Market wrap: Global cues, macro data, crude price lead to first weekly drop in five weeks

Market wrap: Global cues, macro data, crude price lead to first weekly drop in five weeks

Last updated: 18 Jun, 2021 | 01:59 pm

Market wrap: Global cues, macro data, crude price lead to first weekly drop in five weeks

The markets snapped a 4-week gaining streak as factors such as inflation data, volatile crude oil prices, and global cues from Fed Reserve Meet weighed. The week also saw 4 new IPOs, after a long break in the primary markets.

The Nifty started off the week with minor gains on Monday, as sentiments remained upbeat with decline in Covid-19 (lowest since March). The index continued its winning run on Tuesday, after biotech firm Novavax said that its vaccine was found to be 90.4% effective in clinical trials.

However, the stock market saw a modest correction on Wednesday, as firm crude oil prices and negative Asian stocks weighed. Investors were also booking profits, ahead of the US Fed’s Monetary Policy statement. Meanwhile, the CPI inflation came in at 6.3% on Jun-21, above the RBI’s upper tolerance band of 6%.

The index continued its decline on Thursday after the US Fed raised its inflation outlook. The Fed has also moved up the time frame on which it will next hike interest rates. On the final day of the week, Nifty erased all the intra-day losses and ended flat. The Nifty snapped its 4-week winning streak to register a fall of 0.73% for the last five sessions.

Top gainers and losers

  • Nifty Bank Slips for second straight week (down 1%) 
  • Except for FMCG & IT, all sectoral indices close lower in the week
  • 38 Nifty stocks give negative returns; Adani Ports, CIL, JSW, Tata Steel top losers
  • HUL, HDFC Life, Infosys, Tata Consumer among top Nifty gainers this week

Here is a quick recap of the market moving developments:

  • IPO euphoria returns: The week saw four interesting IPOs, after a long break in the primary markets. While IPOs of Shyam Metalics and Sona Comstar opened for subscription on 14th June, the IPOs of KIMS Hospitals and Dodla Dairy opened for subscription on 16th, Wednesday. Shyam Metalics got subscribed by a whopping 123 times, while Dodla Dairy got subscribed by 46 times. 
  • CPI inflation rises: CPI inflation rose to 6.30% in May-21, as compared to 4.23% in the month of April. This is the highest level in the last 6 months. This is also the first time since Nov-20 that retail inflation has come in outside RBI’s upper tolerance band of 6%.  The higher inflation month-on-month was primarily on the back of a substantial increase in food prices. Food inflation (CFPI) was 5.01% in May compared with 1.96% in April, official data showed.
  • Adani Group stocks roiled: Adani Group stocks took a beating in the week, after media reports said that three accounts of Foreign Portfolio Investors (FPI) holding of Rs 43,500 crore in Adani Group have been frozen by NSDL. These three groups are Albula Investment Fund, Cresta Fund, and APMS Investment Fund. However, the Adani Group refuted the allegations, and NSDL also reportedly denied the development. Despite the denials and clarifications, the stocks fell between 7 -23% in the week.
  • Oil prices near multi-year highs: Crude oil prices soared to new highs in the week, on the back of falling US crude inventories which limited the impact of a stronger US dollar. Brent crude oil futures dropped 12 cents, or 0.1%, to $74.27 on Friday. They had hit their highest level since April 2019 in the previous session. The unlocking of various economies, along with hopes of further recovery has boosted demands for crude oil.

Check out our other analysis on important market developments!

  • Why should you add international stocks to your portfolio? Adding international stocks to your portfolio can give you immense advantages such as diversification benefits, and additional currency return due to depreciation of the rupee. View analysis
  • RBI policy update: Repo rate, inflation, growth, liquidity and more:  The  RBI's Monetary Policy Committee (MPC) has kept the repo rate unchanged at 4% in its bi-monthly policy meeting held today. The reverse repo rate too stands unchanged at 3.35%. Repo rate is the rate at which the RBI lends to commercial banks, and reverse repo is the rate at which it borrows from them. View analysis
  • Shyam Metalics IPO: Shyam Metalics is set to raise up to Rs 909 crore via IPO which opens on 14th June, Monday. View analysis