Indian Equity Summary
· The benchmark Indices Nifty/Sensex closed in green (up by ~1.5% on WoW basis) for four consecutive weeks on the back of early signs ofØ economic recovery, de-escalation of border skirmishes between India & China and steady FII/FPI inflows.On the sectoral front, indices that witnessed the highest gains includes BSE Metals, BSE Bankex and BSE IT.
· 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 by 9 bps, settled at 5.76% on Jul 10Ø compared with 5.85% on Jul 3.
· Reserve Bank of India announced the auction of three Government of India 91day, 182 day and 364 day Treasury Bills for an aggregate amount ofØ ₹35,000, to be conducted on 16th July 2020.
· Also, State Governments announced to sell securities by way of an auction to be conducted on 14th July 2020, for an aggregate face value of ₹Ø 11,250 Cr.
· We expect the 10 year benchmark yield to trade between 5.70-6.90% in near term.Ø
Domestic News
· Economic Outlook Survey by FICCI, it has projected the country’s annual median GDP growth for 2020-21 at -4.5%.Ø
· According to data released by RBI, Bank credit and deposits grew 6.18% and 11% to ₹102.45 lakh crore and ₹138.67 lakh crore, respectively, inØ the fortnight ended June 19.
· Chinese FDI has dipped to $163.78 million in 2019-20 from $229 million in the Fy20 while India’s trade deficit with China fell to $48.66 billion inØ 2019-20 on account of the decline in imports from the China.
· Recovery of Industries can be concluded from the IIP figures released for India, as the rate of contraction shrinks to over 37% in May as againstØ the month of April when it was over 57%.
· Thermal coal imports at India’s 12 major ports dropped 34.70 per cent to 17.71 million tonnes (MT) in the the first quarter of the current fiscal,Ø according to the Indian Ports’ Association (IPA).
International News
· US producer price index for final demand dropped 0.2% last month after rebounding 0.4% in May. However, excluding the volatile food, energyØ and trade services components, producer prices rose 0.3% in June.
· Moody’s analysts have forecasted that UK’s public debt ratio is expected to rise by 24% of GDP or more relative to 2019 levels whileØ have forecasted for a contraction of 10.1% in the UK’s GDP in 2020 and a relative growth of 7.1% in 2021.
· The International Energy Agency (IEA) raised its forecast to 92.1 million barrels per day (bpd), up 400,000 bpd from its last month’sØ outlook, citing a smaller-than-expected second-quarter decline.
· The world’s third-largest economy-Japan, is forecasted to contract 5.3% in FY21, as per a Reuters Poll of over 30 economists.Ø China’s passenger car sales in June fell 6.5% year on year to 1.68 million units as per the China Passenger Car Association (CPCA)Ø
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