Ways2Capital Reviews : Key Events That Could Impact The Stock Market In June Series

Domestic Event:

1. RBI Rate Decision meeting:
Reserve Bank of India's Monetary Policy Committee began its bi-monthly meeting to chalk out future course of interest rates on June 06. India’s rupee so far this year, has weakened 4.5%. Minutes of RBI’s April meeting suggest two of the six MPC members have already decided to vote in favor of a 25 basis points hike. The two rate hikes by RBI between now and December is expected as the yield of 10-year government bonds gained for the fifth consecutive session after a finance ministry official flagged the possibility of an increase in interest rates to curb inflation. Will it happen on this Wednesday or do we have to wait for the August meeting? In EM basket, Turkey raised interest rates last week by a massive 300 basis points.

2. IMD Forecast:
The India Meteorological Department (IMD), which will issue its second forecast for this year’s monsoon in early June.

Along with the updated forecast, separate forecasts for the monthly (July and August) rainfall over the country as a whole and seasonal (June-September) rainfall over various geographical regions of India will also be issued. A 'good'/poor' monsoon will have affect inflation in the economy and there is a direct co-relation the economy with rains. If the monsoon predictions are accurate, the agricultural sector is set for a boost. Moreover, sectors like fast moving consumer goods, auto, fertilizers, and cement are likely to get a boost. Agriculture accounts for nearly 15 percent of the nation's GDP (gross domestic product).

International Events:

1.Trump and North Korean leader Meeting:
Trump’s scheduled June 12 summit in Singapore with North Korean leader Kim -- comes amid renewed uncertainty about Kim’s intentions. North Korea, whose nuclear ambitions have been a source of tension, has made advances in missile technology in recent years but Trump has sworn not to allow it to develop nuclear missiles and wants North Korea to “denuclearise,”.

2. Fed Meeting on 12-13 June:
The global markets are concerned about rate hikes by Fed, the meeting will be watched closely. The US inflation data on 12th June will be closely watched because higher inflation would mean rate hikes by Fed.

3.OPEC Meeting:
The Organization of the Petroleum Exporting Countries (OPEC) will meet on June 22 to review its oil production policy. The cartel is widely expected to continue with its supply-cutting deal until at least the end of 2018 as top oil exporter Saudi Arabia would be happy to see crude rise above $80 or even $100 a barrel.

4. Global Trade Tension:
Due to escalating trade tensions” between US trading partners such as China and the EU, the World Trade Organisation (WTO) forecast that global trade volumes to expand by 4.4 percent in 2018 after growing 4.7 percent last year in the best performance seen in six years and in 2019, the growth in global trade is expected to moderate to 4%, which is “below the average rate of 4.8% since 1990 but still firmly above the post-crisis (after 2008) average of 3%.

5. Political Risks in Europe:
Italy,s economy, the euro zone's third-largest with government debt burden of €2.3tn (£2tn; $2.7tn the second-highest debt level in the EU, after Greece's), has been without a government since March because no political group can form a majority. The two big winners of an election - Five Star and The League - attempted to join forces but abandoned efforts after President Sergio Matarella vetoed their choice of finance minister. The president appointed a new prime minister, Carlo Cottarelli, and the attempt to form a government collapsed, and new elections are now likely. So, any update on Italy’s political crisis will be watched closely.
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About Bhoomi Desai