Indian Equity Summary-
·
Expected faster recovery in the rural markets on
the back of government subsidies, and above average monsoon and indicative
strong tractorØ sales
along with strong global buoyed the domestic equity market sentiment. The
domestic benchmark Indices Nifty 50 and Sensex moved higher by ~2.16%/2.42% on
a WoW basis , where the top performing sectoral indices on WoW basis includes
BSE Power ,BSE IT and BSE FMCG that rose by 4.64%, 4.03% and 3.64%
respectively.
·
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 10400-10,800 in
the near term.
Indian Debt Market-
·
Government bond prices rose as the yield on the
latest 10-year benchmark 5.79% 2030 paper softened, settled at 5.85% on Jul 3
compared toØ
5.91% on Jun 26.
·
Reserve Bank of India announces the auction of
three Government of India 91day, 182 day and 364 day Treasury Bills for an
aggregate amount ofØ ₹35,000.
·
Also, State Governments announced to sell
securities by way of an auction to be conducted on 7th July 2020, for an
aggregate face value of ₹Ø
11,500 Cr.
·
We expect the 10 year benchmark yield to trade between
5.80-6.00% in near term.Ø
Domestic News
·
The IHS Markit Services PMI in June rose to 33.7
from 12.6 in May as the services activity picked up pace in June from record
lows earlier whileØ the
India Manufacturing Purchasing Managers’ Index stabilized at 47.2 in June
compared with 30.8 in May, however continues to indicate contraction in factory
activity by being lower than 50 mark.
·
The Composite PMI Output Index, which measures
combined services and manufacturing output, rose to 37.8 in June, up from 14.8
in May.Ø
·
As per the Indian Ports Association (IPA),major
ports in India witnessed an approx. 20% fall in traffic during the quarter
ended June asØ
coronavirus lockdowns slowed economic activity.
·
Electricity Output data reflects signs of
recovery in June as the electricity generation declined by a slower rate ie
5.3% during the second half ofØ
June as compared with a decline of 14.5% during the first fifteen days of the
month.
·
As per the data released by Centre for
Monitoring India economy(CMIE),unemployment rate in India eased to 11% in June
from 23.5% in May.Ø
International News
·
China's services sector grows at fastest pace
since April 2010 as the Caixin/Markitservices Purchasing Managers’ Index (PMI)
of China rose toØ 58.4
in June as against May’s 55.0.
·
Britain’s government has drafted a plan to
double the number of its job coaches to 27,000 at a cost of 800 million pounds
($997 million), with aØ
view to tackle a rise in unemployment triggered by the coronavirus lockdown.
·
Britain’s house prices fell in annual terms for
the first time since 2012 in June, fell by 0.1% YoY ,as the country reeled from
the coronavirusØ
shock to the economy.
·
Global tourism revenues are expected to fall by
up to $3.3 trillion due to COVID-19 restrictions, with the United States
standing to lose the mostØ
according to a study by U.N.
·
US consumer confidence index rose to a reading
of 98.1in June from 85.9 in May. However, the confidence index remains 34.5
points below itsØ
pre-pandemic level.
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