Indian Equity Summary-
· Reflection of the global volatility was visible in the domestic equity markets .The nifty small cap (+5%) indices outperformed the benchmarkØ indices, Nifty (+1.5%) on WoW basis. The overall market closed with strong market breadth, and lower volatility while the INR marginally weakened. Top gaining sectoral indices includes Bse Metals ,BSE Auto and BSE CD while BSE Bankex and BSE IT were laggards.
· In the recently conducted MPC meeting RBI maintained status quo on the rates.Ø
· Going forward, global factors like development on the US -China relationship front , and domestic factors like the monsoon trajectory andØ remaining earnings season ; will continue to dictate the trend of the domestic equity market. We expect the trading range for Nifty between 10900-11,400 in the near term.
Indian Debt Market-
· Government bond prices fell marginally as the yield of the 10-year benchmark 5.79% 2030 paper settled at 5.89% on August 7 as against 5.84%Ø on July 31 .
· The Reserve Bank of India (RBI) left the key interest rates unchanged and allowed banks to restructure certain loans as part of efforts to reviveØ the economy.
· We expect the 10 year benchmark yield to trade between 5.80-6.05% in near term.Ø
Domestic News
· India Manufacturing Purchasing Managers’ Index (PMI) PMI stood at 46 in July, down from 47.2 in June.Ø
· India posted a trade surplus of $790 million in June, its first in over 18 years, with imports plunging as the coronavirus pandemic depressedØ domestic demand for crude oil, gold and other industrial products, reflecting a slowing economy.
· Mutual funds that invest in equity showed a net outflow of 24.80 billion rupees ($331.02 million) in July compared with an inflow of 2.41 billionØ rupees in June, data published on Monday by the Association of Mutual Funds in India (AMFI) showed.
International News
· US initial jobless claims tumbled to 1.186 million, a decrease of 249,000 from the previous week's revised level of 1.435 million.Ø
· Japan first-quarter GDP unchanged at 2.2% annualised contraction after 2nd revision.Ø
· Fitch Ratings has affirmed United States' Long-Term Foreign-Currency (LTFC) and Local-Currency (LC) Issuer Default Ratings (IDRs) at 'AAA' andØ revised the Outlooks to Negative from Stable.
· SOUTH Korea's manufacturing activity shrank at a much slower pace in July, signalling that a gradual recovery in demand is gaining momentumØ on easing lockdowns, although the resurgence in infections remained a risk.
Disclaimer :
The information and views presented here are prepared by Karvy Private Wealth (a division of Karvy Stock Broking Limited) or other Karvy Group companies. The information contained herein is based upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. Karvy Private Wealth is only a distributor of securities and financial market products.
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