Indian Equity Summary-
·
The domestic equity market
closed in green on WoW basis as the benchmark indices Nifty/Sensex closed in
positive by 1.4%/1.3% respectively.Ø IMF updated its
GDP growth forecast for India, and expects during the year, India's economy
will contract by 4.5 percent, though in FY22 it is expected to grow by 6%.
Negative sentiments like border tension between India and China along with
rising Covid- 19 cases may cause intermediate volatility. Above normal expected
monsoon will bode well for the Khariff crops. With no fresh talks for further
Lockdowns soothed investors' sentiment as well as the business sector , as hint
of recovery have already been witnessed in Unlock 1 and going forward Unlock
2.0 hopefully will provide further support .
·
Going forward, global factors
like development on the US -China relationship front , any resurgence of
Covid-19 cases globally, as economiesØ have started
opening up ; will continue to dictate the trend of the domestic equity market.
We expect the trading range for Nifty between 9800-10,500 in the near term.
Indian Debt Market-
·
Government bond prices fell as
the yield on the latest 10-year benchmark 5.79% 2030 paper settled at 5.91% on
Jun 26 compared with 5.85% onØ Jun 19.On a review of current and evolving liquidity and market
conditions, the Reserve Bank has decided to conduct simultaneous purchase and
sale of government securities under Open Market Operations (OMO) for ₹10,000 crores each on July 02, 2020. We expect
the 10yr Gsec to soften going forward .
·
Government of India has
announced to launch Floating Rate Savings Bonds, 2020 (Taxable) scheme
commencing from July 01, 2020 to enableØ person
resident in India/HUF to invest in a taxable bond, without any monetary
ceiling.
·
We expect the 10 year benchmark
yield to trade between 5.80-6.05% in near term.Ø
Domestic News
·
The government announced a Rs
15,000 crore infrastructure development fund with an interest subsidy scheme to
promote investment byØ private players and MSMEs in dairy, meat processing and animal feed
plants, a move which is expected to create 3.5 million jobs
·
India may impose
anti-circumvention duty on a chemical, used in electrical, electronic,
mechanical and chemical from Korea and China with aØ view to
guard domestic players from cheap imports from these countries.
·
The government is considering
basic customs duty of around 20 percent on solar energy equipment to provide an
edge to domesticØ manufacturers and discourage imports, particularly from China.
·
Zydus Cadila has received nod
from the US health regulator to market generic antihistamine Meclizine
hydrochloride tabletsØ
International News
·
The International Monetary Fund
(IMF) forecast a deeper recession for this year and a slower and uncertain
recovery for next year after theØ corona virus,
or Covid-19, pandemic plunged the global economy into a crisis like no other.
The global economy is set to shrink 4.9 percent this year, which is worse than
the 3 percent contraction predicted in April, the lender said in an update to
its World Economic Outlook.
·
China left its benchmark
lending rates unchanged for the second straight month despite the economy
struggling to recover from the impact ofØ the
coronavirus crisis.
·
First-time claims for U.S.
unemployment benefits fell by much less than expected in the week ended June
20th to 1.480 million, a decrease ofØ 60,000 from the
previous week's revised level of 1.540 million.
·
US real gross domestic product
tumbled by 5.0 percent in the first quarter, unchanged from the estimate
provided last month. The steep dropØ in GDP in the
first quarter reflects a notable turnaround from the 2.1 percent jump seen in
the fourth quarter of 2019.
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