Highlights from the markets during the month
Indian markets remained flat during the month. The month got a boost after the RBI’s monetary policy committee unanimously voted to interest rate hike while maintaining a neutral stance. Sectorally, buying interest was seen in healthcare, metal, oil & gas, Information Technology, and automobile counters. This added to overall gain. However, owing to downbeat in the domestic services activity data and weakening rupee against the dollar, gains over the later week were constrained. Mid-month, the market rally continued with the institutional investors showing renewed buying interest in the beaten-down stocks that corrected sharply in the calendar year 2018. The rally remained controlled ahead of the Organization of the Petroleum Exporting Countries (OPEC) meeting to decide the roadmap for oil production output. Last week the market started to correct sharply due to the decision pertaining to OPEC. Other key highlights of the month are:
- Trade tension is mounting between the United States and China after Pr Donald Trump threatened to impose a 10% tariff on $200 billion of Chinese goods
- India’s Nikkei manufacturing Purchasing Managers Index (PMI) fell from 51.6 in April to 51.2 in May, while services PMI fell to 49.6 in May from April’s 51.4
- According to a UN report, foreign direct investment in India decreased to $40 billion in 2017 from $44 billion in 2016
- The government approved Rs 8,500 crore bailout package for the sugar industry
- The Securities and Exchange Board of India (SEBI) doubled the investment limit for angel funds in venture capital firms to Rs 10 crore that is aimed at providing a fillip to early stage start-ups
- Prime Minister Modi announced that the government had doubled agriculture budget during 2014-2019 with an aim to double farm-level income by 2022
- SEBI tweaked takeover and buyback norms and rationalized regulation for Foreign Portfolio Investors (FPIs) and mutual funds
- SEBI shorted time for the announcement of price band for initial public offerings (IPOs) to two days from five days
Things to watch out for in March 2018 and its impact
- Developments with respect to Goods and Services Tax (GST) upon completion of one-year of its implementation
- Developments with respect to trade tension between China and the United States
- Data for US inflation, US job openings and India inflation, export-import and IIP growth are expected in July second week which is likely to impact the market mood
