HDFC Securities weekly bulletin

Markets in the week gone by

Domestic markets ended the volatile week on a flat note on account of profit booking as well as concerns over the slow progress of monsoon. Equity indices continued to hit fresh highs on the back of positive global cues but made small progress. Sensex and Nifty ended the week with minor gains of 0.28 per cent and 0.15 per cent, respectively. The markets edged higher in 2 out of 4 trading sessions during the week.

In the broader markets BSE Midcap index was down 0.2% while the BSE Smallcap index rose 1.4%. Market breadth was in favour of gainers with 11 shares advancing for every 10 losers.

Average cash turnover on NSE was 27% higher as compared to previous week aided by a series of bulk deals. Among the sectoral indices Private Bank gained 4.2%, Financial Services was up 2.0%, IT was up 1.9%, and Telecom was up 0.9%. On the downside Auto lost 2.7%, Oil & Gas fell 2.5%, Capital Goods fell 2.0% and FMCG fell 1.9%

Among Nifty 100 stocks, Motherson surged 7.5%, Vedanta was up 5.1%; ICICI Bank gained 4.8%; Axis Bank added 4.8%; and HDFC Bank rose 4.3%. On the downside, ABB fell 6.9%; Hero Motocorp slipped 6.1%; Ultratech Cement was down 5.2%; Maruti Suzuki fell 5.0% and Siemens declined 4.5%.

As per provisional figures, FIIs were net buyers of Rs 9103cr in the equity markets during the week and DIIs were net buyers of Rs 9575 crore.

U.S. stocks finished mostly lower Friday as the technology sector slumped, but major equities indexes still rose for the week. S&P Global said its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, inched up to 54.6 this month, the highest since April 2022, from a 54.5 reading in May. However, while a rebound in employment helped lift the reading, price pressures eased, adding to recent data that has boosted optimism that inflation may be cooling. For the week, the Dow climbed 1.5%, the S&P 500 rose 0.6% and the tech-heavy Nasdaq rose less than 0.1%. The S&P 500 and Nasdaq each logged a third straight week of gains.

Crude oil prices settled higher for the week as signs of improving U.S. oil demand and falling fuel inventories, pushed crude prices to a seven-week high on Thursday. For the week, the US oil benchmark was up 2.7% at $80.6/barrel. Gold prices reversed course on Friday, moving down more than 1.50%. Economic data from the US prompted investors' reaction to pricing out fewer interest rate cuts by the Federal Reserve (Fed) due to the solid state of the economy. Gold prices were down 0.4% for the week at $2322.0/ounce.

The Indian 10yr G-Sec yield fell 1 bps to 6.97%. The Indian rupee depreciated by 4 paise against the US dollar to Rs 83.59 per USD. US investors poured money into technology funds at a record pace over the past week as surging demand for artificial-intelligence winners attracted fresh inflows . Roughly $8.7 billion flowed into tech funds during the week that ended June 19, according to data from Bank of America Global Research.

Other economic data

India

·??????? The HSBC India Manufacturing PMI rose to 58.5 in June 2024 from May's three-month low of 57.5. Services PMI edged up to 60.4 in June 2024 from 60.2 in the previous month. That drove the composite PMI to 60.9 from 60.5 the previous month.

·??????? The Union Cabinet has approved an increase in the Minimum Support Prices for 14 crops for the upcoming Kharif season.

·??????? India slipped seven ranks to 15 in the World Investment Ranking in 2023 as foreign direct investment inflows fell 43 percent to $28 billion.

·??????? Fitch Ratings revised India's growth forecast for the ongoing financial year from 7% projected in March to 7.2%

US

·??????? Retail Sales in the United States increased by 2.3% year-on-year in May 2024, following a downwardly revised 2.7% rise in April.

·??????? Industrial Production in the United States increased 0.4% year-on-year in May 2024, the first increase in five months, following a downwardly revised 0.7% fall in April.

·??????? Housing starts in the US fell 5.5% in May 2024, the lowest since July 2020, from April's downwardly revised 1.352 million.

·??????? The S&P Global US Manufacturing PMI rose to a three-month high of 51.7 in June 2024 from 51.3 in May. Services PMI rose to 55.1 in June of 2024 ?- a 26 month high - from 54.8 in the earlier month.

·??????? Economic data released on June 20 indicated that unemployment in the US continues to rise. The Labor Department reported that fillings for jobless benefits reached 238,000 for the week ended June 15, up 5,500 from the previous week. This is the highest level since September 2023.

·??????? The?University of Michigan’s Survey of Consumers?showed that consumer sentiment declined to 65.6 in June, down from 69.1 in May. This reading also came below the 71.5 Dow Jones estimate

UK/Eurozone/Germany

·??????? The annual inflation rate in the UK slowed to 2% in May 2024, the lowest since July 2021, from 2.3% in April.

·??????? The Bank of England decided to maintain the Bank Rate at 5.25% during its June meeting, as expected, with two members advocating for a decrease to 5%.

·??????? Retail sales in the UK soared 2.9% month-over-month in May 2024, recovering from an upwardly revised 1.8% decline in April.

·??????? The S&P Global Flash UK Manufacturing PMI edged higher to 51.4 in June of 2024 from 51.2 in the earlier month. Services PMI fell to 51.2 in June 2024 from 52.9 in May.

·??????? Annual inflation rate in the Euro Area increased to 2.6% in May 2024 from 2.4% in each of the previous two months.

·??????? The Eurozone Manufacturing PMI dropped to 45.6 in June 2024, hitting a six-month low after falling from 47.3 in May. Services PMI declined to 52.6 in June 2024 from 53.2 in May.