News U Can Use
July 12, 2019
The Week that was…
July to 12
Indian Economy
India’s Index of Industrial Production (IIP) growth came in at 3.1% YoY in May 2019
compared with upwardly revised growth of 4.3% (rise of 3.4% originally reported) in Apr
2019 and increase of 3.8% in May 2018. The mining, manufacturing and electricity sector
rose 3.2%, 2.5% and 7.4% in May 2019 compared with a rise of 5.8%, 3.6% and 4.2% a
year ago, respectively.
India’s consumer inflation accelerated to 3.18% YoY in Jun 2019 from 3.05% in May 2019
but slowed compared with 4.92% in May 2018. Food inflation grew 2.17% in Jun 2019
compared with a growth of 1.83% in May 2019 and a growth of 2.91% in the same month
of the previous year. Pulses and products inflation rose to 5.68% YoY in Jun against a rise
of 2.13% in May. Meat and fish inflation rose to 9.01% YoY in Jun against a rise of 8.12%
in May.
According to government’s Meteorological Department, the monsoon has covered almost
the entire country, but three-fourths of the department’s sub-meteorological divisions still
fall under the “deficient” rainfall category. India Meteorological Department’s data shows
the overall monsoon deficiency, which was 33% at the start of the month, has dipped to
21%. No sub-division in the country recorded “large deficiency.
Media reports showed the government identified 28 central PSUs for disinvestment this
year. It also includes the national air carrier. The government is aiming to garner more than
Rs. 1 lakh crore in 2019-22 from the sale of its shares in public sector undertakings.
Indian Equity Market
Domestic Equity Market Indices
1 Week Return
YTD Return
S&P BSE Sensex
38,736.23 -1.97% 7.40%
Nifty 50
11,552.50 -2.19% 6.35%
-Cap 14,553.88 -1.17% -5.73%
S&P BSE Small
-Cap 13,776.58 -2.58% -6.32%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
08-Jul-19 351 1488 0.24
09-Jul-19 882 919 0.96
10-Jul-19 593 1192 0.50
11-Jul-19 931 841 1.11
12-Jul-19 898 895 1.00
Source: NSE
Indian equity markets witnessed a
downward trend during the week as
investors were reeling under the
aftereffects of the Union Budget 2019-
20. The market was expecting a big
stimulus for the economy in the budget,
which didn’t happen. Instead, the
finance minister announced certain
measures that didn’t go down well with
investors, including increasing public
holding in listed companies from 25%
to 35% and hike in surcharge on the
high-income group.
Further, the U.S. President complained
that India’s tariffs on U.S. products
were unacceptable, raising concerns of
trade tiff between the two countries.
Investors remained cautious ahead of
India's industrial production data for
May 2019 and retail inflation rate for
Jun 2019, scheduled post market hours
of the week’s last trading day.
Nifty 50
Mid Cap
Small Cap
27.85 28.33 30.57 35.55
2.95 3.61 2.43 1.92
Dividend Yield
1.21 1.29 1.02 1.04
Source: BSE, NSE Value as on July
12, 2019
Indian Equity Market (contd.)
Sectoral Indices
Last Returns (in %)
Closing* 1-Wk 1-Mth
S&P BSE Auto
S&P BSE Bankex
12,923.39 1.61% -0.93%
S&P BSE Metal
S&P BSE Oil & Gas
Source: Thomson Reuters Eikon
*Value as on July 12, 2019
On the BSE sectoral front, barring S&P BSE
HC (1.61%), all the major indices closed in
the red. Sectors have reacted negatively to
certain measures announced in the budget.
S&P BSE CD (-8.55%) stood as the major
loser followed by S&P BSE CG (-5.20%)
and S&P BSE Oil & Gas (-2.75%).
The auto sector lost 2.38% as Jun 2019
vehicle sales declined across categories,
once again exposing the weakness in the
sector. .
Indian Derivatives Market Review
Nifty Jul 2019 Futures stood at 11,544.35, a discount of 8.15 points, below the spot closing of
11,552.50. The total turnover on NSE’s Futures and Options segment for the week stood at
Rs. 62.90 lakh crore as against Rs. 55.55 lakh crore for the week to Jul 5.
The Put-Call ratio stood at 0.87 compared with the previous week’s close of 0.79.
The Nifty Put-Call ratio stood at 1.15 against the previous week’s close of 1.09.
Domestic Debt Market
Debt Indicators
Call Rate
5.63 5.56 5.69 6.35
91 Day T
5.85 5.89 5.97 6.63
07.32% 2024, (5 Yr GOI)
6.45 6.62 6.80 7.01
07.26% 2029, (10
6.49 6.70 7.01 7.26
Source: Thomson Reuters Eikon
Value as on July 12, 2019
Bond yield plunged for the second
week as the government announced
its plan for raising a proportion of its
borrowing through bond sales in the
overseas market. This somewhat
helped in alleviating fears of widening
fiscal deficit. After this announcement,
the bond market has likely turned
attractive for foreign participants,
which declined yields further.
Prices further boosted following
strength in the local currency after the
U.S. Federal Reserve chairman
signalled a policy rate-cut.
Yields on the 10-year benchmark
paper (7.26% GS 2029) plunged 21
bps to close at 6.49% compared with
the previous close of 6.70% after
trading in the range of 6.46% to
8-Jul 9-Jul 10-Jul 11-Jul 12-Jul
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
Domestic Debt Market (Spread Analysis)
Sec Yield
Corporate Yield
1 Year 6.16 7.75 159
3 Year 6.45 7.71 126
5 Year 6.56 7.80 124
10 Year 6.59 8.03 143
Source: Thomson Reuters Eikon
Value as on July 12, 2019
Yields on gilt securities increased on 1 and 2-
year paper by 1 bps each and fell across the
remaining maturities in the range of 7 bps to
23 bps.
Corporate bond yields fell across the
maturities in the range of 6 bps to 23 bps. The
maximum decline was witnessed on 8- and 9-
year papers and the minimum decline was
witnessed on 4-year paper.
Difference in spread between AAA corporate
bond and gilt expanded across 3 to 6 years’
maturities by up to 8 bps, closed steady on 10-
year paper and contracted across the
remaining maturities by up to 11 bps.
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 12-Jul-19 05-Jul-19
in %
in bps
Source: Thomson Reuters Eikon
Regulatory Updates in India
The government booked almost 1,800 cases for issuing fake Goods and Services Tax
(GST) invoices since 2017-18, media reports showed. The highest number of cases have
been booked in 2018-19 when the authorities booked 1,220 cases involving an amount of
nearly Rs. 9,500 crore. The government informed the Rajya Sabha that 1,796 cases for
issuing fake GST invoices has been booked in three years to claim the Input Tax Credit
(ITC) available under the GST.
The finance secretary said the government will soon start the process of raising funds from
overseas markets by issuing sovereign bonds in the second half of the fiscal. The finance
minister in Budget 2019-20 announced that the government would start raising a part of its
gross borrowing programme from external markets in foreign currencies. She added that
India’s sovereign external debt-to-GDP level is among the lowest globally at less than 5%.
Department of Investment and Public Asset Management secretary said the government
will carry out a number of ‘big and small’ strategic sales of public sector undertakings
(PSUs) in the current financial year and bringing down stakes in many PSUs to below 51%.
The finance ministry has justified raising tax incidence on the super rich, saying the highest
tax rate in India was still lower than many countries, including the U.S. and China. The
ministry said it is a worldwide phenomenon to ask the super rich to pay extra tax. Revenue
secretary said that the highest tax individual tax rate is 45% in China and South Africa, and
50.3% in the U.S.
Regulatory Updates in India (contd..)
The Reserve Bank of India said in its latest quarterly residential asset price monitoring
survey that housing affordability has worsened over the past four years even as banks have
become increasingly risk intolerant.
The Telecom Regulatory Authority of India (TRAI) is stuck to its recommendation on the
reserve price of spectrum, including 5G band, said media news. The Digital
Communications Commission (DCC) had asked TRAI to reconsider its spectrum
recommendations to ensure competition and greater participation of larger set of players in
auctions slated for 2019. The 5G band is aimed by the government to be put up for auctions
later in 2019.
Reserve Bank of India governor said the central bank will discuss issuance of overseas
sovereign bonds with the government. After the customary post-budget meeting with the
finance minister, he said the system has sufficient liquidity and the budget has made
provision for the non-banking financial sector.
India has started a probe into alleged dumping of flat rolled products of stainless steel from
15 countries. These countries include China, the U.S. and Japan. This comes following
complaints by domestic players. Commerce ministry’s investigation arm Directorate General
of Trade Remedies has begun the investigation after finding evidence of dumping of the
products from several countries including China, Korea and the European Union.
Global News/Economy
A Labor Department report showed an unexpected uptick in U.S. consumer prices in Jun
2019, reflecting steep drop in gas prices offset by an increase in the cost of shelter. The
Labor Department said its consumer price index inched up 0.1% in Jun, matching the slight
increase seen in May 2019.
A Labor Department report showed first-time claims for U.S. unemployment benefits
unexpectedly fell in the week ended Jul 6, 2019. The report said initial jobless claims
dropped to 209,000, a decrease of 13,000 from the previous week's revised level of 222,000.
Figures from the Office for National Statistics showed U.K. gross domestic product grew in
May 2019 after a decline in Apr 2019. GDP rose 0.3% MoM in May following a 0.4% decline
in Apr. The expansion was in line with expectations. In Mar 2019, GDP edged up 0.1%.
However, the rolling three-month growth slowed to 0.3% in the quarter to May from 0.4% in
the three months to Apr. In the Jan to Mar 2019 period, the growth was 0.5%.
The National Bureau of Statistics said consumer prices in China were up 2.7% YoY in Jun
2019, in line with expectations and unchanged from the May 2019 reading. On a monthly
basis, consumer prices were down 0.1% following the flat reading a month earlier. The
bureau also said that producer prices were flat YoY in Jun.
Global Equity Markets
Global Indices
Russell 3000
1,321.16 1.06% 24.32%
Nasdaq 100
7,943.24 1.30% 25.49%
FTSE 100
7,505.97 -0.62% 11.56%
DAX Index
12,345.30 -1.78% 16.92%
Nikkei Average
21,685.90 -0.28% 8.35%
Straits Times
3,357.34 -0.28% 9.40%
Source: Thomson Reuters Eikon
Value as on July 12, 2019
U.S. markets closed higher with investor
sentiment broadly supported by the
recent Congressional testimony of the
U.S. Federal Reserve chief.
The Fed chief indicated crosscurrents,
such as trade tensions and concerns
about global growth, have continued to
weigh on the U.S. economic outlook.
This, in turn, revived optimism about a
rate cut.
European markets witnessed pressure amid concerns over global economic slowdown as
the International Monetary Fund (IMF) and Bank of England spoke about risks from trade
tensions, Brexit impact and Italy's big deficit budget. Investor sentiment was dented by
tensions between the U.S. and the U.K. after Britain's ambassador to Washington
resigned during the week.
Asian markets ended the week in the red with investors remaining cautious ahead of
Chinese trade data and amid fresh worries over U.S.-China trade tensions. Nonetheless,
the downturn was restricted by dovish remarks from U.S. Fed, which reignited hopes of a
U.S. interest rate cut later this month.
Global Debt (U.S.)
Yields on the 10-year U.S. Treasury
bond rose 7 bps to 2.11% compared
with the previous week’s close of 2.04%.
U.S. Treasury prices fell initially as
market participants remained on the
sidelines ahead of the release of U.S.
Federal Reserve meeting minutes for
Jun 2019 and U.S. Fed chief’s
congressional testimony that was due
on Jul 10, 2019.
Losses were extended following weak
demand at the auction of $16 billion 30-
year bonds. U.S. Treasury prices fell
further after U.S. consumer price index
and producer price index rose in Jun
However, further losses were restricted
after the U.S. Fed chief in his
congressional testimony expressed
concerns over global growth which
increased the possibility of a rate cut by
the U.S. central bank in the near term.
8-Jul 10-Jul 12-Jul
US 10-Year Treasury Yield Movement
Source: Thomson Reuters Eikon
Commodities Market
Performance of various commodities
Last Closing*
1-Week Ago
Brent Crude($/Barrel)
67.14 64.82
Gold ($/Oz)
1,415.50 1,399.55
Gold (Rs/10 gm)
34,407 34,655
Silver ($/Oz)
15.21 14.97
Silver (Rs/Kg)
37,733 37,775
Source: Thomson Reuters Eikon *
Value as on July 12, 2019
Gold prices grew amid rising U.S.-China
trade feud after the U.S. President said
that China did not keep its promise of
purchasing American farm products.
Rising geopolitical tensions between the
U.S. and Iran heightened after the latter
said that it would bolster its uranium
enrichment, leading to a breach of the
2015 nuclear deal.
Brent Crude
Brent crude prices grew and stood above
the $65-a-barrel mark as tropical storm
Barry continued to inch towards the Gulf
Coast, compelling oil producers around
the belt to reduce their output by more
than half.
Baltic Dry Index
The Baltic Dry Index grew on the back of
improved capesize and panamax
12-Jun-19 22-Jun-19 2-Jul-19 12-Jul-19
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Commodity Prices
Rebased to 10
Source: Thomson Reuters Eikon
Currencies Markets
Movement of Rupee vs Other Currencies
Last Closing*
1-Wk Ago
US Dollar
68.59 68.75
Pound Sterling
86.01 86.50
77.29 77.52
100 Yen
63.30 63.70
Source: RBI Figures in INR , *
Value as on July 12, 2019
The rupee strengthened against the
greenback after U.S. Federal Reserve
chairman indicated interest rate cut at its
upcoming monetary policy meeting.
The euro weakened initially due to
uncertainty over U.S. Fed’s interest rate
decision. However, the trend reversed
after U.S. Fed chairman, in its testimony,
indicated interest rate cut at the
upcoming monetary policy meeting.
The pound rose against the greenback
as the latter weakened after the U.S. Fed
chairman indicated interest rate cut at
the upcoming monetary policy meeting.
The yen rose against the U.S. dollar after
the U.S. Fed chairman reinforced
expectations that the central bank will cut
interest rates in its next monetary policy
12-Jun-19 22-Jun-19 2-Jul-19 12-Jul-19
Source: Thomson Reuters Eikon
Prices (
in terms of
Rebased to 10
Currency Movement
The Week that was…
July to 12
The Week that was (July 08 July 12)
Date Events
Present Value
Previous Value
July 08, 2019
German Industrial Production (YoY) (May)
-3.70% -2.30%
German Trade Balance (May)
18.7b 16.9b
July 09, 2019
Japan Machine Tool Orders (YoY) (Jun P)
-38.00% -27.30%
July 10, 2019
China Consumer Price Index (YoY) (Jun)
2.70% 2.70%
U.K. Monthly Gross Domestic Product (MoM) (May)
0.30% -0.40%
U.K. Industrial Production (YoY) (May)
0.90% -1.10%
U.K. Manufacturing Production (YoY) (May)
0.00% -1.10%
U.K. Trade Balance (May)
-£2324m -£3716m
July 11, 2019
U.S. Consumer Price Index (YoY) (Jun)
1.60% 1.80%
Germany Consumer Price Index (YoY) (Jun F)
1.60% 1.60%
U.S. Initial Jobless Claims (Jul 6)
209k 222k
Japan Tertiary Industry Index (MoM) (May)
-0.20% 0.80%
July 12, 2019
India Consumer Price Index (Jun)
3.18% 3.05%
India Index of Industrial Production (May)
3.10% 3.40%
China New Yuan Loans CNY (Jun)
1660.0b 1180.0b
Eurozone Industrial Production (YoY) (May)
-0.50% -0.40%
Japan Industrial Production (YoY) (May F)
-2.10% -1.80%
China Trade Balance (Jun)
$50.98b $41.66b
The Week ahead
July to 19
The Week Ahead
Day Event
Jul 15, 2019
India Wholesale Price Index (Jun)
China Gross Domestic Product YTD (YoY) (2Q)
China Industrial Production (YoY) (Jun)
Jul 16, 2019
Germany ZEW Survey Expectations (Jul)
Eurozone ZEW Survey (Economic Sentiment) (Jul)
U.S. Retail Sales Advance (MoM) (Jul)
U.S. Industrial Production (MoM) (JUN)
Jul 17, 2019
U.K. Consumer Price Index (YoY) (Jun)
Eurozone Consumer Price Index (YoY) (Jun F)
U.S. Housing Starts (MoM) (Jun)
Japan Trade Balance (Jun)
Jul 18, 2019
Japan National Consumer Price Index (YoY) (Jun)
U.S Initial Jobless Claims (Jul 13)
U.S. Leading Index (Jun)
Jul 19, 2019
U.S. University of Michigan Sentiment (Jul P)
Japan All Industry Activity Index (MoM) (May)
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