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India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
NIFTY (+0.3%) and SENSEX (+0.2%) end flat wow amid continued strong foreign inflows
Mid caps outperformed (NIFTYM50 Index +2.2%), while Energy lagged (CNXNRG Index -1.1%) wow
FIIs turned net buyers and have now bought US$0.8 bn ytd, while domestic MFs have bought US$0.3 bn ytd
INRUSD strengthened to 44.07 on strong foreign inflows and a weak dollar after the ECB hiked rates on Thursday
Dollar weakness also nudged commodities higher (+1.4% wow); Asian stocks rose (+1.7%) for the 3rd straight week
Overview
Indian equity markets witnessed domestic selling
pressure due to profit booking after foreign
investors pumped in US$2.5 bn in two weeks.
Strong foreign inflows spurred the INR to 44.07
against the USD. Markets will likely look to inflation
data and FY2011 earnings beginning next week for
further cues. Last week saw the ECB raise rates to
1.25% and Brent crude topping US$120 per barrel.
Asian equities continued their strong performance
(+1.7%) led by China (+2.5%) wow despite the PBOC
hiking interest rates by 25bp.
NIFTY price performance
NIFTY ended flat wow, but is down 4.8% ytd
Source: NSE, Datastream, GS Global ECS Research.
Foreign and Domestic Flows
Foreign buying reached US$1.4 bn wow, but
domestic MFs sold US$0.2 bn wow as of
Wednesday, April 6.
Earnings Sentiment and Relative Valuation
MSCI India Energy had the strongest EPS
sentiment (+4.8%) wow.
Commodities
MCX Spot Commodity Index rebounded to gain
1.4% wow. Crude (+3%) and Silver (+3.4%) gained
wow, while Natural gas fell 6% wow.
Events & Earnings releases
Feb IP (Apr 11), Mar WPI (Apr 14), Infosys FY11
results (Apr 15).
Focus
Popu-list: Census 2011.
Changes in banking system liquidity have been a key driver of overnight rates in recent months.
After several months of tightness, which resulted in a sharp increase in short-end rates and an
important overhang for equity markets, liquidity has eased considerably in recent days. We analyze
the outlook for liquidity through our liquidity framework. We find that notwithstanding the recent
easing, system liquidity may remain tight due to government borrowing, a high credit-deposit
ratio, and a weaker balance of payments. More importantly, we think the Reserve Bank of India will
have a preference for keeping liquidity tight given the concerns about inflation. Recently
recommended changes to the central bank’s operating procedures also state the intention of
keeping system liquidity tight, and banks in borrowing mode. We estimate sensitivities of liquidity,
deposit, and credit growth to different assumptions on capital inflows and government borrowing
needs. With our expectation of a further 50 bp in policy rate hikes, we think that short-end rates
may remain high in FY12.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
NIFTY (+0.3%) and SENSEX (+0.2%) end flat wow amid continued strong foreign inflows
Mid caps outperformed (NIFTYM50 Index +2.2%), while Energy lagged (CNXNRG Index -1.1%) wow
FIIs turned net buyers and have now bought US$0.8 bn ytd, while domestic MFs have bought US$0.3 bn ytd
INRUSD strengthened to 44.07 on strong foreign inflows and a weak dollar after the ECB hiked rates on Thursday
Dollar weakness also nudged commodities higher (+1.4% wow); Asian stocks rose (+1.7%) for the 3rd straight week
Overview
Indian equity markets witnessed domestic selling
pressure due to profit booking after foreign
investors pumped in US$2.5 bn in two weeks.
Strong foreign inflows spurred the INR to 44.07
against the USD. Markets will likely look to inflation
data and FY2011 earnings beginning next week for
further cues. Last week saw the ECB raise rates to
1.25% and Brent crude topping US$120 per barrel.
Asian equities continued their strong performance
(+1.7%) led by China (+2.5%) wow despite the PBOC
hiking interest rates by 25bp.
NIFTY price performance
NIFTY ended flat wow, but is down 4.8% ytd
Source: NSE, Datastream, GS Global ECS Research.
Foreign and Domestic Flows
Foreign buying reached US$1.4 bn wow, but
domestic MFs sold US$0.2 bn wow as of
Wednesday, April 6.
Earnings Sentiment and Relative Valuation
MSCI India Energy had the strongest EPS
sentiment (+4.8%) wow.
Commodities
MCX Spot Commodity Index rebounded to gain
1.4% wow. Crude (+3%) and Silver (+3.4%) gained
wow, while Natural gas fell 6% wow.
Events & Earnings releases
Feb IP (Apr 11), Mar WPI (Apr 14), Infosys FY11
results (Apr 15).
Focus
Popu-list: Census 2011.
Changes in banking system liquidity have been a key driver of overnight rates in recent months.
After several months of tightness, which resulted in a sharp increase in short-end rates and an
important overhang for equity markets, liquidity has eased considerably in recent days. We analyze
the outlook for liquidity through our liquidity framework. We find that notwithstanding the recent
easing, system liquidity may remain tight due to government borrowing, a high credit-deposit
ratio, and a weaker balance of payments. More importantly, we think the Reserve Bank of India will
have a preference for keeping liquidity tight given the concerns about inflation. Recently
recommended changes to the central bank’s operating procedures also state the intention of
keeping system liquidity tight, and banks in borrowing mode. We estimate sensitivities of liquidity,
deposit, and credit growth to different assumptions on capital inflows and government borrowing
needs. With our expectation of a further 50 bp in policy rate hikes, we think that short-end rates
may remain high in FY12.
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