The World This Week : 29th May 2020 – 5th June 2020
Indian Equity Summary-
·
The Global and the domestic
equity market witnessed a broad based rally on the backdrop of gradual
reopening of the global economy andØ unprecedented
stimulus package implemented worldwide by the central banks and government. The
domestic equity market, in line with the global markets closed in green for the
second consecutive week with Nifty 50 and Sensex up by 5.86% and 5.75% respectively.
·
Majority of the sectoral
indices closed in green on a W-o-W basis with the top performing sectoral
indices being BSE Realty, BSE Consumer,Durable, BSE Metals that rose by 11.12%,
10.03% and 9.27% respectively.
·
Going forward, global factors
like development on the US -China relationship front , Covid-19 situations as
globally economies have started, opening up and as the remaining results of the
earnings seasons unfold will continue to dictate the trend of the domestic
equity market. We expect the trading range for Nifty between 9800-10,300 in the
near term.
Indian Debt Market-
·
Government bond prices fell
sharply as the yield on the latest 10-year benchmark 5.79% 2030 paper settled
at 5.82% on Jun 5 compared withØ 5.78% on May 29.
·
Reserve Bank of India announces
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
·
State Governments have
announced the sale of their securities by way of an auction, for an aggregate
face value of ₹ 16,060 Cr.Ø
·
We expect the 10 year benchmark
yield to trade between 5.80-6.00% in near term.Ø
Domestic News
·
According to industry body
world steel ,India's steel demand is likely to face a steep decline of 18 per
cent in 2020 while the global steel demandØ is
expected to contract 6.4 percent to 1,654 million tonnes (MT) due to the
Covid-19 crisis.
·
Rail freight traffic in April
and May dropped by 28 percent, or 58 million tonne (mt), to 148 MT, compared
to 206 mt during the same period lastØ year owing to
the decline in economic activity during the first two months of the fiscal year
2020-21 (FY21).
·
The RBI has created a Payments
Infrastructure Development Fund (PIDF) of Rs 500Crore to encourage acquirers to
deploy Points of Sale (PoS)Ø infrastructure — both physical and digital modes — in tier-3 to
tier-6 centres and north eastern states.
·
Rating agency Moody’s
downgraded India’s foreign currency and local currency long term issuer ratings
to Baa3 from Baa2, while maintaining aØ negative
outlook, citing prolonged period of low growth and further deterioration in the
government’s fiscal position.
·
International News
·
China exports fall from 3.5 in
April% to 3.3% in May while imports fall from 14.2% in April to 16.7% in May.Ø
·
As per the Institute for Supply
Management (ISM) ,index of US factory activity rose to 43.1 In May from 41.5 in
April. A reading below 50Ø indicates contraction in manufacturing that accounts for 11% of the
US economy.
·
As per the job report released
Labor Department for the month of May, the jobless rate in US dropped to 13.3%
in May from 14.7% in AprilØ whereas Nonfarm payrolls rose by 2.5 million jobs after a record
plunge of slightly under 20.7 million in April.
·
Japan's factory activity in May
shrank at the fastest pace since March 2009 as the final au Jibun Bank Japan
Manufacturing PurchasingØ Managers' Index (PMI) fell to 38.4 from 41.9 in April.
·
Member countries of the Group
of 20 pledged more than $21 billion to fight the coronavirus(Covid-19)
pandemic.Ø As per the details of draft
deal reported by Reuetrs, OPEC, Russia and allies are in deliberation to extend
record oil production cuts of 9.7Mb/pdØ until the end
of July after crude prices doubled in the past two months on the back of their
efforts to withdraw almost 10% of global supplies from the market. Commodities
and Currency
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