Markets this month July 2018

Highlights from the markets during the month

Indian markets rose by nearly 6% during the month. The equity market, though started on a positive note, was primarily affected after the opposition parties tabled a no-confidence motion against the government in the Lok Sabha.

This resulted in some degree of selling pressure that was intensified particularly for metal firms amid weakness in the global commodity prices. Selling pressure was also seen in other sectors such as realty, healthcare, and automobile. Having said that the loss was prevented by the end of the third week with oil marketing companies providing the support on the back of fall in crude oil prices. The losses were also chipped off after the government wins the trust vote with a much higher margin than anticipated.

During the last week, the market continued with its cheer and was major supported by large cap counters such as Maruti Suzuki, Reliance Industries, HDFC twins and the likes. The bulls took the center stage with Sensex advancing new highs every day. The rally was also supported by the optimism surrounding improvement in Q1 results and also due to the reduction in GST rates announced by the GST council by as much as 10% on a wide range of products.

Other key highlights of the month are:

  • Wholesale prices rose by 5.77% in June 2018 from 4.43% in May 2018
  • The International Monetary Fund (IMF) projected a stronger growth for India at 7.3% in 2018 and 7.5% in 2019 increasing from 6.7% in 2017
  • The Finance Ministry approved a capital infusion of Rs 11,336 crore in five weak public sector banks
  • The government decided to drop the Financial Resolution and Deposit Insurance (FRDI) Bill
  • The Reserve Bank of India gave an in-principle nod to LIC to acquire a majority stake in IDBI Bank
  • Global equity market posted mixed performance which was region specific and remained volatile
  • Prices of crude oil declined on account of possible talks to release from global crude reserves along with a slowdown in global economic growth, and the potential for US waivers on Iran oil sanctions
  • Federal Reserve Chief Jerome Powell indicated an upbeat view of the domestic economy. He also indicated that the central bank will not move too quickly in changing the monetary policy

Things to watch out for in March 2018 and its impact

  • Monetary policy by the Reserve Bank of India, Monthly Automobile Sales Data in addition to Nikkei Manufacturing PMI Data and Nikkei Services PMI Data will be released in the first week of August which could have a bearing on the market
  • 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

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