In the fortnight ended 14th June 2019, major global markets gain in the middle of rate-cut expectations from the U.S. Federal Reserve (Fed) and upbeat economic data.

International Market

U.S. markets gained on optimism that U.S. Federal Reserve will cut interest rate in the near-term after a report showed bigger than expected decline in U.S. import and export prices in May 2019.

European markets too took positive cues from the rate-cut expectations, the European Central Bank (ECB) left its key interest rate unchanged and expects interest rates to remain at the present level longer.

Asian peers followed their global counterparts. China braved the trade war storm to post upbeat trade data for May 2019. Investors also welcomed the Chinese promise of increasing support for the economy.

Indian Market

Indian equity markets bucked the trend and fell in the fortnight as the country took U.S. head on and the Monetary Policy Committee lowered its economic growth estimates for FY20.

Banking and financial sector weakened during the fortnight period. The sector witnessed decline despite Monetary Policy Committee reducing repo rate by 25 bps.

The auto sector remained weak as sales continue to flounder and major carmakers have started to cut production. The IT sector may gain as, in future, companies might invest in avenues like cloud migration.

The rupee strengthened against the greenback during the period. Decline in crude oil prices and expectations of a rate-cut by the U.S Federal Reserve in 2019 boosted the domestic currency.

Source: MFI Explorer

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