Weekly Commentary – 16th August 2019

Nifty50 took a downward plunge again, losing 0.6% from last Friday’s closing. Amongst sectoral indices, Pharma was down 3%, IT down 2.9%, Auto down 1.9%, FMCG down 1.4%. Media was up 1.4%

Market Updates:

• SBI: Economic slowdown on account of multiple factors – SBI’s research report ‘Ecowrap’ has stated that the present economic slowdown is owing to a combination of structural, cyclical factors, and global uncertainties. About automobile sector slowdown, the report stated that slowdown is restricted not just to India but across geographies with China also facing the impact of auto slowdown. It also said the criticality of automobile sector can be gauged by a humongous 30 million employment on a per annum basis which it generates. Out of this more than 50 percent could be of contractual nature, hence the seriousness of the current auto slowdown.
• India’s exports increase 2.25% in July; trade deficit narrows to $13.43 billion – India’s merchandise exports grew by 2.25 percent in July 2019 to $26.33 billion as compared to same period of last year, on the back of higher shipments of organic goods, drugs and pharmaceuticals. Trade deficit, gap between imports and exports, narrowed to $13.43 billion in July from $18.63 billion a year ago, helped by lower oil import bill.
• Economic transition to offer investment opportunities for real estate sector: CREDAI-CBRE Study – A joint study carried out by CREDAI and CBRE has stated that India’s economic transition, workforce expansion and urbanization will offer vast development and investment opportunities for the real estate sector in the next decade, leading to significant growth in housing, office, retail and warehousing space. It also noted that by 2030, the sector would expand immensely, led by new asset classes like coworking, coliving, student housing and real estate investment trusts (REITs).