This week in a nutshell (June 28th to July 2nd)

This week in a nutshell (June 28th to July 2nd)

Technical Talks

NIFTY opened the week on 28th June at 15,915 and closed on 2nd July at 15,725. It made a weekly loss of 1%. The 20DMA of 15,752 might as a resistance to the index and the 50DMA of 15,301 might act as a support. This suggests a net downside of 2.5% from hereon.

Weekly highlights

  • On 28th June 21, India’s finance minister Ms. Nirmala Sitharam addressed a press conference announcing economic relief measures. Rs 11.1 lakh mn of loan guarantee scheme was announced for Covid affected sectors. Few measures were also announced with a view to reviewing the tourism sector.
  • The GOI removed import restrictions on refined palm oil till December 21. India is the largest importer of vegetable oils with nearly 15mn tonne annually. The palm oil comprises 9mn tonnes out of the total 15mn tonne. The domestic edible oil prices have doubled in FY21. We believe this move might lead to better availability of the commodity in the domestic market which will further lead to lower prices.
  • The seasonally-adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) declined to 48.1 in June 21 from 50.8 in May. The index fell below the critical 50.0 mark for the first time since July 20. A level above 50 denotes expansion while a score below 50 denotes contraction. The manufacturing sector activities contracted as a rise in coronavirus cases led to strict containment measures which adversely impacted demand.
  •   The Indian Meteorological Department (IMD) forecasted a normal monsoon rainfall over the country as a whole in July 21. However, prevailing conditions suggest that no favorable conditions may develop for further advance of southwest monsoon in Rajasthan, Western UP, Haryana, Chandigarh, Delhi, and Punjab. The availability of good monsoon leads to better agricultural output, which in turn further leads to a boost in the agriculture sector.
  •  The foreign institutional investors (FII) sold Rs 54,168 mn worth of Indian equity shares last week. Domestic institutional investors (DII) undertook Rs 64,174mn of net buying during this week.

Things to watch out for this week

  • The 1QFY22 result season will start next week, with TCS reporting results on July 8, 2021.
  • Auto OEM’s announced June monthly volume data, with a rebound over the previous month’s volume across the board. Further easing of state specific restrictions might drive the share price of auto OEM’s.

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