Outcome of referendum on Brexit from the EU to decide near term trend
Macroeconomic data, outcome of referendum on Brexit from the European Union on 23 June 2016, progress of monsoon rains, trend in global markets, investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs), the movement of rupee against the dollar and crude oil price movement will dictate trend on the bourses in the near term.
Investors will closely watch the progress of monsoon rains. As per reports, according to the India Meteorological Department (IMD), from 1 June to 15 June 2016, the country has received overall 43.6 mm of rainfall as compared to normal level of 55.7 mm, an overall deficiency of 22%. IMD in its second stage forecast on 3 June 2016 had stuck to its preliminary forecast of above normal rains for the 2016 southwest monsoon season (June to September). Quantitatively, monsoon season rainfall for the country as a whole is likely to be 106% of the long period average (LPA) with a model error of plus/minus 4%, IMD had said.
Meanwhile, Mahanagar Gas is coming up with an initial public offer (IPO) of 2.46 crore shares through a 100% book building process. The IPO will open for subscription on Tuesday, 21 June 2016 and will close on Thursday, 23 June 2016. The price band for the issue has been fixed at Rs 380 to Rs 421. The IPO includes offer for sale of upto 1.23 crore shares by GAIL (India) and upto 1.23 crore shares by BG Asia Pacific Holdings PTE Ltd (BGAPH). The company is promoted by GAIL India and BGAPH, each of who holds 45% of the company's equity shares. Mahanagar Gas is one of the largest city gas distribution (CGD) companies in India.
On global front, the UK government holds a referendum on 23 June 2016 on whether the country should remain a member of the European Union (EU). The Organization for Economic Cooperation and Development (OECD) has warned that Britain's leaving the EU -- the so-called Brexit -- could send shocks through global financial markets. The OECD said on 1 June 2016 that a United Kingdom vote to leave the EU would trigger negative economic effects on the UK, other European countries and the rest of the world. Brexit would lead to economic uncertainty and hinder trade growth, with global effects being even stronger if the British withdrawal from the EU triggers volatility in financial markets, the OECD said. By 2030, post-Brexit UK GDP could be over 5% lower than if the country remained in the European Union, the OECD said.
Data on Nikkei Flash Japan Purchasing Manufacturing Index (PMI) for June 2016 is due on Thursday, 23 June 2016. Data on Markit Flash Composite PMIs for France, Germany and the Euro region for June are also due on 23 June 2016, indicating health of manufacturing activity in these regions.
In US, Federal Reserve Chairwoman Janet Yellen's semi-annual testimony before Senate Banking Committee, in Washington is scheduled on Tuesday, 21 June 2016. Data on existing home sales for May will be announced on Wednesday, 22 June 2016. Dallas Federal Reserve Bank President Robert Kaplan's speech in New York is scheduled on Thursday, 23 June 2016. The Markit flash Purchasing Managers' Manufacturing Index (PMIs) for June, indicating activity of the manufacturing sector for that month will be released on Thursday, 23 June 2016. Data on new home sales measuring the number of newly constructed homes with a committed sale during May 2016 is also scheduled for release on 23 June 2016.
Investors will closely watch the progress of monsoon rains. As per reports, according to the India Meteorological Department (IMD), from 1 June to 15 June 2016, the country has received overall 43.6 mm of rainfall as compared to normal level of 55.7 mm, an overall deficiency of 22%. IMD in its second stage forecast on 3 June 2016 had stuck to its preliminary forecast of above normal rains for the 2016 southwest monsoon season (June to September). Quantitatively, monsoon season rainfall for the country as a whole is likely to be 106% of the long period average (LPA) with a model error of plus/minus 4%, IMD had said.
Meanwhile, Mahanagar Gas is coming up with an initial public offer (IPO) of 2.46 crore shares through a 100% book building process. The IPO will open for subscription on Tuesday, 21 June 2016 and will close on Thursday, 23 June 2016. The price band for the issue has been fixed at Rs 380 to Rs 421. The IPO includes offer for sale of upto 1.23 crore shares by GAIL (India) and upto 1.23 crore shares by BG Asia Pacific Holdings PTE Ltd (BGAPH). The company is promoted by GAIL India and BGAPH, each of who holds 45% of the company's equity shares. Mahanagar Gas is one of the largest city gas distribution (CGD) companies in India.
On global front, the UK government holds a referendum on 23 June 2016 on whether the country should remain a member of the European Union (EU). The Organization for Economic Cooperation and Development (OECD) has warned that Britain's leaving the EU -- the so-called Brexit -- could send shocks through global financial markets. The OECD said on 1 June 2016 that a United Kingdom vote to leave the EU would trigger negative economic effects on the UK, other European countries and the rest of the world. Brexit would lead to economic uncertainty and hinder trade growth, with global effects being even stronger if the British withdrawal from the EU triggers volatility in financial markets, the OECD said. By 2030, post-Brexit UK GDP could be over 5% lower than if the country remained in the European Union, the OECD said.
Data on Nikkei Flash Japan Purchasing Manufacturing Index (PMI) for June 2016 is due on Thursday, 23 June 2016. Data on Markit Flash Composite PMIs for France, Germany and the Euro region for June are also due on 23 June 2016, indicating health of manufacturing activity in these regions.
In US, Federal Reserve Chairwoman Janet Yellen's semi-annual testimony before Senate Banking Committee, in Washington is scheduled on Tuesday, 21 June 2016. Data on existing home sales for May will be announced on Wednesday, 22 June 2016. Dallas Federal Reserve Bank President Robert Kaplan's speech in New York is scheduled on Thursday, 23 June 2016. The Markit flash Purchasing Managers' Manufacturing Index (PMIs) for June, indicating activity of the manufacturing sector for that month will be released on Thursday, 23 June 2016. Data on new home sales measuring the number of newly constructed homes with a committed sale during May 2016 is also scheduled for release on 23 June 2016.
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