9 Oct 2017

Equities: broad upward momentum


Equity markets continue to enjoy broad upward momentum while growth is sustained and, in particular corporate earnings continue to please. Another US interest rate hike this year is now the consensus, even if the underlying inflation expectations are not convincing. Indian markets have been vacillating in a range of 500 points around the 10,000 level without seeing much sustained upward momentum or, indeed downside risk. Has increased by just 1.2% to 9980 after trading in a range of 5.1%. Average daily trading volumes have shifted upwards with a trailing average now at $4.7bn and daily numbers rising every week. Foreign portfolio investors have been consistent sellers of Indian equities on a relative valuation basis for some time now, unloading a net $3,1bn in the latest month. Domestic institutions have largely offset this, buying a net $2.8bn in ash equities but brokers are also reporting a substantial increase in retail buying in the expectation of recent returns being repeated. Volatility remains subdued nonetheless, with the India VIX trading in a narrow range between 9 and 14 before settling at 11. Market breadth is narrow as the market declines but strong on the rise. Nifty futures are typically trading at a premium of 1% to cash.

1 comment:

  1. Telecom stocks in focus, as The Telecom Regulator has proposed relaxing spectrum holding limits, a move that would encourage mergers and acquisitions as well as spectrum trading in a market where small carriers are trying to sell assets, including airwaves, to repay debt.
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