Stock Market News 18 July 2016

Rate sensitives outperform in a buoyant

market

Hope of a cut in interest rate by the Reserve Bank of India (RBI), above-

normal monsoon and benefits accruing from the 7th Pay Commission recommendation

(7CPC) have fuelled a rally in stocks of interest rate sensitive sectors. While the Nifty

Auto index hit record high in intra-day deals on Monday, the Nifty Bank index hit its 52-

week high level on the National Stock Exchange (NSE). Last week, the Nifty Realty

index too had touched a 52-week high of during intra-day deals

What is causing PSU banks to rally?

A look at the way PSU Banks are moving may give an indication that the worst is over

for these banks. In the last one month alone, the NSE PSU Bank index has jumped by

18.85% while the NSE Private Bank index has moved only 5.61% and the broad Nifty

has gained only 5.28%.

Reliance Industries gains post Q1 earnings

Reliance Industries (RIL) was up nearly 3% to Rs 1,039 on the BSE in early morning

trade after the company post market on Friday reported gross refining margin (GRM) of

$11.5 a barrel in the June 2016 quarter (Q1), ahead of Street expectations of $9-10 a

barrel. The GRMstood at $10.4 a barrel in the year-ago quarter, and at $10.8 a barrel in

March 2016 quarter.

Morgan Stanley revises down global growth forecast

Though world markets have Brexit vote outcome in their stride, leading global research

houses remain worried about economic growth going ahead, with analysts at Morgan

Stanley, too, revising down their forecast for FY17. In their recent report – Global macro

summer outlook: Clouded by Politics and Policy Uncertainty – Chetan Ahya, managing

director, Morgan StanleyAsia expects growth to firm to 3.2% in 2017, but has moved

further below the consensus estimate of 3.6%.

Huge premium on stock exchange-listed bonds makes

sovereign gold bonds attractive

Unlike the past three sovereign gold bond issues, the response to the fourth instalment

is expected to be higher as the market price benchmark for bonds is now available. The

price of the first tranche of bonds, which was listed on stock exchanges this month, has

been discovered — the bonds which were issued at Rs 2,684 per gramme in last

November are trading at 9-10% premium to the prevailing market price of similar quality,

which is 999 purity gold.

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