• Domestic equity markets rose for the third consecutive week as key benchmark indices BSE Sensex and Nifty 50 rose 0.28% and 0.15%, respectively. The rally was broad-based, as the mid-cap segment and the small-cap segment also closed the week in green.

• Gains were extended after the Swiss National Bank delivered another interest rate cut, reducing its policy rate by 25 bps to 1.25%. However, it was restricted following the rise in crude oil prices along with an escalation in trade tensions between the European Union and China.

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• Investors’ focus remained on the upcoming Union budget along with progress of the monsoon for further cues.

• On the BSE sectoral front, BSE Bankex rose 3.22% led by private sector banks due to ‘valuation comfort’ over public sector banks and the return of foreign money.

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• BSE IT increased 1.88% after a major U.S. based information technology firm provided a positive annual revenue growth forecast, indicating demand in the crucial U.S. marketplace.

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• Bond yields fell tracking the drop in U.S. Treasury yields following softer growth in U.S. retail sales data in May 2024. Gains were extended due to purchase by foreign investors and banks that aided sentiment ahead of a crucial week where Indian bonds will be included in JPMorgan's emerging market debt index.

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• Yield on the 10-year benchmark paper (7.10% GS 2034) fell by 1 bps to close at 6.97% from the previous week’s close of 6.98%.

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• According to the Central Board of Direct Taxes, India's net direct tax collections have surged by 21% YoY to over Rs. 4.62 lakh crore till Jun 17 of FY25.

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• The Bank of England voted 7:2 in favor of maintaining benchmark interest rates at 5.25%. BoE’s stance contrasts with recent moves by the European Central Bank (ECB) which began easing rates earlier this month and diverges from the expectations surrounding the US Federal Reserve which is projected to delay rate cuts until later in the year.

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• The People’s Bank of China (PBoC) kept the benchmark 1-year and 5year loan prime rates unchanged at 3.45% and 3.95% respectively, in line with estimates.

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• Gold prices declined by approximately 0.50% during the week, failing to sustain near the week’s high of $2368. The hawkish stance of the U.S. Federal Reserve and robust data prints, including Flash Manufacturing PMI and Existing Homes Sales, dented gold’s appeal. The critical support level remains at $2280, and a weekly close below this point could signal further bearish pressure.

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• Silver faced a notable pullback, surrendering approximately 4% of its recent gains. This decline was driven by several key factors, including a stronger U.S. dollar index, increasing yields, and overall softness in the bullion market.

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• Crude oil extended its winning streak for two consecutive weeks, with prices rising by nearly 3%. Expectations of tighter market balances in Q3 and escalating geopolitical risks in the Middle East contributed to the bullish sentiment. The EIA’s weekly report showed an unexpected draw down in gasoline stocks, driven by increased demand—reaching the highest level this year.

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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