News U Can Use
April 6, 2018
The Week that was???
April to 6
Indian Economy
??? The Monetary Policy Committee (MPC) in its first bi-monthly policy review for 2018-19 kept
key policy repo rate unchanged at 6.0% and retained its ???neutral??? stance. Consequently, the
reverse repo rate stood unaltered at 5.75%, and the marginal standing facility (MSF) rate and
bank rate remained at 6.25%, each. Out of five members of the MPC, five policymakers were
in favour of the monetary policy decision and one advocated for a policy rate increase of 25
??? The Nikkei India Manufacturing Purchasing Managers' Index (PMI) fell to 51.0 in Mar 2018
from 52.1 in Feb 2018. This marked the weakest pace of rise in the last five months. The
downside reflected drop in new work and output and a fall in employment for the first time in
eight months.
??? The seasonally adjusted Nikkei India Services Business Activity Index improved from 47.8 in
Feb 2018 to 50.3 in Mar 2018 driven by greater inflows of new work. Meanwhile, the headline
seasonally adjusted Nikkei India Composite PMI Output Index, rose from 49.7 in Feb to 50.8
in Mar, driven by growth in both the manufacturing and service sectors.
??? Government data showed that the index of eight core industries grew 5.3% in Feb 2018 as
against 6.1% in Jan 2018 (6.7% originally reported) and 0.6% in Feb 2017. The month on
month slowdown in pace of growth reflects 2.4% and 1.5% decline in crude oil and natural
gas products respectively. Meanwhile, cement witnessed maximum growth of 22.9%. Growth
for Apr to Feb 2018 slowed to 4.3% from 4.7% in the same period of the previous year.
Indian Equity Market
Domestic Equity Market Indices
Indices 06-Apr-18 1 Week Return YTD Return
S&P BSE Sensex 33,626.97 2.00% -0.55%
Nifty 50 10,331.60 2.15% -1.00%
S&P BSE Mid-Cap 16,596.57 3.97% -6.95%
S&P BSE Small-Cap 17,882.99 5.23% -7.25%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
02-Apr-18 1,493 312 4.79
03-Apr-18 1,351 446 3.03
04-Apr-18 736 1,064 0.69
05-Apr-18 1,528 290 5.27
06-Apr-18 1,099 699 1.57
Source: NSE
??? Indian equity markets closed in the
green amid positive impact of
monetary policy wherein the MPC
lowered inflation expectations for the
fourth quarter of FY18 and first and
second halves of FY19.
??? Meanwhile, Reserve Bank of India
(RBI) permitting banks to spread their
bond trading losses over four quarters
and jump in big auto companies??? Mar
2018 vehicle sales further supported
buying interest. Expansion in the
Indian services sector in Mar 2018
added to the gains.
??? However, trade war tensions between
the U.S. and China and expansion of
India???s manufacturing sector in Mar
2018 at the weakest pace in 5 months
capped the gains. Persisting concerns
over the Indian banking sector also
weighed on the market sentiment.
Nifty 50
Mid Cap
Small Cap
23.24 25.65 38.52 102.61
3.09 3.55 2.91 2.59
Dividend Yield
1.15 1.24 0.86 0.64
Source: BSE, NSE Value as on Apr 06
, 2018
Indian Equity Market (contd.)
Sectoral Indices
Last Returns (in %)
Closing* 1-Wk 1-Mth
S&P BSE Auto
25,409.26 5.62% 5.43%
S&P BSE Bankex
27,855.60 2.42% 1.10%
22,192.97 -0.31% 5.11%
18,799.74 1.75% 1.11%
10,552.42 2.55% 2.68%
13,685.66 4.01% -0.76%
12,233.40 1.10% -0.93%
S&P BSE Metal
13,631.13 2.32% -6.06%
S&P BSE Oil & Gas
14,823.03 1.43% -2.70%
Source: Thomson Reuters
Eikon *Value as on Apr 06
, 2018
??? On the BSE sectoral front, indices closed on
a positive note. S&P BSE Auto (5.62%)
stood as the major gainer followed by S&P
BSE Healthcare (4.01%), S&P BSE Power
(3.17%), and S&P BSE Realty (2.90%).
??? Gains in auto stocks reflect solid auto sales
numbers. S&P BSE FMCG and S&P BSE
Bankex gained 2.55% and 2.42%,
respectively. S&P BSE Consumer Durables
was only loser and fell 0.31%.
Indian Derivatives Market Review
??? Nifty Apr 2018 Futures were at 10,352.85 points, a premium of 21.25 points, over the spot
closing of 10,331.60. The turnover on NSE???s Futures and Options segment stood at Rs. 34.44
lakh crore against Rs. 35.09 lakh crore on Mar 28.
??? The Put-Call ratio stood unchanged from the previous week???s close at 0.91.
??? The Nifty Put-Call ratio stood at 1.45 compared with the previous week???s close of 1.10.
Domestic Debt Market
Debt Indicators
Call Rate
5.89 7.57 5.87 5.85
91 Day T-Bill
6.10 6.12 6.30 6.07
7.80% 2021, (5 Yr GOI)
6.94 7.09 7.22 6.56
7.17% 2028, (10 Yr GOI)
7.17 7.40 7.77 --
Source: Thomson Reuters
Eikon *
Value as on Apr 06, 2018
??? Bond yields plunged after the MPC in
its bi-monthly monetary policy review
lowered its inflation rate projections for
the first and second half of FY19.
??? Forecast by a private weather agency
of normal monsoon rainfall this year
also eased inflation concern that
further boosted bond market.
??? News that the RBI permitted banks to
spread provisions made for mark-to-
market losses on their bond portfolios
also supported the domestic bond
??? Yield on the 10-year benchmark paper
(7.17% GS 2028) fell 23 bps to close
at 7.17% from the previous week???s
close of 7.40%, after trading in a range
of 7.12% to 7.37%.
3-Apr 4-Apr 5-Apr 6-Apr
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
Domestic Debt Market (Spread Analysis)
G-Sec Yield
Corporate Yield
1 Year
6.45 7.54
3 Year
6.94 7.74
5 Year
7.10 7.89
10 Year
7.18 8.14
Source: Thomson Reuters
Eikon Value as on Apr 06, 2018
??? Yields on gilt securities fell across all
maturities in the range of 11 bps to 45
bps. Maximum decrease was witnessed
on 11-year paper while minimum was
witnessed on 1- and 2-year papers.
??? Corporate bond yields fell across the
maturities in the range of 4 bps to 19 bps.
??? Spread between AAA corporate bond and
gilt expanded across all maturities by up
to 39 bps, barring 4- and 6- year
maturities that contracted by up to 5 bps
and 1-year paper that remained
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-Apr-18 28-Mar-18
Yield in %
Change in
Source: Thomson Reuters Eikon
Regulatory Updates in India
??? The RBI has modified its rigid position on provisioning norms for banks suffering losses from
bonds trading. RBI has permitted lenders to scatter their trading losses over four quarters so
that arranging funds to meet provisioning norms on bankrupt cases is not difficult. Also, the
central bank has stated that banks should create an Investment Fluctuation Reserve, which
could be used in case it is required to provide for bond losses in the future.
??? Securities and Exchange Board of India (SEBI) announced that it has brought in a new system
for depositories. The new system that will be effective from May 1, 2018, would be used to
monitor the foreign investment limits in listed Indian companies. This new system has been set
up in consultation with the RBI, thereby helping the companies to ensure compliance with
various foreign investment limits.
??? SEBI has raised the limit to process up to 100 orders per second by a user for algorithm
trading from the existing limit of 20 orders per second. This comes on the wake of relaxing
algorithm trading norms at commodity derivatives exchanges. The decision was taken after
receiving representations from exchanges along with views of Commodity Derivatives Advisory
??? RBI has appointed the Financial Benchmark India Pvt Ltd (FBIL) for valuation of portfolios of
government securities. This was earlier done by the Fixed Income Money Market and
Derivatives Association of India (FIMMDA). According to the directive issued by RBI, FIMMDA
has stopped publishing prices/yield of government securities effective Mar 31, 2018.
Regulatory Updates in India (contd..)
??? Insolvency and Bankruptcy panel has recommended changes to the insolvency resolution
framework in its report that was released by the ministry of corporate affairs. It has suggested
changes to the insolvency resolution framework to make it flexible for resolution professionals
to raise interim finance. To facilitate this, it has recommended that interest should be calculated
till one year after the liquidation date or repayment whichever is earlier. Currently, the interest is
calculated only till the liquidation date.
??? RBI has deferred implementation of two key regulatory policies. The regulator deferred the
execution of the Indian Accounting Standards (Ind AS) by one year. Also, countercyclical buffer
related provisioning requirements have been postponed. Ind AS is a global accounting practice
that is compulsory for lenders to adopt that may lead to initial credit losses. RBI stated that Ind
AS was to be effectively implemented from 2018. Meanwhile, banks were being asked to
submit half yearly balance sheets based on the Ind AS formats as a part of the preparedness.
??? The agriculture ministry has allowed states to set up their own insurance companies for
implementing the Pradhan Mantri Fasal Bima Yojana (PMFBY). For proper implementation of
the old crop insurance schemes which have now been merged with PMFBY, states had placed
several requests with the centre. The Comptroller and Auditor General in its 2017 report had
made observations that these schemes were poorly implemented during 2011-2016.
Global News/Economy
??? According to the Labor Department, U.S. non-farm payroll employment rose much less than
expected by 103,000 jobs in Mar 2018 after jumping by an upwardly revised 326,000 jobs
(313,00 jobs originally reported) in Feb 2018. The less than expected job growth came as rise in
employment in the manufacturing, healthcare, and mining sectors were partly offset by job
losses in the construction and retail sectors. The unemployment rate stood at 4.1% in Mar 2018,
unchanged from the five previous months. Meanwhile, annual rate of growth in average hourly
employee earnings rose 2.7% in Mar 2018 from 2.6% in Feb 2018.
??? According to the Institute for Supply Management, U.S. manufacturing Purchasing Managers
Index (PMI) fell to 59.3 in Mar 2018 from 60.8 in Feb 2018. The more than expected fall was
due to slowdown in the pace of job growth and new orders in the manufacturing sector.
??? According to data from IHS Markit, eurozone???s service PMI fell to 54.9 in Mar 2018 from 56.2 in
Feb 2018. Similarly, eurozone???s composite PMI fell to 55.2 in Mar from 57.1 in Feb as rates of
growth slowed in both manufacturing and services sectors.
??? According to survey data from IHS Markit, U.K.???s PMI fell more than expected to 51.7 in Mar
2018 from 54.5 in Feb 2018 due to snow disruption and unusually bad weather conditions in
Mar 2018.
??? As per survey results from IHS Markit, China???s manufacturing PMI fell unexpectedly to 51.0 in
Mar 2018 from 51.6 in Feb 2018. The unexpected fall was driven by slowdown in production
and new orders.
Global Equity Markets
Global Indices
Dow Jones
23,932.76 -0.71% -3.59%
Nasdaq 100
6,433.21 -2.25% -1.20%
FTSE 100
7,183.64 1.80% -6.07%
DAX Index
12,241.27 1.19% -4.90%
Nikkei Average
21,567.52 0.53% -8.25%
Straits Times
3,442.50 0.42% 1.16%
Source: Thomson Reuters Eikon
??? U.S. markets came under pressure as
concerns over trade war reignited
following China???s announcement of tariff
hike on certain goods imported from the
??? Losses were extended after U.S. job
growth slowed by much more than
anticipated in Mar 2018.
??? European markets closed on a positive note on optimism over a resolution of trade tensions
between the U.S. and China. Gains were capped as final data of a private survey showed
that Mar euro zone private sector expanded in Mar 2018 at the weakest pace since the start
of 2017. Meanwhile, euro zone retail sales increased at a slower than expected pace in Feb
after falling in the previous two months.
??? Asian markets witnessed a mixed trend. Optimism over negotiations between the U.S. and
China to resolve the escalating trade tensions provided initial support to the bourses. Gains
were capped as worries about a global trade war intensified amid reports of U.S. President's
plan to impose additional tariffs on Chinese imports.
Global Debt (U.S.)
??? Yield on the 10-year U.S. Treasury bond
rose 4 bps to close at 2.78% from the
previous week???s close of 2.74%.
??? U.S. Treasury prices rose initially as its
safe haven appeal improved after the
Institute for Supply Management reported
that the index of factory activity for U.S.
fell in Mar 2018.
??? However, the trend reversed, amid
reports that the U.S. is looking to resolve
a trade dispute with China.
??? Further losses were restricted at the end
of the week after the U.S. nonfarm payroll
employment for Mar 2018 came below
market expectations and grew at the
slowest rate in the last six months.
2-Apr 3-Apr 4-Apr 5-Apr 6-Apr
Yield in %
US 10-
Year Treasury Yield Movement
Source: Thomson Reuters Eikon
Commodities Market
Performance of various commodities
Last Closing* 1-Week Ago
Brent Crude($/Barrel)
65.70 68.21
Gold ($/Oz)
1,332.89 1,324.00
Gold (Rs/10 gm)
30,396 30,630
Silver ($/Oz)
16.35 16.32
Silver (Rs/Kg)*
37,884 38,325
Source: Thomson Reuters
Eikon *Value as on Apr 06, 2018
??? Gold prices inched up as investors
remained worried of a potential global
trade war as China announced tariff hike
on certain goods imported from the U.S.
in retaliation to U.S.??? move of imposing
tariff on steel and aluminum.
??? Brent crude prices moved down as
concerns over supply glut weighed on
sentiment after Russia reported an
increase in production in Mar 2018.
??? However, the downside was limited after
U.S. crude inventories fell by 4.617
million barrels for the week ended Mar
Baltic Dry Index
??? The Baltic Dry Index fell on the back of
lower capesize and panamax activities.
7-Mar-18 22-Mar-18 6-Apr-18
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
Source: Thomson Reuters Eikon
Currencies Markets
Movement of Rupee vs Other Currencies
Currency Last Closing* 1-Wk Ago
US Dollar
64.99 65.04
Pound Sterling
90.96 92.28
79.51 80.62
100 JPY
60.54 61.54
Source: RBI Figures in INR , *Value as on Apr 06, 2018
??? The Indian rupee rose against the
greenback after MPC in its bi-monthly
monetary policy review cut its inflation
projections for FY19.
??? Euro weakened against the greenback
after the euro zone composite output
index fell in Mar 2018.
??? Pound initially weakened against the
greenback after the U.K. services PMI for
Mar 2018 came below market
expectations. However, the trend reversed
after the U.S. nonfarm payroll employment
for Mar missed market expectations and
grew at the slowest pace in the past six
??? Yen weakened against the greenback as
its safe haven appeal dampened amid
reports that the United States is looking to
resolve a trade dispute with China.
7-Mar-18 22-Mar-18 6-Apr-18
Source: RBI
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
- 0.09%
The Week that was???
April to 6
The Week that was (Apr 2 ??? Apr 6)
Date Events
April 2, 2018
??? India's eight core industries data (Feb) 5.30% 6.10%
??? U.S. ISM Manufacturing (Mar) 59.3 60.8
??? U.S. ISM Employment (Mar) 57.3 59.7
April 3, 2018
??? India???s Nikkei Manufacturing PMI (Mar) 51.00 52.1
??? Germany Retail Sales (YoY) (Feb) 1.30% 2.50%
??? U.K. Markit Manufacturing PMI (Mar) 55.1 55
April 4, 2018
??? Eurozone Consumer Price Index Estimate
(YoY) (Mar)
1.40% 1.10%
??? U.S. ISM Non-Manufacturing/Services
Composite (Mar)
58.8 59.5
??? Japan Nikkei Composite PMI (Mar) 51.3 52.2
??? China Caixin Composite PMI (Mar) 51.8 53.3
??? U.S. Durable Goods Orders (Feb F) 3.00% 3.10%
April 5, 2018
??? India???s Monetary Policy Committee???s Interest
Rate Decision
6.00% 6.00%
??? India???s Nikkei Services PMI (Mar) 50.3 47.8
??? U.S. Initial Jobless Claims (Mar 31) 242k 218k
??? U.K. Markit/CIPS Composite PMI (Mar) 55.2 55.3
April 6, 2018
??? U.S. Change in Non-farm Payrolls (Mar) 103k 326k
??? Germany Industrial Production (YoY) (Feb) 2.60% 6.30%
The Week Ahead
April to 13
The Week Ahead
Day Event
April 9, 2018
??? Euro Zone Sentix Investor Confidence (Apr)
??? U.K. Halifax House Prices (MoM) (Mar)
??? Japan Consumer Confidence Index (Mar)
??? Japan Eco Watchers Survey Current (Mar)
April 10, 2018
??? China New Yuan Loans CNY (Mar)
??? Japan Machine Tool Orders (YoY) (Mar P)
??? U.K. NIESR GDP Estimate (3M) (Mar)
April 11, 2018
??? China Consumer Price Index (YoY) (Mar)
??? U.S. Consumer Price Index (YoY) (Mar)
??? U.K. Trade Balance (Feb)
??? U.K. Manufacturing Production (YoY) (Feb)
April 12, 2018
??? India Consumer Price Index (Mar 18)
??? India Index of Industrial Production (Feb 18)
??? Eurozone Industrial Production (YoY) (Feb)
??? U.S. Initial Jobless Claims (Apr 7)
??? U.S. Export Price Index (YoY) (Mar)
April 13, 2018
??? U.S. University of Michigan Sentiment (Apr P)
??? China Trade Balance CNY (Mar)
??? Germany Consumer Price Index (YoY) (Mar F)
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 considered as guidelines,
recommendations or as a professional guide for the readers. It may be noted that since Reliance Nippon Life Asset Management Company Limited (RNLAM)
(formerly Reliance Capital Asset Management Limited) has not independently verified the accuracy or authenticity of such information or data, or for that matter
the reasonableness of the assumptions upon which such data and information has been processed or arrive data; RNLAM does not in any manner assures the
accuracy or authenticity of such data and information. Some of the statements & assertions contained in these materials may reflect RNLAM???s views or opinions,
which in turn may have been formed on the basis of such data or information. The Sponsor(s), the Investment Manager, the Trustee or any of their respective
directors, employees, affiliates or representatives do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such
data or information. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate
and opinions given are fair and reasonable, to the extent possible. This information is not intended to be an offer or solicitation for the purchase or sale of any
financial product or instrument. Recipients of this information should rely on information/data arising out of their own investigations. Before making any
investments, the readers are advised to seek independent professional advice, verify the contents in order to arrive at an informed investment decision. None of
the Sponsor(s), the Investment Manager, the Trustee, their respective directors, employees, affiliates or representatives shall be liable in any way for any direct,
indirect, special, incidental, consequential, punitive or exemplary damages, including on account of lost profits arising from the information contained in this
All information contained in this document has been obtained by ICRA Online Limited from sources believed by it to be accurate and reliable. Although reasonable
care has been taken to ensure that the information herein is true, such information is provided ???as is??? without any warranty of any kind, and ICRA Online Limited or
its affiliates or group companies and its respective directors, officers, or employees in particular, makes no representation or warranty, express or implied, as to the
accuracy, suitability, reliability, timelines or completeness of any such information. All information contained herein must be construed solely as statements of
opinion, and ICRA Online Limited, or its affiliates or group companies and its respective directors, officers, or employees shall not be liable for any losses or injury,
liability or damage of any kind incurred from and arising out of any use of this document or its contents in any manner, whatsoever. Opinions expressed in this
document are not the opinions of our holding company, ICRA Limited (ICRA), and should not be construed as any indication of credit rating or grading of ICRA for
any instruments that have been issued or are to be issued by any entity.
Thank you for
your time.