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India Monthly Review
Retrospective – January 2011: One Sigma Event Only
Monthly
January Retrospective– In Summary
•
MSCI India was the second worst-performing EM in January. Egypt was the worst.
•
India’s absolute performance in January was 1.3 sigma below the average January performance of the past 30 years.
•
All sectors were down MoM. Tech and Telecom were the best- and worst-performing sectors, respectively.
•
Foreigners turned sellers for the first time in seven months.
•
Domestic institutions were buyers during the month.
•
Volatility rose MoM.
•
INR depreciated vs. the USD and the Euro.
•
IIP tumbled to 2.7% and inflation accelerated marginally.
MSCI India underperformed the global indices by a significant margin in January. At the end of the month, India was the second worst- performing EM (the worst was Egypt). There have been 28 instances since 1995 when India has been among the bottom five performing markets in EM. The BSE Sensex touched a five-month low in January and was down 10.6% MoM – the worst monthly performance since Oct-08. Historically, there have been 26 occasions when the market has fallen by more than 10% MoM. The mid-cap and small-cap indices underperformed the large cap index by c2ppt.
Retrospective – One Sigma Event, Only!
Sector performance: Technology was the best sector for the second consecutive month while Telecom was the worst-performing sector. These two sectors remain the best- and worst-performing sectors over the past 12 months. At the end of the month, all sectors were down MoM (in INR), quite contrary to the positive returns of December. During the month, Healthcare led and Telecom lagged relative to their respective EM sectors. Sector rotation breadth turned moderate with five sectors changing relative positions MoM while the sector rotation depth fell to a four-month low during the month.
Institutional flows: FII inflows in the cash market turned negative (of around US$1.2bn) for the first time in seven months. FIIs also turned sellers in the futures market. Domestic mutual funds started the year as moderate buyers (at US$80mn) after remaining sellers of equities all through 2010. Domestic insurance companies bought stock (in excess of US$1 billion) in January.
, Equity market activity: Market activity was weak during the month. Cash volumes and turnover were down 15% and 11% MoM, respectively. Cash turnover is down to its lowest level since Feb-10. Derivatives turnover rebounded after falling sharply in the previous month. Intra-day and inter-day volatility rose to 11-month and six- month highs, respectively. Average open interest was down MoM for the fourth month running. The put-call ratio fell a further 5ppt MoM. Breadth fell 15% MoM after touching a 5 ½-month high in early January.
Currency: The volatility in the rupee vs. the USD continued. The INR depreciated 2.6% and 5.1% MoM against the USD and the Euro, respectively.
Valuations and earnings expectations: MSCI India’s absolute valuations fell to a 19-month low. Relative to emerging markets, India’s valuation fell to a six-month low and was at a 45% premium at the end of January
Bond market: Long yields touched a 26-month high during the month and ended the month 24bp higher over the previous month, while the short yields fell marginally MoM. The yield curve widened MoM for the first time in nine months.
Macro indicators: IIP growth tumbled to 2.7% in November. Inflation accelerated marginally on the back of higher food prices. Credit growth saw a marginal deceleration during the month.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
India Monthly Review
Retrospective – January 2011: One Sigma Event Only
Monthly
January Retrospective– In Summary
•
MSCI India was the second worst-performing EM in January. Egypt was the worst.
•
India’s absolute performance in January was 1.3 sigma below the average January performance of the past 30 years.
•
All sectors were down MoM. Tech and Telecom were the best- and worst-performing sectors, respectively.
•
Foreigners turned sellers for the first time in seven months.
•
Domestic institutions were buyers during the month.
•
Volatility rose MoM.
•
INR depreciated vs. the USD and the Euro.
•
IIP tumbled to 2.7% and inflation accelerated marginally.
MSCI India underperformed the global indices by a significant margin in January. At the end of the month, India was the second worst- performing EM (the worst was Egypt). There have been 28 instances since 1995 when India has been among the bottom five performing markets in EM. The BSE Sensex touched a five-month low in January and was down 10.6% MoM – the worst monthly performance since Oct-08. Historically, there have been 26 occasions when the market has fallen by more than 10% MoM. The mid-cap and small-cap indices underperformed the large cap index by c2ppt.
Retrospective – One Sigma Event, Only!
Sector performance: Technology was the best sector for the second consecutive month while Telecom was the worst-performing sector. These two sectors remain the best- and worst-performing sectors over the past 12 months. At the end of the month, all sectors were down MoM (in INR), quite contrary to the positive returns of December. During the month, Healthcare led and Telecom lagged relative to their respective EM sectors. Sector rotation breadth turned moderate with five sectors changing relative positions MoM while the sector rotation depth fell to a four-month low during the month.
Institutional flows: FII inflows in the cash market turned negative (of around US$1.2bn) for the first time in seven months. FIIs also turned sellers in the futures market. Domestic mutual funds started the year as moderate buyers (at US$80mn) after remaining sellers of equities all through 2010. Domestic insurance companies bought stock (in excess of US$1 billion) in January.
, Equity market activity: Market activity was weak during the month. Cash volumes and turnover were down 15% and 11% MoM, respectively. Cash turnover is down to its lowest level since Feb-10. Derivatives turnover rebounded after falling sharply in the previous month. Intra-day and inter-day volatility rose to 11-month and six- month highs, respectively. Average open interest was down MoM for the fourth month running. The put-call ratio fell a further 5ppt MoM. Breadth fell 15% MoM after touching a 5 ½-month high in early January.
Currency: The volatility in the rupee vs. the USD continued. The INR depreciated 2.6% and 5.1% MoM against the USD and the Euro, respectively.
Valuations and earnings expectations: MSCI India’s absolute valuations fell to a 19-month low. Relative to emerging markets, India’s valuation fell to a six-month low and was at a 45% premium at the end of January
Bond market: Long yields touched a 26-month high during the month and ended the month 24bp higher over the previous month, while the short yields fell marginally MoM. The yield curve widened MoM for the first time in nine months.
Macro indicators: IIP growth tumbled to 2.7% in November. Inflation accelerated marginally on the back of higher food prices. Credit growth saw a marginal deceleration during the month.
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