Current Market Scenario

Markets on Consolidation

INDEX WATCH

9688

10495

25024

7459

July 12

9828

10644

25329

7568

Aug 9INDEX % Change

Nifty 1.4

Sensex 1.2

CNX Midcap 1.4

BSE Small Cap 1.4

• Domestic macro data improves

• Select stocks continue to outperform

• Global markets volatile on multiple concerns

• Corporate results were mixed

• Monsoon deficit narrows

IIP Signals Rebound in Economy

Muted IIP GrowthANNUAL IIP GROWTH RATE

-2

0

2

4

6

8

10

12

14

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

FY

%

8.4 8

11.5

8.6

2.8

10.3

8.2

2.81.1

- 0.1

WPI and CPI Inflation Chart

7.3 %

11.1 %

CPI Inflation – Historic Chart

FII Activity - Equity

11.8Total

- 0.3Aug

2.1July

2.3June

2.3May

1.6April

3.3March

0.2Feb

0.1Jan

Equity $ Bn2014

Domestic Investors Turning Towards Equity

10,845 Cr

Equity Mutual Fund Folios Started Increasing

+ 1.9 MnFolios

Q1 Result – Sensex Companies

Results of 16 companies

% Change (YoY)

20.5

12.1

June 2014

10.5Net Profit

9.6Sales

June 2013

Q1 Result Performance

Results of 903 companies

% Change (YoY)

19.9

13.8

June 2014

9.5Net Profit

5.2Sales

June 2013

RBI Fight Against Inflation Continues

• RBI maintains repo and CRR

• Marginal cut in SLR to facilitate liquidity available for private sector

• RBI very Firm on controlling inflation

• Rate cut likely to come only in 1st Quarter of FY 16

Global Inflation Rates

0.5France

0.8Germany

2.1US

2.3China

3.6Hong Kong

3.7Mexico

4.5Indonesia

6.5Brazil

6.6South Africa

7.3India

8.2Egypt

10.9Argentina

Rate %Country

When US Fed will Hike Rate ?

• Fed repeatedly saying rate will remain close to zero for a considerable time

• If US economy shows good improvement and inflation goes up, US Fed has no choice to increase interest rate

• Hike in US interest rate will make US $ stronger and carry trade costlier

• Markets will discount the event before actual rate hike happens

US Fed Fund Rate Chart

0.25 %

Rupee Weakens on Dollar Strength

Stable Crude Oil Prices

105

Monsoon Deficit Narrows

- 18508.1418.4

% DeviationNormalActual

All India Area Weighted Rainfall in mm

Period 1 June – 8 Aug

621Scanty and Deficient

15

0

Till Aug 8 2014 Till Aug 7 2013No. of SubDivisions

13Normal

17Excess

Deficient Across India

First Test for NDA Government

• New NDA Government has majority in LokSabha but not in Rajya Sabha

• Crucial legislative bills like FDI hike in insurance needs support of other parties to get passed in parliament

• Passage of insurance bill will be crucial for sentiments and ability of New Government to pursue reforms

Geopolitical Concerns To Dominate Global Markets

• Russia – Ukraine issue to impact European markets

• Iraq concern, Civil War in Libya will have impact on crude oil prices

• Israel – Gaza fight will affect cooperation between countries

Events and Data to Watch

• Q1 Results

• June IIP Data on Aug 12

• Monsoon

• Government Action

Thank You