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.
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