Tata Mutual Fund

Market Commentary

  • Request a callback
    Please fill the details below & we will get in touch with you
    Fields with * marks are mandatory
    Name *

    Mobile No *

    Landline No -

    City *

    Thank You!

    We will get back to you soon.

Equity Market

Equity Commentary - June 2019

Indian equity markets were down for the month of June 2019 with the Sensex down by (0.8%), and the Nifty by (1.1%). The broader market; the BSE Midcap & the BSE 200 were also down with a performance of (1.9%) and (1.2%) respectively. In terms of sectors; Banks, Capital Goods, Consumer Durables, Metals, Realty and Power were the major outperformers whilst all other sectors underperformed the BSE Sensex. FIIs were net buyers in June, with net inflows to the tune of ~USD 0.23 bn. Net equity buying in June by domestic MFs in the market were ~USD 0.9 bn.

Index Name As on As on As on Return in %
28-Jun-19 31-May-19
29-Jun-18 1 Month 1 Year

S&P BSE Sensex 

39,395 

39,714 

35,423 

-0.8%

11.2%

S&P BSE IT Sector 

15,654

 15,782

13,920

-0.8%

12.5%

S&P BSE FMCG Sector 

11,362 

11,518 

11,213 

-1.4%

1.3%

S&P BSE Capital Goods 

19,855 

19,939 

17,488 

-0.4%

13.5%

S&P BSE Consumer Durables 

26,128 

24,700 

20,207 

5.8%

29.3%

S&P BSE Healthcare 

12,889 

13,305 

14,004 

-3.1%

-8.0% 

S&P BSE 200 

4,927  

4,987  

4,608 

-1.2% 

6.9% 

S&P BSE BANKEX 

34,972

35,264 

29,251 

-0.8% 

19.6% 

S&P BSE Auto 

17,904  

18,446 

23,838 

 -2.9% 

-24.9% 

S&P BSE Metal 

11,107

10,756 

13,064 

3.3% 

-15.0% 

S&P BSE Oil&Gas 

14,803

15,734 

13,660 

-5.9% 

8.4% 

S&P BSE Mid-Cap 

14,808

15,096 

15,451 

-1.9% 

-4.2% 

S&P BSE Small-Cap 

14,239 

14,867 

16,032 

-4.2% 

-11.2% 

S&P BSE Realty Index 

2,201 

2,201 

2,073 

0.0% 

6.2% 

S&P BSE Power 

2,094 

2,010 

1,947

4.2% 

7.6% 

 

 

  

 

  



Index Name As on As on As on Return in %
30-Jun-19 31-May-19
30-Jun-18  1 Month 1 Year

Nifty 50 

11,789 

11,923

10,714 

-1.1% 

10.0% 

Nifty IT 

15,936 

16,161 

13,990 

-1.4% 

13.9% 

Nifty Bank 

31,105 

31,375 

26,364

-0.9% 

18.0% 

Nifty Energy 

16,047 

16,560 

13,333 

-3.1% 

20.4%

Nifty Pharma

8,065 

8,455 

9,173 

-4.6% 

-12.1% 

Nifty Midcap 100 

17,654 

17,959 

18,181 

-1.7%

-2.9% 

Nifty Infrastructure 

3,369 

3,339 

3,126 

0.9% 

7.8% 

Nifty Realty 

285 

284 

272 

0.3% 

4.9% 

Nifty FMCG 

29,546

29,850 

28,966 

-1.0%

2.0% 

Nifty Smallcap 100 

6,200 

6,548 

7,178 

-5.3% 

-13.6% 

Nifty Consumption 

4,756 

4,809 

5,031

-1.1% 

-5.5% 

Nifty Auto 

7,928 

8,176 

10,709 

-3.0% 

-26.0% 

Nifty Metal 

2,980 

2,900 

3,440 

2.8%

-13.4% 

Nifty 200 

6,099 

6,178 

5,713 

-1.3%

 6.8% 

Nifty Commodities 

3,636 

3,685 

3,507 

-1.3% 

3.7% 

Nifty Financial Services 

13,556 

13,480 

11,007 

0.6% 

23.2% 


The Macro Picture

  June 2019 May 2019
WPI 2.45% (May 2019) 3.07% (April 2019)
CPI 3.05% (May 2019) 2.92% (April 2019)
Index of Industrial Production 3.43% (April 2019) -0.07% (March 2019)
Repo rate 5.75% (as on June 30, 2019) 6.0% (as on May 31, 2019)  
Marginal Standing Facility Rate 6.00% (as on June 30, 2019)   6.25% (as on May 31, 2019) 
Source: RBI, MOSPI

Inflation

India’s Wholesale Price Inflation (WPI) Index came in at 2.45% YoY in May 2019 as compared to 3.07% for March 2019 on account of stable food inflation.
The Consumer Price Inflation (CPI) index came at 3.05% YoY in May as compared to 2.92% in the previous month on benign food prices. 

Growth

India’s Real Gross Domestic Product (GDP) grew at 5.8% YoY in Q4 FY19 reducing from the pace of 6.6% in Q3FY19. Private consumption grew 7.2% YoY for the quarter. The gross fixed capital formation growth fell sharply to (~3.6% YoY).

Other macro developments (fiscal deficit and household savings)

India’s fiscal deficit for FY19 was at 3.39% against the earlier budgeted 3.3%, a marginal increase – a decent performance by the government given the headwinds it faced on lower GST tax collections. The budgeted number for FY20 also stands at 3.4% including the new income supplement scheme for marginal farmers to the tune of approximately US$10bn. 

Market Outlook

Modi government has been reelected with an absolute majority for the BJP. The new cabinet ministers have been assigned their roles. Among the key changes from the past 5 years have been – Mr Amit Shah looking after Home Ministry. Mr Rajnath Singh being assigned the Defense Ministry. Mrs Nirmala Sitharaman is the new Finance Minister and Mr S Jaishankar the new External Affairs Minister. The role of the new finance minster would be critical given the slowdown in growth in economy led by tight liquidity and the NBFC/HFC sector ALM (Asset Liability Mismatch) issues.

Farm loan waivers/handouts are increasingly becoming popular instruments among all political parties constraining future government capital expenditure and crowding out potential private investments. FY20 budget has more of the same with the government promising Rs 6000 per annum income support scheme for marginal farmers totaling to approximately US$10 bn annual spend.

Near term strong 15%+ CAGR earnings growth by Nifty/Sensex companies along with reasonable valuations make us optimistic of our performance going forward.

In terms of our portfolio positioning, we remain focused on companies with faster earnings growth visibility. We continue to remain overweight on private sector banks on account of their ability to gain market share and maintain relatively higher growth rates.

Long-term structural drivers like demographic advantage, low household debt, limited penetration across different consumer categories, increased potential for financial savings and urbanization makes India a compelling equity story from medium to long term perspective.

We believe investors would be well advised to invest with medium to long term perspective and systematically increase exposure to Indian equity markets.


Designed & Developed by Idealake

Email a friendX

Fields with* marks are mandatory

Name* Email*

Name Email

Name Email

Name Email

Name Email

Sender Name*

Sender Email*

Message