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  • It’s a wrap: Market updates, news and insights for the week ending 22nd June

    Publish date: 22nd June, 2018


    News: Barclays Bank sees the Rupee at Rs 72/$ by the end of the year 2018

    Investment perspective:

    • A weak rupee is beneficial for sectors like IT and pharma companies as their products become more competitive in global markets.

    • However, rupee at 72/$ will make oil imports more expensive and that means we may get to see more inflation.


    News: OPEC to raise oil supply. It had cut oil supply by 1.8 million barrels per day since Jan 2017

    Investment perspective:

    • It means more oil will come into the market which can reduce the price of crude. Crude has already fallen from $80/bbl to $73/bbl.
    • India imports 75% of its daily crude oil needs and that is the reason the markets were up sharply on Friday.

    Related read: How crude oil prices caused ‘May Day’ in Indian midcaps


    News: India imposes import duties on key farm imports from the United States in retaliation to the 25% tariff imposed by the US on some metals

    Investment perspective:

    • India being a net importer should benefit by imposing these trade tariffs. The US has already gained $800 billion from such tariffs.

    • The risk is that if every country tries that then it could lead to a trade war and currency war with rupee falling further.

    Related read: US-China trade face off: Why should India be concerned?


    News: LIC may take a major stake in IDBI Bank, which has been making losses and had also reported gross NPAs above 25%

    Investment perspective:

    • That can be good news for IDBI bank shareholders and that explains why the stock was up in Friday’s trade.

    • However, the question is whether the money belonging to the insurance premium payers should be used for these buyouts?


    News: More than 100 stocks have touched new 52-week lows on the NSE

    Investment perspective:

    • This underlines that the pain in the mid-caps and the small caps has been much more acute this time around.

    • When more stocks are hitting 52-week lows, the A/D is normally negative and the market needs a bigger effort to move up.

    Related read: Check the top trending stocks of this week


    News: Stock futures of 45 companies will be shifting to compulsory delivery mode from the July contract onwards

    Investment perspective:

    • This new rule was brought by SEBI to curb speculation in stock futures. Currently, these are settled only in cash.

    • Traders can rush to cover short positions. Hence, where there are stock futures short, there could be a squeeze.


    News: ICICI Bank brings in Sandeep Bakshi as the interim CEO of ICICI Bank pending inquiry by the Srikrishna commission

    Investment perspective:

    • The final outcome can only be known once the report is out and the board takes a decision on the conflict of interest issue.

    • Immediately, the corporate governance worries have been taken care of. Bakshi is a ICICI group veteran and was heading the life insurance business.

    Related read: Why we continue to have a ‘Buy’ rating on ICICI Bank


    News: MPC minute hinting at few more rate hikes by the RBI in the coming months

    Investment perspective:

    • All members of the MPC have been worried about rising inflation and that means rates could go higher.

    • The decision can also be driven by how the US central bank (FED) plays its interest rates out there.

    Related read: RBI policy: 5 things to know about repo rate hike


    News: BJP withdraws support to the PDP government in the state of Jammu & Kashmir

    Investment perspective:

    • The current CM, Mehbooba Mufti has already resigned and now governor’s rule is likely to be imposed.

    • This may be an interesting development in the light of the general elections schedule next year.