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India Weekly Kickstart
Portfolio Strategy Research
No respite from string of disappointing macro data; markets lose 0.6% on Friday after IP print
CNXIT Index outperformed (+1.4%) wow, but rate-sensitive areas declined ahead of the RBI’s meeting on June 16.
Strong foreign inflows of US$106mn wow and domestic outflows of US$40mn, as of the close of June 8, 2011.
Industrial production grew 4.4% yoy (old series) in April, below the revised 7.3% yoy growth in March.
Asian stocks fell more than 3% wow on continued weak macro data and a surprise rate hike in Korea.
Overview
Weaker-than-expected IP data released on Friday
capped NIFTY’s gains (-0.6% wow). The govt.
released a new series (base of 2004/2005) that
showed 6.3% yoy growth in April, lower than the
8.8% yoy increase in March. Investors will likely look
to this week’s WPI data and RBI meeting for further
cues. Last week saw rate-sensitive sectors fall
sharply on expectations of further rate hikes. Our
India Economics team expects RBI to hike rates by
25bp on June 16, and thinks the quantum of rate
hikes may be reduced for the remainder of 2011.
NIFTY price performance
NIFTY fell 0.6% last week, down 10.6% ytd
Source: NSE, Datastream, GS Global ECS Research.
Foreign and domestic flows
FIIs have bought US$0.03bn ytd, while DIIs bought
US$3.1bn ytd as of the close of June 8, 2011.
Earnings sentiment and relative valuation
MSCI India Financials saw the weakest EPS
sentiment (-15.6%) wow. India’s valuation
premium to MXAPJ climbed to 25%.
Commodities
Natural gas (+4.0%) continued to outperform,
while Turmeric fell further (-6.5%) wow as
commodities ended flat wow.
Macro events
WPI (June 14), RBI policy meeting (June 16).
Focus
PSUs: DuPont Dimension
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
India Weekly Kickstart
Portfolio Strategy Research
No respite from string of disappointing macro data; markets lose 0.6% on Friday after IP print
CNXIT Index outperformed (+1.4%) wow, but rate-sensitive areas declined ahead of the RBI’s meeting on June 16.
Strong foreign inflows of US$106mn wow and domestic outflows of US$40mn, as of the close of June 8, 2011.
Industrial production grew 4.4% yoy (old series) in April, below the revised 7.3% yoy growth in March.
Asian stocks fell more than 3% wow on continued weak macro data and a surprise rate hike in Korea.
Overview
Weaker-than-expected IP data released on Friday
capped NIFTY’s gains (-0.6% wow). The govt.
released a new series (base of 2004/2005) that
showed 6.3% yoy growth in April, lower than the
8.8% yoy increase in March. Investors will likely look
to this week’s WPI data and RBI meeting for further
cues. Last week saw rate-sensitive sectors fall
sharply on expectations of further rate hikes. Our
India Economics team expects RBI to hike rates by
25bp on June 16, and thinks the quantum of rate
hikes may be reduced for the remainder of 2011.
NIFTY price performance
NIFTY fell 0.6% last week, down 10.6% ytd
Source: NSE, Datastream, GS Global ECS Research.
Foreign and domestic flows
FIIs have bought US$0.03bn ytd, while DIIs bought
US$3.1bn ytd as of the close of June 8, 2011.
Earnings sentiment and relative valuation
MSCI India Financials saw the weakest EPS
sentiment (-15.6%) wow. India’s valuation
premium to MXAPJ climbed to 25%.
Commodities
Natural gas (+4.0%) continued to outperform,
while Turmeric fell further (-6.5%) wow as
commodities ended flat wow.
Macro events
WPI (June 14), RBI policy meeting (June 16).
Focus
PSUs: DuPont Dimension
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