News You Can Use Of 06 May 2022

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NEWS U CAN USE

May 06, 2022

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The Week that was…

May to 6

May

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Indian Economy

• According to S&P Global, India’s Manufacturing Purchasing Managers’ Index (PMI) rose to

54.7 in Apr 2022 from 54.0 in Mar 2022. India's manufacturing sector grew in Apr owing to

stronger gains in output and factory orders, as well as increased growth in international

sales.

• India S&P Global India Services Purchasing Managers' Index rose to 57.9 in Apr 2022 from

53.6 in Mar 2022. India's services activity expanded on strong demand, prompting firms to

add jobs for the first time since Nov, however, sky-rocketing inflation remained a major

concern. The composite index rose to 57.6 in Apr from 54.3 in Mar.

• According to the preliminary reports from the commerce ministry, exports rose 24.22% to

USD 38.19 billion in Apr 2022 owing to strong performance by sectors like petroleum

products, electronic goods and chemicals. Imports rose 26.55% to USD 58.26 billion. The

trade deficit in Apr 2022 widened to USD 20.07 billion as against USD 15.29 billion in the

year-ago period.

• According to data from the Centre for Monitoring Indian Economy (CMIE), India’s

unemployment rate rose to 7.83% in Apr 2022 from 7.60% in Mar 2022. The urban

unemployment rate rose to 9.22% in Apr from 8.28% in Mar, while the rural

unemployment rate slipped to 7.18% in Apr from 7.29% in Mar.

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Domestic Equity Market Indices

Indices

06-May-22

1 Week Return

YTD Return

S&P BSE Sensex

54,835.58

-3.90% -5.87%

Nifty 50

16,411.25

-4.04% -5.43%

S&P BSE Mid

-Cap

23,129.61

-5.28% -7.37%

S&P BSE Small

-Cap

27,092.41

-5.31% -8.03%

Source: MFI Explorer

NSE Advance/Decline Ratio

Date Advances Declines

Advance/Decline Ratio

02-May-22 701 1468 0.48

04-May-22 364 1815 0.20

05-May-22 920 1221 0.75

06-May-22 401 1754 0.23

Source: NSE

• Indian equity markets witnessed sharp

decline during the week. Recently, RBI

joined global central banks in raising

interest rates as it hiked the key repo

rate by 40 bps, triggering strong sell off

in the equity markets. The move had

severely dented investors’ confidence.

• Weak global cues also dragged bourses

with Bank of England hiking interest

rates to a 13-year high of 1% and

warned of looming risks of a recession.

The central bank also sharply raised its

inflation estimates to 10% for the year

due to the Russia-Ukraine conflict and

lockdowns in China.

• Meanwhile, Fed’s announcement of its

widely expected decision to raise

interest rates by 50 basis points

generated mixed reaction.

Ratios

S&P BSE

Sensex

Nifty 50

S&P BSE

Mid Cap

S&P BSE

Small Cap

P/E

23.01 20.89 22.35 35.27

P/B

3.21 4.19 2.77 3.11

Dividend Yield

1.16 1.21 1.14 0.80

Source: BSE, NSE Va

lue as on May 06, 2022

Indian Equity Market

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Sectoral Indices

Indices

Last

Closing*

Returns (in %)

1-Wk 1-Mth

S&P BSE Auto

23,962.27

-4.95% -3.51%

S&P BSE Bankex

39,879.82

-3.98% -7.32%

S&P BSE CD

38,963.39

-8.68%

-10.62%

S&P BSE CG

26,323.94

-3.82% -8.41%

S&P BSE FMCG

13,716.53

-2.60% -0.90%

S&P BSE HC

22,916.19

-5.85% -7.38%

S&P BSE IT

31,048.67

-2.94%

-13.92%

S&P BSE Metal

20,680.34

-4.50%

-11.57%

S&P BSE Oil & Gas

19,411.66

-0.44% -2.66%

Source:

Refinitiv *Value as on May 06, 2022

• On the BSE sectoral front, barring S&P BSE

Power, all the major sectors closed in the red.

S&P BSE Consumer Durables was the major

loser, down 8.68%, followed by S&P BSE

Realty and S&P BSE Healthcare, which fell

8.02% and 5.85%, respectively.

• Sectors were affected by RBI’s stance on 40

bps rate hike.

Indian Derivatives Market Review

• Nifty May 2022 Futures stood at 16,419.40, a premium of 8.15 points above the spot closing

of 16,411.25. The total turnover on NSE’s Futures and Options segment for the week stood

at Rs. 483.80 lakh crore as against Rs. 502.45 lakh crore for the week to Apr 29.

• The Put-Call ratio stood at 0.83 compared with the previous week’s close at 0.84.

• The Nifty Put-Call ratio stood at 0.74 compared with the previous week’s close of 0.96.

Indian Equity Market (contd.)

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Debt Indicators

(%)

Current

Value

Ago

Mth

Ago

Mth

Ago

Call Rate

3.33 3.33 3.26 3.43

91 Day T

-Bill

4.58 4.03 3.78 3.67

05.63% 2026, (5 Yr GOI)

7.19 6.50 6.05 5.73

06.54% 2032, (10 Yr GOI)

7.45 7.14 6.92 6.36

Source:

Refinitiv Value as on May 06, 2022

• Bond yields surged during the week

under review and witnessed the biggest

weekly rise in over five years after the

Monetary Policy Committee

unexpectedly kicked off its rate hike

cycle to put a check on rise in domestic

inflationary pressures.

• Yield on the 10-year benchmark paper

(6.54% GS 2032) jumped 31 bps to close

at 7.45% as compared to the previous

week’s close of 7.14%. This was the

biggest weekly rise in bond yields since

the week ended Feb 10, 2017.

• RBI conducted the auction of four

government securities namely 5.74% GS

2026, GOI FRB 2028, 6.67% GS 2035 and

6.99% GS 2051 for a notified amount of

Rs. 32,000 crores, which was completely

accepted.

Domestic Debt Market

7.00

7.25

7.50

2-May 4-May 5-May 6-May

Yield in %

10 -Yr Benchmark Bond ( % )

Source: CCIL

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Maturity

G-

Sec Yield

(%)

Corporate Yield

(%)

Spread

bps

1 Year 5.56 6.16 59

3 Year 7.05 7.01 -4

5 Year 7.41 7.70 30

10 Year 7.59 8.15 56

Source:

Refinitiv

Value as on

May 06, 2022

• Yields on gilt securities increased across the

maturities in the range of 26 bps to 74 bps.

• Corporate bond yields increased across the

maturities in the range of 37 bps to 67 bps.

The maximum increase was witnessed on 15-

year paper and the minimum increase was

witnessed on 2-year paper.

• Difference in spread between AAA corporate

bond and gilt contracted across 1 to 5-year

maturities by up to 25 bps and expanded

across the remaining maturities in the range

of 7 bps to 34 bps.

Domestic Debt Market (Spread Analysis)

3.60

6.00

8.40

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

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

Change in bps 06-May-22 29-Apr-22

Yield

in %

Change

in bps

Source: Refinitiv

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• In a surprise move, the Reserve Bank of India hiked the repo rate by 40 bps to 4.40% with

immediate effect. The cash reserve ratio (CRR) was also increased by 50 basis points to 4.5%,

starting May 21, 2022. The current standing deposit facility rate is 4.15%, whereas the

marginal standing deposit facility rate and the bank rate are both 4.65%. The MPC also

decided to maintain its accommodative stance while working on reducing accommodation

to ensure that inflation remains within target while supporting growth in the future.

• The RBI cautioned that while the Indian economy appears capable of weathering the

deterioration in geopolitical conditions as a result of the ongoing Russia-Ukraine conflict, it

faces headwinds from global geopolitical spillovers, rising commodity prices, and declining

foreign demand. The RBI, on the other hand, did not change its Apr forecast for GDP

growth.

• SEBI has ordered REIT and InvIT issuers, stock exchanges, and all other intermediaries to

ensure that units of REITs and InvITs are listed within 6 working days of the issue closing.

They currently have 12 working days to ensure the listing. On Jul 1, 2022, the new directive

will take effect.

• According to the International Monetary Fund’s (IMF) database, the gross domestic product

(GDP) of India will hit the target of $5 trillion not before FY29. Thus, the latest forecast hints

that the target of $5 trillion may fructify with a minimum delay of four years.

Regulatory Updates in India

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• According to a rating agency, the RBI's surprise rate hike, which signals a reversal of the

interest rate cycle, will put downward pressure on the banking system's loan growth,

which had been showing signs of recovery with an 11% increase. Even if growth in the

agriculture section stays stable and modest in the retail segment, the tailwinds supporting

a pick-up in credit growth will be in demand from the industries and services segments.

• The central government has given 14 states, including Andhra Pradesh, West Bengal,

Rajasthan, Punjab, Assam, and Kerala, a revenue deficit grant of Rs. 7,183.42 crore. The

money was released by the Ministry of Finance's Department of Expenditure. This is the

2nd monthly instalment of Post Devolution Revenue Deficit (PDRD) grant to states.

• According to Union Coal and Mines Minister, India has to enhance domestic coal output to

meet rising fuel demand and minimise import dependency. He stated that the coal

ministry's goal is to reduce thermal coal imports and make the country an "Aatmanirbhar"

in the field. He claims that continuing mining operations will help to increase coal supplies

while also providing jobs for the community.

Regulatory Updates in India (contd..)

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• U.S. Federal Reserve raise the target range for the federal funds rate interest rates by 50

bps to a range between 0.75% and 1.0% as widely expected by the market. The central

bank anticipates that ongoing increases in the target range will be appropriate in an effort

to return elevated inflation to its 2% objective. In addition, the Fed decided to begin

reducing its holdings of Treasury securities and agency debt and agency mortgage-backed

securities on Jun 1, 2022.

• According to a report released by the Labor Department, U.S. non-farm payroll

employment rose 428,000 jobs in Apr 2022, matching the revised jump seen in Mar 2022.

Meanwhile, report showed the unemployment rate came in unchanged at 3.6% in Apr.

• The Bank of England hiked its benchmark rate by a quarter-point to its highest level since

2009, as officials attempt to combat increasing inflation, which is now expected to exceed

10% in 2022. The MPC will keep an eye on developments in light of new information and

their implications for medium-term inflation.

• According to data from the Cabinet Office, Japan’s consumer confidence index rose to

33.0 in Apr 2022 from 32.8 in Mar 2022. Japan's consumer confidence improved for the

first time in six months in Apr.

• According to S&P Global, China’s Caixin services Purchasing Managers' Index fell to 36.2 in

Apr 2022 from 42.0 in Mar 2022. The steep drop came as a result of stronger Covid-19

containment procedures, which resulted in faster activity reductions and new orders.

Global News/Economy

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Global Indices

Indices

06-May-22

1-Week

Return

YTD

Return

Russell 3000

1,908.61 -1.71% -21.77%

Nasdaq 100

12,693.54 -1.25% -22.22%

FTSE 100

7,387.94 -2.08% 0.05%

DAX Index

13,674.29 -3.00% -13.92%

Nikkei Average

27,003.56 0.58% -6.21%

Straits Times

3,291.89 -1.94% 5.38%

Source: Refinitiv

Value as on May 06,

2022

U.S.

• U.S. markets closed in the red as investors

preferred to cash-in on the relief rally

seen following the Fed's monetary policy

announcement. The Fed Chief was less

hawkish than some had feared.

• Meanwhile, concerns about higher rates,

inflation, global economic outlook and

the ongoing war between Russia and

Ukraine also contributed to the pullback

on Wall Street.

Europe

• European markets fell amid worries that aggressive central bank tightening and

uncertainty surrounding the war in Ukraine and COVID-19 lockdowns in China will dent

economic growth. German industrial output slumped 3.9% MoM in Mar, much bigger than

the economists' forecast of 1.0% decline and reversing Feb's revised 0.1% rise.

Asia

• Asian markets largely went down as investors assessed the policy impacts of the Fed's

tightening moves on consumer demand and the broader economy.

Global Equity Markets

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

20 bps to close at 3.14% as compared to

the previous week’s close of 2.94%. The

U.S. benchmark 10-year Treasury yield hit

3% for the first time since Dec 2018.

• U.S. Treasury prices fell initially during the

week under review on growing possibility

that the U.S. Fed may announce a hike in

the fed funds target rate by 50 basis

points to 0.75%-1.00%.

• U.S. Treasury prices fell further after the

U.S. Federal Reserve Chief raised the fed

funds target rate by 50 basis points, the

biggest interest rate hike in 22 years, and

said it would begin trimming its bond

holdings next month as a further step to

put a check on rising inflation.

Global Debt (U.S.)

2.90

3.05

3.20

2-May 3-May 4-May 5-May 6-May

US 10-Year Treasury Yield Movement

Source: Refinitiv

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Performance of various commodities

Commodities

Last Closing*

1-Week Ago

Brent Crude($/Barrel)

114.90 107.27

Gold ($/Oz)

1882.96 1896.40

Gold (Rs/10 gm)

51458 51847

Silver ($/Oz)

22.34 22.74

Silver (Rs/Kg)

62412 64735

Source: Refinitiv *

Value as on May 06, 2022

Gold

• Gold prices eased following rise in the dollar

index that neutralized a relatively less

hawkish stance on interest rate hikes from

the U.S. Federal Reserve.

Brent Crude

• Brent crude oil prices rose on supply fears

after European Union announced more

sanctions against Russia, including a six-

month petroleum embargo, countering

worries about weakening Chinese demand.

Baltic Dry Index

• The index rose during the week due to

improved capsize and panamax activities.

Commodities Market

9.00

10.00

11.00

6-Apr-22 21-Apr-22 6-May-22

Global Commodity Movement

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

Global

Commodity Prices

Rebased to 10

Source: Refinitiv

-1.76%

7.11%

-0.71%

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Movement of Rupee vs Other Currencies

Currency

Last Closing*

1-Wk Ago

US Dollar

76.75 76.42

Pound Sterling

94.79 95.71

EURO

80.71 80.58

100 Yen

58.75 58.66

Source: Refinitiv Figures in INR , *

Value as on May 06,

2022

Rupee

• The Indian rupee weakened against the

greenback on concerns that rising inflation may

result in more aggressive monetary policy

tightening by global central banks.

Euro

• The euro rose against the greenback after the

U.S. Federal Reserve Chief played down the

prospect of a 75-basis point rate hike moving

ahead.

Pound

• The pound weakened against the greenback

after Bank of England warned of recession risks,

triggering expectations of a slowdown in its

rate-hiking cycle.

Yen

• The yen weakened against the greenback on

concerns that the U.S. Federal Reserve will

tighten monetary policy faster than others to

curb rising inflation.

Currencies Markets

9.55

9.90

10.25

6-Apr-22 16-Apr-22 26-Apr-22 6-May-22

USD GBP Euro JPY

Source: Refinitiv

Currency

Prices (

in terms of INR)

Rebased to 10

Currency Movement

0.42%

0.16%

-0.95%

0.15%

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The Week that was…

May to 6

May

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The Week that was (May 2 – May 6)

Date Events Present Value Previous Value

Monday,

May 02, 2022

• India S&P Global Manufacturing PMI (Apr)

54.7 54

• Germany Retail Sales (YoY)(Mar)

-2.70% 7%

• Eurozone Consumer Confidence(Apr)

-22 -21.6

• U.S. ISM Manufacturing PMI(Apr)

55.4 57.1

Tuesday,

May 03, 2022

• Germany Unemployment Rate (Apr)

5% 5%

• Eurozone Unemployment Rate(Mar)

6.80% 6.90%

• U.S. Factory Orders (MoM)(Mar)

2.20% 0.10%

Wednesday,

May 04, 2022

• U.S. ISM Services PMI(Apr)

57.1 58.3

• Eurozone Retail Sales (YoY)(Mar)

0.80% 5.20%

• U.S. ADP Employment Change(Apr)

247K 479K

Thursday,

May 05, 2022

• India S&P Global Services PMI (Apr)

57.9 53.6

• Germany Factory Orders (MoM)(Mar)

-4.70% -0.80%

Friday,

May 06, 2022

• U.S. Nonfarm Payrolls(Apr)

428K 428K

• U.S. Unemployment Rate(Apr)

3.60% 3.60%

• Germany Industrial Production (MoM)(Mar)

-3.90% 0.10%

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The Week Ahead

May to 13

May

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Day Event

Monday,

May 09, 2022

•

Bank of Japan Monetary Policy Meeting Minutes

•

China Trade Balance USD (Apr)

Tuesday,

May 10, 2022

•

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

•

Japan Overall Household Spending (YoY)(Mar)

•

Eurozone ZEW Survey – Economic Sentiment (May)

•

Germany ZEW Survey – Economic Sentiment(May)

Wednesday,

May 11, 2022

•

China Consumer Price Index (YoY)(Apr)

•

Germany Harmonized Index of Consumer Prices (YoY)(Apr)

•

U.S. Consumer Price Index (YoY)(Apr)

Thursday,

May 12, 2022

•

India Industrial Production (YoY) (Mar)

•

India Consumer Price Inflation Rate (YoY) (Apr)

•

U.K. Gross Domestic Product (QoQ)(Q1) PREL

•

U.K. Industrial Production (MoM)(Mar)

Friday,

May 13, 2022

•

India Balance of Trade Final (Apr)

•

U.S. Michigan Consumer Sentiment Index (May) PREL

•

Eurozone Industrial Production (MoM)(Mar)

The Week Ahead

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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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