Week in review: Sensex, Nifty rise amid positive cues from global peers

Domestic equities gained significantly during a week characterised by extreme volatility, reflecting favourable global stocks. The Nifty finished just below 15,700. Four of the five trading sessions this week saw advances for indices.

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Global stock markets rose as commodities prices fell. Lower commodity prices are likely to benefit the manufacturing sector by lowering input costs. Additionally, it’ll aid in reducing overall inflation.

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The Sensex rose 1,367.56 points, or 2.66%, to 52,727.98 in the week ending Friday, June 24, 2022. The Nifty 50 index rose 405.75 points, or 2.65%, to 15,699.25. The BSE Mid-Cap index gained 2.38% to 21,803.16. The BSE Small-Cap index rose 1.61% to 24,521.93. 

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How equity benchmarks performed on a weekly basis:

Monday, June 20, 2022 

The major market indices finished the day with modest gains, snapping a six-day losing trend. The S&P BSE Sensex advanced 237.42 points, or 0.46%, to 51,597.84. The Nifty 50 gained 56.65 points, or 0.37%, to 15,350.15.

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Tuesday, June 21, 2022 

Domestic stock indices finished the day with solid gains, mirroring bullish global trends. The S&P BSE Sensex increased 934.23 points, or 1.81%, to 52,532.07. The Nifty 50 index increased by 288.65 points, or 1.88%, to 15,638.80. 

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Wednesday, June 22, 2022 

The benchmark indices finished with significant losses due to negative global cues. The S&P BSE Sensex, the barometer index, fell 709.54 points, or 1.35%, to 51,822.53. The Nifty 50 index fell 225.50 points, or 1.44%, to 15,413..30. 

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Thursday, June 23, 2022 

The major equity indices finished with big gains. Due to the NSE’s weekly index option expiry, trading was erratic. The S&P BSE Sensex increased 443.19 points, or 0.86%, to 52,265.72. The Nifty 50 index increased by 143.35 points, or 0.93%, to 15,556.65.

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Friday, June 24, 2022 

Indices finished the day with robust gains, increasing for the second day in a row. Global stock markets rose as commodities prices fell. The S&P BSE Sensex increased 462.26 points, or 0.88%, to 52,727.98. The Nifty 50 index increased by 142.60 points, or 0.92%, to 15,699.25.

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What happened in the Global markets:

India

The India Meteorological Department (IMD) said on Thursday, June 23, 2022, that the Southwest Monsoon is expected to reach the whole country by 6 July 2022, rather than the usual date of 8 July 2022.

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In Q4 2021-22, India’s current account deficit (CAD) fell to $13.4 billion (1.5% of GDP) from $22.2 billion (2.6% of GDP) in Q3 2021-22. The sequential fall in CAD in Q4 2021-22 was mostly due to a reduction in the trade deficit and a lower net outflow of primary income. In the financial report, net foreign direct investment (FDI) was $13.8 billion in the fourth quarter of 2020-21. Net foreign portfolio investment (FPI) decreased by $15.2 billion, primarily from the equity market.

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Net external commercial borrowings (ECBs) to India were $3.3 billion in Q4 2021-22, down from $6.1 billion the previous year. There was a $16.0 billion outflow in foreign exchange reserves (on a BoP basis), compared to a $3.4 billion accretion in Q4 2020-21.

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India’s direct tax collections for the fiscal year 2022-23 ended on June 16, 2022, with net collections of Rs 3,39,225 crore, up 45% over the previous year’s similar period of Rs 2,33,651 crore.

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Advance tax collections for the first quarter of FY 2022-23 stood at Rs 1,01,017 crore, up from Rs 75,783 crore in the corresponding quarter, representing a more than 33% increase.

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China

On Monday, China maintained its benchmark lending rates for corporate and household loans, as projected. The one-year loan prime rate (LPR) remained at 3.70%, while the five-year LPR remained at 4.45%.

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Japan

Core consumer prices in Japan increased 2.1% year on year in May, in line with forecasts. This is higher than the Bank of Japan’s inflation objective of 2%.

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After maintaining its ultra-low interest rates last week, the Bank of Japan issued the minutes of its April monetary policy meeting on Wednesday. According to the minutes, several members believed that underlying inflation, as measured by the CPI excluding items such as energy, remained quite modest. According to the minutes, the majority of members of the BOJ policy board expect short-term and long-term interest rates to continue at current levels or lower.

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South Korea

South Korea’s central bank said on Tuesday that it expects inflation to be higher than previously forecasted and that it would thoroughly examine debt repayment difficulties to determine whether a half-percentage point interest rate rise in July is reasonable.

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Australia

Australia’s central bank predicted that inflation will peak by the year’s end. In a speech, Reserve Bank of Australia governor Philip Lowe projected that inflation in Australia would peak at roughly 7% by the end of the year as pandemic-related supply chain disruptions were resolved.

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United States

Investors examined comments made by US Federal Reserve Chair Jerome Powell about the central bank’s goal of slowing inflation. Powell told Congress on Wednesday that the Fed is “strongly committed” to lowering inflation, which has reached a 40-year high in the United States. He also stated that a recession is a “possibility,” which has weighed on the market mood.

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The Labor Department said on Thursday that weekly jobless claims in the United States declined 2,000 to a seasonally adjusted 229,000 for the week ended June 18, indicating that the labour market remained tight.

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In May, factory production in the United States unexpectedly decreased. The Fed said that manufacturing output fell 0.1% last month, the first drop since January, after rising 0.8% in April.