Mi­nor Cor­rec­tion In June - Good For Mar­kets !

Dalal Street Investment Journal - - MARKET WATCH -

In­dian mar­kets showed signs of fa­tigue at record highs, in line with their global peers. Bench­mark in­dex BSE Sen­sex was down by 0.28 per cent in the past two weeks, while Nifty slipped 0.44 per cent dur­ing the same pe­riod. Dow Jones and S&P 500 slid 0.23 per cent and 0.99 per cent, re­spec­tively. Ger­man mar­kets slipped the most in the past cou­ple of weeks with DAX clos­ing down by 3.20 per cent. Other ma­jor Euro­pean mar­kets, namely, CAC 40 and FTSE 100 were down by 2.16 per cent and 1.15 per cent, re­spec­tively.

Asian mar­kets showed rel­a­tive out­per­for­mance as com­pared to their global peers with Nikkie man­ag­ing to stay flat, slip­ping only by 0.05 per cent and Hand Seng mov­ing down by 0.54 per cent. The FIIS turned net sell­ers to the tune of ₹-2828.43 crore, while the DIIS were net buy­ers to the tune of ₹4294.32 crore.

The crude oil prices have jumped from $46 per barrel to al­most $49 per barrel in the past one week. How­ever, the pres­sure on crude oil prices is ex­pected to re­main and does not seem to be af­fect­ing the mood of the eq­uity mar­kets. Gold prices are seen soften­ing even as USD is show­ing some strength. Ow­ing to the GST im­ple­men­ta­tion, dif­fer­ent sec­tors in In­dia re­acted to the big­gest tax re­form. FMCG was the top per­form­ing in­dex, with the BSE FMCG in­dex climb­ing 5.60 per cent in the past two weeks. BSE Metal in­dex was the only other sec­toral in­dex that put up a pos­i­tive per­for­mance, gain­ing 2.29 per cent in the past two weeks.

BSE Re­alty in­dex, which was top per­form­ing in­dex over the last one year, shed gains by 0.48 per cent in last cou­ple of weeks. BSE Auto and BSE Bankex dragged the broader mar­kets by slid­ing 1.87 per cent each over the last 15 days. The global eq­uity mar­kets are gush with liq­uid­ity, and the same is seen in the healthy par­tic­i­pa­tion of in­vestors in the IPO mar­kets glob­ally. Lo­cally in In­dian mar­kets, the past week saw CDSL list­ing on the bourses with a hefty pre­mium. The share got listed with a whop­ping 80 per cent pre­mium to its is­sue price of ₹149 per share. The RBI was the newsmaker of the past two weeks with the cen­tral bank com­ing out with fi­nan­cial sta­bil­ity re­port which stated that the ad­vances by NBFCS in­creased at a faster rate than the banks and that the ag­gre­gate bal­ance sheet of the NBFC sec­tor ex­panded by 14.5 per cent dur­ing 2016-17. How­ever, NBFCS’ net profit was down by 2.9 per cent.

With the daily in­dex charts of ma­jor bench­mark in­dices form­ing a ‘lower top, lower bot­tom’ for­ma­tion, chances are that we may see some con­sol­i­da­tion go­ing for­ward and that ac­tion may come from ei­ther the mid-cap or small-cap space in the com­ing few months.

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