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Weekly wrap-up: Market updates, news and insights for the week ending 05th July, 2019
Publish date: 05th July, 2019
NEWS: BUDGET LEADS NIFTY AND SENSEX SHARPLY DOWN FOR THE WEEK
Perspective:
- The Union Budget tried to reach out to NBFCs, banks, start-ups and the common man.
- The proposal to increase the public shareholding to 25% as well as higher surcharge affected stocks of companies where promoter stake is high.
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News: BRENT CRUDE FAILS TO HOLD HIGHER LEVELS ON GROWTH CONCERNS
Perspective:
- After touching a high of $67/bbl during the week, Brent could not consolidate on the advantages of the likely rapprochement between the US and China
- Oil weakness in the second half of the week was largely due to global growth slowdown concerns, especially in the light of falling bond yields and inverted yield curve in the US.
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NEWS: ECONOMIC SURVEY PEGS FISCAL 2019-20 GDP GROWTH AT 7%
Perspective:
- The Economic Survey eased growth estimates to a 5-year low but expects a revival in consumption and investments to drive growth in the coming years.
- The Survey also hinted at dovish interest rates on the back of falling core inflation pushing India’s real GDP to an ambitious $5 trillion by 2025 and $10 trillion by year 2030.
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NEWS: BANKERS MAY NOW GET LESSER POWERS IN NCLT RESOLUTIONS
Perspective:
- While approving the Arcelor acquisition of Essar Steel, the NCLAT has cut down the powers of the Committee of Creditors (COC) on the distribution of proceeds
- The acquirer will be permitted to work out the break-up of payouts to financial and operational creditors with the COC not having any say in the distribution
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NEWS: US BENCHMARK 10-YEAR BOND YIELD LEADS INDIAN YIELDS LOWER
Perspective:
- Indian bond yields fell below the 6.75% mark after the US benchmark yields fell to a 4-year low of 1.94%. Last year Indian yields had touched 8.3% while US yields were closer to 3%.
- The sharply lower yields in the US was led by dovish signals from the Fed with strong hopes of a rate cut in July Fed meet. Indian policy had also turned distinctly dovish.
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NEWS: LARSEN & TOUBRO ACQUIRES OVER 60% STAKE IN MINDTREE LTD.
Perspective:
- L&T virtually took majority control of Mindtree after its stake reached 60.06% subsequent to Nalanda Capital of Singapore agreeing to sell its 10% stake in Mindtree to L&T
- L&T has been looking at a hostile takeover of Mindtree to expand its current technology offerings to include Mindtree’s strong digital franchise.
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NEWS: CONSUMER STAPLES SIGNAL ANOTHER TOUGH QUARTER TO EXCHANGES
Perspective:
- Among the FMCG companies, Marico and Godrej Consumer Products took the lead to inform the exchanges about another likely tepid quarter in terms of sales revenues
- The FMCG companies have informed the exchanges that the liquidity crunch combined with the delayed monsoons were expected to hurt rural demand in the June quarter
Related reads
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NEWS: SKYMET EXPECTS HEAVY RAINS IN JULY TO COMPENSATE FOR DRY JUNE
Perspective:
- Private sector SKYMET stated that 2019 saw the worst rainfall since 2015 with the rainfall deficit standing at 33% on an all-India basis. July is expected to compensate this deficit.
- However, the overall production of the Kharif crop is largely dependent on the timely sowing which happens in June. That may have been impacted due to delayed monsoons.
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By: Sandhya Kannan, Head – Content
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