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NEWS U CAN USE
May 20, 2022
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The Week that was…
16
th
May to 20
th
May
2
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Indian Economy
• India’s Wholesale price index-based inflation (WPI) rose to 15.08% YoY in Apr 2022 from
14.55% in Mar 2022. WPI based rate of inflation in the same period of the previous year
stood at 10.74%. The growth of WPI Food index stood at 8.88% in Apr 2022 as against
8.71% in Mar 2022 and 8.67% in Feb 2022. The rise in WPI for Apr 2022 came on the back
of rise in prices of mineral oils, basic metals, crude petroleum & natural gas, food articles,
non-food articles, food products and chemicals & chemical products etc. as compared Apr
2021.
• India witnessed the highest ever annual FDI (foreign direct investment) inflow of $83.57
billion in FY22 compared with $81.97 billion in FY21. FDI equity inflow in manufacturing
sectors rose 76% YoY in FY22 to $21.34 billion. Among sectors, computer software and
hardware attracted maximum inflows followed by the services sector and automobile
industry.
• A Global Rating agency lowered India’s growth forecast to 7.3% from 7.8% for FY23 on
rising inflationary pressure and longer-than-expected Russia-Ukraine war. The rating
agency increased its inflation forecast for India by 90 bps to 6.3% for FY23.
• According to the Confederation of Indian Industry (CII), the Reserve Bank of India's
decision to raise benchmark interest rates, as well as the prospect of a healthy monsoon,
will assist to keep inflation under control. In FY23, the CII forecasts GDP growth of 7.4% to
8.2%, with the outlook heavily reliant on the trend of global crude oil prices.
3
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4
Domestic Equity Market Indices
Indices 20-May-22 1 Week Return YTD Return
S&P BSE Sensex 54,326.39 2.90% -6.74%
Nifty 50 16,266.15 3.07% -6.27%
S&P BSE Mid-Cap 22,506.85 3.17% -9.86%
S&P BSE Small-Cap 26,351.29 4.09% -10.55%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
16-May-22 1406 746 1.88
17-May-22 1828 322 5.68
18-May-22 1164 976 1.19
19-May-22 399 1760 0.23
20-May-22 1763 372 4.74
Source: NSE
• Indian equity markets paused the sharp
declines witnessed over past few weeks
and managed to close modestly higher
following the mixed cues from the
global markets. Positive news related
to quarterly earning numbers of some
of the key stocks helped to uplift the
market sentiments.
• Nonetheless, mounting concerns for
rising domestic inflation added
negative sentiments for the market
participants.
• As per the media reports Reserve Bank
of India is likely to raise the interest
rate in June’s meeting which weighed
on market sentiments. Additionally,
relentless selling by FIIs also kept
investors wary.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
22.19 20.05 21.06 36.12
P/B
3.16 4.16 2.68 3.01
Dividend Yield
1.20 1.31 1.25 0.86
Source: BSE, NSE Va
lue as on May 20, 2022
Indian Equity Market
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5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
S&P BSE Auto
24,883.00 4.78% 0.84%
S&P BSE Bankex
39,631.09 3.63% -5.44%
S&P BSE CD
36,981.49 0.74% -13.19%
S&P BSE CG
26,419.73 5.34% -4.27%
S&P BSE FMCG
14,130.41 4.81% 1.41%
S&P BSE HC
22,937.73 2.78% -7.40%
S&P BSE IT
29,308.21 -2.20% -9.64%
S&P BSE Metal
19,259.77 7.32% -15.54%
S&P BSE Oil & Gas
19,001.96 2.87% -6.23%
Source: Refinitiv *Value as on May 20, 2022
• On the BSE sectoral front, barring S&P BSE IT
and S&P BSE Teck, all the indices closed in the
green. S&P BSE Metal was the top gainer, up
7.32%, followed by S&P BSE Capital Goods and
S&P BSE FMCG, which went up 5.34% and
4.81%, respectively.
• Metal sector got a boost after one of the
major global rating agencies reported that
demand of steel is expected to grow by
around 10% through 2022 amid the
government's continued focus on the
construction of roads, railways, ports and
airports.
Indian Derivatives Market Review
• Nifty May 2022 Futures stood at 16,253.25, a discount of 12.90 points below the spot
closing of 16,266.15. The total turnover on NSE’s Futures and Options segment for the
week stood at Rs. 494.19 lakh crore as against Rs. 547.81 lakh crore for the week to May 13.
• The Put-Call ratio stood at 0.77 compared with the previous week’s close at 0.83.
• The Nifty Put-Call ratio stood at 1.07 compared with the previous week’s close of 0.73.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-Wk
Ago
1-Mth
Ago
6-Mth
Ago
Call Rate
4.14 4.08 3.33 3.44
91 Day T-Bill
4.92 4.90 3.97 3.54
05.63% 2026, (5 Yr GOI)
7.08 6.99 6.37 5.67
06.54% 2032, (10 Yr GOI)
7.36 7.32 7.11 6.35
Source: Refinitiv Value as on May 20, 2022
• Bond yields rose during the week under
review as the minutes of the latest
monetary policy meeting held in May
2022 hinted at more frontloading of
policy rate hikes by the Monetary Policy
Committee in the months ahead.
Increase in global crude oil prices further
dampened market sentiments.
• Yield on the 10-year benchmark paper
(6.54% GS 2032) rose 4 bps to close at
7.36% as compared to the previous
week’s close of 7.32%.
• Data from Reserve Bank of India (RBI)
India's foreign exchange reserves fell for
the tenth consecutive week to $593.28
billion as on May 13, 2022 the lowest
since week ended May 21, 2021 and
down from $595.95 billion in the
previous week.
Domestic Debt Market
7.30
7.35
7.40
17-May 18-May 19-May 20-May
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 5.85 6.63 78
3 Year 7.07 7.37 30
5 Year 7.31 8.28 97
10 Year 7.49 8.33 83
Source: Refinitiv
Value as on
May 20, 2022
• Yields on gilt securities increased across the
maturities by up to 27 bps barring 11-year
paper which fell 3 bps.
• Corporate bond yields increased across the
maturities in the range of 9 bps to 24 bps
barring 15-year paper which closed steady.
• Difference in spread between AAA corporate
bond and gilt expanded across the maturities
in the range of 5 bps to 13 bps barring 2-year
paper and 15-year paper which contracted 2
bps and 9 bps respectively.
Domestic Debt Market (Spread Analysis)
-8
2
12
3.80
6.00
8.20
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 20-May-22 13-May-22
Yield in %
Change in bps
Source: Refinitiv
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8
• According to a significant state-run bank research paper, the Reserve Bank of India (RBI)
would very certainly raise interest rates in the approaching monetary policy meetings,
maybe as early as Aug 2022, to pre-pandemic levels of 5.15%. Food prices in rural areas have
risen dramatically, as have fuel prices in metropolitan areas. This inflation is largely due to
the Russia-Ukraine conflict, which has put strain on the supply chain, thus blaming the RBI
for the inflationary pressure is pointless.
• The Union Cabinet has given its approval to a proposal that would allow the boards of public
sector undertakings (PSUs) to recommend strategic divestiture, minority stake sales, or the
liquidation of their subsidiaries and joint ventures. PSU boards currently have the authority
to make equity investments, mergers, and acquisitions, subject to specific net-worth
ceilings. PSUs, on the other hand, lack the authority to disinvest and close their subsidiaries,
with the exception of advocating minority interest sales for specific PSUs.
• An empowered group of ministers (GoM) has recommended a flat 28% goods and services
tax (GST) on internet gaming, casinos, and horse races. The ministerial panel determined
that the tax will be imposed on the entire "face value" or "bet amount," rather than the total
transaction value. The prize money or net commissions (revenues) that gaming companies
get are included in the total transaction value.
• The standards for coping with stressed public-private partnership (PPP) projects at major
ports have been finalised by the centre. Major ports can take over usable elements of
stranded projects at various levels of completion under these criteria.
Regulatory Updates in India
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9
• The governor of the Reserve Bank of India (RBI) instructed select public and private sector
bank CEOs to keep a close eye on recent geopolitical developments and take appropriate
measures, including capital raising, to protect their balance sheets from any potential
impact these events may have. The governor also asked the banks to offer the essential
support for the ongoing economic recovery. Banks have also been instructed to pay close
attention to the grievance redressal mechanism in order to improve it.
• In an attempt to rein in errant bidders who bid excessively low, the Road Transport
Ministry has asked highway builders to provide an additional performance security. The
National Highways Authority of India, the National Highways and Infrastructure
Development Corporation, the Border Roads Organisation, and all state governments
have received this direction.
• The Prime Ministers of India and Nepal conducted bilateral meetings in which they
discussed ways to deepen current cooperation and expand new areas of cooperation in
their multidimensional bilateral partnership. Following their meeting, the two sides signed
six Memorandums of Understanding (MoUs) on cultural and educational collaboration.
Regulatory Updates in India (contd..)
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• China’s industrial production fell 2.9% YoY in Apr 2022 as against 5% fall in Mar 2022. The
decline came due to disruption caused by the Covid-19 lockdown and weaker foreign
demand.
• Eurozone gross domestic product expanded 0.3% QoQ sequentially, the same rate as seen
in the fourth quarter of 2021.
• U.K. consumer price inflation rose 9% YoY in Apr 2022 from 7% in Mar 2022. The sharp
increase was caused by rising food and gasoline prices.
• As per preliminary data, Japan's gross domestic product fell by an annualised 1% in the
first quarter of 2022 following a downwardly revised 3.8% gain in the prior three months.
• According to final estimate, eurozone harmonized index of consumer prices rose 7.4% YoY
in Apr 2022, the same as in Mar 2022. Core inflation that excludes energy, food, alcohol
and tobacco, rose sharply to 3.5% in Apr from 3% in Mar 2022.
• U.S. retail sales rose increased 0.9% in Apr 2022, slower than upwardly revised rise of 1.4%
(0.5% increase originally reported) in the previous month.
• The People's Bank of China surprisingly reduced its lending rates for long-term loans. The
move is set to support lending to the property market.
• Japan’s consumer inflation accelerated to 2.5% YoY in Apr 2022 from 1.2 rise in prior
month. Core CPI, which excludes volatile food prices, went up 2.1% YoY, higher than 0.8%
in the previous month.
10
Global News/Economy
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11
Global Indices
Indices
20-May-22
1-Week
Return
YTD
Return
Russell 3000 1,779.18 -4.02% -27.08%
Nasdaq 100 11,835.62 -4.45% -27.48%
FTSE 100 7,389.98 -0.38% 0.07%
DAX Index 13,981.91 -0.33% -11.98%
Nikkei Average 26,739.03 1.18% -7.13%
Straits Times 3,240.58 1.55% 3.74%
Source: Refinitiv Value as on May 20, 2022
U.S.
• U.S. equity markets fell amid substantial
volatility. Market participants remained
concerned over high inflation and that
aggressive monetary policy tightening
by the U.S. Federal Reserve may push
the U.S. economy towards recession.
• Downbeat U.S. economic data added to
the losses.
Europe
• European equity markets fell as concerns about inflation and ominous earnings reports
from U.S. retailers dented global sentiment. On the data front, German producer prices
soared 33.5% YoY in Apr, a new record annual rise as the war in Ukraine drove energy
costs higher in Europe’s largest economy.
Asia
• Asian markets bucked the downward trend of its global peers after as China cut its
benchmark reference rate for mortgages by an unexpectedly wide margin.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury fell 14
bps to close at 2.79% as compared to the
previous week’s close of 2.93%.
• U.S. Treasury prices rose initially during
the week under review as its safe-haven
appeal improved on mounting concerns
over global growth after China’s industrial
production and retail sales fell on a yearly
basis in Apr 2022 and a steep drop in New
York state's factory activity in May 2022.
• U.S. Treasury prices rose further following
a slew of downbeat U.S. economic data.
• Gains were extended as market
participants remained concerned over
high inflation and that aggressive
monetary policy tightening by the U.S.
Federal Reserve may push the U.S.
economy towards recession.
Global Debt (U.S.)
2.60
2.90
3.20
16-May 17-May 18-May 19-May 20-May
US 10-Year Treasury Yield Movement
Source: Refinitiv
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13
Performance of various commodities
Commodities
Last Closing* 1-Week Ago
Brent Crude($/Barrel)
114.49 111.96
Gold ($/Oz)
1845.68 1811.15
Gold (Rs/10 gm
) 50785 50275
Silver ($/Oz)
21.75 21.07
Silver (
Rs/Kg) 61942 58935
Source: Refinitiv *Value as on May 20, 2022
Gold
• Gold prices went up with the dollar
receding from two-decade highs amid
mounting concerns over U.S. economic
growth revived safe-haven demand.
Brent Crude
• Brent Crude prices remained steady as a
planned European Union (EU) ban on
Russian oil balanced demand concerns over
slowing economic growth. The EU is hoping
to clinch a deal on a proposed ban of
Russian crude imports which includes
carve-outs for EU states most dependent
on Russian oil such as Hungary.
Baltic Dry Index
• The index rose during the week due to
improved capesize and panamax activities.
Commodities Market
8.00
9.00
10.00
11.00
12.00
20-Apr-22 5-May-22 20-May-22
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
Source: Refinitiv
3.23%
2.26%
1.91%
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing* 1-Wk Ago
US Dollar
77.58 77.35
Pound Sterling
96.83 94.46
EURO
82.14 80.36
100 Yen
60.69 60.09
Source: Refinitiv Figures in INR , *
Value as on
May 20, 2022
Rupee
• The Indian rupee weakened against the
greenback as concerns over rising inflation
across the globe dampened market sentiments.
Euro
• The euro rose against the greenback on value
buying. Optimism over the easing of China's
crackdown on technology sector and COVID-19
pandemic also contributed to the upside.
Pound
• The pound rose against the greenback as
upbeat economic data from U.K. reinforced
expectations that the Bank of England will need
to continue raising interest rates to fight high
inflation.
Yen
• The yen rose against the greenback as high
volatility in global financial markets boosted the
safe haven appeal of the Japanese currency.
Currencies Markets
9.40
9.60
9.80
10.00
10.20
20-Apr-22 5-May-22 20-May-22
USD GBP Euro JPY
Source: Refinitiv
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
2.51%
1.00%
2.21%
0.30%
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15
The Week that was…
16
th
May to 20
th
May
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16
The Week that was (May 16 – May 20)
Date Events Present Value Previous Value
Monday,
May 16, 2022
• China Industrial Production YoY (Apr) -2.90% 5.00%
• China Retail Sales YoY (Apr) -11.10% -3.50%
• Eurozone Balance of Trade (Mar) €-16.4B €-8.8B
Tuesday,
May 17, 2022
• U.K. Unemployment Rate (Mar) 3.70% 3.80%
• India WPI Inflation YoY (Apr) 15.08% 14.55%
• U.S. Retail Sales MoM (Apr) 0.90% 1.40%
• U.S. Industrial Production YoY (Apr) 6.40% 5.40%
• Eurozone GDP Growth Rate YoY 2nd Est (Q1) 5.10% 4.70%
Wednesday,
May 18, 2022
• Japan GDP Growth Annualized Prel (Q1) -1% 3.80%
• China House Price Index YoY (Apr) 0.70% 1.50%
• Eurozone Inflation Rate YoY Final (Apr) 7.40% 7.40%
• U.S. Housing Starts MoM (Apr) -0.20% -2.80%
• U.K. Inflation Rate YoY (Apr) 9.00% 7.00%
Thursday,
May 19, 2022
• Japan Balance of Trade (Apr) ¥-839.2B ¥-414.1B
• U.S. Existing Home Sales MoM (Apr) -2.40% -3.00%
Friday,
May 20, 2022
• Japan Inflation Rate YoY (Apr) 9.00% 7.00%
• U.K. Retail Sales YoY (Apr) -4.90% 1.30%
• Eurozone Consumer Confidence Flash (May) -21.10 -22.00
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17
The Week Ahead
23
rd
May to 27
th
May
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18
Day Event
Monday,
May 23, 2022
• Germany Ifo Business Climate (May)
• U.S. Chicago Fed National Activity Index (Apr)
Tuesday,
May 24, 2022
• Germany S&P Global Manufacturing PMI Flash (May)
• Eurozone S&P Global Manufacturing PMI Flash (May)
• U.K. S&P Global/CIPS Manufacturing PMI Flash (May)
• U.S. S&P Global Manufacturing PMI Flash (May)
• U.S. New Home Sales MoM (Apr)
Wednesday,
May 25, 2022
• Germany GDP Growth Rate YoY Final (Q1)
• Germany GfK Consumer Confidence (Jun)
• U.S. Durable Goods Orders MoM (Apr)
• Japan Leading Economic Index Final (Mar)
Thursday,
May 26, 2022
• U.S. GDP Growth Rate QoQ 2nd Est (Q1)
• U.S. Pending Home Sales YoY (Apr)
• U.S. Initial Jobless Claims (21/May)
Friday,
May 27, 2022
• China Industrial Profits (YTD) YoY (Apr)
• U.S. PCE Price Index YoY (Apr)
• U.S. Michigan Consumer Sentiment Final (May)
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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