OVERVIEW OF MARKET
Nifty recorded sharp gains of ~4% during the month led by measures announced by the Finance Ministry to boost the economy. Among the measures were a reduction in corporate tax rate(excluding cess & surcharge) from 30% to 22% and a concessional rate of tax at 15% for domestic manufacturing companies. On the International front, a temporary surge in crude price to ~$72 was caused due to drone attacks on Saudi Arabia’s oil plants. Crude eventually closed at ~$61 levels after Saudi Aramco announced that they would ramp up production to pre-strike levels by the end of the month. Further, evolving events around US-China trade talks and policy rate cut by the US Federal Reserve eased global sentiment. Among the sectors, Energy, Infra and Auto outperformed while Pharma and IT underperformed the Nifty during the month. FIIs turned net buyers to the tune of about Rs 70bn, while domestic mutual funds bought Rs 105bn of equity during the month.
The Index of Industrial Production reported a growth of 4.3% in July compared to a growth of 1.1% in June. CPI and WPI inflation remained stable at 3.2% and 1.1% respectively for the month of August.
The Bond yields rose during the month of September 2019. The 10 year benchmark G-Sec (7.26% GOI 2029) closed 14 bps higher at 6.70% against 6.56% last month.