gained strength against the Euro, as the market reels under geo-political uncertainty on
account of forthcoming elections in France. The latest polls show that the far right candidate Marine Le
Pen is closing the gap with her establishment rivals, although she still trails them by significant margins.
A better-than-expected slew of preliminary purchasing manager surveys out of France and Germany
failed to provide any support to the currency.
 The Dow Jones continued its dream run this week to log its best record-setting streak in three decades.
Good corporate earnings and a discernible faith in Donald Trump's policies have rallied the markets
higher.
 Oil prices rose on Thursday after US data showed a surprise decline in inventories, suggesting that a
global glut may be ending after moves by OPEC to cut production.
 Gold prices edged higher during European morning hours on Thursday, as investors digested the latest
Federal Reserve meeting minutes.
Weekly Recap Disclaimer
Recommendation Parameters for Fundamental/Technical Reports:
Buy – Absolute return of over +10%
Accumulate – Absolute return between 0% to +10%
Reduce – Absolute return between 0% to -10%
Sell – Absolute return below -10%

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Published in 2017. © India Infoline Ltd 2017

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