After a relief rally in the previous week, benchmark indices failed to carry forward the momentum this week. However, glimpses of positive developments were visible in the energy, media, metal, and PSU bank sectors. It was the second consecutive week where the Nifty managed to close above the 11,000 psychological level. Further, Bank Nifty stayed afloat the 28,000 mark two weeks in a row. The NBFC space was also in action after the government operationalized the partial guarantee scheme for stressed NBFCs and HFCs. This move is expected to allow PSU banks to purchase assets from these firms, thus providing them liquidity support.
In terms of macro-economic data, retail inflation eased marginally to 3.15% in July from 3.18% in June. Inflation remained below RBI's 4% for the 12th straight month, despite recent interest rate cuts. Further, wholesale inflation hit a 25-month low in July. WPI stood at 1.08% in July slowing sharply from 2.02% in June.
Exports growth turned positive and rose by 2.25% in the month of July, while trade deficit narrowed to a 4-month low of $13.43bn. Exports increased to $26.33bn in July vs. $25.75bn yoy.
Meanwhile, the rupee further lost ground and weakened against the US Dollar during the week. The currency fell towards the 71.50 mark amid rising crude oil prices.
Globally, US President Donald Trump said that US and Chinese negotiators were holding “productive” trade talks and expected the two nations to meet in September despite imposing tariffs on over $125bn worth of Chinese imports effective September 1.