HDFC Sky: Weekly Bulletin
Markets in the week gone by
The domestic markets gained further ground in the week goneby with benchmarks hitting lifetime highs mainly led by extended buying from FIIs, mixed global markets, steady progress of monsoon and RBI governor confidence about 7.2
percent growth in the current financial year. Sensex and Nifty ended the week with gains of 2.36 per cent and 2.17 per cent, respectively. The markets edged higher in 4 out of 5 trading sessions during the week.
In the broader markets, BSE Midcap index and the BSE Smallcap index rose by 0.4-0.5%.
The average cash turnover on NSE was 13% lower than the previous week. Among the sectoral indices, Oil & Gas gained
3.1%, IT up 2.4%, Financial Services up 2.0%, and FMCG up 1.4%. On the downside Realty lost 2.4%, Media fell 2.3%, Metal was down 1.8% and PSU Bank declined 0.2%
Among Nifty 100 stocks, Ultratech Cement surged 9.4%, Grasim was up 8.3%; Reliance Industries gained 7.6%; Dr Reddy added 6.5%; and Naukri increased 6.3%. On the downside, IndusInd Bank fell 4.1%; Cipla slipped 3.9%; DLF was down 3.7%; Eicher Motor fell 3.6% and Vedanta declined 3.5%.
As per provisional figures, FIIs were net buyers of Rs 2832cr in the equity markets during the week and DIIs were net buyers of Rs 8423 crore.
U.S. stocks finished lower on Friday, reversing early gains, as investors absorbed data that the U.S. monthly inflation was unchanged in May though in line with economists' expectations, while Treasury yields turned higher.
The data fueled optimism for some investors that the US Federal Reserve could begin cutting interest rates in September. Traders were rearranging their positions in the aftermath of the debate between Joe Biden and Donald Trump. Biden’s shaky performance boosted sentiment around Trump’s odds for securing a second term in the White House. AI stocks kept oscillating through the week. For the week, the Dow, and the S&P 500 both were down 0.1% and the tech-heavy Nasdaq closed with 0.2% gain.
Oil prices settled higher for the week, setting a third consecutive weekly increase. The market remains buoyed by supply concerns stemming from escalating geopolitical tensions and potential weather-related disruptions, which have overshadowed signs of weak demand.
For the week, the US oil benchmark was up 1.1% at $81.5/barrel. Gold prices inched higher on Friday and were up 0.6% for the week at $2336.9/ounce.
The Indian 10yr G-Sec yield rose 4 bps to 7.01%. The Indian rupee depreciated by 6 paise against the US dollar to Rs 83.65 per USD.
Other economic data
India
India infrastructure output rose 6.3% year-on-year in May, decelerating from Aprils 6.7% expansion, hurt by a contraction in cement and crude oil and a slowdown in refinery products and steel.
The Union governments fiscal deficit was curtailed to 3% of the budgetary target at the end of the first two months of the financial year-ending March 2025. The fiscal deficit figure follows a sharp contraction of Rs 1.59 lakh crore in May, owing to the surplus Reserve Bank of India dividend, reducing the deficit from Rs 2.1 lakh crore at the end of April.
India’s external debt ratio improved to the best level in 13 years in FY24, declining to 18.7 percent of the GDP from 19 percent in the previous year. India’s debt servicing improved during this period, rising to 6.7 percent from 5.3 percent in the previous year.
The country’s foreign exchange to debt ratio improved to 97.4 percent in FY24 from 92.7 percent in the previous year. For FY24, India’s current account deficit moderated to $23.2 billion (0.7% of GDP) during FY24 from $67 billion (2% of GDP) during the previous year on the back of a lower merchandise trade deficit.
US
American consumers lost some confidence in June as expectations over the near-term future fell again. The Conference Board said that its consumer confidence index fell in June to 100.4 from 101.3 in May.
New orders for manufactured durable goods in the United States rose by 0.1% month-over-month in May 2024, following a downwardly revised 0.2% increase in April.
The core personal consumption expenditures price index in the US increased just a seasonally adjusted 0.1% for the month of May and was up 2.6% from a year ago the latter number down 0.2 percentage point from the April level. Both numbers were in line with the Dow Jones estimates.
领英推荐
Personal income in the US rose 0.5% on the month, stronger than the 0.4% estimate. Consumer spending, however, increased 0.2%, weaker than the 0.3% forecast.
The Commerce Department’s third and final estimate for Q1 gross domestic product showed a seasonally adjusted annualized gain of 1.4%. That was 0.1 percentage point higher than the previous estimate but in line with the Dow Jones estimate.
UK/Eurozone/Germany
Britain's economy pulled out of recession at a faster pace than previously thought in the first three months of this year. British gross domestic product expanded by 0.7% from the previous quarter, above an initial estimate of 0.6% growth.
Retail sales in Germany shrank 1.2% month-over-month in April 2024, following a strong 2.6% increase in March. Year-on-year, retail sales decreased 0.6%, extending the downwardly revised 1.9% fall from the previous month.
Germanys seasonally adjusted jobless rate held at 5.9% for the sixth consecutive month in May 2024, close to three-year highs.
Japan/China
Industrial production in Japan grew by 2.8% month-over-month in May 2024, shifting from a 0.9% fall in the prior month. Yearly, industrial output rose by 0.3% in May, pointing to the first expansion in seven months.
Retail sales in Japan increased by 3% year-on-year in May 2024, accelerating from an upwardly revised 2.4% gain in April. On a monthly basis, retail sales rose 1.7% in May, accelerating from a 1.2% gain in April.
Core inflation in Japans capital rose in June (to 2.1% YoY vs forecast of 2.0% and 1.9% in May) on rising fuel bills and the boost to import costs from a weak yen.
The?Japanese yen?hit a near-38 year low against the U.S. dollar at 161.28 on Friday.
Chinas industrial profits rose at a much slower pace in May, underlining the struggles faced by the worlds second-largest economy as weak domestic demand crimps overall growth. Earnings rose 0.7% year-on-year last month after a 4% increase in April while gains over the first five months also eased to 3.4% from 4.3% in the January-April period.
According to preliminary data, the value of outward foreign direct investment (FDI) from China amounted to approximately $147.85 billion in 2023 vs $163.12 billion in 2022 and $178.82 billion in 2021. In 2023, Chinese outward FDI flows ranked third in the world, while global FDI outflows declined by two percent.
Events in the coming week
1-Jul – India/Japan/China/Eurozone/Germany/UK/US Manufacturing PMI;
3-Jul – India/Japan/China/Eurozone/Germany/UK/US Services PMI; Eurozone – PPI; US – Trade Balance, Factory Orders, Total Vehicle Sales
5-Jul –Eurozone – Retail Sales; US – Unemployment Rate
Outlook
Nifty ended slightly lower on June 28 forming a minor bearish pattern. However, on weekly charts, Nifty?rose for the
fourth consecutive week (up 2.17% - the largest weekly gain in 5 months) to record its best month so far this year.?On
weekly charts, the Nifty formed a large bull candle breaking out of a range. On monthly charts, Nifty gained 6.57% - the
largest monthly gain in 6 months. Nifty could face resistance from the 24174-24380 band while support could come in at
23338 in the near term. Nifty keeps defying all expectations of giving even a small correction.