Monthly Commentary by Fundamental Equity Research

Indian equity benchmarks hit all-time high levels in November and ended the month with a gain of over one and a half per cent with key indices settling at 11877 (Nifty) and 40129 (Sensex) levels respectively.

The growth of eight core infrastructure industries contracted massively by 5.2% in September 2019, as compared to the same period of last year, due to a decline in output of coal, crude oil, natural gas, cement and electricity.

India’s manufacturing activity slowed down in the month of October. The Nikkei India Manufacturing Purchasing Managers’ Index (PMI) – a composite single-figure indicator of manufacturing performance – slipped to a two-year low of 50.6 in October from 51.4 in September.

India’s forex reserves increased by $1.83 billion to a new lifetime high of $442.58 billion in the week ended October 25, helped by a jump in core currency assets and value of gold.

India’s factory output growth contracted by 4.3% in September as compared to a contraction 1.1% in August 2019 as all three broad-based sectors of capital goods production, consumer durables, and infrastructure and construction goods contracted.
India’s merchandise exports contracted by 1.11% in October 2019 as compared to the same period of last year.

India’s retail inflation based on Consumer Price Index quickened to 16-month high of 4.62% in October from 3.99% in September 2019, on the back of higher food prices.

India’s WPI inflation again eased to 0.16% in the month of October 2019 as against 0.33% for the previous month and 5.54% during the corresponding month of the previous year.

The cabinet cleared the structure of the proposed exclusive alternate investment fund (AIF) for the real estate sector with an initial corpus of Rs 25,000 crore, more inclusive terms and a commitment to continue to provide more budget funds, in addition to the initial Rs 10,000 crore, as & when the demand arises.

We continue our strategy of buying quality management with quality growth-oriented companies to create long term sustainable wealth. We are recommending investors to buy stocks like ICICI Bank, Bajaj Finance, HDFC Life, IGL, HDFC Bank, ITC, HUL.

Author: Mr. Saurabh Joshi, CA, AnandRathi Equity Research (Investment Services), 4th December 2019


Leave a Reply

Your email address will not be published. Required fields are marked *