News You Can Use of 09 February 2024

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NEWS U CAN USE

February 09, 2024

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The Week that was…

Feb to 09

Feb

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Indian Economy

• India’s Services Purchasing Managers’ Index (PMI) rose to 6-month high to 61.8 in Jan 2024

as compared to 59.0 in Dec 2023 due to an increase in new business activity. Composite

PMI also rose to 61.2 from 58.5 in the same period.

• The Monetary Policy Committee (MPC) in its sixth bi-monthly monetary policy review of

FY24 kept key policy repo rate unchanged at 6.50% with immediate effect for the sixth

consecutive time. The standing deposit facility (SDF) rate also remained unchanged at

6.25%. Five out of six members voted to keep the policy repo rate unchanged. The MPC

also remained focused on withdrawal of accommodation to ensure that inflation

progressively aligns with the target, while supporting growth.

• According to the RBI, CPI inflation is projected at 5.4% for 2023-24 with Q4 at 5.0%.

Assuming a normal monsoon next year, CPI inflation for 2024-25 is projected at 4.5% with

Q1 at 5.0%, Q2 at 4.0%, Q3 at 4.6% and Q4 at 4.7%, with the risks are evenly balanced.

• According to the RBI, real GDP growth for 2024-25 is projected at 7.0% with Q1 at 7.2%,

Q2 at 6.8%, Q3 at 7.0% and Q4 at 6.9%, with the risks are evenly balanced.

• According to reports, over Rs 600 crore has been collected as a penalty for not integrating

PANs with Aadhaar, while 11.48 lakh PANs remain unlinked. Last date for linking PAN with

Aadhaar was Jun 30, 2023. Inoperative PANs face higher TDS and TCS rates.

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Domestic Equity Market Indices

Indices

09-Feb-24 1 Week Return YTD Return

S&P BSE Sensex

71,595.49 -0.68% -0.89%

Nifty 50

21,782.50 -0.33% 0.24%

S&P BSE Mid

-Cap 39,569.57 1.65% 7.41%

S&P BSE Small

-Cap 45,650.30 -0.44% 6.98%

Source: Refinitiv

Values as on Feb 09, 2024

• Domestic equity markets fell during the

week after witnessing a rise in the

previous week as key benchmark

indices S&P BSE Sensex and Nifty 50 fell

0.68% and 0.33% respectively. The

small-cap segment also closed the

week in red, however, the mid-cap

segment closed the week in green with

healthy gains.

• Domestic equity markets fell following

the reports of better-than-expected

U.S. non-farm payrolls figures in Jan

2024 that raised doubt on the

likelihood of an early interest rate cut

by the U.S. Fed. Even though the RBI

held the policy repo rate at 6.50% for

the sixth time in a row at its monetary

policy meeting that concluded on Feb

08, 2024, the losses were extended in

the lack of any significant indication of

a rate reduction.

Ratios

S&P BSE

Sensex

Nifty 50

S&P BSE

Mid Cap

S&P BSE

Small Cap

P/E

24.46 22.51 27.83 33.26

P/B

3.63 3.82 3.61 3.50

Dividend Yield

1.14 1.24 0.92 0.65

Source: NSE, BSE

Values as on Feb 09, 2024

Indian Equity Market

NSE Advance/Decline Ratio

Date

Advances Declines Advance/Decline Ratio

05-Feb-24 1,048 1,553 0.67

06-Feb-24 1,568 955 1.64

07-Feb-24 1,436 1,102 1.30

08-Feb-24 991 1,544 0.64

09-Feb-24 798 1,731 0.46

Source: NSE

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Sectoral Indices

Indices

Last Returns (in %)

Closing 1-Wk 1-Mth

S&P BSE Auto

44,766.17 0.99% 6.48%

S&P BSE Bankex

51,732.68 -0.47% -2.87%

S&P BSE CD

49,692.52 -0.72% -1.07%

S&P BSE CG

55,451.74 -1.11% -1.96%

S&P BSE FMCG

19,449.15 -2.26% -4.63%

S&P BSE HC

34,931.55 3.39% 7.38%

S&P BSE IT

38,456.83 1.08% 8.83%

S&P BSE Metal

27,753.48 1.75% 5.51%

S&P BSE Oil & Gas

28,032.10 3.80% 18.36%

Source:BSE

Values as on Feb 09, 2024

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

experienced a rise of 3.80% supported by a

persistent rally in oil marketing companies. The

sector held a modest advance as the market

weighed down geopolitical risks in the Middle

East.

• S&P BSE FMCG fell 2.26% because of lower-

than-expected earnings of some leading

companies in Q3FY24.

Indian Derivatives Market Review

• Nifty Feb 2024 Futures stood at 21,842.60, a premium of 60.10 points above the spot

closing of 21,782.50.

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

1957.65 lakh crore as against Rs. 1986.04 lakh crore for the week to Feb 02.

• The Put-Call ratio stood at 0.93 compared with the previous week’s close of 0.95.

• The Nifty Put-Call ratio stood at 1 compared with the previous week’s close of 1.02.

Indian Equity Market (contd.)

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7.00

7.02

7.04

7.06

7.08

7.10

7.12

5-Feb 6-Feb 7-Feb 8-Feb 9-Feb

Yield in %

10 -Yr Benchmark Bond ( % )

Source: CCIL

Debt Indicators

(%)

Current

Value

1-Wk

Ago

1-Mth

Ago

6-Mth

Ago

Call Rate

6.73 6.56 6.74 6.39

91 Day T-Bill

7.03 7.02 6.96 6.75

05.74% 2026, (5 Yr GOI)

7.00 7.19 7.02 7.16

07.18% 2033, (10 Yr GOI)

7.11 7.06 7.19 7.17

Source: Refinitiv Values as on Feb 09, 2024

• Bond yields rose tracking the rise in U.S.

treasury yields after stronger than

expected increase was witnessed in non-

farm payrolls data in Jan 2024 in U.S.

which dampened the expectation of

aggressive rate cuts by U.S. Federal

Reserve. Losses were extended as the

Reserve Bank of India did not provide any

major indication of rate cut in its recently

conducted monetary policy meeting.

• Yield on the 10-year benchmark paper

(7.18% GS 2033) rose by 5 bps to close at

7.11% from the previous week’s close of

7.06%.

• Data from Reserve Bank of India showed

that India's foreign exchange reserves

increased to $622.47 billion for the week

ended Feb 02, 2024 compared with

$616.73 billion a week earlier.

Domestic Debt Market

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-5

6.80

6.90

7.00

7.10

7.20

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

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

Change in bps 09-Feb-24 02-Feb-24

Yield in %

Change in bps

Source: Refinitiv

Maturity

G-Sec Yield

(%)

Corporate Yield

(%)

Spread

bps

1 Year 7.17 7.96 79

3 Year 7.20 7.76 56

5 Year 7.20 7.7 50

10 Year 7.24 7.45 21

Source: Refinitiv

Values as on Feb 09, 2024

• Yields on gilt rose between 4 to 11 bps across the

maturities, barring 19 year paper that fell by 10 bps,

while 30 year paper was unchanged.

• Corporate bond yields increased up to 11 bps across

the curve, barring 8 to 10 & 15 year papers that fell

between 4 to 27 bps.

• Difference in spread between AAA corporate bond

and gilt contracted between 2 to 33 bps across the

segments, barring 2 & 3 year papers that contracted

up to 2 bps, while 4 year paper remained steady.

Domestic Debt Market (Spread Analysis)

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• The Insolvency and Bankruptcy Board of India has amended the process for resolving

insolvency involving personal guarantors and voluntary liquidation have been modified. The

modifications lifted limitations on the appointment of an Insolvency Professional (IP) as a

Resolution Professional (RP) for personal guarantors. The amendments also mandated that

a meeting of creditors be called in situations involving personal guarantors.

• The Indian government has announced a reduction in the amount of wheat that traders and

wholesalers can hold in an effort to guarantee plenty of supply and stabilize prices. The

previous limit of 1,000 metric tons has now been lowered to 500 metric tons.

• The Reserve Bank of India has announced plans to strengthen security measures for the

Aadhaar-enabled payment system (AePS) in order to reduce the risk of fraud. The absence

of two-factor authentication is currently a source of concern because it leaves users

vulnerable, particularly those who are older. With this move, more fraud prevention

measures like timed OTP authentication may be implemented.

• The Reserve Bank of India (RBI) is stepping up its efforts to roll out its Central Bank Digital

Currency (CBDC) by adding new features to improve its functionality. Programmability and

offline functionality are being added to the digital currency by the RBI as part of the CBDC

pilot program.

Regulatory Updates in India

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• The Cabinet approved the next round of spectrum auctions that are scheduled for later

this year with a reserve price of Rs. 96,317 crore. All the available spectrum in 800, 900,

1800, 2100, 2300, 2500, 3300 megahertz and 26 gigahertz bands will be put to auction.

The reserve prices for different bands have been updated using appropriate indexation,

per the advice of the Telecom Regulatory Authority of India.

• IRDAI has recently issued a circular in which it directed health insurers to remove cap from

sum insured for Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homeopathy

(AYUSH) treatment. With this, treatments under AYUSH systems will get coverage to the

extent of sum insured. In order to provide cashless facilities, insurers will need to set up

quality standards and procedures for enrolling in AYUSH hospitals and day care centers as

network providers, as most of these treatments do not require 24-hour hospitalization.

Regulatory Updates in India (contd..)

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• According to the Commerce Department, U.S. trade deficit increased to $62.2 billion in Dec

2023 from a revised $61.9 billion in Nov 2023. Economists had expected the trade deficit

to narrow to $62.2 billion from the $63.2 billion originally reported for the previous month.

• According to the Institute for Supply Management, U.S. services PMI climbed to 53.4 in Jan

2024 from a downwardly revised 50.5 in Dec 2023, with a reading above 50 indicating

growth in the sector.

• According to Destatis, Germany’s industrial output dropped 1.6% MoM in Dec 2023, bigger

than the revised 0.2% fall in Nov 2023 and also worse than economists' forecast of 0.4%

decrease.

• According to Destatis, Germany’s consumer price index registered an annual increase of

2.9% in Jan 2024, slower than the 3.7% rise in Dec 2023. Food price inflation moderated to

3.8% from 4.6% a month ago.

• According to a survey, China’s services Purchasing Managers' Index, or PMI, unexpectedly

fell to 52.7 in Jan 2024 from a five-month high of 52.9 in the previous month. The score

was seen at 53.0.

• According to the National Bureau of Statistics, China’s consumer prices declined 0.8% on a

yearly basis in Jan 2024, which was steeper than Dec's 2023 0.3% decrease. Prices were

forecast to drop 0.5%.

Global News/Economy

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Global Indices

Indices

09-Feb-24

1-Week

Return

YTD

Return

Russell 3000 2,603.90 2.60% 8.37%

Nasdaq 100 17,962.41 1.81% 6.75%

FTSE 100 7,572.58 -0.56% -2.08%

DAX Index 16,926.50 0.05% 1.04%

Nikkei Average 36,897.42 2.04% 10.26%

Straits Times 3,138.30 -1.30% -3.15%

Source: Refinitiv Value as on Feb 09, 2024

U.S.

• U.S. equity markets rose after Labor

Department data indicated a slight

downward revision to Dec 2023

consumer price growth which was

revised to 0.2% form the earlier 0.3%.

Optimistic economic data from the U.S.

seems to have reduced chances of

interest rate cuts, but strong economic

indicators are still seen favourably for

the market, which further added to

gains.

Europe

• European equity markets closed on a mixed note. Sentiment was affected by escalating

global tensions and uncertainty about central banks' plans to decrease interest rates.

However, losses were restricted following data showing that Germany's consumer price

inflation had an annual increase of 2.9% in Jan 2024, slower than the 3.7% rise in Dec

2023.

Asia

• Asian equity markets mostly rose following comments from Japan’s central bank governor

that even if the Bank of Japan abandons its negative interest rate policy, rapid rate hikes

are uncertain.

Global Equity Markets

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4.00

4.05

4.10

4.15

4.20

4.25

5-Feb 6-Feb 7-Feb 8-Feb 9-Feb

Yield in %

US 10-Year Treasury Yield Movement

Source: Refinitiv

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

by 16 bps to close at 4.19% from the

previous week’s close of 4.03%.

• U.S. Treasury prices fell after the U.S.

Fed Chair continued to push back

against the prospect of near-term rate

cuts and stating that a robust economy

allows the U.S. central bank more time

to assess whether inflation will continue

to decline.

• Further, prices fell after the labor

department indicated that initial claims

for unemployment benefits in the U.S.

decreased in the week ending Feb 03,

2024, which fell from the previous week

but less than economists forecast and,

that further decreased the chance of an

interest rate cut in Mar 2024.

Global Debt (U.S.)

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9.00

9.50

10.00

10.50

11.00

9-Jan-24 25-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)

86.17 82.13

Gold ($/Oz)

2,024.16 2,038.59

Gold (Rs/10 gm)

62,379 62,901

Silver ($/Oz)

22.60 22.67

Silver (Rs/Kg)

70,427 71,685

Source: Refinitiv *Value as on Feb 09, 2024

Gold

• Gold prices fell after data reported that

U.S. initial claims for unemployment

benefits decreased in the week ending Feb

03, 2024, down from the previous week

but less than economists had predicted,

and that significantly decreased the chance

of an interest rate cut in Mar 2024.

Brent Crude

• Brent crude oil price rose as escalating

tensions in the Middle East raised worries

about potential trade and supply

disruptions.

Baltic Dry Index

• The index rose over the week due to

improved capesize and panamax activities.

Commodities Market

09-Feb-24

4.92%

-0.71%

-0.29%

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9.40

9.60

9.80

10.00

10.20

9-Jan-24 25-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

83.00 82.84

Pound Sterling

104.71 105.63

EURO

89.40 90.13

100 Yen

55.55 56.58

Source: Refinitiv Figures in INR , *

Value as on Feb 09, 2024

Rupee

• The Indian rupee in the spot trade fell against

the U.S. dollar due to strong greenback demand

and rise in U.S. Treasury yields.

Euro

• Euro remained steady against the greenback as

investors reduced their bets that the U.S.

Federal Reserve will aggressively lower interest

rates soon after new economic data further

diminished those odds.

Pound

• Pound declined against the U.S. dollar after

data on unemployment benefits from the U.S.

once more demonstrated the strength of the

U.S. labor market.

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

bets that the U.S. Federal Reserve will keep

interest rates higher for an extended period of

time.

Currencies Markets

09-Feb-24

0.19%

-1.82%

-0.81%

-0.87%

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The Week that was…

Feb to 09

Feb

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The Week that was (Feb 05 – Feb 09)

Date Events

Present

Value

Monday,

February 05, 2024

• India HSBC Composite PMI Final (Jan) 61.2 58.5

• India HSBC Services PMI Final (Jan) 61.8 59

• China Caixin Services PMI(Jan) 52.7 52.9

• Germany HCOB Composite PMI(Jan) 47 47.1

• U.S. ISM Services PMI(Jan) 53.4 50.5

• Japan Labor Cash Earnings (YoY)(Dec) 1% 0.70%

Tuesday,

February 06, 2024

• U.K. BRC Like-For-Like Retail Sales (YoY)(Jan) 1.40% 1.90%

• Germany Factory Orders(MoM)(Dec) 8.90% 0%

• Eurozone Retail Sales (YoY)(Dec) -0.80% -0.40%

Wednesday,

February 07, 2024

• Germany Industrial Production (MoM)(Dec) -1.60% -0.20%

• U.S. EIA Crude Oil Stocks Change (Feb 2) 5.521M 1.234M

• Japan Current Account (Dec) ¥744.3B ¥1,925.6B

Thursday,

February 08, 2024

• Reserve Bank of India Interest Rate Decision 6.50% 6.50%

• China Consumer Price Index (MoM)(Jan) 0.30% 0.10%

• U.S. Initial Jobless Claims(Feb 2) 218K 227K

• U.S. Wholesale Inventories(Dec) 0.40% 0.40%

Friday,

February 09, 2024

• Germany Harmonized Index of Consumer Prices (YoY)(Jan) 3.10% 3.10%

• China M2 Money Supply (YoY)(Jan) 8.70% 9.70%

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The Week Ahead

Feb to 16

Feb

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The Week Ahead

Day Event

Monday,

Feb 12, 2024

• India Inflation Rate (YoY) (Jan)

• India Industrial Production (YoY) (Dec)

• India Manufacturing Production (YoY) (Dec)

• Japan Producer Price Index (YoY)(Jan)

Tuesday,

Feb 13, 2024

• U.K. Employment Change (Dec)

• U.S. Consumer Price Index ex Food & Energy (YoY)(Jan)

Wednesday,

Feb 14, 2024

• India WPI Food Index (YoY) (Jan)

• U.K. Core Consumer Price Index (YoY)(Jan)

• Eurozone Gross Domestic Product (QoQ)(Q4) PREL

• Japan Gross Domestic Product (QoQ)(Q4) PREL

Thursday,

Feb 15, 2024

• U.K. Industrial Production (MoM)(Dec)

• U.K. Gross Domestic Product (QoQ)(Q4) PREL

• U.K. Manufacturing Production (YoY)(Dec)

• U.S. Initial Jobless Claims (Feb 9)

Friday,

Feb 16, 2024

• Germany Wholesale Price Index (YoY)(Jan)

• U.S. Producer Price Index ex Food & Energy (YoY)(Jan)

• U.S. Michigan Consumer Sentiment Index (Feb) PREL

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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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