𝗦𝗮𝗺𝗮𝘀𝘁𝗵𝗶𝘁𝗶 𝗔𝗱𝘃𝗶𝘀𝗼𝗿’𝘀 𝗪𝗲𝗲𝗸𝗹𝘆 𝗠𝗮𝗿𝗸𝗲𝘁 𝗧𝗿𝗮𝗰𝗸𝗲𝗿 – 𝗙𝗼𝗿 𝘁𝗵𝗲 𝘄𝗲𝗲𝗸 𝗲𝗻𝗱𝗲𝗱 *June 6,* 𝟮𝟬𝟮𝟱 *1. Indian Equities – Mid- & Small-caps steal the show* * *Headline indices were subdued,* with the Nifty 50 and Sensex ending slightly in the red. This masked a much stronger undertone in the broader market, where investor risk appetite clearly picked up. * *Midcaps and smallcaps outperformed sharply* , with gains of over 2% for the week. These segments benefitted from strong earnings momentum, renewed interest from domestic institutional investors, and improving sentiment toward India's capex cycle. * *The RBI’s surprise 50 bps rate cu* t was the week's most important event. By bringing the repo rate down to 5.50%, the central bank signalled a decisive shift to supporting growth. The rationale cited was a sharp decline in headline inflation to 3.2%, coupled with subdued private investment activity. * *Markets cheered the move* , especially sectors sensitive to interest rates—such as financials, real estate, and discretionary consumption. The Nifty closed the week above the psychological 25,000 mark, despite a muted start. *2.Factors & Styles – Alpha roars back* * *High-beta and alpha-driven strategies bounced back strongly*, suggesting that investors are now willing to take on more risk. The Nifty Alpha 50 index gained 3.5% for the week and is up over 11% in the past month—reversing prior underperformance. * *Momentum strategies also performed well* , supported by a sharp rally in recently trending mid- and smallcap names. Investors appeared more comfortable leaning into past winners in an environment where macro conditions are turning more supportive. * *Defensive strategies—like low-volatility and quality indices—lagged,* as markets rotated away from safety. This shift is typical in early easing cycles, where investors begin to favour higher-growth and higher-risk names. *3. Fixed Income – Bull-steepening continues* * *Bond yields fell across the curve* , with the 10-year government bond yield easing to 6.22% and short-term yields declining even more sharply. The 6-month T-bill yield, for example, dropped to 5.41%. * *The yield curve is steepening,* reflecting abundant liquidity at the short end and expectations of further easing by the RBI. This pattern—known as a bull steepening—is favourable for bondholders, especially those positioned in medium-duration segments. * *Investor interest remains high* in 3–5 year government securities, which offer a sweet spot between yield and duration risk. With inflation under control and the central bank turning dovish, bonds may continue to deliver steady returns. *4. Global Backdrop – Central-bank divergence widens* * *U.S. equities posted modest gains* , with the S&P 500 and Nasdaq 100 both inching higher. However, the tone from the Federal Reserve remained cautious. Sticky inflation and higher import tariffs continue to challenge the case for near-term rate cuts. * *Bond yields in the U.S. edged up,* with the 10-year Treasury yield rising to 4.37%. This stands in contrast to India’s falling yield trend, widening the interest rate differential between the two economies. * *European equities performed better,* led by the DAX, as investor expectations firmed around a potential rate cut by the ECB in the coming quarter. Growth data in the Eurozone showed some early signs of bottoming. * *Asian markets were mixed* , but Hong Kong stood out. The Hang Seng Index rose 2.4%, helped by continued policy support from Chinese authorities aimed at stabilising the real estate market and improving consumer confidence. *5. Commodities & FX – Gold regains shine; oil under pressure* * *Gold prices in India rose sharply* , gaining 3.6% over the week and taking year-to-date gains past 27%. Investors continue to seek refuge in gold amid geopolitical risks and diverging global policy narratives. * *Oil prices drifted lower,* with Brent crude falling 1.6% to below $65/barrel. Sentiment weakened on concerns about excess U.S. fuel inventories and speculation that OPEC+ could raise output to protect market share, despite slowing demand. * *The rupee depreciated slightly* , ending the week at ₹85.72 against the dollar. The weakness was primarily driven by the growing policy gap between the Fed (on hold) and the RBI (now easing). However, healthy equity inflows helped cap further downside. 𝗨𝗻𝘁𝗶𝗹 𝗻𝗲𝘅𝘁 𝘁𝗶𝗺𝗲, 👋 𝗯𝘆𝗲! 🌟