News You Can Use of 02 February 2024

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NEWS U CAN USE

February 02, 2024

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The Week that was…

Jan to 02

Feb

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Indian Economy

• Government data showed that India’s fiscal deficit for the period from Apr to Dec of FY24

stood at Rs. 9.82 lakh crore or 55.0% of budget estimates of the current fiscal. India’s fiscal

deficit stood at 59.8% of the budget estimate in the corresponding period of the previous

fiscal year. Total expenditure stood at Rs. 30.54 lakh crore or 67.8% of the budget

estimate as compared to 71.4% of the budget estimate in the corresponding period of the

previous fiscal year.

• According to the government data, the combined Index of Eight Core Industries increased

by 3.8% in Dec 2023 as compared to 8.3% in Dec 2022. The production of all Eight Core

Industries recorded positive growth in Dec 2023 over the corresponding month of last

year except crude oil. Coal witnessed the maximum growth at 10.6% in Dec 2023 followed

by Natural Gas with 6.6% growth.

• India's Goods and Services Tax (GST) revenue reached Rs. 1,72,129 crore in Jan 2024,

indicating a remarkable 10.4% YoY growth. Over the course of a 10-month period of FY24,

GST collections increased by 11.6% YoY to Rs. 16.69 lakh crore.

• The Manufacturing Purchasing Managers' Index climbed to four-month high to 56.5 in Jan

2024 compared to 54.9 in Dec 2023 as the health of manufacturing sector improved

substantially on the back of fast growth in new orders and production.

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Domestic Equity Market Indices

Indices

02-Feb-24 1 Week Return YTD Return

S&P BSE Sensex

72,085.63 1.96% -0.21%

Nifty 50

21,853.80 2.35% 0.56%

S&P BSE Mid

-Cap 38,928.11 3.13% 5.67%

S&P BSE Small

-Cap 45,849.80 3.35% 7.44%

Source: Refinitiv

Values as on Feb 02, 2024

• Domestic equity markets rose during

the week after witnessing a fall in the

previous week as key benchmark

indices S&P BSE Sensex and Nifty 50

rose 1.96% and 2.35% respectively. The

rally in the market was broad-based as

the mid-cap segment and the small-cap

segment also closed the week in green.

• Domestic equity markets rose during

the week following the U.S. Federal

Reserve’s decision to keep the interest

rate unchanged that caused ease in U.S.

Treasury yields along with bolstered

expectations of potential rate cuts by

the U.S. central bank. In the meanwhile,

the key benchmark indices reached a

new high following the interim budget,

presented in Lok Sabha on Feb 1, 2024,

which was cheered by the market

participants that outlined plans to

narrow the fiscal deficit in FY25.

Ratios

S&P BSE

Sensex

Nifty 50

S&P BSE

Mid Cap

S&P BSE

Small Cap

P/E

24.49 22.51 27.57 33.23

P/B

3.64 3.83 3.57 3.53

Dividend Yield

1.12 1.22 0.92 0.64

Source: NSE, BSE

Values as on Feb 02, 2024

Indian Equity Market

NSE Advance/Decline Ratio

Date

Advances Declines Advance/Decline Ratio

29-Jan-24 1,480 1,060 1.40

30-Jan-24 1,206 1,277 0.94

31-Jan-24 1,654 843 1.96

01-Feb-24 1,088 1,423 0.76

02-Feb-24 1,336 1,211 1.10

Source: NSE

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Sectoral Indices

Indices

Last Returns (in %)

Closing 1-Wk 1-Mth

S&P BSE Auto

44,328.49 4.02% 6.58%

S&P BSE Bankex

51,975.08 2.42% -3.25%

S&P BSE CD

50,050.43 -0.40% -0.46%

S&P BSE CG

56,072.20 -1.46% 2.11%

S&P BSE FMCG

19,898.63 -0.15% -3.22%

S&P BSE HC

33,785.65 2.45% 4.77%

S&P BSE IT

38,045.10 2.27% 6.29%

S&P BSE Metal

27,275.50 4.47% 0.29%

S&P BSE Oil & Gas

27,005.37 9.47% 16.03%

Source:BSE

Values as on Feb 02, 2024

• On the BSE sectoral front, S&P BSE Oil & Gas

increased 9.47% on fuel supply concerns in the

aftermath of a missile attack on a Trafigura-

operated fuel tanker in the Red Sea.

• S&P BSE PSU rose 8.23% as a result of higher

capital expenditures in the FY25 interim budget

as PSU companies are among the primary

beneficiaries of government capex initiatives.

Indian Derivatives Market Review

• Nifty Feb 2024 Futures stood at 21,951.40, a premium of 97.60 points above the spot

closing of 21,853.80.

• The total turnover on NSE’s Futures and Options segment for the week stood at Rs.

1986.04 lakh crore as against Rs. 1499.04 lakh crore for the week to Jan 25.

• The Put-Call ratio stood at 0.95 compared with the previous week’s close of 0.89.

• The Nifty Put-Call ratio stood at 1.02 compared with the previous week’s close of 0.81.

Indian Equity Market (contd.)

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6.90

7.00

7.10

7.20

7.30

29-Jan 30-Jan 31-Jan 1-Feb 2-Feb

Yield in %

10 -Yr Benchmark Bond ( % )

Source: CCIL

Debt Indicators

(%)

Current

Value

1-Wk

Ago

1-Mth

Ago

6-Mth

Ago

Call Rate

6.56 6.77 6.77 6.34

91 Day T-Bill

7.02 7.03 6.93 6.74

05.74% 2026, (5 Yr GOI)

7.19 7.04 7.08 7.12

07.18% 2033, (10 Yr GOI)

7.06 7.18 7.21 7.15

Source: Refinitiv Values as on Feb 02, 2024

• Bond yields fell following the fiscally

responsible union budget which

positively surprised the market

participants with lower-than-expected

fiscal deficit and gross borrowing targets

for FY25. Gains were extended due to

drop in U.S. Treasury yields which fell

below 4%.

• Yield on the 10-year benchmark paper

(7.18% GS 2033) fell by 12 bps to close at

7.06% from the previous week’s close of

7.18%.

• Data from Reserve Bank of India showed

that India's foreign exchange reserves

increased to $616.73 billion for the week

ended Jan 26, 2024 compared with

$616.14 billion a week earlier.

Domestic Debt Market

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-20

-15

-10

-5

6.60

6.80

7.00

7.20

7.40

3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs

India Yield Curve Shift (%) (W-o-W)

Change in bps 02-Feb-24 25-Jan-24

Yield in %

Change in bps

Source: Refinitiv

Maturity

G-Sec Yield

(%)

Corporate Yield

(%)

Spread

bps

1 Year 7.11 7.92 81

3 Year 7.11 7.63 52

5 Year 7.09 7.6 51

10 Year 7.17 7.62 45

Source: Refinitiv

Values as on Feb 02, 2024

• Yields on gilt fell up to 17 bps across the maturities.

• Corporate bond yields fell between 5 to 9 bps

across the curve.

• Difference in spread between AAA corporate bond

and gilt expanded up to 8 bps across the segments,

barring 2 to 5 year papers that contracted up to 7

bps.

Domestic Debt Market (Spread Analysis)

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• The Economic Advisory Council to the PM in its working paper, urged the necessity of

regulating artificial intelligence (AI) using a complex adaptive system (CAS) approach. This

would entail erecting barriers and divisions, requiring manual "overrides" and "authorization

chokepoints," requiring audits for accountability and transparency, defining liability

guidelines, and establishing a specialized regulator for the industry.

• According to the PFRDA circular dated Jan 12 ,2024, partial withdrawal has been allowed up

to 25% of the subscriber’s overall contributions for motives for example, advanced

education, marriage, private house purchase, and medical expenses w.e.f. Feb 1, 2024.

• According to the interim union budget of 2024, fiscal deficit target for FY25 has been set at

5.1% of the GDP and the government aimed to reduce it below 4.5% by FY26, while fiscal

deficit target for FY24 revised downwards to 5.8% of the GDP.

• The Union government will provide Rs. 75,000 crore as interest-free loan for fifty years to

assist state reforms in achieving the goal of ‘Viksit Bharat’. India is to become a developed

country by 2047, according to government vision.

• The government has hiked allocation towards its flagship Production-Linked Incentive (PLI)

scheme for FY25 to Rs. 6,200 crore, up 33% from FY24's budgeted estimate of Rs. 4,645

crore. The PLI scheme, which currently covers 14 sectors, attracted investments of over Rs

1.03 lakh crore and generated employment for over 6.78 lakh individuals.

Regulatory Updates in India

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• IRDAI has not changed the existing commission structure of agents and intermediaries in

its news expense of management (EoM) guidelines. Insurance companies can keep

providing a commission structure within the EoM. For instance, a life insurer may choose to

pay their agents or intermediaries 100% of the first-year premium as commission if a life

insurer charges 100% of the first-year premium as EoM.

• According to a gazette notification by IRDAI, insurance companies including life, non-life

and standalone health insurers must develop a board-approved policy for directly sourced

policies that would have a lower premium if a policy is sourced directly from a

policyholder. The new regulations will be in force for three years, starting on Apr 1, 2024.

Regulatory Updates in India (contd..)

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• According to the Labor Department, U.S. non-farm payroll employment spiked by 353,000

jobs in Jan 2024 compared to economist estimates for an increase of about 180,000 jobs.

• According to the Labor Department, U.S. initial jobless claims rose to 224,000 in the week

ended Jan 27th, 2024, an increase of 9,000 from the previous week's revised level of

215,000.

• The U.S. Federal Reserve on Jan 31, 2024 announced that it has once again decided to

leave interest rates unchanged. The Fed said it has decided to maintain the target range

for the federal funds rate at 5.25 to 5.50% in support of its dual goals of maximum

employment and inflation at the rate of 2% over the longer run. The central bank also

described economic growth as solid while noting job gains have moderated since early last

year but remain strong.

• The Bank of England left its benchmark rate unchanged for the fourth straight meeting on

Feb 01, 2024, and suggested rate cuts this year. The Monetary Policy Committee decided

in a 6-3 split vote to keep the bank rate at a 15-year high of 5.25%, as expected.

• According to Eurostat, eurozone’s consumer prices rose 2.8% in Jan 2024 on a yearly basis,

slightly slower than the 2.9% increase in Dec 2023. Excluding energy, food, alcohol and

tobacco, core inflation eased to 3.3% in Jan 2024 from 3.4%.

• According to the National Bureau of Statistics, China’s manufacturing PMI has improved to

49.2 in Jan 2024. That's up from 49.0 in Dec 2023, although it remains beneath the boom-

or-bust line of 50 that separates expansion from contraction.

Global News/Economy

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Global Indices

Indices

02-Feb-24

1-Week

Return

YTD

Return

Russell 3000 2,537.85 1.91% 5.62%

Nasdaq 100 17,642.73 1.27% 4.85%

FTSE 100 7,615.54 -0.26% -1.52%

DAX Index 16,918.21 -0.25% 0.99%

Nikkei Average 36,158.02 1.14% 8.05%

Straits Times 3,179.77 0.64% -1.87%

Source: Refinitiv Value as on Feb 02, 2024

U.S.

• U.S. equity markets rose following

upbeat quarterly earnings reports from

Facebook parent Meta Platforms and

online retail giant Amazon. Both

companies' fourth-quarter results

surpassed analyst expectations.

However, gains were restricted after

the U.S. Federal Reserve kept interest

rates on hold at its monetary policy

meeting on Jan 31, 2024.

Europe

• European equity markets fell after the Bank of England kept interest rates unchanged at

its monetary policy meeting on Feb 01, 2024, that led to uncertainty about the outlook of

interest rates. Meanwhile, stronger than expected employment growth in Jan 2024,

lowers the likelihood of an interest rate cut in Mar 2024 also weighed on the market

sentiment.

Asia

• Asian equity markets mostly rose following the announcement by Chinese regulators of

further initiatives to support the nation's property sector and equity market.

Global Equity Markets

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3.70

3.75

3.80

3.85

3.90

3.95

4.00

4.05

4.10

4.15

29-Jan 30-Jan 31-Jan 1-Feb 2-Feb

Yield in %

US 10-Year Treasury Yield Movement

Source: Refinitiv

• Yields on the 10-year U.S. Treasury fell

by 13 bps to close at 4.03% from the

previous week’s close of 4.16%.

• U.S. Treasury prices rose as renewed

concerns about the regional banking

sector and higher-than-expected jobless

claims pushed investors toward safer

assets. Prices rose further after the U.S.

monetary policy review on Jan 31, 2024

in which the U.S. Fed Chair confirmed

that interest rates had peaked for this

cycle and would probably decline in the

upcoming months as the rate of

inflation declines.

• However, gains were restricted

following stronger than expected U.S.

non-farm payrolls data in Jan 2024,

dampening expectations of an

impending U.S. Federal Reserve interest

rate cut.

Global Debt (U.S.)

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8.50

9.00

9.50

10.00

10.50

11.00

11.50

2-Jan-24 18-Jan-24

Global Commodity Movement

Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)

Global Commodity Prices

Rebased to 10

Source: Refinitiv

Performance of various commodities

Commodities

Last Closing* 1-Week Ago

Brent Crude($/Barrel)

82.13 85.93

Gold ($/Oz)

2,038.59 2,018.34

Gold (Rs/10 gm)

62,901 62,151

Silver ($/Oz)

22.67 22.79

Silver (Rs/Kg)

71,685 71,175

Source: Refinitiv *Value as on Feb 02, 2024

Gold

• Gold prices rose after data revealed that

weekly jobless claims in the U.S. increased

in the week ended Jan 27th, 2024.

However, gains were restricted as the U.S.

dollar traded higher following strong U.S.

nonfarm payrolls data in Jan 2024, which

raised doubts about whether the U.S.

Federal Reserve would begin lowering

interest rates.

Brent Crude

• Brent crude oil prices fell as investors

monitored efforts to negotiate a cease-fire

in the Israel-Hamas war and data indicating

an unexpected rise in U.S. oil inventories.

Baltic Dry Index

• The index fell over the week due to

sluggish capesize and panamax activities.

Commodities Market

02-Feb-24

-4.42%

-0.54%

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9.20

9.40

9.60

9.80

10.00

10.20

2-Jan-24 18-Jan-24

USD GBP Euro JPY

Source: Refinitiv

Currency Prices ( in terms of INR)

Rebased to 10

Currency Movement

Movement of Rupee vs Other Currencies

Currency

Last Closing* 1-Wk Ago

US Dollar

82.84 83.12

Pound Sterling

105.63 105.65

EURO

90.13 90.42

100 Yen

56.58 56.23

Source: Refinitiv Figures in INR , *

Value as on Feb 02, 2024

Rupee

• The Indian rupee in the spot trade rose against

the U.S. dollar following positive trend in

domestic equity and decline in crude oil prices.

Euro

• Euro fell against the greenback after data

showed stronger-than- expected non-farm

payrolls in the U.S. in the month of Jan 2024,

which reduced the chances of near-term

Federal Reserve interest rate cuts.

Pound

• Pound declined against the U.S. dollar following

information that revealed higher-than-expected

non-farm payrolls in the U.S. in Jan 2024.

• Yen fell marginally against the U.S. dollar after

strong U.S. jobs data dampened rate cut hopes.

Currencies Markets

02-Feb-24

-0.33%

0.62%

-0.32%

-0.02%

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The Week that was…

Jan to 02

Feb

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The Week that was (Jan 29 – Feb 02)

Date Events

Present

Value

Monday,

January 29, 2024

• U.S. 6-Month Bill Auction 4.985% 5.02%

• Japan Unemployment Rate(Dec) 2.40% 2.5%

Tuesday,

January 30, 2024

• Germany Gross Domestic Product (YoY)(Q4) PREL -0.20% -0.3%

• U.K. Consumer Credit(Dec) £1.197B £2.058B

• Eurozone Consumer Confidence(Jan) -16.1 -16.1

• Eurozone Gross Domestic Product s.a. (QoQ)(Q4) PREL 0.00% -0.10%

• Japan Retail Trade (YoY)(Dec) 2.10% 5.40%

Wednesday,

January 31, 2024

• India Infrastructure Output (YoY) (Dec) 3.80% 7.90%

• China NBS Manufacturing PMI(Jan) 49.2 49

• Germany Retail Sales (YoY)(Dec) -1.70% -2.40%

• Germany Consumer Price Index (YoY)(Jan) PREL 2.90% 3.70%

• U.S. Fed Interest Rate Decision 5.50% 5.50%

Thursday,

February 01, 2024

• China Caixin Manufacturing PMI(Jan) 50.8 50.8

• Eurozone Core Harmonized Index of Consumer Prices (YoY)(Jan) PREL

3.30% 3.40%

• U.S. Initial Jobless Claims(Jan 26) 224K 215K

• U.S. ISM Manufacturing PMI(Jan) 49.1 47.1

Friday,

February 02, 2024

• U.S. Average Hourly Earnings (MoM)(Jan) 0.60% 0.40%

• U.S. Nonfarm Payrolls(Jan) 353K 333K

• U.S. Michigan Consumer Sentiment Index(Jan) 79 78.8

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The Week Ahead

Feb to 09

Feb

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The Week Ahead

Day Event

Monday,

Feb 05, 2024

• China Caixin Services PMI(Jan)

• Eurozone HCOB Composite PMI(Jan)

• Eurozone Producer Price Index (MoM)(Dec)

• U.S. S&P Global Composite PMI(Jan)

• U.S. ISM Services PMI (Jan)

Tuesday,

Feb 06, 2024

• U.K. BRC Like-For-Like Retail Sales (YoY)(Jan)

• Germany Factory Orders (YoY)(Dec)

• Eurozone Retail Sales (YoY)(Dec)

Wednesday,

Feb 07, 2024

• Germany Industrial Production (MoM)(Dec)

• Japan Current Account Dec)

Thursday,

Feb 08, 2024

• Reserve Bank of India Interest Rate Decision

• China Consumer Price Index (YoY)(Jan)

• U.S. Initial Jobless Claims (Feb 2)

Friday,

Feb 09, 2024

• Germany Harmonized Index of Consumer Prices (YoY)(Jan)

• U.S. Fed Monetary Policy Report

• China New Loans (Jan)

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The information herein is meant only for general reading purposes and contains all factual and statistical information pertaining to Industry and

markets which have been obtained from independent third party sources and which are deemed to be reliable. The information provided cannot be

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