Equity Market Review

Indian markets were weak in month of June as geopolitical tensions and slow progress of monsoon weighed on the sentiment. Nifty and Sensex ended the month of June with (-1.1%) and (-0.8%) returns.

Global equities witnessed a strong rally in June as geopolitical tension between US-Iran eased after initial flair up and progress of US-China trade talks. All global indices ended on positive note in month of June. Worldwide Dow Jones was the top performer with (+7.2%), followed by Hang Seng (+6.1%), Euro Stoxx (+5.9%) and FTSE100 (+3.7%) returns. Nikkei was worst performer with (+3.3%) returns.

MSCI Emerging market outperformed, Indian domestic market with (+5.7%) returns. MSCI AWI Index ended with (+5.6%) returns. BSE Mid cap and BSE Small cap index both underperformed its larger peers. BSE Mid cap and BSE Small cap index ended the month of June with (-1.9%) and (-4.2%) returns.

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Debt Market Review

The 10-year benchmark G-Sec yield closed at 6.70% as on 5th July 2019, down by 65 bps M-o-M from its previous close of 7.35% as on 31st May 2019 while that on the short-term 1-year T-Bill ended 42 bps lower M-o-M at 6.13%.

The 3-year AAA bond yield ended 07 bps lower M-o-M at 7.33%, The 5-year AAA bond yield ended 03 bps lower M-o-M at 7.48%, The 10-year AAA bond yield ended 34 bps lower M-o-M at 7.68%, while the short-term 1-year AAA bond yield ended 30 bps down at 7.20%.

In 3yr segment, the spreads of AAA bonds over G-Sec increased by 17 bps M-o-M to 78bps, whereas in 5yr it increased 21 bps M-o-M to 75bps. In 10yr segment the spread remained the same M-o-M at 85 bps.

Within the short term segment, yield on 3-month commercial paper (CP) was down 50 bps M-o-M to 6.60% while 1-year CP yield was down 50 bps M-o-M at 7.5%.

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