Indian Equity Summary-
· The Global and the domestic equity market witnessed a broad based rally on the backdrop of gradual reopening of the global economy andØ unprecedented stimulus package implemented worldwide by the central banks and government. The domestic equity market, in line with the global markets closed in green for the second consecutive week with Nifty 50 and Sensex up by 5.86% and 5.75% respectively.
· Majority of the sectoral indices closed in green on a W-o-W basis with the top performing sectoral indices being BSE Realty, BSE Consumer,Durable, BSE Metals that rose by 11.12%, 10.03% and 9.27% respectively.
· Going forward, global factors like development on the US -China relationship front , Covid-19 situations as globally economies have started, opening up and as the remaining results of the earnings seasons unfold will continue to dictate the trend of the domestic equity market. We expect the trading range for Nifty between 9800-10,300 in the near term.
Indian Debt Market-
· Government bond prices fell sharply as the yield on the latest 10-year benchmark 5.79% 2030 paper settled at 5.82% on Jun 5 compared withØ 5.78% on May 29.
· Reserve Bank of India announces 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
· State Governments have announced the sale of their securities by way of an auction, for an aggregate face value of ₹ 16,060 Cr.Ø
· We expect the 10 year benchmark yield to trade between 5.80-6.00% in near term.Ø
Domestic News
· According to industry body world steel ,India's steel demand is likely to face a steep decline of 18 percent in 2020 while the global steel demandØ is expected to contract 6.4 percent to 1,654 million tonnes (MT) due to the Covid-19 crisis.
· Rail freight traffic in April and May dropped by 28 percent, or 58 million tonne (mt), to 148 MT, compared to 206 mt during the same period lastØ year owing to the decline in economic activity during the first two months of the fiscal year 2020-21 (FY21).
· The RBI has created a Payments Infrastructure Development Fund (PIDF) of Rs 500Crore to encourage acquirers to deploy Points of Sale (PoS)Ø infrastructure — both physical and digital modes — in tier-3 to tier-6 centres and north eastern states.
· Rating agency Moody’s downgraded India’s foreign currency and local currency long term issuer ratings to Baa3 from Baa2, while maintaining aØ negative outlook, citing prolonged period of low growth and further deterioration in the government’s fiscal position.
· International News
· China exports fall from 3.5 in April% to 3.3% in May while imports fall from 14.2% in April to 16.7% in May.Ø
· As per the Institute for Supply Management (ISM) ,index of US factory activity rose to 43.1 In May from 41.5 in April. A reading below 50Ø indicates contraction in manufacturing that accounts for 11% of the US economy.
· As per the job report released Labor Department for the month of May, the jobless rate in US dropped to 13.3% in May from 14.7% in AprilØ whereas Nonfarm payrolls rose by 2.5 million jobs after a record plunge of slightly under 20.7 million in April.
· Japan's factory activity in May shrank at the fastest pace since March 2009 as the final au Jibun Bank Japan Manufacturing PurchasingØ Managers' Index (PMI) fell to 38.4 from 41.9 in April.
· Member countries of the Group of 20 pledged more than $21 billion to fight the coronavirus(Covid-19) pandemic.Ø As per the details of draft deal reported by Reuters, OPEC, Russia and allies are in deliberation to extend record oil production cuts of 9.7Mb/pdØ until the end of July after crude prices doubled in the past two months on the back of their efforts to withdraw almost 10% of global supplies from the market. Commodities and Currency.
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