Highlights from the markets during the month
Indian equities advanced during the month with the S&P BSE Sensex and Nifty 50 rose nearly 3% each. The market was buoyed with optimism with respect to the trade talks between the US and China. Sectorally some of the counters that performed well include capital goods, power, healthcare, and metal. In addition, investors’ cheered the fall in the domestic inflation rate.
While the market continued to move north, some degree of correction was witnessed due to weakening rupee and the worries about the currency crisis in Turkey. Some of the other developments during the month are detailed as under:
- India’s exports rose 14.32% on-year in July while imports rose 28.8% resulting in widening the deficit.
- Retail inflation fell to a nine-month low of 4.17% in July on account of slowdown in prices of vegetables and fruits.
- The Parliament passed a bill to amend the Insolvency and Bankruptcy Code 2016. This is aimed at allowing home buyers to be treated as financial creditors and seeking to set up a special dispensation for small sector enterprises.
- President Ram Nath Kovind gave his assent to the Insolvency and Bankruptcy Code (Second Amendment) Act 2018.
- The MoF rejected Rs 30,000 crore fund-infusion proposal for Air India in the absence of a clear turnaround plan.
- The government unveiled a draft scheme for extending the UDAN scheme to international circuits which could boost the Airlines sector.
- The government asked ONGC to list its overseas unit ONGC Videsh
- The RBI instructed rating agencies to scan companies’ bank account details in assessing their ability to repay loans.
- SEBI is considering the proposal of allowing mutual funds to use covered calls as part of their equity strategy.
- SEBI to come with guidelines with respect to close-ended funds.
- Global equities ended in green amid optimism over trade meeting between the US and China although the talks ended with no progress. Also, crude oil prices advanced following the bigger-than-expected decline in US crude oil inventories.
Things to watch out for in August 2018 and its impact
- Developments with respect to trade tension between China and the United States
- Developments with respect to US, Iran, and OPEC countries pertaining to crude oil
- Developments with respect to currency tension in Turkey
- Crude oil price trajectory and Rupee trajectory with respect to US Dollar