Markets last week
The NIFTY inched up 1.5% last week, marking consistent gains over the previous few weeks. Over the last few months, we’ve seen mutual fund flows nosedive across both fixed income and equity. June was a big blow to equity — mutual funds contributed ~INR 10,000 crores lesser compared to last year. The markets were holding up with massive equity inflows from foreign institutions during both May and June — June alone saw over ~INR 22,000 crores more compared to last year. Initial data in July points to the same trend across mutual funds. However, we are watching out if foreign investor action provides the necessary support.
Layoffs and salary cuts continue
Unemployment is close to its levels before the crisis, driven by the informal sector — no gains for the salaried
Managing costs is a crucial challenge across 60% of CEOs, according to a recent survey
No reversal in demand
A few isolated reports point to a small pickup in consumer durables owing to work from home requirements — they are still down 19% June compared to last year
More downgrades in the pipeline
35% of credit ratings on Indian companies either have a negative outlook or are on credit watch with negative implications, according to S&P Global
The government gets a boost
GST collections in June were down only 9%, compared to last year
COVID concerns remain
There are delays in the rollout of the Fed’s lending programme
Australia went into lockdown again the previous week
Allocation changes
There are no changes from last week.
Among other things, there are reports of insurance agencies witnessing a more-than-expected number of health claims related to COVID. This trend could materially increase prices across insurers. Please choose a floater policy, if you don’t have one yet.
