Please click here for Monthly Equity & Debt Outlook Presentation – July 2020
· Nifty (up +7.5%) finally decoupled from the US markets (S&P up only +1.8%) and outperformed during June.
· Despite the headwinds, Indian markets continued to rise due to high foreign inflows (+$2.5bn, highest monthly inflows in 2020) and marginal domestic institutional buying (+$0.3bn). In sectorial trends, all sectors were up v/s May with Realty and Banks at the top.
· After the border clash with China led to 20 Indian casualties, the Indian forces deployed along the 3500-km border were given “full freedom” to counter any aggressive Chinese behavior . Later both countries, however, agreed on a “step-wise mutual disengagement” from areas of friction in Ladakh averting further escalation.
· IMF projected a deeper 4.5% contraction (vs -1.9% in April) for India in FY21 citing a longer lockdown period and slower than anticipated recovery. FY22 growth forecasted at +6% vs +7.4% earlier.
· Moody’s downgraded India’s rating to Baa3, last level of investment grade rating, while keeping outlook as negative. whereas Fitch reaffirmed BBB- rating but changed the outlook to negative. S&P retained BBB- rating with a stable outlook.
· The gross GST revenue collected in the month of June, 2020 is Rs 90,917 crore.
· The India Manufacturing Purchasing Managers Index (PMI) edged up to 47.2 in June, compared with 30.8 in May.
· May merchandise trade deficit narrowed to a decade low $3.2bn on weak crude and faster recovery in exports vs imports.
· RBI’s FX reserves hit a record $500bn on portfolio inflows and lower trade deficit.