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
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