Domestic Markets closed flat; Sensex ends 21 points up & Nifty settled at 15,683

After reporting steep losses in intraday, domestic equity benchmarks bounced back in late trade and ended almost flat on Friday, June 18, 2021. In the intraday trend, the indices slumped over one per cent today but made a sharp V-shaped recovery to close almost flat.

The S&P BSE Sensex gained 21.12 points or 0.04 per cent to close at 52,344.45. The Nifty 50 index fell 8.05 points or 0.05 per cent and settled at 15,683.35. The Nifty Bank index also lost 47.40 points or 0.14 per cent to end at 34,558.

However, a deeper correction was seen in the broader market at the BSE, where the BSE MidCap closed 0.70 per cent lower and BSE SmallCap fell 0.89 per cent.

Sellers outnumbered buyers. On the BSE, 1214 shares rose and 1999 shares fell. On the Nifty 50 index on the NSE, 22 shares advanced and 28 shares declined. The top five gainers on Nifty 50 are Adani Ports (up 7.15 per cent), Bajaj Auto (up 3.04 per cent), Hindustan Unilever (up 3 per cent), Bharti Airtel (up 2.25 per cent) and Grasim (up 1.98 per cent). The top five losers are ONGC (down 3.48 per cent), Coal India (down 3.38 per cent), JSW Steel (down 3.30 per cent), NTPC (down 3.15 per cent) and UPL (down 2.92 per cent).

COVID-19 Update

Total COVID-19 confirmed cases worldwide were at 17,74,38,001 with 38,42,377 deaths. India reported 7,98,656 active cases of COVID-19 infection and 3,83,490 deaths while 2,85,80,647 patients have been discharged, data showed.

India's Foreign Exchange Reserve

Reserve Bank of India has said that the foreign exchange reserves of the country reached an all-time high of US$ 605.0 billion on June 4, 2021. In the last one year, the country's foreign exchange reserve rose by US$ 103 Billion.

RBI says, India is the 5th largest reserve holding country in the world, the 12th largest foreign holder of US treasury securities and the 10th largest in terms of gold reserves. RBI estimated that, In terms of projected imports for 2021-22, the current level of reserves provides cover for less than 15 months. At present Switzerland's reserves are sufficient for import upto 39 months; Japan's upto 22 months; Russia's reserves upto 20 months and China's reserves are sufficient for import upto 16 months.

In the foreign exchange market, the Indian rupee appreciated against the US dollar in May 2021 and gained further in June. In terms of the 40-currency real effective exchange rate index, the Indian Rupee appreciated by 2.0 per cent in May 2021 over its level a month ago.

Economy

On the data front, May's UK retail sales fell 1.4 per cent month on month, official statistics revealed on Friday. The German Producer Price Index (PPI) rose 1.5 per cent month on month in May. On an annual basis, the PPI was 7.2 per cent against a projection of 6.4 per cent. The Bank of Japan on Friday announced its decision to hold steady on monetary policy as well as an extension of the duration of its pandemic relief program. The number of Americans applying for unemployment benefits rose last week for the first time since April despite widespread evidence that the economy and the job market are rebounding steadily from the pandemic recession.

The Reserve Bank of Australia will begin raising its key interest rate in early 2023 as the key metrics set by policymakers for the economy will be met by then, a chief economist of a bank said. His call comes a day after a spectacular jobs report showed unemployment fell to 5.1 per cent in May, back to pre-pandemic levels, and the economy added more than 100,000 positions. It comes a week after a major banking group predicted rate hikes would begin in the second half of 2023. The think tank expects the RBA to increase the current 0.1 per cent cash rate by 15 basis points in the first quarter of 2023; 25 basis points in the second and a further 25 basis points in the final three months of that year.

The economist reckons the jobless rate will fall to 4 per cent by next June, a level he considers full employment, and "drift down" through the second half of 2022 to reach 3.8 per cent by year's end. RBA Governor Philip Lowe has said the economy can probably handle unemployment in the low 4s or high 3s, suggesting he sees the maximum level similarly. The economist said he does not believe wage growth will have to exceed 3 per cent as a condition for the initial rate increase.