The Sensex and the Nifty declined 0.85% and 0.89% in the last week as gains led by the outcome of the FOMC meeting was followed by profit booking towards later part of the week.
The FOMC announced no change in the policy rates but eliminated the word “patient” that used to normally appear in their statements. This means that the rise in the interest rates would be as and when the economic conditions warrant and not dependent on time. The Fed lowered its forecasts for the unemployment rate but also for GDP growth and inflation. Overall, the Fed is not in a hurry to raise policy rates but would act upon it if economic data comes on the expected lines. Read our analysis on Fed Policy and Markets
Industrial production in the US, for the month of February edged up 0.1% after declining 0.3% in January. Overall industrial production was supported by a spike in utilities while other major components showed declines. Manufacturing dipped 0.2% in February after falling 0.3% in the month of January. This was the third consecutive decline for this component.
The Rajya Sabha in the last week passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2015. The Mines and Minerals (Development and Regulation) Amendment Bill, 2015 sought to introduce the system of auction of mines that supply minerals like iron ore, bauxite and limestone to enhance transparency in mineral allocations.
The inflation based on the Wholesale Price Index (WPI) was reported at -2.06% for the month of February 2015 as compared to -0.39% for the month of January 2015. The WPI based inflation for the month of December 2014 was revised to -0.5% as compared to 0.11% reported earlier.
India’s merchandise export dipped 15% to USD 21.55 billion in February 2015 as compared to February 2014. Exports declined in February 2015 over February 2014, mainly driven by a 55% dip in exports of petroleum products to USD 2.11 billion, while exports of electronic goods dipped 19% to USD 0.47 billion, engineering goods 1% to USD 5.1 billion, gems and jewellery 4% to USD 3.52 billion and meat and poultry products 32% to USD 0.3 billion. Exports of readymade garments increased 9% to USD 1.54 billion, while that of drugs and pharmaceuticals was flat at USD 1.16 billion. Imports dipped 15.7% to USD 28.39 billion in February 2015 compared to February 2014. The trade deficit narrowed to a 17-month low of USD 6.85 billion in February 2015.
Portfolio and Sector Performance
Our model Twelve stock portfolio has given one-year returns of 62.79% and has outperformed the benchmark Sensex by 33.21%.
On a weekly basis twelve stock portfolio has declined 1.44% in value and the Benchmark BSE Sensex has declined by 0.85%. The Portfolio has underperformed the benchmark by 0.59%.
The Nineteen Stock Portfolio has given one-year returns of 61.52% and has outperformed the benchmark BSE 500 by 21.73%.
On a weekly basis nineteen stock portfolio has declined 1.44% in value and the Benchmark BSE 500 has declined 0.94%. The Portfolio has underperformed the benchmark by 0.5%.
Industry and Stock Specific trends
The sectoral indices closed in negative territory last week. The S&P BSE Bankex, Auto, PSU and Oil and Gas indices declined 0.81%, 1.35%, 1.45% and 0.05% respectively in the last week. The S&P BSE IT index rose 0.67% in the last week.
Stock Gainers
Wipro stock rose 2.28% in the last week as the company announced that it has been selected by the US-based utility company, Greater Cincinnati Water Works (GCWW) as its IT partner to transform the utility’s CRM, billing and service bureau operations.
TCS stock rose 1.11% in the last week as the company announced that it has expanded its presence in Singapore with the opening of the new 1000-person TCS Singapore Banking and Financial Services Centre. The facility will provide a range of application development, digital and IT services to leading global banks in the Asia Pacific region according to TCS.
Losers
ICICI Bank stock declined 3.38% in the last week as it has completed the sale of its non-material wholly-owned banking subsidiary in Russia to Sovcombank in Russia.
BHEL stock declined 3.48% in the last week. The company has won an order worth Rs.2.25 bn from NTPC for setting up a 120 megawatts (MW) hydroelectric power project in West Bengal after International Competitive Bidding (ICB). The Company’s scope of work in the contract envisages engineering, procurement, manufacturing and erection and commissioning of hydro generating sets and associated electro-mechanical works and is to be executed in a schedule of 45 months.
Derivatives
The derivative market saw fall in open interest in Nifty futures by 7.22%. Nifty at the money put option volatility declined and call option volatility rose last week.
Market Update
The Rupee appreciated in the last week against the USD with FII inflows. FIIs were net equity buyers to the tune of USD 130 million in the third week of March 2015.