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The World This Week – 5th June 2020 to 12th June 2020

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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