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Below is the Views On Gold Monthly View By Chirag Mehta, Sr. Fund Manager, Alternative Investments, Quantum Mutual Fund
The headline indices-Sensex and Nifty ended lower on Wednesday amid US-China trade tensions. The Nifty opened lower and kept falling till it made an intraday low sometime around 1320 Hrs. Later a feeble recovery attempt failed and the Nifty closed 0.50% or 59.4 points lower at 11906.2.
The small and midcap indices fell more. Advance decline ratio was negative. Market volumes were below normal - around Rs.26000 cr on the NSE. Auto, Banks, Capital Goods, Telecom and Realty indices fell the most while Metals and FMCG gained.
IndiaVIX fell 2.54% to 14.12, the lowest close since Dec 20, 2018. This reflects lower need for downside protection or upside participation which essentially means that market participants do not expect markets to move majorly on either side in the near term.
Oil prices fell nearly 2% on Wednesday, weighed down by a weaker demand outlook and a rise in U.S. crude inventories despite growing expectations of ongoing OPEC-led supply cuts.
Most Southeast Asian stock markets fell on Wednesday, with Malaysia leading declines, as escalating tensions on the U.S.-China trade front and concerns of slowing growth in China curbed risk sentiment. Broader Asian markets were also tepid with investor sentiment soured by deepening dents in the Sino-U.S. trade negotiations and China growth worries.
China’s producer price index (PPI) rose 0.6% in May year-on-year, slowing from its fastest pace in four months in April, the National Bureau of Statistics (NBS) data showed on Wednesday. The consumer price index (CPI) increased 2.7% year-on-year in May, its fastest pace since February 2018, and in line with analyst expectations.
Shares of Tata Steel closed 2.7% higher despite the European Commission formally blocking the proposed European steel joint venture with ThyssenKrupp AG. The EU antitrust regulators prohibited the merger saying the deal would push up the steel prices and discourage competition.
Shares of Dewan Housing Finance Corporation closed 3.4% higher after the company paid Rs 961 crore interest on non-convertible debentures (NCDs).
Indiabulls Housing Finance shares closed 7.9% lower after the company moved the Supreme Court seeking urgent listing of a plea filed against it in which it has been alleged that the company misappropriated Rs 98,000 crore of public money. The court postponed the hearing to July.
Yes Bank shares dropped more than 3 percent after two directors decided to resign from their post in the current week.
Technically, with the Nifty correcting from the recent lower high of 12000 mark, there is a possibility of further weakness in the coming sessions. The next lower levels to be watched at 11,820-800 in the next few sessions. Immediate resistance to be watched at 11965.
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