Minor Correction In June - Good For Markets !
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.