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NEWS U CAN USE
September 17, 2021
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The Week that was…
13
th
September to 17
th
September
2
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Indian Economy
• Consumer Price Index based inflation (CPI) marginally eased to 5.30% in Aug 2021 from
5.59% rise in Jul 2021 and 6.69% in Aug 2020. The CPI for Aug 2021 stayed within the
Reserve Bank of India's tolerance level (2% - 6%) for second straight month. The
Consumer Food Price Index also eased to 3.11% in Aug 2021 from 3.96% in Jul 2021 and
9.05% in Aug 2020.
• Wholesale Price Index (WPI) based inflation rose to 11.39% YoY in Aug 2021 from 11.16%
in Jul 2021. However, the WPI Food Index eased to 3.43% in Aug 2021 from 4.46% in Jul
2021. WPI based rate of inflation for crude petroleum and natural gas over the year stood
at 40.03% in Aug 2021 compared to Aug 2020 when the same stood at -16.44%. WPI
inflation for manufactured products stood at 11.39% in Aug 2021 compared to Aug 2020
when the same stood at 1.36%.
• India’s merchandise trade deficit widened to $13.81 billion in Aug 2021 from $8.20 billion
in Aug 2020. The trade deficit thus widened by 68.30%. Merchandise exports grew 45.76%
YoY to $33.28 billion in Aug 2021 from $22.83 billion in Aug 2020. Merchandise imports
rose 51.72% YoY to $47.09 billion in Aug 2021 from $31.03 billion in Aug 2020. Oil imports
in Aug 2021 stood at $11.65 billion which was higher by 80.64% in dollar terms compared
to Aug 2020. Non-oil imports were estimated at $35.43 billion in Aug 2021 which was
44.13% higher in dollar terms compared to Aug 2020.
3
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4
Domestic Equity Market Indices
Indices 17-Sep-21 1 Week Return YTD Return
S&P BSE Sensex
59,015.89 1.22% 23.59%
Nifty 50
17,585.15 1.24% 25.77%
S&P BSE Mid-Cap
25,046.48 1.38% 39.60%
S&P BSE Small-Cap
28,006.79 1.31% 54.75%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
13-Sep-21 1053 977 1.08
14-Sep-21 1199 819 1.46
15-Sep-21 1278 741 1.72
16-Sep-21 950 1057 0.90
17-Sep-21 569 1431 0.40
Source: NSE
• Indian equity markets settled for the
week in the positive terrain with
benchmark indices continuing to touch
fresh record highs and Sensex
breaching the 59,000 level for the first
time. Risk appetite boosted after data
showed retail price inflation slipped to
a four-month low of 5.3% in Aug from
5.59% in the previous month.
• Global cues also remained supportive
as slower than expected rise of the U.S.
inflation data downplayed the risk of
tapering of the stimulus measures by
U.S. Federal Reserve.
• Markets rallied following government’s
announcement of relief package for
the telecom sector and production
linked incentive for auto sector.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
30.78 26.93 35.93 40.75
P/B
3.77 4.44 3.48 3.58
Dividend Yield
0.91 1.13 0.84 0.66
Source: BSE, NSE Va
lue as on Sep 17, 2021
Indian Equity Market
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5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
S&P BSE Auto
23,282.20 2.60% 3.01%
S&P BSE Bankex
43,262.12 3.46% 5.91%
S&P BSE CD
40,905.92 1.65% 11.89%
S&P BSE CG
26,041.37 1.06% 8.29%
S&P BSE FMCG
15,055.55 0.76% 8.42%
S&P BSE HC
26,552.67 0.14% 1.25%
S&P BSE IT
34,850.19 1.55% 3.56%
S&P BSE Metal
20,477.72 -1.09% -2.37%
S&P BSE Oil & Gas
17,617.10 1.09% 10.86%
Source: Refinitiv *Value as on Sep 17, 2021
• On the BSE sectoral front, majority of the
sectors closed in the green. Banking stocks
went up with RBI Governor commenting that
stressed assets situation "looks manageable"
as the stock of gross non-performing assets
(NPAs) remained stable even after the second
wave of pandemic.
• Auto sector gained investors’ attention during
the week after Union Cabinet approved the
revised production-linked incentive (PLI)
scheme for the automobile sector, which aims
at promoting domestic manufacturing and
create jobs.
Indian Derivatives Market Review
• Nifty Sep 2021 Futures stood at 17,603.15, a premium of 18.00 points above the spot
closing of 17,585.15. The total turnover on NSE’s Futures and Options segment for the
week stood at Rs. 315.10 lakh crore as against Rs. 250.99 lakh crore for the week to Sep 10.
• The Put-Call ratio stood at 0.88 compared with the previous week’s close of 0.92.
• The Nifty Put-Call ratio stood at 1.15 compared with the previous week’s close of 1.27.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-Wk
Ago
1-Mth
Ago
6-Mth
Ago
Call Rate
3.22 3.13 3.23 3.25
91 Day T-Bill
3.30 3.31 3.38 3.35
05.22% 2025, (5 Yr GOI)
5.22 5.22 5.36 5.74
06.10% 2031, (10 Yr GOI)
6.17 6.18 6.23 --
Source: Refinitiv Value as on Sep 17, 2021
• Bond yields fell after U.S. inflation rose
less than expected in Aug 2021, which
eased concerns over an interest rate hike
by the U.S. Federal Reserve. Another
positive was domestic retail inflation that
eased in Aug 2021.
• However, gains were almost reversed on
news reports that central government
will borrow in the second half of this
fiscal year to fund the Goods and Services
Tax compensation (GST) to states. The
RBI continued to suck out excess liquidity
from the system through variable rate
reverse repo auctions, which fueled
concern of more such measures moving
ahead.
• Yield on the 10-year benchmark paper
(6.10% GS 2031) fell by 1 bps to close at
6.17% compared to the previous closing
of 6.18%.
Domestic Debt Market
6.14
6.18
6.22
13-Sep 14-Sep 15-Sep 16-Sep 17-Sep
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 3.94 5.22 128
3 Year 4.91 5.19 28
5 Year 5.69 6.18 49
10 Year 6.26 6.90 64
Source: Refinitiv Value as on
Sep 17, 2021
• Yields on gilt securities fell by up to 39 bps
across the maturities, barring 1, 3, 5 & 19 year
papers that rose by up to 2 bps while 4 year
paper was steady.
• Corporate bond yields rose in the range of 2 to
68 bps across the curve, leaving 2 to 4 & 15 year
papers that fell in the range of 4 to 11 bps. Yield
rose the most on 1 year paper.
• Spread between AAA corporate bond and gilt
expanded by up to 66 bps across segments,
except 3, 4 and 15 year papers that contracted
12, 4 and 3 bps, respectively.
Domestic Debt Market (Spread Analysis)
-8
-1
6
2.60
5.10
7.60
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 17-Sep-21 10-Sep-21
Yield in %
Change in bps
Source: Refinitiv
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8
• The Finance Minister made a host of choices at the GST Council meeting. The Council agreed
to extend the reductions on some Covid-related medications until Dec 31, 2021. Two Covid
medications were given GST exemption by the GST Council. The GST Council has reduced the
tax rate on cancer drugs from 12% to 5%. The GST rate on biodiesel for mixing with fuel has
been reduced from 12% to 5%. Restaurant services provided through e-commerce meal
delivery providers will be subject to GST, which will be levied at the point of delivery.
• The Union Cabinet has approved a telecom sector relief package that includes a four-year
ban on telecom businesses paying statutory dues and permitting 100% foreign investment
through the automatic route. These measures are expected to ease the cash flow issues
being faced by some players in the industry.
• The Union Cabinet has authorised Rs. 26,058 crore production linked incentive (PLI) scheme
for the auto, auto-components, and drone industries to improve India's manufacturing
capacity. The PLI scheme will encourage the development of a worldwide supply chain for
sophisticated automotive technology in India.
• Securities and Exchange Board of India (SEBI) has proposed revising the settlement rules to
align them with the specific nature of violations committed by firms in order to make the
mechanism more effective. The regulator has recommended revising the timelines for
settlements and rationalising the fee structure, which is an application involving an out-of-
court resolution of securities law breaches.
Regulatory Updates in India
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9
• The Finance Minister issued a formal government guarantee on the securities receipts that
the new "bad bank" will issue to banks as it acquires non-performing assets. The
government will provide a guarantee of Rs. 30,600 crore.
• According to the commerce and industry, by Nov 1, 2021, India and the U.K. plan to begin
negotiations on a trade agreement. By Mar 2022, the two countries hope to reach an
interim trade agreement, which will be followed by a comprehensive FTA. Early
concessions on select essential high-priority items and services linked to tariffs or market
access will be part of the interim agreement.
• The Insurance Regulatory and Development Authority of India (IRDAI) will shortly allow a
slew of new non-life policies in India, including title insurance and surety insurance. The
purpose of a title insurance policy is to safeguard a property buyer/developer against
financial loss resulting from a defect in the title to real property. Surety insurance is
designed to safeguard parties against financial loss as a result of payment defaults.
• IRDAI has announced new trade credit insurance guidelines, which will take effect on Nov
1, 2021. The goal is to support the trade credit insurance industry's long-term viability and
economic stability by identifying trade losses caused by credit risks. These
recommendations will apply to all insurers transacting general insurance business who are
registered under the Insurance Act of1938, according to an IRDAI circular.
Regulatory Updates in India (contd..)
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• According to the Labor Department, U.S. consumer price index rose 0.3% MoM in Aug
2021 after rising 0.5% in Jul 2021. Excluding food and energy prices, core consumer prices
inched up 0.1% MoM in Aug 2021 after increasing 0.3% in Jul 2021.
• According to the Commerce Department, U.S. retail sales rose 0.7% MoM in Aug 2021 after
falling by a revised 1.8% in Jul 2021.
• According to data from the National Bureau of Statistics, China’s retail sales rose 2.5% YoY
in Aug 2021 as against 8.5% rise in Jul 2021. In Aug, retail sales grew at a considerably
slower rate as the Delta variant epidemic weighed on consumer confidence, while
industrial output growth slowed due to supply chain bottlenecks and rising raw material
costs.
• According to the Cabinet Office, Japan's government downgraded its economic
assessment amid rising downside risks from the current domestic and overseas infections
and negative effects through the supply chains.
• According to data from the Office for National Statistics, U.K. unemployment rate fell 0.3%
points from the previous quarter to 4.6% in three months to Jul 2021. The employment
rate rose 0.5% points to 75.2% in three months to Jul 2021.
• According to data from the Office for National Statistics, U.K. consumer price index (CPI)
rose 3.2% YoY, highest rate since 2012, following 2% rise in Jul 2021. On the monthly
basis, CPI rose 0.7% in Aug as against unchanged from Jul.
10
Global News/Economy
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11
Global Indices
Indices
17-Sep-21
1-Week
Return
YTD
Return
Russell 3000 2,298.44 -0.50% 17.71%
Nasdaq 100 15,333.47 -0.69% 18.97%
FTSE 100 6,963.64 -0.93% 7.79%
DAX Index 15,490.17 -0.77% 12.91%
Nikkei Average 30,500.05 0.39% 11.13%
Straits Times 3,071.23 -0.89% 8.00%
Source: Refinitiv Value as on Sep 17, 2021
U.S.
• U.S. markets dipped despite lower-than-
expected increase in U.S. consumer
prices in Aug 2021 as investors
continued to presume that the U.S.
Federal Reserve is likely to begin
tapering its asset purchases by Dec
2021. Market participants also remained
cautious due to a resurgent COVID-19
virus and U.S. Federal Reserve meeting
scheduled next week.
Europe
• European markets fell considerably as UK inflation accelerated to a more than 8-1/2-year
high and on disappointing China’s retail sales and industrial production data. UK's inflation
data triggered expectation that the Bank of England might soon start tapering its
stimulus.
Asia
• Asian markets witnessed a mixed trend amid concerns about slowing global growth and
bets on early tapering by the U.S. Federal Reserve.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury rose 2
bps to close at 1.36%, from the previous
week’s close of 1.34%.
• U.S. Treasury prices rose initially after
inflation in U.S. rose less than expected in
Aug 2021 which led to uncertainty as to
when the U.S. Federal Reserve might start
tapering its monthly asset purchase
program.
• However, the trend reversed after retail
sales rebounded in Aug 2021 which
dampened the safe haven appeal of U.S.
Treasuries. U.S. Treasury prices fell
further on growing possibility that the
U.S. Federal Reserve could reduce its
asset purchases by the end of the year
despite a surge in COVID-19 cases.
Global Debt (U.S.)
1.26
1.31
1.36
13-Sep 14-Sep 15-Sep 16-Sep 17-Sep
Yield in %
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)
73.85 71.87
Gold ($/Oz)
1754.16 1787.34
Gold (Rs/10 gm)
46,178 46,898
Silver ($/Oz)
22.39 23.72
Silver (Rs/Kg)
61,067 63,806
Source: Refinitiv *Value as on Sep 17, 2021
Gold
• Gold prices witnessed pressure as an
unexpected increase in U.S. retail sales
raised expectations that the Fed may
reduce its stimulus sooner, which also
drove a rally in the dollar. Meanwhile,
investors are focusing on the upcoming
U.S. Federal Reserve meeting.
Brent Crude
• Brent Crude prices went up as offshore
U.S. production continues to slowly return.
Oil prices found additional support as
industry data showed a larger than
expected drop in U.S. crude inventories, as
well as anticipation that demand will
increase as vaccination rollouts expand.
Baltic Dry Index
• The index rose on WoW basis due to
improved capesize and panamax activities.
Commodities Market
9.30
10.00
10.70
17-Aug-21 1-Sep-21 16-Sep-21
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
Source: Refinitiv
-5.59%
2.75%
-1.86%
17-Sep-21
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing* 1-Wk Ago
US Dollar
73.49 73.69
Pound Sterling
101.38 101.49
EURO
86.52 87.13
100 Yen
66.89 66.94
Source: Refinitiv Figures in INR , *
Value as on Sep 17, 2021
Rupee
• The Indian rupee rose against the U.S. dollar
following gains in the domestic equity market
and greenback sales by some foreign banks.
Euro
• The euro fell against the greenback on growing
possibility that the U.S. Federal Reserve could
reduce its asset purchases by the end of the
year.
Pound
• Sterling fell against a dollar after U.S. retail
sales unexpectedly increased in Aug 2021.
Yen
• The yen fell against the greenback on growing
possibility that the U.S. Federal Reserve could
reduce its asset purchases by the end of the
year. However, most of the losses were
neutralized after U.S. inflation rose less than
expected in Aug 2021.
Currencies Markets
9.70
9.77
9.84
9.91
9.98
10.05
17-Aug-21 1-Sep-21 16-Sep-21
USD GBP Euro JPY
Source: Refinitiv
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
- 0.07%
- 0.27%
- 0.11%
- 0.70%
17-Sep-21
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15
The Week that was…
13
th
September to 17
th
September
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16
The Week that was (September 13 – September 17)
Date Events Present Value Previous Value
Monday,
September 13, 2021
• India Consumer Price Inflation (YoY) (Aug) 5.30% 5.59%
• Japan Producer Price Index (YoY)(Aug) 5.50% 5.60%
• Germany Wholesale Price Index (YoY)(Aug) 12.30% 11.30%
Tuesday,
September 14, 2021
• India Wholesale Price Inflation (YoY) (Aug) 11.39% 11.16%
• India Balance of Trade (USD) (Aug) -13.81B -10.97B
• U.K. ILO Unemployment Rate (3M)(Jul) 4.60% 4.70%
• U.S. Consumer Price Index (YoY)(Aug) 5.30% 5.40%
• Japan Industrial Production (YoY)(Jul) 11.60% 11.60%
Wednesday,
September 15, 2021
• China Retail Sales (YoY)(Aug) 2.50% 8.50%
• U.K. Consumer Price Index (YoY)(Aug) 3.20% 2.00%
• China Industrial Production (YoY)(Aug) 5.30% 6.40%
• Eurozone Industrial Production (MoM)(Jul) 1.50% -0.10%
Thursday
September 16, 2021
• U.S. Retail Sales (MoM)(Aug) 0.70% -1.8%
• Japan Merchandise Trade Balance Total (Yen) (Aug) -635.4B 439.4B
Friday,
September 17, 2021
• U.S. Michigan Consumer Sentiment Index(Sep) PREL 71 70.3
• Eurozone Consumer Price Index (MoM)(Aug) 0.40% -0.10%
• U.K. Retail Sales (MoM)(Aug) -0.90% -2.5%
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17
The Week Ahead
20
th
September to 24
th
September
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18
Day Event
Monday,
September 20, 2021
• Germany Producer Price Index (MoM)(Aug)
• U.K. Rightmove House Price Index (YoY)(Sep)
Tuesday,
September 21, 2021
• U.S. Housing Starts (MoM)(Aug)
• U.S. Building Permits (MoM)(Aug)
Wednesday,
September 22, 2021
• People Bank of China Interest Rate Decision
• Bank of Japan Interest Rate Decision
• U.S. Federal Reserve Interest Rate Decision
• Eurozone Consumer Confidence (Sep) PREL
Thursday,
September 23, 2021
• U.K. Interest Rate Decision
• Germany Markit PMI Composite (Sep) PREL
• Eurozone Markit PMI Composite (Sep) PREL
• U.S. Markit PMI Composite (Sep) PREL
Friday,
September 24, 2021
• Japan National Consumer Price Index (YoY)(Aug)
• U.K. GfK Consumer Confidence (Sep)
• Germany IFO – Business Climate (Sep)
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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