1ST NOV 2017
Husains
MARKET WRAP Equity benchmarks ended the session on a subdued note, with the Nifty ending almost quarter of a percent lower. The Sensex was down 36.11 points at 33230.05, while the Nifty closed lower by 24.50 points at 10339.20. The market breadth was narrow as 1,368 shares advanced against a decline of 1,304 shares, while 146 shares were unchanged. Axis Bank and ONGC were the top gainers on both indices, while Infosys, M&M, UPL and Vedanta were the top losers.
BROAD MARKET INDICES INDEX
CURRENT
OPEN
HIGH
NIFTY 50
10,336.10
10,364.90
10,367.70
10,323.95
10,363.65
-0.27
NIFTY NEXT 50
29,656.45
29,775.15
29,785.30
29,495.55
29,674.75
-0.06
NIFTY MIDCAP 50
5,129.30
5,124.45
5,144.10
5,095.05
5,116.30
0.25
NIFTY100 LIQ15
4,573.75
4,594.15
4,611.20
4,554.15
4,582.45
-0.19
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LOW
P. Close %CHANGE
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ASIAN INDEX INDEX
OPEN
HIGH
LOW
CLOSE
%CHANGE
NIKKEI 225
21,897.29
22,020.38
21,840.07
22,011.61
-0.00
HANG SENG
28,247.00
28,354.11
28,183.79
28,245.54
-0.32
TAIWAN
10,768.90
10,829.33
10,747.37
10,793.80
0.34
SSE
3,381.00
3,397.10
3,376.12
3,394.50
0.12
INDIAN MAJOR SECTORAL INDICES INDEX
CURRENT
OPEN
HIGH
NIFTY BANK
25,039.15
25,042.10
25,078.65
24,948.10
24,988.55
0.20
NIFTY FIN SERVICE
10,231.05
10,238.70
10,271.95
10,210.10
10,222.40
0.08
NIFTY IT
10,839.65
10,793.10
10,870.55
10,781.00
10,854.30
-0.13
NIFTY PHARMA
9,749.00
9,753.75
9,829.20
9,697.95
9,754.85
-0.06
Contact No. +91-903-977-7700
LOW
P. Close
%CHANGE
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NEWS UPDATE WORLD VIEW-Why stocks in emerging markets, including India, will continue to surge Investors have ploughed into emerging markets over the past two years and there appears to be no end in sight to a rally that ranges from Santiago to Shanghai. Here’s why there’s more good news ahead: The tide that lifts all these boats – including India -- is unlikely to be quelled by any of the so-called risk factors: the dollar, oil prices or valuations. How emerging markets have performed vis-à-vis other global markets, and versus each other, tell some interesting stories. A Moneycontrol scan of stock market returns over five years, two years and just the current year shows that emerging market outperformance started two years ago, and that Asia, as a rule, has been comfortably ahead of the emerging market universe as a whole. This year, Asian emerging markets are returning 33 percent against 29 percent for emerging markets as a whole and double the 17 percent for global markets. It’s clear that the region’s two biggest emerging economies, China and India, even if they are slowing down, are still growing at a rapid rate given their size, both relative to other emerging markets and in absolute terms. India may have seen two recent months of foreign fund outflows, but the picture is still strong for the year. There are a few surprises in the top ranks of emerging market performance, though. Contact No. +91-903-977-7700
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NEWS UPDATE Leader of the pack Turkey, supposedly in the throes of creeping Islamisation and assaults on democracy, is doing very well thank you. Chile is returning 32 percent and Peru 28 percent, while Brazil is level-pegging with the Nifty’s 26 percent. EM performance owes much to the traditional drivers of younger populations, burgeoning consumption and in the case of a lucky few, the blessing of natural resources. As long as the EM under the lens is reasonably stable politically, investors are more than happy to bring in their money. “If you consider the MSCI Emerging Markets index as a growth index, and the world is forecast to grow at 3.7 percent, emerging markets will react – the world speeding up is a very good reason to be overweight EM equities,” Lorne Baring, Managing Director at B Capital SA, a Swiss wealth management firm, told Moneycontrol from Geneva. “Stability in developed markets leads to outperformance by emerging markets.” The three main risks to that outperformance are the dollar, oil and valuations. On closer examination, none of them appears to be a real threat:
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NEWS UPDATE The dollar has performed poorly through 2017, losing roughly 11 percent against the euro, and a Reuters poll of 60 strategists saw the greenback at its current level, at best, over the next year. This means that investors are likely to stay invested in high interest-rate environments like those prevailing in emerging markets. Central banks in developed markets are not expected to raise rates often or by much, if at all, and the rate differential with emerging markets is likely to stay. A weak dollar also lifts prices of metals and other commodities, benefiting emerging market producers. Oil is currently at USD 58 a barrel, with the prospect of higher output from Libya, Nigeria and shale offsetting a surprisingly disciplined OPEC supply cut. Analyst polls peg the average price of Brent crude to rise by a dollar or two next year, a raise big importers like India can easily live with. And then there is the issue of valuations, but there appears to be plenty of room for growth. “The MSCI Emerging Markets Index has a forward P/E of 11.9 times and a trailing P/E of 16.3 times earnings. I would consider anything under 20 times as reasonable,� said Baring. AXA Investment Managers expects earnings per share in the EM space to grow by around of 20 percent, driven by robust sales and improving margins.
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