2

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Current Market Scenario

2

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2

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2

\Markets Correction Restarts

INDEX WATCH

INDEX 13, Nov 9, Oct % Change

Nifty 7,762 8,189 - 5.2

Sensex 25,610 27,079 - 5.4

CNX Midcap 12,885 13,255 - 2.7

BSE Small Cap 11,125 11,348 - 1.9

• Poor earnings keep Bulls inactive

• NDA loss in Bihar election rejuvenates bears

• Possibility of Fed rate hike in December

• Midcaps outperform large cap stocks

2

\Market Corrects on Multiple Reasons

• Poor Corporate results

• Expectation of US Fed rate hike leading to Foreign money outflow

• Difficulty in passage of crucial bills

• Slow recovery in domestic economy

• China slowdown

2

\Corporate Results Disappoints

• Most of companies reported poor earnings

• Select midcaps reported good results backed by fall in commodity prices

• Demand both domestic and exports remains weak

2

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Q2 Result Performance

Results of 1,948 companies

% Change (YoY)

Sep 2015 Sep 2014

Sales - 6.1 4.3

Net Profit - 1.5 10.7

2

\Pharma Stocks lose Health

• Negative action from US FDA drags large cap pharma stocks

• Rally in large cap pharma stocks have pushed index higher in last two years

• Consolidation expected in large cap pharma stocks

2

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Exports Imports Contract

2

\Positive for Markets

• Domestic flows remain healthy

• Crude oil weakness to help India

• Recovery in domestic macro economy

2

\Brent Crude 18 Month Performance

2

\India Crude Oil Imports

FY15 FY16

Crude Oil Imports US$ Bn 82.3 48.1

Apr - Sep

Down by 41.5%

2

\Healthy Indirect Tax Collections

SegmentFY 16,

Lakh Cr.

FY 15,

Lakh Cr.% Change

Excise Duty 1.47 0.87 68.6

Service Tax 1.12 0.89 26.1

Customs Duty 1.22 1.04 16.8

Overall 3.82 2.81 35.9

April – October

•Tax hike in petroleum products leading to huge jump in Excise collections

• If additional measures are removed tax collections are up by 11.6%

2

\Equity Funds Net Inflows (Cr.)

-20000

0

20000

40000

60000

80000

2008

2009

2010

2011

2012

2013

2014

2015

2016

FY

Ne

t In

flo

ws 40782

1056 595- 13405

264

- 12931 - 7627

68121

57,874*

* Till Oct

2

\Repo Rate Chart

6.75

8.0

8.5

9.0

4.75

7.25

Total Cut 125 Basis Points since 2015

2

\Next One Year View

• Implementation of 7th Pay Commission to boost consumption

• Healthy Govt. plan spending to boost investments

• Investors should utilize current correction as an opportunity to build portfolio

• Mix of domestic and export oriented stocks for ideal portfolio

2

\US Fed Rate Hike

• Markets preparing for US Fed Rate Hike in December meeting (15th and 16th )

• If happens first rate hike since 2006

• Analyst expects emerging markets currencies to react negatively to rate hike

• Markets to discount the event before actually happens

2

\US Fed Rate Chart

Last Hike

0.25 %

5.25 %

2

\FII Turns SellersFII Net Flows for 2015

-3

-2

-1

0

1

2

3

Ja

n

Fe

b

Ma

r

Ap

r

Ma

y

Ju

n

Ju

l

Au

g

Se

p

Oct

No

v

Month

$ B

n

2.11.8 1.81.9

- 0.9- 0.5 - 2.5 - 0.9

0.8

Year to Date Investment $ 4.4 Bn

1.0

Till Nov 10

- 0.3

2

\Events to Watch

• US Fed rate on Dec 15,16

• Commodity prices

• Winter session of Parliament to begin from Nov, 26

2

\

Thank You