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Market wrap: Positive global cues, declining covid cases push index to fresh high

Market wrap: Positive global cues, declining covid cases push index to fresh high

Last updated: 12 Jun, 2021 | 06:15 am

Market wrap: Positive global cues, declining covid cases push index to fresh high

The markets saw another interesting week, with factors such as declining Covid-19 cases across the country, momentum in vaccination drive, favorable global cues such as declining treasury yields boosting investor sentiments.  

The Nifty started off the week with good gains on Monday as investors were upbeat due to declining new Covid-19 cases (lowest in 2 months). Over the next two days, the index declined due to negative global cues, and profit booking. 

On Tuesday, the World Bank cut India's FY22 growth forecast from 10.3% to 8.3% citing the impact of the second wave of Covid. The sentiments were also impacted due to a fall in global stocks ahead of important inflation data in the US.

Positive global cues and the progress in vaccination drive drove the index to new highs in the last two days of the week. Record-high stocks in the U.S and falling Treasury yields is leading investors to look for more risk and potentially better returns in emerging markets such as India. The Nifty ended the week with gains of over 1%.

Top gainers and losers

  • Nifty Media was the biggest gainer in the week, gaining 7.09%.
  • Sensex, Nifty & Midcap Index extend their winning streak to 4 weeks in a row
  • Nifty Bank falls after 3-week gaining streak, down 0.7%
  •  IT, Media & Pharma among top gaining indices in the week. Nifty IT jumps over 4%
  • PowerGrid, NTPC, Coal India, Tech Mahindra, HCL Tech top Nifty gainers in the week
  • HDFC, Bajaj Finserv, L&T, Bajaj Auto top Nifty losers in the week

Here is a quick recap of the market moving developments:

  • GST revenues recover: GST collections came in at Rs 1.02 lakh crore, making it the eighth straight month of collections above the Rs 1 lakh crore mark. The collections have been 65% higher than the GST revenues in the same month in the previous year.
  • Free vaccines for all above 18: On Monday, PM Modi announced that the central government has taken back control of vaccine procurement and will supply Covid-19 vaccines to states free of cost. From June-21, all citizens above 18 years of age will be given vaccines for free. Of the total vaccine availability, 75% will be procured by the Centre and the remaining 25% will continue to be available for private hospitals.
  • Oil prices rise: Oil prices rose for the third straight week on the back of improving demand. The International Energy Agency has raised concerns that the market will need extra supply next year. Oil futures in New York rose 1.9% this week, extending its rally to the highest settlement since October 2018. The IEA said that OPEC and its allies will need to lift output to keep the market adequately supplied.
  • IIP rises due to lower base: India's factory output rose 134% in April, on the back of a very low base in April last year. Due to lockdown, industrial activity came to a standstill on April- 20. In April 2020, the Index of Industrial Production (IIP) had contracted 55.5%. On IIP shrank 13% in April-21 against a 12.3% growth in March-21, reflecting the hit to production activity in April.

Gold prices fall

Gold prices moved lower amid gains in equities. Moderation in cases have reduced appeal for the safe-haven asset class of late.

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