Market outlook - Broader market to outperform the benchmark - ICICI Securities

India's oil output fell 6% to 2.5 MMT in June mainly due to lower output from privately operated fields. Natural gas output declined 12% to 2.3 BCM in June due to lower offtake. ONGC's oil & gas output was at 1.7 MMT, down 1.1% YoY and 1.8 BCM, down 9.4% YoY.

As per FADA data, industry retail volumes fell 42% YoY to 9.8 lakh units in June 2020 (2-W down 40.9%, PV down 38.3%, 3-W down 75.4%, CV down 83.8%, tractors up 10.9%). The body estimated 15-35% YoY volume decline for full year FY21E except for the tractor segment, which is expected to post positive growth.

As per media sources, the government is mulling privatising more than half of its state-run PSU banks to keep only five PSBs, going forward. As part of this plan, the government plans to sell stakes in Bank of India, Central Bank of India, Indian Overseas Bank, Uco Bank, Bank of Maharashtra, Punjab & Sind Bank. Also, the government has clarified it would disclose the full plan under privatisation policy currently being formulated.

As per media sources, RBI may allow banks to extend moratorium to certain stressed sectors like aviation, automobiles and hospitality beyond August 31, 2020 in a move to provide additional support to these sectors amid Covid.

According to media sources, consumer electronics companies are planning to ramp up their festive production to a level of last year amid pent up demand in refrigerators, washing machines, microwave ovens, televisions and grooming products.

Brent Crude prices closed higher at US$ 43.8/barrel as compared to previous week's closing price of US$ 43.8/barrel. Gold prices ended higher at $ 1891/ounce as compared to previous week's closing price of $1811/ounce. Bond yields ended broadly flattish at 5.82% as compared to previous week's closing price of 5.81%.

International Markets:

US Markets: US markets ended sharply lower tracking soft corporate results and disappointing unemployment data prints. The number of US citizens filing new claims for unemployment benefits continued to remain near the record highs. Initial claims for state unemployment benefits came at a seasonally adjusted 1.46 million for the week ended July 18, 2020 vs 1.31 million cases in the prior week.

European Markets: The European markets closed lower amid weak rising Covid-19 fears as well as the sharp escalations of disputed between USA and China. Eurozone's composite output index rose to a 25-month high of 54.8 as against economist estimates of 51.1.

Important data releases in next week:

US: Goods Trade Balance (June), Crude Oil Inventories

Japan: Capital Spending YoY, Retail Sales YoY (June)

China: Chinese Composite PMI, Manufacturing PMI (July)

Europe: Unemployment Rate (June), CPI YoY (July)

Upcoming Results Next Week

Marico, Bharat Electronics, United Spirits, Havells India, Tech Mahindra, Kotak Mahindra Bank, Nestle, Castrol, Orient Cement, Colgate, Bharti Airtel, Maruti Suzuki, Dabur, HDFC Ltd, SBI, Sun Pharma

Source : Equity Bulls

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