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The World This Week – 31st Oct – 6th Nov 2020

Indian Equity Summary-

·        On the back of improving the country 's macro scenario and strengthening of the rupee, the domestic stock market rallied in line with returns from major global peers. With the midcap stock also having stellar rise; whopping gains over five percent for the Nifty and more than twelve percent for the Bank Nifty on a weekly basis and a broad-based rally, shows that the market feels that the uncertainty is behind us and in the foreseeable future we are likely to see some powerful rally.

·        Going forward, with the uncertainty due to US elections moving out of the way volatility will reduce substantially leading to money moving towards the riskier assets; domestic factors like ongoing Q2 corporate earnings season, supreme court moratorium decisions and FII/DII inflows and USD/INR rates ; will continue to dictate the trend of the domestic equity market. We expect the trading range for Nifty between 11900- 12,500 in the near term and trade with a positive bias.

 

Indian Debt Market-

·        The Government bond prices ended flat on a WoW basis. The yield on the 10-year benchmark 5.77% 2030 paper settled at 5.87% on November 06 compared with 5.88% on October 29.

·        The Indian rupee touched an over one-week high of 73.8 against the US dollar, before erasing some gains to trade 74.1 per USD and moving further away from a two-month low hit on Wednesday. Investors dumped the greenback amid expectations of Joe Biden's victory in the US presidential election.

·        Reserve Bank of India announces the auction of Government of India Treasury Bills for INR6000cr.

·        We expect the 10 year benchmark yield to trade between 5.80-6.05% in near term.

 

Domestic News

·        GST collections cross Rs 1 trillion in October for first time in 8 month mop up grows 10% y-o-y at Rs 1.05 trillion, almost equal to levels in February before a nationwide lockdown to contain the coronavirus pandemic.

·        Indian service sector activity ended the seven-month sequence of decline and registered growth in October, supported by improved market conditions amid easing COVID-19 restrictions. At 54.1 in October, up from 49.8 in September, the seasonally adjusted India Services Business Activity Index posted above the 50.0 no-change mark for the first time since February.

·        On the fourth anniversary of demonetisation, Prime Minister Narendra Modi on Sunday said it has helped reduce black money, increase tax compliance and formalisation, and given a boost to transparency.

 

International News

·        US trade deficit narrowed to $63.9 billion in September from a revised $67.0 billion in August. Economists had expected the deficit to narrow to $63.8 billion from the $67.1 billion originally reported for the previous month.

·        Eurozone retail sales declined more-than-expected in September after recovering in August. Retail sales volume fell 2 percent month-on-month in September, in contrast to a 4.2 percent increase in August. Sales were forecast to drop 1 percent.

·        Imports to China rose by 4.7 percent year-on-year to USD 178.74 billion in October 2020, after a 13.2 percent surge a month earlier and less than market estimates of a 9.5 percent increase. This was the second straight month of growth in inbound shipments, as domestic demand recovery from the COVID-19 shocks continued.

·        Moody’s Investors Service lifted on Friday 6 November 2020 Greece’s sovereign credit rating to Ba3 from B1 and confirmed a stable outlook.

 

Disclaimer

The information and views presented here are prepared by Karvy Private Wealth (a division of Karvy Stock Broking Limited) or other Karvy Group companies. The information contained herein is based upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. Karvy Private Wealth is only a distributor of securities and financial market products.

 

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