Sensex touched 60K level and Nifty is just shy away from 18K level, the current bull run leg started during the time when India was battling against Covid-19 second wave in April-19 has yielded close to 25% - Presto!
Globally, markets are trading on a mixed note as the concerns of inflation are mounting, and Fed has mentioned of started the tapering program soon in next 6- 8 weeks followed by series of rate hikes. However, domestic markets are buoyant amid liquidity in the market and strong earnings outlook which is attracting foreign inflows. Going forward, investors will lookout for earnings season with IT companies to come out first and global manufacturing PMI levels.
FIIs/FPIs have invested Rs. 20.83 billion in August 2021 and Rs. 135 billion in September 2021. Foreign Institutional Investors (FIIs) Derivative Statistics have shown a rise in the open interest across stock options, and stock futures. Implied volatility (IV) rose for call options and for put options in the last week. Rise in IV for put option and for call option shows unsteady support for Nifty at present levels.
Wallstreet indices ended the volatile week on a flat note on Friday amid concerns over the Chinese real estate company Evergrande default on dollar denominated bond and ban of cryptos by the Chinese government. Also, Nike shares fell more than 6% after lowering its sales outlook due to factory closures in Vietnam. During the week, Dow Jones gained by 0.62%, Nasdaq declined by 0.03%, and S&P 500 rose by 1%.
The yield on the benchmark 10-year UST continued to rise to hit 1.45% on Friday, the highest since 5th July 2021, as investors digest the latest Federal Reserve monetary policy statement. The central bank signalled stimulus could start being reduced in November and interest rates could rise as soon as next year, while cutting growth forecasts and hiking inflation projections for this year.
European stocks closed lower on Friday, snapping a 3-day rally on weak data and concerns over the Evergrande interest default. Investors braced for a big change in Germany�s leadership as voters head to the polls to elect the nation�s new Chancellor. During the week, FTSE rose by 1.26% and DAX up by 0.26%.
Brent crude prices touched 3 year highs of USD 78 per barrel on Friday amid global supply concerns following storms in the US that damaged facilities on the Gulf coast. Disruptions in US Gulf Coast production following Hurricane Ida and other storms have led to sharp draws in US and global inventories. During the week, Brent crude prices gained by 3.53%.
Gold steadied around USD 1740 an ounce on Friday, close to its lowest level since August 2021 and book its third straight weekly loss hit by a series of hawkish signals from major central banks. On weekly basis,
Global Economy
The number of Americans filing for new claims for unemployment benefits unexpectedly rose for a 2nd straight week to 351,000 in the week ending 18th September 2021, well above market forecasts of 320,000. It is the highest reading in 4 weeks, as the coronavirus delta variant continues to hurt the economic recovery.
The Bank of England left its benchmark interest rate at a record low of 0.1% and its bond-buying program unchanged at a total of 895 billion Pounds by the end of this year during its September 2021 policy-meeting.
The Central Bank of Brazil unanimously decided to raise the Selic rate by 100 basis points to 6.25% on 22nd September 2021 policy-meeting, as expected. It was the fifth interest rate hike in 2021 and policymakers see another interest rate increase by the same margin at the next meeting.
Stocks of crude oil in the US tumbled by 6.108 million barrels in the week ended 17th September 2021, following a 5.437 million barrels drop in the previous week, above market expectations of a 2.400 million decline.
Japan's consumer prices declined by 0.4% (Y-o-Y) in August 2021, after a 0.3% drop a month earlier. This was the eleventh straight month of decrease in consumer prices, amid weakening consumption due to the ongoing COVID-19 pandemic.
