• Domestic equity markets rose for the fourth consecutive week as key benchmark indices BSE Sensex and Nifty 50 rose 2.36% and 2.17%, respectively. The rally was broad-based, as the mid-cap segment and the small-cap segment also closed the week in green.

• Domestic equity markets rose during the week as investors’ sentiment was underpinned after the central bank data showed that India's current account balance recorded a surplus of $5.7 billion or 0.6% of GDP in Q4 FY24, driven by a lower merchandise trade deficit.

• Meanwhile, markets key benchmark indices progressed to hit fresh milestones supported by information technology and energy stocks.

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• However, gains were capped due to profit booking ahead the release of the U.S. personal consumption expenditure inflation data of May 2024, which will provide more clarity on interest rate trajectory by the U.S. Federal Reserve. Rising global crude oil prices also restricted the gains.

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• Bond yields rose during the week, meanwhile, most of the domestic government bonds under the Fully Accessible Route were included in the JPMorgan emerging market debt index on Jun 28, 2024.

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• Yield on the 10-year benchmark paper (7.10% GS 2034) rose by 4 bps to close at 7.01% from the previous week’s close of 6.97%.

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• Spot gold prices rebounded from its 2-weeks lows after Friday’s US May core PCE price index data rose at the slowest pace in 3 years, which improves the chances that the Fed will cut interest rates this year.

• Gold prices are expected to hold the support near $2295 and expected to rise towards $2375 amid growing expectation of rate cut in 2024. Moderation in US inflation numbers and slowest growth in the 1st quarter has increased the probability of rate cut.
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• According to the Ministry of Commerce & Industry, the combined Index of Eight Core Industries increased by 6.3% in May 2024 as compared to 5.2% in May 2023. The production of most of the Eight Core Industries recorded growth in May 2024 over the corresponding month of last year except crude oil, fertilizers and cement. Electricity witnessed the maximum growth at 12.8% in May 2024 followed by coal with 10.2% growth.

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• India’s current account balance recorded a surplus of US$ 5.7 billion (0.6% of GDP) in Q4 FY24 as against a deficit of US$ 8.7 billion (1.0% of GDP) in Q3 FY24 and US$ 1.3 billion (0.2% of GDP) in Q4 FY23. Current account deficit improved significantly to US$ 23.2 billion (0.7% of GDP) during FY24 from US$ 67.0 billion (2.0% of GDP) in FY23 on the back of a lower merchandise trade deficit.

• Debt market saw positive FPI inflows (US$1 bn) after witnessing outflows in April ahead of JP Morgan bond inclusion. That said, CY2024 saw overall robust inflows in first five months to the tune of US$6 bn, driven primarily by debt inflows (US$6.4 bn).

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• In April 2024, CPI inflation marginally eased to 4.83%y/y (Mar 2024: 4.85% y/y, Last year same period: 4.70%y/y), driven down by favourable base effect and sequential momentum in line with seasonality.

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Best Regards,

​​​​​​​Alpha Research Team

Disclaimer

The above views are our expectations of the economy, market and investments. The views may or may not play out accordingly. You are requested to do your own due diligence before making any investment