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The World This Week


Indian Equity Summary-Benchmark indices Sensex and Nifty closed in the green for the second consecutive week in line with the global key equity indices. Nifty 50 andØ Sensex rose by 1.7% and 1.4% respectively. Sectorally, all the sectors indices barring Consumer durable and IT closed in green. BSE Metal, BSE Power and BSE Bankex were the top performers and rose by 6.65%, 4.99%, and 3.41% respectively.  Investor sentiments were also lifted by the announcement of further relief package of TLTRO by RBI targeted towards small and medium-sizedØ financial institutions including NBFCs and MFIs. The reverse repo rate has been cut by another 25bps to 3.75% to incentivize the banks to lend.  India VIX continues to cool off and has dropped to ~42.59 on Friday. It has dropped by ~32% in 1 month. Ø  Going forward, the growth in the number of COVID-19 cases among other factors such as the movement of rupees, crude oil prices, foreignØ currency inflows and outflows will continue to determine the forward-looking market pattern. We expect the trading range for Nifty between 8700 -9500 in the near term.
Indian Debt Market-  Government bond prices ended sharply higher .Yield of the 10-year benchmark 6.45% 2029 paper settled at 6.35% on April 17 as against 6.49 %Ø on April 9.  Bond prices lifted on account of the announcement of further monetary policy easing by the central bank along with additional liquidityØ boosting measures to ease the economy in stress.  Reverse repo was cut by RBI by 25 basis points (bps) to 3.75% with a view to encourage more lending by banks .Ø  RBI conducted its fourth targeted long-term repo auction on April 17 of three-year duration for a notified Rs 25,000 crore.Ø  We expect the 10 year benchmark yield to trade between 6.15-6.40% in near term.
Domestic News  Headline CPI in India fell to a four month low of 5.91% year on year in March 2020 from 6.68 in previous month.Ø  India’s inflation based on the Wholesale Price Index (WPI) eased to 1% in March from 2.26% in February on the back of a sharp fall in food pricesØ  The income-tax department has set its budgetary direct tax collection target for 2020-21 at Rs 13.19 lakh crore, 28% more than the actualØ collections in the year ended March 31.  IMF has downgraded the projections on India's growth rate from 5.8% to 1.9% for FY21 and has forecasted global recession due to COVID-19.Ø  India’s southwest monsoon this year is expected to be normal at 100% of the long period average ,according to the India MetrologicalØ Department.  RBI announced Rs 50000 crore targeted long term repo operation (TLTRO 2.0),with a view to boost small and medium-sized financialØ organizations including NBFCs and MFIs .
International News  China’s CPI rose 4.3% on-year in March, compared with 5.2% in February, while Producer Price Index fell 1.5% in March compared with a 0.4%Ø fall in February.  China's GDP fell to 6.8% in the first quarter from a year earlier , the worst performance since at least 1992.Ø  US benchmark index ,Nasdaq gained by 4.65% as the US Federal Reserve (Fed) announced a $2.3 trillion financial support package to boostØ local governments and small and mid-sized businesses in its latest move to keep the US economy intact.  US retail sales plummeted 8.7% in March after falling by a revised 0.4% in February.Ø  Capacity utilisation for the industrial sector in US decreased to 72.7% in March from 77% in February while US industrial production plungedØ 5.4% in March after rising by a downwardly revised 0.5% in February.

Link - http://www.karvywealth.com/data/sites/1/skins/karvywealth/Download_media_report.aspx?FileName=DAC78AD8-3ABC-49D9-9D51-35BE11258B39|5169329

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