The World This Week - 13th to 17th June, 2016

1. THE WORLD THIS WEEK
June 13– June 17, 2016

2. EQUITY VIEW

3. EQUITY VIEW
• The RBI governor Mr. Raghuram Rajan is not continuing the second term as The RBI Governor in a surprising turn
of events over the weekend. This news might come as surprise for market investor, impact of this we might see on
the market this week as nifty might correct 50-100 points.
• This is going to be an action packed week as UK is going under the referendum on 23rd June. The feedback from
most of the analysts in India and The British region about the result is 50-50. If the Britain leaves the EU as per the
referendum, we might see some kind of volatility in currency. We might see Euro trembling and cascading effect
on some of the emerging currencies. One thing is definite that the long term picture will not change too much.
Britain may have to reorganize all their investment.

4. EQUITY VIEW
• The market might remain range bound in this week with lower bias. Market might garner support around 7900 level
if Brexit does not happen, else market might find support lower 5%-7%. In order to avoid volatility one should know
that the long-term India story remains unchanged even if there is no Rajan. So particularly for this week avoid to
any take position in market and wait for all the global events to pass.

5. NEWS

6. DOMESTIC MACRO
• The wholesale price index (WPI) rose in May by 0.79 per cent, up from 0.34 per cent in April, when it
showed the first monthly rise after 17 months of contraction. The official data showed the latest push was
primarily due to a rise in food inflation, up 7.88 per cent, compared to 4.23 per cent in April. Also, prices
of manufactured products rose for a third month, up 0.91 per cent in May.
• India has imposed a 20 percent tax on sugar exports to keep a lid on domestic prices, according to the
government , a move that is likely to boost global prices of the sweetener. According to the Food minister
Ram Vilas Paswan the government plans to introduce a 25 percent tax on sugar exports to maintain local
supplies.

7. GLOBAL MACRO
• The heads of the three main political institutions of the European Union will meet in
Brussels next Friday, June 24, when the result of Britain's referendum on whether to leave
the bloc will be known. European Commission President Jean-Claude Juncker, the EU
chief executive, would host a meeting with European Council President Donald Tusk, who
chairs summits of EU leaders, and European Parliament President Martin Schulz.
• A UK exit from the European Union could mean the UK misses out on up to 5.6% of GDP
growth by 2019, the IMF has warned. Brexit is the "largest near-term risk" to the UK
economy, the IMF said in its annual UK economic outlook. It added that the net economic
effects would probably be "negative and substantial". But economists for the Brexit
campaign said the consensus that a UK exit would be bad for the economy was "based
on flawed EU-centric models".
EURO

8. GLOBAL MACRO
• U.S. housing starts slipped in May as the construction of multi-family
housing units dropped, but further gains in building permits signaled a
rebound that would support economic growth in the second quarter.
• Britain's departure from the European Union could send shock waves across
the global economy and threaten more than a trillion dollars in investment
and trade with the United States. International policymakers are ramping up
their warnings of the dangers of a British exit.
UNITED STATES

9. GLOBAL MACRO
• China's May retail sales shows steady consumer demand but growth is
certainly moderating driven by the drag on jewelry and luxury goods while
clothing and apparel are performing within expectations. More important,
online retail sales continue to outperform, bringing penetration higher to
12.7%.
• China's macroeconomic data in May added further to growth concerns.
While expansion in industrial production and retail sales steadied, that for
fixed asset investment was sharply lower. Industrial production grew +6% y/y
in May, in line with expectations and April's reading, while retail sales
expanded +10% y/y, compared with consensus and April's +10.1% growth.
CHINA

10. INDICES
Date Sensex Midcap Auto Bankex CD CG FMCG HC IT Metals O&G Power Realty Teck
13/06/16 26,397 11,320 19,123 20,163 11,382 14,533 8,137 14,926 11,270 8,194 9,402 1,917 1,419 6,068
14/06/16 26,396 11,340 19,144 20,245 11,429 14,545 8,162 15,002 11,223 8,233 9,353 1,922 1,431 6,046
15/06/16 26,726 11,407 19,304 20,525 11,440 14,874 8,239 15,025 11,325 8,298 9,460 1,961 1,436 6,102
16/06/16 26,525 11,365 19,127 20,242 11,436 14,722 8,199 14,962 11,300 8,332 9,431 1,951 1,426 6,070
17/06/16 26,626 11,359 19,233 20,244 11,503 14,657 8,258 14,844 11,323 8,352 9,421 1,955 1,476 6,090
0.87% 0.35% 0.58% 0.40% 1.07% 0.86% 1.49% -0.55% 0.47% 1.93% 0.21% 1.98% 4.03% 0.36%

11. COMMODITIES AND CURRENCY
Date USD GBP EURO YEN Crude (Rs. per BBL) Gold (Rs. Per 10gms)
13/06/2016 67.07 95.12 75.51 63.32 3,278 29,496
14/06/2016 67.15 95.10 75.75 63.46 3,279 29,892
15/06/2016 67.16 95.11 75.29 63.19 3,256 29,873
16/06/2016 67.21 95.24 75.82 64.55 3,224 30,598
17/06/2016 67.17 95.55 75.46 64.39 3,106 29,939
-0.14% -0.46% 0.07% -1.69% 5.25% -1.50%

12. DEBT
Tenor Gilt Yield in % (Friday) Change in bps (Week)
1-Year 7.00 0
2-Year 7.08 0
5-Year 7.40 0
10-Year 7.50 1

13. KIASL TEAM
Jharna Agarwal
Head- Advisory
Jharna.agrawal@Karvy.com
Nupur Gupta
Lead Advisor
Nupur.gupta@Karvy.com

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