Market Outlook - Broader market to witness catch up activity - ICICI Direct

The government may not be considering sugar export subsidy for the sugar season 2020-21 given global raw sugar prices are trading 15 cents / Ib & Indian sugar get a premium of 2-3 cents over & above that, Export prices of sugar is closer to Rs. 29 / kg (cost of production is ~28-30/kg). White sugar prices are also trading at USD 400 / tonnes, which translates into Rs. 30 / kg.

Media reports state that Ola Electric has ambitious plans to entering electric 2-W manufacturing space domestically by setting up the world's largest e-scooter manufacturing facility. The company is said to want to set up a 2 million unit p.a. capacity with production targeted to be commenced within 18 months.

RBI has allowed banks to co-lend with NBFCs including HFCs in order to improve credit flow to unserved and underserved segment. Under this model the bank have to take their share of individual loans on a back-to-back basis on books while NBFCs are required to retain minimum of 20% share of individual loans on their books. Banks can claim priority sector status in respect to their share of credit.

As per media reports, Steel companies have increased prices by Rs. 1,200 a tonne effective November 1, 2020. On a cumulative basis, steel mills have increased HRC steel prices by Rs 8,000-8,500 since July 2020 to ~ Rs. 44500/tonne. The increase in prices reflected a recovery in domestic demand.

Brent Crude prices was higher at US$ 39.9/barrel as compared to previous week's closing price of US$ 37.9/barrel. Gold prices ended higher at $ 1950/ounce as compared to previous week's closing price of $ 1879/ounce. Bond yields ended broadly flattish at 5.87% as compared to previous week's closing price.

International Markets:

US Markets: The US markets ended higher as clarity emerges on the election result. The number of US citizens filing new claims for unemployment benefits continued to remain near the record highs. Initial claims for state unemployment benefits came at a seasonally adjusted 0.8 million for the week ended Oct 24, 2020 vs a similar number of cases in the prior week. As per the US Fed Reserve Chair, more emergency fund is required to support the US economy, amid months of gridlock.

European Markets: The European markets ended higher as the Brexit deal compromise looms and also clarity on US election result. Economy ministers from Eurozone warned of the inevitable negative impact on business activity due to the second wave of lockdown.

Source : Equity Bulls

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