2. Equity View: The GDP data released on Friday last week
showed better results than expected by most of the analysts. FYQ1
GDP growth of 5.7% was mainly due to recovery in manufacturing and
industrial sector. We expect the recovery to continue to strengthen
in the coming quarters and believe the GDP growth for FY15 to be
ranging between 5.5-6%. This would be a significant recovery from
4.6% observed last year. IIP and Inflation number to be released in
the second week of this month should also show a positive traction.
We believe that the IIP number would range between 3.5-4% for last
month and CPI Inflation below 8% along with WPI below 5.5-6%.
Overall seasonal deficit of monsoon is 17-18% which is lower than
expectations. Although there is a marginal dip in the area under
cultivation when compared with last year, there is nothing
substantial to impede agricultural activity for the year. The
agricultural GDP growth for the fiscal should be between 2-2.5%
which is a fall in growth from previous year however it is positive
and any reduction would be compensated by the increase in
manufacturing activity. The services sector continues to show good
traction and we expect its growth to stay around 7%. We believe
that economic recovery is beginning to get firmer every day as
there are a lot of steps being taken by the government on
infrastructure and industries to ensure a durable recovery. The
next key trigger for the market remains global cues. In the last
couple of weeks, the US Federal Reserve has given no sign that they
are in a rush to hike interest rates so we believe that global
factors also remain benign atleast at this point in time. News:
DOMESTIC MACRO: Government notifies liberalised foreign direct
investment (FDI) norms for the Railways, permitting 100% FDI
through automatic route in several areas, including high speed
trains. Rating agency Moody's expects Indias GDP to grow at 5.1% in
the first quarter (April-June) of the current fiscal; also expects
foreign currency bond issues in India for non-financial firms to
touch a record high of $13-$14 bn in 2014 Indian economy grew 5.7%
in the quarter ended June, compared with 4.6% in the previous
quarter. India's fiscal deficit in the first four months of the
current financial year was Rs 3.25 lakh cr, or 61.2% of the
full-year target; the deficit was 62.8% during the comparable
period in the previous fiscal year. GLOBAL MACRO EURO Eurozone
consumer price index came in at 0.3% in August on an annual basis,
compared with 0.4% in July.
3. Euro zone economic confidence index fell to 100.6 in August,
the lowest score since December, from 102.1 in July. United States
The US economy expanded 4.2% in Q2 2014 according to the second
estimate, higher than the previous estimate of 4%, following a
contraction of 2.1% in Q1 2014. US pending home sales rose 3.3% in
July after a 1.3% decrease in June US durable goods orders surged
by a seasonally adjusted 22.6% in July following an upwardly
revised gain of 2.7% in June China Chinas final HSBC/Markit
Purchasing Managers' Index (PMI) retreated to 50.2 in August,
roughly in line with a preliminary reading of 50.3. Indices: Date
Sensex Midcap Auto Bankex CD CG FMCG HC IT Metals O&G Power
Realty Teck 25/08/14 26,437 9,281 17,106 17,938 9,111 14,774 7,243
13,254 10,044 12,291 11,053 2,080 1,786 5,579 26/08/14 26,443 9,259
17,111 17,896 9,141 14,650 7,308 13,403 10,068 12,384 10,976 2,052
1,785 5,580 27/08/14 26,560 9,327 17,250 17,990 9,199 14,703 7,347
13,398 10,143 12,358 11,068 2,040 1,761 5,614 28/08/14 26,638 9,299
17,294 18,004 9,181 14,913 7,402 13,357 10,086 12,253 11,185 2,042
1,727 5,594 0.76% 0.19% 1.10% 0.36% 0.77% 0.94% 2.19% 0.77% 0.41%
-0.31% 1.19% -1.84% -3.27% 0.28% Commodities and Currency: Date USD
GBP EURO YEN Crude (Rs. per BBL) Gold (Rs. Per 10gms) 25/08/2014
60.43 100.12 79.74 58.01 6182 27625 26/08/2014 60.50 100.33 79.91
58.24 6203 27831 27/08/2014 60.47 100.15 79.65 58.17 6201 27742
28/08/2014 60.47 100.35 79.86 58.27 6211 27923 29/08/2014 - - - -
6196 - -0.08% Rupee Depreciated -0.24% Rupee Depreciated -0.15%
Rupee Depreciated -0.45% Rupee Depreciated 0.23% 1.08%
4. Debt: Tenor Gilt Yield in % (Friday) Change in bps (Week)
1-Year 8.69 2 2-Year 8.51 5 5-Year 8.62 5 10-Year 8.57 4
5. Varun Goel Jharna Agarwal Nupur Gupta Ridhdhi Chheda
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