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The World This Week - 3rd April 2020 to 9th April 2020


Indian Equity Summary- 
·         Domestic equity markets gained during a truncated trading week and closed in the green after 7 weekly losses in a row. Benchmark indices,Ø Sensex closed at Rs 31159, surging by 12.93% and Nifty closed up by 12.72% at 9111 on WoW basis. Sentiments were also lifted by positive FPI/FII inflows of RS 2462 Crore recorded in the week ending 9th April as compared to outflows of Rs 10,131 in the previous week. Sectorally, massive rally was witnessed in Auto sector while other top gaining sectors include banking, healthcare, metals and consumer durable . 
·         Further, global cues also impacted the market as the major oil producers agreed on their biggest-ever cut in oil production.
·         Going forward, the growth in 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 7600 -9000 in the near term.
Indian Debt Market- 
·         Government bond prices ended lower. Yield of the 10 year benchmark 6.45% 2029 paper settled at 6.49% on April 9 as against 6.31% on April 9.
·         Concerns about the mounting fiscal deficit of India and also heavy borrowing plan of Government amid nationwide lockdown continues to pull the bond prices down. 
·         States raised a total notified Rs 37,500 crore via sale of dated securities in the state development bond auction.
·         The RBI conducted a 3-year targeted long term repo auction for a notified Rs 25,000 crore on the last trading day of the week, receiving bidsamounting to ~Rs 1.13 lakh crore. Further , RBI announced the auction of state development bonds for a total of Rs 13,128 crore on April 13. 
·         We expect the 10 year benchmark yield to trade between 6.25-6.50% in near term.
Domestic News
·         India Services PMI declined to 49.3 in March 2020 from February’s 85-month high of 57.5, and below market expectations of 52.5.
·         India’s Industrial Production Growth accelerated to 4.5% year-on-year in February 2020, from 2.1% in the previous month.
·         The Finance ministry has released about Rs 34,000 crore in two phases to states as compensation for their revenue loss in the goods and servicesØ tax (GST) regime in order to provide further relief to states amid the extended lockdown due to coronavirus outbreak.
·         The government has disbursed the first installment of Rs 15,841 crore to 7.92 crore farmers under the PM-KISAN scheme.
·         World Bank sees FY21 India growth at 1.5-2.8%; slowest since economic reforms three decades back while Asian Development Bank (ADB) expected India’ growth to slow down to 4% in the current fiscal owing to weak global demand.
·         India’s Fiscal deficit stood at 5.07% of GDP in February and is likely to increase in March.
·         Asian Development Bank has assured India $2.2 billion in its fight against the Covid-19 pandemic.
International News 
·         US Broader indices, Dow Jones and Nasdaq gained by~11% and `10% respectively on hopes of additional fiscal stimulus by the government toØ combat the rampant spreading of Covid-19 
·         US non-farm payrolls plunged by 701,000 jobs in March after jumping by an upwardly revised 275,000 jobs in February
·         US Institute of Supply Management (ISM) non-manufacturing index fell to 52.5 in March from 57.3 in February. 
·         UK services PMI posted 34.5 in March, down sharply from 53.2 in February, while the composite PMI was at 36.0 in March, down sharply fromØ 53.0 in February.
·         Japan’s core machinery orders, which is regarded as an indicator of near term capital spending, rose 2.3% in February on a M-o-M basis.
·         Japan Current Conditions Index of the Economy Watchers' Survey decreased to 14.2 in March from 27.4 in FebruaryØ 
·         Japan’s outlook index that signals future activity fell for the second straight month to 18.8 in March from 24.6 in the previous month.

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