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During the MTD period in July 2012 (July 1-23, 2012), the
FIIs were the net buyers of equities and the domestic
mutual funds were the net sellers of equities. For the
MTD period in July 2012 (July 1-23, 2012), the FIIs bought
equities worth Rs9,377 crore while the mutual funds sold
equities worth Rs2,225 crore.
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In the last one month, the BSE Bankex has grown by 2.6%
as compared with a decline of 0.3% in the Sensex. The
BSE Bankex has outperformed the broader index on the
expectation of some fiscal measures by the government
and the subsequent easing by the RBI.
Company
Absolute
Relative
1M
3M
1M
3M
ICICI Bank
7.1
10.5
4.6
8.7
HDFC Bank
6.3
6.1
3.8
4.5
3.3
-6.6
0.8
-8.1
IndusInd Bank
2.0
-1.0
-0.4
-2.5
Axis Bank
1.2
-8.1
-1.2
-9.5
Yes Bank
1.1
-3.9
-1.3
-5.4
IDBI Bank
-1.6
-14.2
-3.9
-15.6
-3.0
-2.8
-5.3
-4.3
Bank of Baroda
-3.4
-6.1
-5.7
-7.5
Federal Bank
-4.6
0.0
-6.8
-1.5
Kotak Mahindra
-5.3
-4.8
-7.6
-6.3
Union Bank
-6.1
-9.8
-8.3
-11.2
Canara Bank
-6.4
-15.2
-8.7
-16.5
Bank of India
-6.8
-5.7
-9.0
-7.1
M - Month
100
20
80
15
60
10
40
20
-10
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
5
-5
-15
0
-20
-20
-40
-25
-60
Trade balance ($bn) LHS
Imports % YoY
Exports % YoY
20.0
15.0
10.0
5.0
Feb-12
May-12
Nov-11
Aug-11
Feb-11
May-11
Nov-10
Aug-10
Feb-10
May-10
Nov-09
Aug-09
Feb-09
May-09
Nov-08
Aug-08
May-08
-5.0
Feb-08
0.0
-10.0
IIP % YoY
3mma
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driven by a 9.3% growth in the consumer durable goods. The production of capital goods reported a decline of 7.7%
vs a decline of 19.6% in April 2012.
On a sequential basis (month on month [MoM]) the IIP grew by 3.3% in May 2012 to an absolute figure of 170.2
(164.7 in April 2012). The manufacturing segment increased by 2.9% MoM led by a 7.8% M-o-M growth in the capital
goods segment. The electricity segment reported a growth of 6.3% MoM followed by a 4.3% M-o-M increase in the
mining segment.
The IIP numbers have been quite volatile recently and turned positive in May after a gap of two months. Based on the
3-monthly moving average, the IIP growth is 0.8% only. The capital goods segment showed a lesser fall but continued
to post a decline. This clearly points to a slowdown in industrial activity which will affect the economic growth.
Leading indicators
In June 2012 the sales of commercial vehicles (CVs; heavy, medium and light) registered a growth of 8.8% YoY,
which was higher than the growth seen in the previous month.
The total telecommunications (telecom) subscriber base in the country grew by 0.7% MoM in June 2012, lower than
the 1.1% growth seen in May 2012.
Capital goods production declined by 7.7% YoY in May 2012 as compared with a contraction of 19.6% YoY in April 2012.
Inflation (WPI)
The WPI-based inflation for June 2012 came in at 7.25%
as against 7.55% in May 2012. The same was slightly
below the markets expectation. However, the inflation
rate for April 2012 has been revised upwards sharply
to 7.5% from the provisional figure of 7.23% led by an
upward revision in the fuel segment.
12%
10%
8%
6%
4%
2%
The inflation rate for June 2012 was lower than the
previous months and was primarily led by a decline in
the prices of the primary articles, and the fuel, power
and light segments. On an annual basis, the increase
in the prices of the primary articles stood at 10.46%
(as against 10.88% in May 2012) due to a decline in the
prices of the non-food articles and minerals. The fuel
0%
Mar-06
Jun-06
Sep-06
Dec-06
Mar-07
Jun-07
Sep-07
Dec-07
Mar-08
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
Sep-09
Dec-09
Mar-10
Jun-10
Sep-10
Dec-10
Mar-11
Jun-11
Sep-11
Dec-11
Mar-12
Jun-12
-2%
inflation also declined to 10.27% from 11.53% in May 2012 whereas inflation in the manufacturing category remained
stable at 5%, similar to that in May.
Inflation in the primary articles remained in double digits, though it showed a marginal decline MoM. Fuel inflation
declined marginally by 0.4% MoM while inflation in manufacturing goods expanded by 0.35% MoM.
The inflation rate for June has come in slightly below the expectation but it remains higher than the comfort level
of the RBI. In addition, the inflation rate is being revised upwards for the previous months which points to a
sustained pressure. Meanwhile, the core inflation has stabilised at 5% levels which gives some comfort. However,
high food inflation and deficient rainfall coupled with the possibility of a fuel price hike will affect the outlook on
inflation. This time around, the markets expectation of a rate cut by the RBI is not significant, but if the government
takes any major action on the diesel pricing front, the RBI may surprise with a 25-basis-point reduction in the
CRR/repo rates.
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Deposit
35.0
7,000
30.0
30.0
6,000
25.0
25.0
5,000
Rs 000 crore
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
-
20.0
15.0
10.0
15.0
3,000
10.0
2,000
5.0
1,000
5.0
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Bank Credit
20.0
4,000
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Rs 000 crore
Credit
% gw t in Agg Credit
Deposits
% grow th
Demand deposits
80.0
78.0
76.0
74.0
72.0
70.0
68.0
66.0
64.0
40.0%
30.0%
20.0%
10.0%
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
-10.0%
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
0.0%
-20.0%
DD grow th
DD as % of TD
24%
8500
8000
7500
7000
6500
6000
5500
5000
4500
4000
3500
3000
2500
2000
22%
20%
18%
16%
14%
12%
Apr-08
Jul-08
Sep-08
Nov-08
Jan-09
Apr-09
Jun-09
Aug-09
Nov-09
Jan-10
Mar-10
Jun-10
Aug-10
Oct-10
Dec-10
Mar-11
May-11
Jul-11
Oct-11
Dec-11
Feb-12
May-12
Jul-12
Rs 000 crore
Money supply
% Y oY - RHS
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2000
1500
1000
0
-500
-1000
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Rs (billion)
500
-1500
-2000
-2500
Source: Bloomberg, Sharekhan Research
Money market
Rev Repo
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Jul-12
Jan-10
Repo
May-12
3.0
Jan-12
0
Mar-12
4.0
Nov-11
2
Sep-11
5.0
Jul-11
6.0
May-11
Jan-11
7.0
Mar-11
Nov-10
8.0
Jul-10
10
Sep-10
9.0
May-10
12
Mar-10
10.0
(%)
14
10Yr
MM Rate
5Yr
3Yr
1Yr
20
10
8.0
0
-10
-20
-30
7.0
6.0
5.0
-40
-50
-60
4.0
3.0
3M
1yr
4yr
10yr
June 12 (% LHS)
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4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
-
75
95
70
90
65
85
80
75
55
70
Sep-11
Jan-05
Jun-05
Nov-05
Apr-06
Sep-06
Feb-07
Jul-07
Dec-07
May-08
Oct-08
Mar-09
Aug-09
Jan-10
Jun-10
Nov-10
Apr-11
Sep-11
Feb-12
Jul-12
USD/INR
JPY /INR
EUR/INR - RHS
May-12
55
Mar-12
60
40
Jan-12
65
45
Nov-11
50
Jul-11
(Rs)
60
GBP/INR - RHS
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
-
10
8
6
4
2
3M
6M
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
12M
Spot
1yr X 1yr Fw d
Source: Bloomberg, Sharekhan Research
The commercial paper rates contracted on an Mo-M basis with the rates for the three-month, six-month and
twelve-month maturities declining by 25 basis points, 23 basis points and 15 basis points respectively.
The spread between the overnight index swap (OIS) spot rates and the one-year forward contract rates stands at
around -67 basis points in the MTD period. This indicates the Streets expectations of a decline in the interest rate
scenario over the next 12 months.
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Equity market
Equity (cash) fund flow
5000
1600
1400
1200
1000
800
600
400
200
0
FII
MF
Rs (crore)
4000
3000
2000
1000
0
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
23-Jul
21-Jul
19-Jul
17-Jul
15-Jul
13-Jul
11-Jul
09-Jul
07-Jul
05-Jul
03-Jul
01-Jul
Cash
29-Jun
25-Jun
F&O
-1000
27-Jun
Rs (billion)
Lacklustre volumes
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Global round-up
United States of America
The industrial production for June 2012 was at 0.4%, higher than -0.1% in the previous month.
The housing starts saw a growth of 6.9% MoM in June as against a decline of 4.8% MoM in the previous month.
The retail sales contracted by 0.4% in June 2012. The retail sales excluding automobiles and gas also declined by
0.2% in June 2012.
The latest data for the US jobless claims (week ended July 14, 2012) showed that jobless claims increased by
36,000 to 386,000.
The ISM Manufacturing Index for June 2012 stood at 49.7, lower than the 53.5 reading seen in the previous month.
United Kingdom
The industrial production for May 2012 declined by 1.6% as against a 1.0% decline seen in the previous month.
The UK National Institute of Economic and Social Research (NIESR)s gross domestic product (GDP) estimate stood
at -0.2% for June 2012, in line with the previous month.
The UKs retail sales grew by 0.3% MoM in June 2012 as against by 0.9% in the previous month. The retail sales (ex
automobiles, fuel) saw an expansion of 0.1% as against a contraction of 1.4% seen in the previous month.
Consumer confidence was flat in June 2012 with the nationwide consumer confidence index at -29, in line with the
previous month.
Euro zone
The retail sales for May 2012 grew by 0.6% MoM after contracting by 1.0% in the previous month. On a Y-o-Y basis,
the retail sales declined by 1.7%.
In June 2012, consumer confidence in the euro zone was negative 19.8% as against a negative 19.8% in the previous
month.
The unemployment rate in the euro zone was at 11.1% in May 2012 as against 11% in the previous month.
Asia
Chinas industrial production for June grew by 9.5% YoY as against 9.6% YoY in the previous month.
Chinas exports for June 2012 grew by 11.3% YoY as compared with the 15.3% Y-o-Y growth seen in the previous
month. Meanwhile the imports grew by 6.3% YoY against the 12.7% Y-o-Y growth seen in the previous month.
Singapores industrial production grew by 1.8% MoM but by 6.6% YoY in May 2012.
Japans machine orders declined by 14.8% MoM in May 2012 as compared with a 1.1% growth seen in the previous
month.
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Data summary
Leading indicators (% YoY)
Particulars
June-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
-20.3
-16
-2.7
10.2
-20.3
-16.3
-7.7
16.4
14.8
17.2
20.0
13.5
2.8
6.8
June-12
8.8
14.5
10.2
-2.8
4.7
2.3
5.8
4.9
19.2
15.7
16.1
15.4
19.3
16.8
17.1
18.3
1.5
1.2
1.3
1.4
1.0
1.0
1.1
0.7
10
2.6
-10
23
60
-18
-1
-11
June-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
9.5
2.7
1.0
4.1
-3.2
0.1
2.4
Telecom subscription*
Fertiliser sales
11.2
2.8
1.1
3.9
-4.0
0.1
2.5
Mining
-1.4
-3.3
-2.1
2.7
-1.3
-3.1
-0.9
Electricity
7.9
9.1
3.2
8.0
2.7
4.6
5.9
Basic goods
7.8
5.5
1.9
7.7
0.9
2.3
4.1
Capital goods
38.7
-16.0
-2.7
10.2
-20.3
-16.3
-7.7
Intermediate goods
1.6
-1.5
-2.5
-0.2
-1.7
-1.4
2.7
Consumer goods
3.1
10.1
2.5
-0.3
1.2
5.2
4.3
Consumer durables
1.6
5.1
-7.5
-6.1
1.0
5.0
9.3
Consumer non-durables
4.4
13.8
10.6
4.5
1.2
5.4
0.1
June-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
9.51
7.74
6.89
7.36
7.69
7.23
7.55
7.25
11.31
3.59
2.76
7.07
10.41
9.71
10.88
10.46
Inflation (WPI)
Particulars
All commodities
Primary
Fuel, Power L&L
June-12
7.9
7.64
6.71
5.82
5.16
5.12
5.02
5.00
Manufactured products
12.85
14.98
14.61
13.55
12.82
11.03
11.53
10.27
8.62
6.49
5.32
7.57
8.65
10.22
10.16
June-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
June-12
13.5
Trade
Particulars
Exports (YoY %)
30.4
4.3
10.0
4.2
-5.7
3.2
-4.2
Imports (YoY %)
42.3
26.0
27.8
24.2
24.3
3.8
-7.4
5.5
(14.10)
(15.20)
(17.40)
(16.40)
(13.91)
(13.49)
(16.27)
(10.3)
309.0
296.7
293.9
295.0
294.4
295.4
288.3
290
Forex rates
Particulars
June-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
June-12
INR/$
44.7
53.3
49.7
48.9
51.2
52.5
56.4
56.3
INR/GBP
72.0
82.1
78.2
78.0
81.8
85.5
87.4
88.1
55.6
68.7
65.2
60.9
62.4
65.5
71.6
70.9
INR/euro
64.8
68.9
65.5
65.9
68.3
69.6
70.0
70.9
June-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
June-12
8.13
8.47
8.05
8.17
8.20
8.09
8.13
7.99
8.33
8.57
8.28
8.20
8.54
8.67
8.50
8.18
Interest rate
Particulars
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