Indian Equity Summary-
·
Benchmark indices ,Nifty 50 and
Sensex closed in red and fell by 1.67% and 1.48% on a WoW basis, after
registering gains for two successiveØ weeks. The fall
in the indices was majorly triggered by the concerns over the surge in domestic
Covis-19 cases and possibility of longer than expected economic recovery. Most
of the Sectoral indices ended in red on a WoW basis, with BSE Metals and BSE Bankex
being the worst performing indices by recording losses of 4.27% and 2.41%.
·
On macro-economic front, Retail
food inflation stood at 9.28% in May 2020 and Industrial production contracted
by 55.5% in April 2020.On theØ Global front as expected the Fed kept rate unchanged at 0% -0.25%
during policy-meeting held on 10th June 2020 and projected a 5% growth in
2021.Going forward, global factors like development on the US -China
relationship front , any resurgence of Covid-19 cases globally, as economies have
started opening up and will continue to dictate the trend of the domestic
equity market. We expect the trading range for Nifty between 9600-10,200 in the
near term.
Indian Debt Market-
·
Government bond prices was
mildly positive as the yield on the latest 10-year benchmark 5.79% 2030 paper
settled at 5.80% on Jun 12 comparedØ with 5.82% on
Jun 05.
·
Reserve Bank of India announced
the auction of 91 days, 182 day and 364 day Government of India Treasury Bills
of Rs 15,000 Crore , Rs 16,000Ø Crore and Rs14,000 Crore, aggregating face value Rs 45,000 Crore to
be conducted on 17th June,2020.
·
State Governments have
announced the sale of their securities by way of an auction,Ø
·
We expect the 10 year benchmark
yield to trade between 5.70-5.90% in near term.
Domestic News
·
As per the limited data
released by the Finance ministry showed that annual retail food inflation eased
to 9.28% in May, from 10.5% in April.Ø
·
The net financial assets of
Indian households gathered pace in FY20 to 7.7% of GDP against 6.5% in FY19,
according to an article in Reserve BankØ of
India’s monthly bulletin.
·
India’s industrial production
shrank by a record 55.5% in April from the year earlier with manufacturing
crashing 64.3%, as computed from dataØ released by the
government.
·
India’s foreign exchange
reserves rose $8.2 billion in the week of June 5 and has now crossed the
milestone $500 billion mark for the first time inØ
country’s history.
·
Overseas borrowings by Indian
companies fell 68.5% to $996.04 million in April, according to data from the
Reserve Bank of India (RBI).Ø
International News
·
China registered its first
expansion since December as the Industrial output growth quickened to 4.4% in
May YoY, against Reuters expectationØ of 5.0% rise
from 3.9% in April.
·
US consumer sentiment index
increased to a reading of 78.9 from 72.3 in May according to a survey by the
University of Michigan’s .Ø
·
According to the US Labor
Department ,U.S. import prices rose by 1.0% in May after falling 2.6% in April
thus recording the largest gain sinceØ February
2019.
·
US Initial claims of
unemployment totaled 1.54 million, compared with the 1.6 million expected from
economists surveyed by Dow Jones.Ø Applications for loans to purchase a home
rose 5% in the week ending 5th June as compared to the previous week and were
13% higher than aØ year ago, according to the US Mortgage Bankers Association.
·
UK’s economy contracted by
20.4% in April from March, shrinking by ~6%. It was 24.5% smaller than in April
2019.Ø