A combination of global events including rising oil prices, a few earnings misses, a brewing conflict between Italy and the European Union over budget spending, and apprehension over rising interest rates weighed down the markets in October. Here is a quick update on ten key sectors:
Automobile: In the past one month, the Auto index has underperformed by declining 9.0% compared with a 6.2% fall in the market. In the last few months, automobile sales have been affected by rising fuel cost, higher insurance premiums, and recent price hikes by automobile companies. In October, M&M and Hyundai reported a strong growth versus a m/m decline in September 2018.
Banking and Finance: Results in Q2 FY 2019 were mixed, with most banks failing to trigger a positive sentiment. HDFC Bank and Kotak met estimates, whereas IndusInd missed expectations.
Capital Equipment: The sector has weakened in India this month due to market headwinds like indices falling to their 52-week lows, the rise in oil prices, and a weakening rupee. On a positive note, equipment manufacturers could benefit from the ongoing U.S-China trade war.
Consumer: The Nifty FMCG index grew 7% YTD but fell 4.6% m/m, hurt by valuation contraction since the end of August. Dabur is down due to lackluster Q2 earnings, while Nestle and Britannia may be the safest bets in the present downtrend.
Materials: Nifty Metal was in an Uptrend Under Pressure during the start of the month and ended it in a correction. Over the month, the index fell about 6.5% on heavy volume. Continue reading “Industry Update: October 2018”