News U Can Use
February 22, 2019
The Week that was…
February to 22
Indian Economy
Foreign direct investment (FDI) into India shrank 7% to $33.49 billion during Apr-Dec in
FY19, according to commerce and industry ministry data. Foreign fund inflows during Apr-
Dec FY18 stood at $35.94 billion. The sectors that received the maximum foreign
investment during in the nine months of the fiscal are services ($5.91 billion), computer
software and hardware ($4.75 billion), telecommunications ($2.29 billion), trading ($2.33
billion), chemicals ($6.05 billion), and the automobile industry ($1.81 billion). Singapore
was the largest source of FDI during Apr-Dec FY19 with $12.97 billion inflow, followed by
Mauritius ($6 billion), the Netherlands ($2.95 billion), Japan ($2.21 billion), U.S. ($2.34
billion), and the U.K. ($1.05 billion).
According to a major global credit rating agency, Indian corporate entities might witness a
slowdown in revenue growth over the next 12-24 months. The rating agency is of the view
that the pending general elections might give rise to additional risks for the Indian
corporates as a change in administration may trigger an increase in government spending
which may push up borrowing costs and result in an increase in domestic inflationary
According to media reports, the Ministry of Finance will infuse Rs. 48,239 crore in 12 state-
run banks in this fiscal. The objective of the move is to help the banks maintain regulatory
capital requirements and finance growth plans. The total amount of capital infusion with
this funding will thus increase to Rs. 1,00,958 crore of the planned recapitalisation of Rs
1.06 lakh crore for the state run banks in this fiscal.
Indian Equity Market
Domestic Equity Market Indices
Indices 22-Feb-19 1 Week Return YTD Return
S&P BSE Sensex 35,871.48 0.17% -0.55%
Nifty 50 10,791.65 0.63% -0.65%
S&P BSE Mid-Cap 14,169.74 1.64% -8.22%
S&P BSE Small-Cap 13,517.71 2.00% -8.08%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
18-Feb-19 583 1216 0.48
19-Feb-19 1024 753 1.36
20-Feb-19 1119 676 1.66
21-Feb-19 1218 571 2.13
22-Feb-19 1226 589 2.08
Source: NSE
Indian equity markets fell on escalating
geo-political tensions, rising crude oil
prices and concerns over slower global
growth. Uncertainty ahead of the
general elections further kept investors
cautious. Meanwhile, investors
remained watchful on U.S.-China trade
talks as initially China blamed U.S. of
spreading cyber security fears and
maligning its leading technology
company. Although, later positive
developments were witnessed as the
U.S. President hinted that the truce
between them could be extended and
U.S. might postpone the increase in
tariffs if the trade talks continue to
Further, investors became worried over
the Reserve Bank of India’s (RBI)
meeting minutes showing Monetary
Policy Committee (MPC) members are
concerned about growth in the country.
Nifty 50
Mid Cap
Small Cap
22.92 26.32 30.31 -97.68
2.99 3.41 2.43 2.00
Dividend Yield
1.20 1.25 1.04 0.96
Source: BSE, NSE Value as on Feb
22, 2019
Indian Equity Market (contd.)
Sectoral Indices
Last Returns (in %)
Closing* 1-Wk 1-Mth
S&P BSE Auto
18,608.14 1.89% -4.73%
S&P BSE Bankex
30,091.92 0.40% -2.14%
21,282.27 0.90% 0.62%
16,815.07 2.46% -4.16%
11,344.28 -0.13% -4.24%
13,585.80 1.14% -2.99%
15,110.63 -1.74% 2.31%
S&P BSE Metal
10,669.97 6.55% -1.13%
S&P BSE Oil & Gas
13,634.56 4.29% -0.69%
S&P BSE Teck
18,608.14 1.89% -4.73%
S&P BSE Power
30,091.92 0.40% -2.14%
Source: Thomson Reuters Eikon
*Value as on Feb 22, 2019
On the BSE sectoral front, most of the
indices closed in the green barring S&P BSE
IT (-1.74%) and S&P BSE Teck (-0.95%) and
S&P BSE FMCG (-0.13%). S&P BSE Metal
(6.55%) stood as the major gainer followed
by S&P BSE Realty (4.46%) and S&P BSE
Oil & Gas (4.29%).
Banking sector got some support as media
reports suggested that the Ministry of
Finance will infuse Rs. 48,239 crore in 12
state-run banks in the fiscal. The objective of
the move is to help banks maintain regulatory
capital requirements and finance growth
Indian Derivatives Market Review
Nifty Feb 2019 Futures were at 10,808.80, a premium of 17.15 points, over the spot
closing of 10,791.65. The total turnover on NSE’s Futures and Options segment for the
week stood at Rs. 44.09 lakh crore as against Rs. 44.27 lakh crore for the week to Feb 15.
The Put-Call ratio stood at 0.88 compared with the previous week’s close of 0.96.
The Nifty Put-Call ratio stood at 1.37 against the previous week’s close of 1.30.
Domestic Debt Market
Debt Indicators
Call Rate
6.34 6.24 6.43 6.42
91 Day T-Bill
6.43 6.37 6.56 6.81
7.80% 2021, (5 Yr GOI)
6.76 6.75 7.02 7.69
7.17% 2028, (10 Yr GOI)
7.60 7.58 7.53 7.83
Source: Thomson Reuters Eikon
Value as on Feb 22, 2019
Bond yields fell initially after the
central bank announced to transfer
an amount of Rs. 280 billion as an
interim surplus to bridge the fiscal
deficit. This was a positive surprise
for the market, which helped in
bringing down the yield.
However, the trend reversed due to
feeble demand at the auction.
Concerns over widening fiscal deficit
and heavy borrowing plan of Rs. 7.10
trillion by the government for the next
financial year continued to weigh on
market sentiment. Minutes of the
latest monetary policy meeting
released by the central bank hinted at
rate cut in Apr 2019 and were in line
with expectations.
Yields on the 10-year benchmark
paper (7.17% GS 2028) rose 2 bps to
close at 7.60% from the last week’s
close at 7.58%.
18-Feb 20-Feb 21-Feb 22-Feb
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
Domestic Debt Market (Spread Analysis)
G-Sec Yield
Corporate Yield
1 Year 6.67 8.28 161
3 Year 6.88 8.36 148
5 Year 7.32 8.51 119
10 Year 7.75 8.73 98
Source: Thomson Reuters Eikon Value as on Feb 22, 2019
Yields on gilt securities increased across
the maturities by up to 7 bps barring 3-,
12- and 13-year papers that fell by up to
2 bps.
Corporate bond yields rose across the
maturities in the range of 2 bps to 7 bps
barring 1-year paper that closed steady.
Difference in spread between AAA
corporate bond and gilt contracted on 1-
and 15-year papers by 2 bps each.
Spread expanded across the remaining
maturities by up to 8 bps barring 4- and
5-year papers that closed steady.
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 22-Feb-19 15-Feb-19
Yield in %
Change in bps
Source: Thomson Reuters Eikon
Regulatory Updates in India
According to media reports, the Reserve Bank of India will pay an interim dividend of Rs.
28,000 crore to the government. There is a perception that the move that will help the
central government to keep fiscal deficit in check. It needs to be noted that this is the
second successive year that the Reserve Bank of India will be transferring an interim
The Union Cabinet has approved the National Electronics Policy. The policy aims at
domestic production of electronics goods to touch $400 billion by 2025 against around $80
billion now. The policy has proposed interest subvention scheme under which an interest
subsidy of 4% will be provided on loans of up to Rs. 1,000 crore on plant and machinery. In
case of a larger loan, subsidy will be limited to Rs. 1,000 crore.
According to media reports, the government plans to address taxation-related pain points
and reduce the number of tax litigations, while focusing on some of the major issues that
may lead to revenue generation. The Central Board of Direct Taxes (CBDT) has made a
four-member committee, in the leadership of income tax commissioner to examine the
matter and submit its final report and recommendations by middle of Mar 2019. The
committee is looking to tackle the issue in a two-prong way addressing some current
pain points and recommending some steps borrowed from international best practices, the
report said.
Regulatory Updates in India (contd..)
According to media reports, the government has eased angel tax norms for start up
companies. The government has increased the investment limit to Rs. 25 crore for availing
income tax concessions by start up entities from the present limit of Rs. 10 crore. In
addition, the government has also broadened the definition of a start up entity. According to
the new norm, an entity will be considered as a start up entity when has been operating for
a time period of ten years from its date of incorporation or registration, instead of the current
seven years. Furthermore, an entity will be treated as a start up entity if its turnover for any
of the financial years since incorporation and registration has not exceeded Rs 100 crore
from the present limit of Rs. 25 crore. The move is of significant importance given the fact
that many start up entities has expressed concerns regarding the fact that they were given
angel tax notices which had adversely impacted their business.
A section of the GST Council is worried that the need to give tax relief to the housing sector
to boost demand could lead to large scale tax evasion by builders. Thus, it wants to ensure
that relief should be structured in such a way that revenue leakage is taken care of. The
proposed GST rate cut with denial of input tax credit to builders would come with a condition
that builders must ensure 80% of the inputs are procured from GST-registered dealers.
Kerala finance minister feels that including capital goods as inputs would enable developers
to meet the condition easily and opening up a window for them to procure other building
materials from unregistered dealers. This could result in lower revenue collection for the
government, and facilitate more evasion.
Global News/Economy
As per the minutes of the U.S. Federal Reserve's latest policy meeting, "a patient approach
would have the added benefit of giving policymakers an opportunity to judge the response of
economic activity and inflation to the recent steps taken to normalize the stance of monetary
policy". The minute stated that additional data would help policymakers gauge the trajectory
of business and consumer sentiment and the impact of the financial tightening on aggregate
The Commerce Department showed a significant increase in U.S. durable goods orders in
Dec 2018. The report said durable goods orders increased 1.2% in Dec after jumping 1.0%
in Nov 2018.
U.K. employment hit a record high in Dec 2018 and wages grew at their fastest pace in a
decade. Employment rose by 167,000 to a record high of 32.60 million in the three months to
Preliminary survey data from IHS Markit showed that eurozone's private sector expanded at
the fastest pace in three months in Feb 2019, led by stronger growth in services, while
manufacturing contracted. The flash Composite Purchasing Managers' Index grew to 51.4
from 51 in Jan 2019.
Overall nationwide consumer prices in Japan increased 0.2% YoY in Jan 2018. This was in
line with expectations and less than 0.3% in Dec 2018. Core consumer prices, which
excludes volatile food prices, increased 0.8% YoY, matching forecasts and up from 0.7% in
the previous month.
Global Equity Markets
Global Indices
Dow Jones
26,031.81 0.57% 11.59%
Nasdaq 100
7,090.63 0.50% 12.02%
FTSE 100
7,178.60 -0.80% 6.70%
DAX Index
11,457.70 1.40% 8.51%
Nikkei Average
21,425.51 2.51% 7.05%
Straits Times
3,269.90 0.93% 6.55%
Source: Thomson Reuters Eikon
Value as on Feb 22, 2019
U.S. markets witnessed buying spree,
led by optimism over positive
breakthrough of talks between U.S. and
China over the trade deal. Recently, the
U.S. President suggested that he could
postpone the increase of tariffs, set to
take effect after the deadline of Mar 1,
2019, in case the trade talks show signs
of progress.
Majority of the European markets drew positive cues from optimism over the upcoming
round of talks between the U.S. and Chinese officials. Investors are expecting that the two
nations will take steps closer toward achieving a trade deal in the foreseeable future.
Market participants also closely followed developments over Brexit.
Asian markets reflected gains in global peers. Buying interest was impacted by the
minutes of the U.S. Federal Reserve’s latest meeting that indicated a patient approach to
raising interest rates in the future. Japanese markets rose on optimism over U.S.-China
trade talks, which helped investors shrug off weak manufacturing data, as revealed in
preliminary reading of a private survey.
Global Debt (U.S.)
Yields on the 10-year U.S. Treasuries
fell 1 bps to close at 2.66% from the
previous close of 2.67%.
U.S. Treasury prices grew ahead of the
release of U.S. Federal Reserve's (Fed)
Jan 2019 policy meeting minutes. Fed
had indicated patience in raising interest
rates in the policy meeting. Weak U.S.
economic data amid federal government
shutdown added to the gains.
Preliminary data for U.S Markit
Manufacturing PMI showed that it fell
more than market expectations for Feb
However, reports of progress in U.S.
and China trade talks, restricted the
gains. According to media reports,
leaders from U.S. and China have
begun framing commitments in principle
on the major issues, thereby marking
the most significant progress so far.
19-Feb 20-Feb 21-Feb 22-Feb
US 10-Year Treasury Yield Movement
Source: Thomson Reuters Eikon
Commodities Market
Performance of various commodities
Last Closing* 1-Week Ago
Brent Crude($/Barrel) 67.45 66.04
Gold ($/Oz) 1327.71 1321.01
Gold (Rs/10 gm) 33252 33193
Silver ($/Oz) 15.92 15.78
Silver (Rs/Kg) 40121 39767
Source: Thomson Reuters Eikon *Value as on Feb 22, 2019
Gold prices grew amid Brexit
uncertainties and political unrest in U.S.
pertaining to the controversial U.S.-
Mexico border. The bullion’s price was
also supported by the cautious stance
taken by Bank of Japan on its monetary
policy amid rising global risks. Concerns
over U.S.-China trade negotiations also
led to the gains. The two economies
recently held talks in Beijing to resolve
their trade differences.
Brent Crude
Brent crude prices surged due to the
OPEC-led production cut to tighten the
oil market. Besides, the U.S. sanction
on Venezuela also raised supply
concerns, thereby adding to the gains.
Baltic Dry Index
The Baltic Dry Index fell on the back of
lower capesize and panamax activities.
23-Jan-19 2-Feb-19 12-Feb-19 22-Feb-19
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
71.22 71.25
Pound Sterling
92.83 91.23
80.75 80.42
JPY(per 100 Yen)
64.29 64.55
Source: RBI Figures in INR , *Value as on Feb 22, 2019
The rupee inched up against the
greenback amid gains in the domestic
equity market and on hopes that the
ongoing trade tussle between U.S. and
China might soon be resolved.
The euro rose against the greenback on
hopes that the ongoing trade tussle
between U.S. and China might soon
come to an end.
The pound rose against the greenback
on hopes that the British Prime Minister
would be able to come out with a revised
Brexit deal with the European Union.
The yen weakened against the
greenback on concerns of another rate
hike in U.S. following the release of U.S.
Fed’s policy meeting minutes of Jan
23-Jan-19 2-Feb-19 12-Feb-19 22-Feb-19
Source: RBI
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
The Week that was…
February to 22
The Week that was (Feb 18 – Feb 22)
Date Events
February 18, 2019
U.K. Rightmove House Prices (YoY) (Feb) 0.2% 0.4%
February 19, 2019
Eurozone ZEW Survey (Economic Sentiment) (Feb) -16.6 -20.9
German ZEW Survey Expectations (Feb) -13.0 -15.0
U.K. Employment Change 3M/3M (Dec) 167k 141k
Japan Trade Balance (Jan) -¥1452.2b 56.7b
February 20, 2019
U.S. MBA Mortgage Applications (Feb 15) 3.6% -6.9%
Eurozone Consumer Confidence (Feb A) -7.4 -7.9
February 21, 2019
Japan National Consumer Price Index (YoY) (Jan) 0.2% 0.3%
U.S. Durable Goods Orders (Dec P) 1.2% 1.0%
Japan All Industry Activity Index (MoM) (Dec) -0.4% -0.5%
Germany Consumer Price Index (YoY) (Jan F) 1.4% 1.4%
Germany Markit/BME Composite PMI (Feb P) 52.7 52.1
Eurozone Markit Composite PMI (Feb P) 51.4 51.0
U.S. Existing Home Sales (MoM) (Jan) -1.2% -4.0%
U.K. Public Sector Net Borrowing (Jan) -15.8b 2.14b
U.S. Leading Index (Jan) -0.1% -0.1%
February 22, 2019
Germany Gross Domestic Product (YoY) (4Q F) 0.9% 0.6%
Eurozone Consumer Price Index (YoY) (Jan F) 1.4% 1.6%
The Week Ahead
February to 01
The Week Ahead
Day Event
February 25, 2019
U.S. Retail Sales Advance (MoM) (Jan)
February 26, 2019
German GfK Consumer Confidence (Mar)
U.S. Housing Starts (MoM) (Dec)
U.S. Consumer Confidence Index (Feb)
February 27, 2019
German Retail Sales (YoY) (Jan)
U.S. Advance Goods Trade Balance (Dec)
Japan Industrial Production (YoY) (Jan P)
February 28, 2019
U.K. GfK Consumer Confidence (Feb)
German Consumer Price Index (YoY) (Feb P)
U.S. Gross Domestic Product Annualized (GDP) (QoQ) (4Q A)
India GDP Estimate Q3FY19
India Index of Eight Core Industries (Jan)
March 01, 2019
Eurozone Consumer Price Index Estimate (YoY) (Feb)
U.S. Personal Consumption Expenditure Core (YoY) (Dec)
U.S. ISM Manufacturing (Feb)
India Nikkei Manufacturing PMI (Feb)
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 (RNAM) 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; RNAM 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 RNAM’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 material.
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.
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
Thank you for
your time.