Finsight 1st June to 5th June 2020

Indian Equity Markets ended on a positive note for the week. Nifty was up 6.0% and Sensex by 5.7% respectively.

Weekly Capsule

– Q4 GDP numbers show buoyancy

The GDP data for the quarter ended on 31st March was published on Friday by the NSO. The GDP grew by 3.1% even with lockdown restrictions taking away half of the March month and taking the FY 20 tally to 4.2%. The data can be disheartening if looked at in isolation, but compared to developed countries like Japan and Italy which saw a contraction in GDP for the same period.

– FDI inflows surge by 14% in FY20, at record level of $50 billion.

On the back of government’s untiring efforts to make India as the new hub to attract foreign investments, the FY20 witnessed a sharp surge in the FDI excluding reinvested earnings by 14% at $50 billion. Including the reinvested earnings, the FDI figure stood at $74 billion. Singapore lead the charge with investments worth $14.7 billion with Mauritius coming second with $8.2 billion in investments.

– FIIs back in action.

The last week witnessed foreign institutional investors emerge as net buyers by a figure ~2 thousand crore more than Domestic Investors. The FII infusion was the key driver for the markets in last week which witnessed a sharp rise by ~6%. The involvement of FIIs also shows that Indian arkets are again becoming attractive for foreign investors even when the country is under the most stringent lockdown since past 2 months.

Nifty at glance

Mutual Fund News:

Gopal Agarwal quits DSP Mutual Fund: Veteran fund manager Gopal Agarwal announced his exit from DSP Mutual Fund. The fund manager was managing marquee funds like the DSP Top 100 equity, DSP focus fund and equity investments in hybrid funds like the DSP Equity Savings.

Outlook:

Going ahead in the upcoming week markets will take cues from the ending of lockdown. If the lockdown extends obviously there is going to be increased pressure on financial system and hence impact on the overall stock market reaction. Given that markets are forward looking, all the sector specific ifs and buts have already been factored in the current prices.

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