Weekly Market Commentary - Dec 23 - Dec 27, 2013

2013 is coming to close. Markets registered a gain on last week of this year as it did in the first week of this year. Highlights of this year were all the noise around QE tapering from US Fed that led to a roller coaster ride for our currency and stock markets. Although, it all turned out to be a whimper but it did give a wakeup call to Indian govt. to get its act together. Add to all this mayhem the cancellation of POSCO and ArcellorMittal plans to setup plants in India, scams, inflation, gang rapes, policy paralysis, rating downgrade warnings and uncertainty around elections. So, there was the ground, seven layers of shit and then us.

Nonetheless, our markets recovered their old glory as Sensex made new highs. Market rejoiced as veterans returned to take care of their broken legacies; stalwarts were appointed to guide our way through fiscal mess, save rupee and general public from scourges of inflation; and anti-corruption wave made way for more business friendly governments and ushered into a new era as a one year old party made people realize that their voices are not unheard.

As many of the above problems have remained unsolved, hope has emerged as country prepares to elect its new leadership in 2014. Let us hope for an even better and interesting 2014.

I wish a very happy and prosperous new year to my readers.

Sensex gained 0.5%; Nifty gained 0.6% while CNX Midcap was up by 2.5% this week.

Monday – Sensex up by 0.1%, Nifty up by 0.2%, Midcap up by 1.1%
Upward movement during the first half of the trading day was capped by late selling seen in Infosys, which saw exit of another key management personnel, HDFC, which saw some profit booking after RBI said inflation fighting is still their topmost priority. Market momentum stayed bullish as global indices firmed up though some volatility generally increases near F&O expiry date.

Tuesday - Sensex down by 0.3%, Nifty down by 0.3%, Midcap up by 0.5%
Markets remained choppy as investors stayed cautious ahead of F&O expiry on Dec 26. Global markets also remained range-bound due to light trading activity ahead of holiday season.

Wednesday – Markets closed on occasion of Christmas

Thursday – Sensex up by 0.2%, Nifty up by 0.2%, Midcap up by 0.2%
Trading activity was mute on the F&O expiry day. Axis Bank rallied surged after the Cabinet Committee on Economic Affairs (CCEA) approved proposal to increase foreign investment in the bank from 49% to 62%.

Friday – Sensex up by 0.6%, Nifty up by 0.6%, Midcap up by 0.7%
Market closed the week higher led by gains in export-oriented sectors such as IT and Pharma as US data showed improved recovery in employment situation. Banks and FMCG also gained as street expects inflation data to be lower in January and RBI to maintain status quo on rates.

Weekly Market Commentary - Dec 16 - Dec 20, 2013

Quite a week for Indian markets. With Fed’s tapering decision out of the way and uncertainty related to Indian govt’s stand on KG D6 gas price revision cleared, investors and business got another major sentiment boost from RBI governor who decided not to raise rates even in the midst of rising inflation. Therefore, what resulted is Sensex regaining 21,000 level while focus now shifted to food inflation data, which, if strengthened, may warrant a rate hike from RBI.

Sensex gained 1.8%; Nifty gained 1.7% while CNX Midcap was up by 3.1% this week.

Monday – Sensex down by 0.3%, Nifty down by 0.2%, Midcap up by 0.4%
Sensex failed to gain ground as impending rate hike concerns, post high inflation numbers, have kept the street nervous. Street is widely expecting a repo rate hike of 25bps to 8.00% in Dec 18 policy review. Recent govt data shows that costly vegetables, particularly potato and onion has pushed the November WPI to 7.52% from 7% previous month while CPI has jumped to 11.24% warranting inflation controlling measures from central bank.

Tuesday - Sensex down by 0.2%, Nifty down by 0.3%, Midcap down by 0.1%
Markets traded in the narrow range as investors stayed cautious ahead of RBI policy review meet on Wednesday.

Wednesday – Sensex up by 1.2%, Nifty up by 1.3%, Midcap up by 1.5%
RBI sprung a surprise as it decided to maintain the status quo and left the rates unchanged. Investors’ sentiments turned bullish as RBI governor Raghuram Rajan indicated lowering of inflation in near term due to falling vegetable prices but promised to act if inflation did not subside as expected.

Thursday – Sensex down by 0.7%, Nifty down by 0.8%, Midcap down by 0.4%
There was some selloff as Fed announced $10bn of tapering every month. Neither the selloff nor the tapering decision came as a surprise. Federal Open Market Committee (FOMC) expects that with appropriate policy accommodation, economic growth will pick up from its recent pace and the unemployment rate will gradually decline.

Friday – Sensex up by 1.8%, Nifty up by 1.7%, Midcap up by 1.7%
Markets went up as Fed’s QE tapering decision is finally out of its way and as expected did not have major impact on either stocks or currency. Sensex got a major boost as govt. finally cleared Reliance Industries’ demand of higher gas prices while asking them to deposit a guarantee equivalent to any incremental revenue. With this decision, govt has cleared lot of uncertainties in the oil and gas industry and made easier for foreign companies to invest in India.

Summary of RBI-Analyst Conference Call - Dec 18, 2013

Dr. Raghuram Rajan (RRR): Recent readings suggest that headline inflation, both retail and wholesale, have increased mainly, but not exclusively on account of food prices. There is, however, reason to wait before determining the course of monetary policy. There are indications that vegetable prices may be turning down sharply. RBI has decided to maintain the status quo.

Reserve Bank will be vigilant and will act if expected softening of food inflation does not materialize and it does not translate into a significant reduction in headline inflation in the next round of data releases, or if inflation excluding food and fuel does not fall.

Gautam Rajesh Kumar, Trust Financial Consultancy: Given the fact that stability in Forex market has returned, CAD has come down, liquidity in the banking system is relatively comfortable, what is the comfort level of inflation for RBI to act on policy rate?

RRR: At this point trying to specify a final target is probably premature, but we do want to see both headline and core inflation come down. So we are also interested in seeing headline inflation which includes the food and fuel component also stabilise and fall.

Srinivasa Varadarajan, Mount Nathan Capital Management: In 1QCY14, it is estimated that about $15 billion of the oil swap will mature and will increase the rupee liquidity in the system. Will the period be used to actually push through the government debt swap at that point in time.

RRR: Actually the net amount is less than $7 billion right now. So that is approximately what will have to be repaid overtime. As and when the time comes, we will take a view as to how that repayment happens and it could be settled through an exchange of rupee funds based on the settlement amount. It could also be, the swaps could be rolled over if necessary and of course if market conditions permit, it can also be repaid. 

Namrata Narkar, IDBI Bank: WPI inflation forecast is being placed largely between 6% and 7% for March 2014. How much of deviation from this forecast is tolerable and if the deviation is above the tolerable level, would the composition of such a deviation then hold significant?

RRR: It depends on not just the WPI, but a whole set of other measures. On the WPI we have been very clear on bringing headline below 5 and core below 3. 

Prasanna, ICICI Securities: You have mentioned the negative output gap as a key factor in helping to contain inflation. Does that mean you do not expect the output gap to narrow in coming quarters and therefore you expect FY15 growth to remain around levels observed in H1FY14?

RRR: My personal sense is that with growth at let us say around 5%, we have somewhere between 1.5%-2% output gap at this point. So with that kind of situation, I think it will take a year or two to get back to potential and therefore we have some room or some time in which the output gap will continue to be negative and exert downward pressure on inflation.

Badri Niwas, Citi Bank: Given you have the experience of July, would you give some guidance to the market on whether the RBI will again use monetary policy tools as a defence for the currency in event of disruption risk that you mentioned manifesting?

RRR: There are some people who argue the disruption this time will be more limited, partly because people have already reacted somewhat over the last 3-4 months. And from India’s perspective, we are in a better position because a) our CAD is much more contained, b) our reserves have grown and we have shown an ability to raise funding if necessary and c) We have lost a fair amount in short maturity bond funds which have the ability to leave more quickly and what remains are the longer term funds. 

Anjali Verma, PhillipCapital: RBI is in favour of removing gold import restrictions. Is it the right time to the remove restrictions and what adverse impact it can have on CAD.

RRR: Gold restrictions are distortion and they are a necessary distortion at this point to restore balance to the CAD. But going forward we would not like this distortion to persist and we would like to remove it.

Ashish Kela, Birla Sun Life Asset Management: Dr. Rajan had highlighted the need to provide real returns to savers. What is the plan on this front? Will this play a role in the monetary policy?

RRR: The question of providing real returns to savers is very much on our minds. We do want to restore savings growth and move towards financial savings by households and I think we have to bring inflation down to make sure that these returns are positive. In the meantime there are stop gap arrangements that are part of a longer term strategy. One example of that is inflation indexed bonds in which real returns are fixed at1.5%.

Rajeev Malik, CLSA: Given widespread macro level demand supply imbalances, what is the efficacy of a blunt instrument such as interest rate in loading CPI core inflation in the supply constrained economy?

RRR: Some of the areas where we had high inflation- pulses and milk- some of that inflation has come down considerably which means there is a supply response that is kicking in and higher prices are a way to activate that supply response. More generally, even in a situation where there are supply constraints of one kind or the other, to the extent that demand exceeds supply, it creates inflationary pressures, some of it is a necessary price adjustment or relative price adjustment, but some of it feeds into more widespread wage inflation. 

Aastha Gudwani, Birla Sun Life: Are we done with the rollback of exceptional measures taken in July, is the cap on LAF here to stay? If yes, then how do you intend to reinstate repo as the permanent operative rate?

RRR: We have ample liquidity and we are largely, with a little bit of volatility, near about the repo rate as being the operational rate. So in that sense I think we have gone back to normal monetary policy at this point.

Weekly Market Commentary - Dec 9 - Dec 13, 2013

As political events have turned very exciting in the country, it is the boring economics that made investors realize that it cannot remain sidelined for long. This week as investors’ sentiment over exit polls reached a climax in the state election results, markets touch their all time high on first trading session of the week. However, as the reality of the day set in, inflation blew out all the air out of the election bubble.

Sensex fell 1.3%; Nifty lost 1.5% while CNX Midcap was down by 2.1% this week.

Monday – Sensex up by 1.6%, Nifty up by 1.7%, Midcap up by 1.0%
Sensex touched a new high as market momentum built up by the exit polls continued. The main opposition and business friendly party BJP win a clear mandate in three out of four state elections strengthening its electoral prospects and chances of forming a government in the centre in May.

Tuesday - Sensex down by 0.3%, Nifty down by 0.5%, Midcap down by 0.5%
Markets saw some profit booking while new draft regulation from CERC led a major blow to NTPC earnings. NTPC went down by 11% as under new guidelines that are going to implement from April 2014, has kept RoE as the method of calculating incentives but has done some tightening on taxation and expenses front making it difficult for players like NTPC and PGCIL to maintain their current profitability.

Wednesday – Sensex down by 0.4%, Nifty down by 0.4%, Midcap down by 0.6%
Markets opened lower as weak global sentiment weighed heavily on domestic trading, but good news on CAD front led indices recoup some of their losses. India managed to lower its current account deficit as exports grew by 5.86% in November while imports dip to their two and a half year low following steep decline in gold imports. India’s CAD now stands at $9.22bn as against $17.2bn previous month.

Thursday – Sensex down by 1.2%, Nifty down by 1.1%, Midcap down by 0.6%
Markets were under selling pressure ahead of release of CPI and IIP numbers. Street estimates IIP numbers are going to signal contraction in the economy while CPI numbers will stick in 10% range prompting RBI governor to raise rates.

Friday – Sensex down by 1.0%, Nifty down by 1.1%, Midcap down by 1.4%
Worse than expected CPI numbers took its toll on the Indian markets when it recorded its biggest weekly fall. CPI for November came at 11.24% vs. street estimates of 10% range raising the fear of increase in interest rates. Street is now estimating a 25bps hike in interest rates on Dec 18. The market has pared all gains made on Monday after state elections results announcement.

Weekly Market Commentary - Dec 2 - Dec 6, 2013

Indian investors are a happy lot this week. Though tapering sword is still hanging over bullish investor sentiments, it seems investors have lot to rejoice over the coming days. Not just exit polls have sounded a victory for their favorite PM candidate, but it has also forced the govt. to increase the pace of their reforms as a last ditch effort to thwart the current anti-incumbency wave in the country. Govt. is back to its disinvestment ways to fill the deficit gap and is likely to make some reform announcements benefitting power and sugar industries.

Sensex gained 1.0%; Nifty gained 1.4% while CNX Midcap was up by 1.1% this week.

Monday – Sensex up by 0.5%, Nifty up by 0.7%, Midcap up by 0.7%
Markets cheered the 2QFY14 GDP growth of 4.8% vs. 4.4% in previous quarter, according to data released by govt. The growth numbers were in-line with street estimates. Also, HSBC PMI index recorded improvement in manufacturing activity for the first time since July. The Index for the manufacturing industry climbed to 51.3 in November from 49.6 in previous month.

Tuesday - Sensex down by 0.2%, Nifty down by 0.3%, Midcap flat
Markets ended up lower as investors resorted to profit booking and cautiousness ahead of Fed’s job report expected at the end of the week. Any improvement in the job recovery may lead to decision in favour of tapering of QE by Federal Reserve. Investors also stayed cautious as India’s capital, New Delhi prepares for polls next day. Even a good announcement from RBI was unable to lift the mood of the market. RBI announced that India’s current account deficit (CAD) narrowed sharply to $5.2bn or 1.2% of GDP in 2Q, from $21bn or 5% last year.

Wednesday – Sensex down by 0.7%, Nifty down by 0.7%, Midcap down by 1.0%
Market sentiments were weak as rise in crude prices added to inflationary concerns. Investors raised concerns that this may lead RBI to raise rates again raising the cost of doing business in the country.

Thursday – Sensex up by 1.2%, Nifty up by 1.3%, Midcap up by 0.8%
Markets went up and regained 21,000 levels as exit polls showed BJP coming to power in at least 4 out of 5 states that had elections recently. BJP is widely viewed as business friendly party among the host of other parties contesting the elections. Any success in state elections will be a testimony of BJP Prime Ministerial candidate Narendra Modi’s popularity and acceptance.

Friday – Sensex up by 0.2%, Nifty up by 0.3%, Midcap up by 0.5%
Exit polls results kept markets up and gave boost to the idea that congress might try to get more reform measures passed in the run up to the main elections in May 2014.

Notes on Indian Gas Policy framework and KG-D6

I have been trying to keep up with developments happening on oil and gas industry front in India for quite some time now. Here, for the benefit of my readers, I am posting copy of my notes on the Indian gas policy and KG-D6 controversy. Although these notes are not comprehensive (I have to work harder), but may give a beginner some headway in the Indian oil and gas industry policy and development space.

 

Brief summary of evolution of Gas Policy in India 

Gas received policymakers’ attention after the discovery of the offshore Bombay High fields by ONGC, from which production began in 1974. 

• By 1984, the government realized the need for a gas distribution network, and set up a separate state-owned company, the Gas Authority of India Limited (GAIL), to develop one.
• In the 1990s, as public sector exploration companies failed to make further gas discoveries, the government auctioned off fields that had been ‘discovered’ but not fully developed by NOCs, to joint ventures between private companies and NOCs under production sharing agreements.
• An upstream regulator, the Directorate General of Hydrocarbons (DGH), was set up in 1993.
• In 1998, the government launched a new regime, the New Exploration Licensing Policy or NELP which was based on PSAs, pitched at greater private and international participation.
• Under the first eight rounds, 234 contracts were signed.
• The ninth round was launched in October 2010. However, bidders have predominantly been domestic private sector companies, and not international companies.
• India also began importing LNG in 2004; it should be noted that, particularly in fertilizers, there was a demand for LNG despite high prices, as prices of the competing input, naphtha were very high.
• In May 2010, the price of ‘administered’ gas was more than doubled from its previously subsidized level; from US$ 1.8 per mmbtu to US$ 4.2 per mmbtu.
• Between 2005 and 2010, APM gas prices remained frozen, with state-owned companies and the Federal government taking on the burden of subsidies. 

 

Gas Pricing Framework

There are three kinds of gas pricing regimes existing in India:

1. Gas prices based on Administered Pricing Mechanism (APM) for those gas reserves before NELP. This was around $2.50/mmbtu and was raised later to $4.2/mmbtu.
2. Import prices paid to LNG imports which depend on international prices which were as high as $16/mmbtu and 
3. Arm’s length price based on market for those gas reserves discovered after NELP. For Krishna Godavari basin the government has fixed gas price at a level of $4.20/mmbtu.

 

KG-D6 Controversy

• The $4.2 price was fixed by Empowered Group of Ministers (EGoM) led by then finance minister Pranab Mukherjee (now President of India) in 2007 and was fixed for 5 years (till Mar 31, 2014).
• RIL’s position is that gas produced from KG-D6 was priced competitively in 2007 but does not reflect the market conditions in 2012. So, RIL is seeking a revision to this price
• Govt invoked the PSC to deny the RIL- BP approvals for 2012-13 budget and recovery of around $1 billion from sale of gas from KG-D6
• PSC Allows govt to conduct audit either through its own representatives or through chartered accountants.
• Petroleum Ministry says approval for budget and work programmes will come after CAG is given the access to records
• RIL maintains that nothing in the PSC permits an audit of operational, commercial and technical decisions of the operator
• The company also maintains that PSC contains no provision that restricts cost recovery through reference to factors like the production level or the extent to which field facilities are utilised.
• RIL attributed the fall in production to the unexpected geology of the area, adding data had established drilling more wells would not have helped.
• RIL says the next stage of its exploration plan for enhancing production is dependent on government approvals. And, it would take four to five years after the approvals for production to rise.
• R S Sharma, former chairman and MD of ONGC (state owned E&P), said it is unfair to withhold approvals, adding RIL does not fall under the purview of CAG. “Decisions in E&P are taken in stages. Characteristics of each block are different, and decisions have to be taken on a case-to-case basis. It is a complex business. It is not like processing, or even the mining industry”.
• Gas output from KG-D6, which peaked to 61.5 mscmd in March 2010 and was set to rise to 80 mscmd by April 2012, has been declining.
• Many believe production is being allowed to fall, as RIL is stuck with a gas price of $4.2 a million British thermal unit till 2014.
• Govt constitutes Rangarajan Committee to resolve gas pricing, profit sharing issues. .
• Rangarajan committee recommends average global prices for domestic gas
• Expected gas price revision is unlikely to benefit Reliance Industries. The clauses in the Cabinet note will not make RIL eligible for any price hike before April 2014.

You can find a compehensive list of all news items that appeared in several newspapers on KG-D6 controversy here.

KG-D6 dispute timeline

In case, a link went dead, you can easily search using the news headline text. 

• April 12, 2000 – RIL signs the PSC with government to develop the KG-D6 basin. (Link)
• Nov 1, 2006 – RIL files amended development plan for KG-D6 with DGH. Production rate to be enhanced to 80 mmcmd from 40 mmcmd. (Link)
• Sept 21, 2008 – RIL has commenced production of hydrocarbons in its KG D6 block of KG basin with crude oil production on Sept 17, 2008. (Link)
• April 1, 2009 – RIL starts natural gas production from KG-D6 fields. (Link)
• Oct 29, 2009 – Production ramped up to about 40 mmscmd. (Link)
• Jan 22, 2010 – Production ramped up to about 60 mmscmd. (Link)
• Feb 21, 2011 – RIL-BP deal announced. (Link)
• June 2011 – CAG report leaked in the media. (Link)
• October 2011 – RIL asks for explanation from ministry preventing cost recovery. (Link)
• November 2011 – RIL seeks arbitration on the matter. (Link)
• April 17, 2012 – RIL and Niko petitioned the Supreme Court asking that the Govt. should nominate an arbitrator. (Link)
• May 3, 2012 – Govt. asked RIL to refund $1.25 bn in production costs. (Link)
• May 30, 2012 – Govt constitutes Rangarajan Committee to resolve gas pricing, profit sharing issues. Committee to submit report by Aug 30, 2012. (Link)
• June 21, 2012 – Niko announced Indian govt. is considering increase in KG-D6 gas prices. (Link)
• Jan 2, 2013 – Rangarajan committee recommends average global prices for domestic gas. (Link)
• Jan 7, 2013 – CAG to begin its audit on Jan 9. (Link)
• Jan 14, 2013 - Gas output from RIL's KG-D6 fields drops to 22 mmscmd. (Link)
• Jan 21, 2013 - Government wants to resolve RIL row over KG-D6 block via talks: Veerappa Moily (Link)
• Jan 22, 2013 - Gas output from RIL's KG-D6 fields drops to all time low of 20 mmscmd. (Link)
• Jan 23, 2013 - Expected gas price revision is unlikely to benefit Reliance Industries. The clauses in the Cabinet note will not make RIL eligible for any price hike before April 2014. (Link)
• Feb 4, 2013 - DGH refused to issue approval letters for the block's work plans and budget since 2010-11. (Link)
• Mar 5, 2013 - Natural gas supplies to power plants has completely stopped after output from the eastern offshore fields dropped to an all-time low of 17.3 mmscmd. (Link)
• Apr 11, 2013 - RIL has shut its ninth well at the main gas fields in the KG-D6 block, leading to output plummeting to an all-time low of 15.5 mmscmd. (Link)
• May 11, 2013 - RIL announced a major gas find more than 4 kms below the sea bed and 2 kms directly underneath the currently producing D1&D3 field in the KG-D6 block off the east coast. (Link)
• June 16, 2013 - In a relief to RIL, Oil Minister has indicated that he may not fully accept DGH's recommendation for taking away 86% of the company's KG-D6 gas block area. (Link)
• July 19, 2013 - The government has given the go-ahead for RIL’s $1.5 billion field development programme for the KG-D6 block. (Link)
• July 22, 2013 - RIL plans to invest $6.5 billion in its KG-D6 gas fields to re-attain natural gas production of up to 60 mmscmd by 2019-20 and regain the lost glory of the prolific block. (Link)
• Aug 7, 2013 - DGH has recommended additional penalty of $781 million (taking the total to $1.786 bn) on RIL for producing less than projected natural gas. (Link)
• Aug 15, 2013 - RIL plans to invest $3.18 billion in R-Series gas field to produce 13-15 mmscmd of gas for 13 years from the D-34 (Dhirubhai-34) discovery in the KG-DWN-98/3 or KG-D6 block. (Link)
• Aug 22, 2013 - 12 power plants solely dependent on KG-D6 gas lying idle. (Link)
• Aug 22, 2013 - ONGC may share KG-D6 infrastructure. (Link)
• Sept 03, 2013 - Government not honouring contracts on KG-D6 gas block, says Reliance. (Link)
• Sept 15, 2013 - Reliance Industries slams oil regulator's move to snatch KG-D6 area.(Link)
• Sept 25, 2013 - If you find more gas in KG-D6, keep it: Angry RIL to govt.(Link)
• Sept 25, 2013 - Govt may hire consultant to end KG-D6 gas row with RIL.(Link)
• Oct 13, 2013 - RIL trashes expert report on KG-D6 output fall.(Link)
• Oct 18, 2013 - RIL, BP to invest up to $10 bn in KG-D6 block: Moily.(Link)
• Oct 22, 2013 - Govt says no to fresh evaluation of whether RIL hoarded KG-D6 gas.(Link)
• Oct 29, 2013 - Oil ministry to ask RIL to surrender 5 KG-D6 gas finds.(Link)
• Nov 12, 2013 - Reliance Industries to furnish bank guarantee (Link)
• Nov 17, 2013 - Non-adherance to KG-D6 plan be taken as default: Panel (Link)
• Nov 18, 2013 - RIL plans to increase KG-D6 gas output (Link)
• Nov 21, 2013 - Govt disallows another $792 mn RIL investment in KG-D6 block (Link)
• Nov 26, 2013 - Reliance Industries' new gas discovery likely biggest ever (Link)
• Nov 26, 2013 - No going back on gas price hikes; notification soon: Moily (Link)
• Nov 27, 2013 - KG output drops to record low (Link)
• Dec 5, 2013 - Reliance Industries's KG-D6 output slips to 10 mmscmd (Link)

Weekly Market Commentary - Nov 25 - Nov 29, 2013

All eyes on Delhi election results on December 8th. These results may act as a precursor to what is in store for Indian investors. As DII turned buyers during the end of November, it seems that street is expecting a rally in December, which may only happen if BJP wins.

Sensex gained 2.8%; Nifty gained 3.0% while CNX Midcap was up by 3.1% this week.

Monday – Sensex up by 1.9%, Nifty up by 2.0%, Midcap up by 1.5%
Indian markets went up in tandem with global markets as Iran nuclear deal led to easing of crude prices. The deal is good for India in more than one way. It helps in removing the hindrances from importing crude from Iran, and lower prices benefits in reduced inflation expectations and deficits.

Tuesday - Sensex down by 0.9%, Nifty down by 0.9%, Midcap down by 0.5%
Markets gave back some of gains it made yesterday as crude prices rebounded and investors booked profits ahead of GDP data release.

Wednesday – Sensex, Nifty and Midcap flat
Markets ended flat as November derivative expiry arrives and investors stay cautious ahead of GDP and fiscal data release expected on Friday.

Thursday – Sensex up by 0.6%, Nifty up by 0.6%, Midcap up by 0.9%
Markets went up on the day of derivative expiry as traders cover their shorts and domestic institutional investors (DIIs) turned net buyers for first time in November, in addition to FIIs who continued stake building in Indian markets.

Friday – Sensex up by 1.3%, Nifty up by 1.4%, Midcap up by 1.1%
Markets showed optimism ahead of 2Q GDP data release expected during after-market hours. Consensus on the street is 4.6% of GDP growth. Anything below that will be indicator of adverse impact of recent repo rate hikes initiated by Governor Raghuram Rajan.