Total GST collections for June 2021 rose to Rs 1.2 lakh crore, the highest so far in FYTD22, from Rs 928 billion in May 2021. Adjusted SGST showed significant improvement in June 2021 as it rose to Rs 696 billion from Rs 402 billion in May 2021. CGST collections also picked up to Rs 337 billion from Rs 283 billion. However, cess collections eased to Rs 66 billion versus Rs 89 billion in May 2021. In Q1FY22, total collections were at Rs 3.1 lakh crore versus Rs 2.4 lakh crore in Q1FY21 and Rs 3 lakh crore in the first quarter of 2020.

Manufacturing activity in Japan remained buoyant as PMI print rose to 53 in July 2021 from 52.4 in June 2021. This was led by the sixth successive increase in production volumes emanating from automotive and semiconductors. Even new orders rose at the sharpest pace in the past three months. However, supply chain disruption impacted input costs which rose at their fastest pace since Sep’08. Employment remained modest. Business confidence remained optimistic underpinned by hopes of successful vaccination.

China’s official manufacturing PMI eased to 50.4 in July 2021 from 50.9 in June 2021. The sub-index for production eased to 51 (51.9 on June 21) while the new orders index dropped to 50.9 (51.5 in June 2021). Within new orders, the export order index fell to 47.7 and the import order index was down to 49.4. Extreme weather (flood in Henan province) and bottlenecks at major ports impacted the activity in July 2021. Non-manufacturing PMI also eased in July 2021, to 53.3 from 53.5 in June 2021.

Markets

Bonds: Except for Japan and India (stable), global yields closed lower due to rising Covid-19 cases globally (0.7mn daily increase). US 10Y yield fell the most by 5bps (1.22 per cent) on account of dovish comments by the Fed. Crude prices rose by 0.4 per cent (US$ 76/bbl) on expectation of revival in demand. India’s new benchmark 10Y yield is trading at 6.19 per cent today.

Currency: Global currencies closed lower against the dollar. After falling for 4-straight sessions, DXY rose by 0.3 per cent awaiting the US jobs report. EUR fell by 0.1 per cent as Euro Area’s inflation rose more than expected on July 21. INR depreciated by 0.2 per cent on the back of higher oil prices. INR is trading higher today, while other Asian currencies are trading mixed.

Equity: Global indices ended lower as investors continued to monitor rising Covid-19 cases and corporate earnings. Amongst other indices, Nikkei (1.8 per cent) dropped the most followed by FTSE (0.7 per cent). Sensex (0.1 per cent) too ended in the red led by metals and banking stocks. However, it is trading higher today, in line with other Asian stocks.

[Based on inputs from Bank of Baroda]