Tata Mutual Fund

Market Commentary

  • Request a callback
    Please fill the details below & we will get in touch with you
    Fields with * marks are mandatory
    Name *

    Mobile No *

    Landline No -

    City *

    Thank You!

    We will get back to you soon.

Equity Market

Equity Commentary – November 2018

The Indian equity markets saw positive returns, with the Sensex up by 5.1%, and the Nifty was up by 4.7%. The broader market; the BSE Midcap & the BSE 200 both underperformed the Sensex with a performance of 2.9% and 4.2% respectively. In terms of sectors; Banking, Consumer Durable, Capital Goods, Auto, Realty were the major outperformers whilst, IT, Metals, Healthcare, Power and Oil & Gas were the major underperformers. FIIs were net buyers in November, with net inflows to the tune of ~USD 0.9 bn. Net equity investments in November 2018 by domestic MFs in the market were ~USD 0.35 bn.

Index Name As on As on As on Return in %
30-Nov-18 31-Oct-18
30-Nov-17  1 Month 1 Year

Nifty 50 Index

10877 

10387 

10227 

4.7 

6.4 

S&P BSE Sensex

36194

34442 

33149 

5.1 

9.2 

S&P BSE MID CAP

15039 

14613 

16917 

2.9 

-11.1 

S&P BSE SMALL CAP

14427 

14201 

18229 

1.6 

-20.9 

S&P BSE 200

4627 

4440 

4527 

4.2 

2.2 

S&P BSE AUTO

20900 

19881 

25205 

5.1

-17.1 

S&P BSE Bankex

29949 

28360 

28631 

5.6 

4.6 

S&P BSE Consumer Durable

20526

19142 

21461 

7.2 

-4.4 

S&P BSE Capital Good

18639 

17489 

18455 

6.6 

1.0 

S&P BSE FMCG

11647 

11128 

10321 

4.7 

12.8 

S&P BSE Health Care

14333 

14727 

13990 

-2.7 

2.4 

S&P BSE IT

14297 

14532 

10731 

-1.6 

33.2 

S&P BSE METAL

11832 

12525 

13902 

-5.5 

-14.9 

S&P BSE Oil & Gas

13246 

13247 

15928 

0.0 

-16.8 

S&P BSE Power Index

1911 

1958 

2321 

-2.4 

-17.6 

S&P BSE Realty

1792 

1680 

2446 

6.7 

-26.7 



Index Name As on As on As on Return in %
30-Nov-18 31-Oct-18
30-Nov-17  1 Month 1 Year

Nifty 50 200

5733 

5498

5619 

4.3 

2.0 

Nifty 50

10877 

10387 

10227 

4.7 

6.4 

Nifty Auto

9270 

8821 

11293 

5.1 

-17.9 

Nifty Bank

26863 

25153 

25332 

6.8 

6.0 

Nifty Commodities

3397 

3346 

3928 

1.5 

-13.5 

Nifty Energy

14324 

13753 

14125 

4.1 

1.4 

Nifty Financial Services

11439 

10640 

10325 

7.5 

10.8 

Nifty FMCG

30126 

28547 

25820 

5.5 

16.7 

Nifty India Consumption

4923

4592 

4827 

7.2 

2.0 

Nifty Infrastructure

3087 

2970 

3517 

3.9 

-12.2 

Nifty IT

14638 

14940 

11115 

-2.0 

31.7 

Nifty Metal

3164 

3297 

3678 

-4.0 

-14.0 

Nifty Midcap 100

17504 

17189 

19895 

1.8 

-12.0 

Nifty Pharma

9276 

9758 

9239 

-4.9 

0.4 

Nifty Realty

232 

215 

326 

8.0 

-28.7 

Nifty Smallcap 100

6216 

6063 

8712 

2.5 

-28.7 


The Macro Picture

  November-18 October-18
WPI 5.28% (October 2018) 5.13% (September 2018)
CPI 3.31% (October 2018) 3.77% (September 2018)
Index of Industrial Production 4.5% (September 2018) 4.7% (August 2018)
Repo rate 6.50% (as on November 30, 2018)  6.50% (as on October 31, 2018)  
Marginal Standing Facility Rate 6.75% (as on November 30, 2018)   6.75% (as on October 31, 2018)  
Source: RBI, MOSPI

Inflation

India’s Wholesale Price Inflation (WPI) Index came in at 5.28% YoY in October 2018 as compared to 5.13% for September 2018 on account of higher manufactured products and fuel inflation.
The Consumer Price Inflation (CPI) index came at 3.31% YoY in October as compared to 3.77% in the previous month on benign food prices.

Growth

India’s Real Gross Domestic Product (GDP) grew at 7.1% YoY in Q2 FY19 reducing from the pace of 8.2% in Q1 FY19. Private consumption grew 7% YoY for the quarter. The gross fixed capital formation continued to grow in double digits (~12.5% YoY).

Other macro developments (fiscal deficit and household savings)

India’s fiscal deficit upto October 2018 is 103.9% of the budgeted estimates. Revenue expenditure has risen 13.2% YoY while capital expenditure has increased 8.8%. Total receipts and expenditure are up 5.3% and 12.7% respectively. India’s net Household financial savings improved to 7.2% in FY18 from 6.8% of the GDP in FY17.

Market Outlook

Equity markets have rebounded sharply during the month of November 2018 on the back of Crude Oil prices correcting to below US$ 60. Debt markets have started showing early signs of stabilizing, however NBFC/HFC exposure to reals estate still remains a key point of concern going forward. Micro story for India, in terms of better corporate earnings growth going forward remains positive, making us optimistic on the long term potential for returns from the Indian Equity as an asset class.

In terms of our portfolio positioning, we remain focused on companies with faster earnings growth visibility. We continue to remain overweight on private sector banks on account of their ability to gain market share and maintain relatively higher growth rates. We are also diversifying exposure to consumption plays across multiple themes.

Long-term structural drivers like demographic advantage, low household debt, limited penetration across different consumer categories, increased potential for financial savings and urbanization makes India a compelling equity story from medium to long term perspective.

We believe investors would be well advised to invest with medium to long term perspective and systematically increase exposure to Indian equity markets.


Designed & Developed by Idealake

Email a friendX

Fields with* marks are mandatory

Name* Email*

Name Email

Name Email

Name Email

Name Email

Sender Name*

Sender Email*

Message