• Domestic equity markets rose for the fifth consecutive week as key benchmark indices BSE Sensex and Nifty 50 rose 1.22% and 1.30%, respectively. The rally was broad-based, as the mid-cap segment and the small-cap segment also closed the week in green.

• Markets rose during the week and reached fresh highs amid reinstated expectations that the U.S. Federal Reserve would start interest rate cuts in Sep 2024.

• Sentiments were boosted following the in-line U.S. PCE price data for May 2024 that reinforced investors’ expectations of at least one interest rate cut later this year.

• Gains were further extended following the dovish commentary from the U.S. Federal Reserve chair, which fueled hopes that rate cuts are closer. While acknowledging the progress in disinflation, the Fed chairman added that officials must have greater confidence before reducing interest rates.

• Among the sectoral indices, the top performers were Nifty IT, Nifty Pharma, and Nifty Health Care, with gains of 4.3%, 3.6%, and 3.1% respectively. The robust performance of these sectors can be attributed to several factors:

​​​​​​​

• Bond yields fell following the ease in U.S. Treasury yields, while market participants continue to gauge the pace of foreign inflows into Indian government bonds since the inclusion of local debt in the JPMorgan index and awaited for U.S. nonfarm payrolls data of Jun 2024 for further cues.

​​​​​​​

​​​​​​​

• Yield on the 10-year benchmark paper (7.10% GS 2034) fell by 2 bps to close at 6.99% from the previous week’s close of 7.01%.

​​​​​​​

​​​​​​​​​​​​​​

• The gross goods and services tax (GST) collection for Jun 2024 stood at Rs 1.74 lakh crore, representing a 7.7% YoY growth. The yearly growth rate of GST collection in Jun 2024 is notably less than compared to 12.4% and 10% increases in April and May 2024, respectively.

​​​​​​​

​​​​​​​

• The Manufacturing Purchasing Managers' Index climbed to 58.3 in Jun 2024 compared to 57.5 in May 2024. The latest reading indicated a sharper improvement in business conditions, as strong demand conditions spurred the expansion in new orders, output and buying levels.

​​​​​​​

• India’s Services Purchasing Managers’ Index (PMI) rose slightly to 60.5 in Jun 2024 as compared to 60.2 in May 2024 buoyed by strong demand and a record rise in export orders. Composite PMI also rose to 60.9 from 60.5 in the same period.

​​​​​​​

• Comex Gold rose 2.7% for the week, its best in seven. Positive news flow supported the advance. The dovish tone by the Fed chairman and weak non-farm payroll data from last Friday increased the probability of a rate cut, boosting precious metals. Friday’s data indicated a weakening US labour market, with the unemployment rate rising to a two-and-a-half-year high of 4.1% and wage growth falling to a three-year low.

​​​​​​​

• Comex Silver surged 7% to clock its best jump since the 12% advance in mid-May. The white metal ended the week above the immediate resistance zone of $31, a positive sign. Silver prices were also supported by expectations that China will unveil concrete stimulus targets in coming month, as significant economic support is estimated to be necessity should Beijing achieve its 5% growth target this year.

​​​​​​​

​​​​​​​

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