News U Can Use
June 01, 2018
The Week that was…
May to 01
Indian Economy
The Gross Domestic Product (GDP) at 2011-12 prices of the Indian economy witnessed a
growth of 7.7% on a yearly basis in the fourth quarter (Q4) of FY18, up from a growth of
5.6%, 6.3% and 7.0% respectively in the first three quarters Q1, Q2 and Q3 of FY18. India
thus surpassed China’s growth of 6.8% in the same time. For FY18, the Indian economy
grew 6.7% on a yearly basis. On the sectoral front, Agriculture, forestry & fishing,
manufacturing and construction witnessed a growth of 4.5%, 9.1% and 11.5% respectively.
The public administration, defense and other services witnessed a maximum growth of
13.3% while mining and quarrying sector witnessed a minimum growth of 2.7%. The
Economic Affairs Secretary added that FY19 growth forecast is 7.5%.
The index of eight core industries witnessed a growth of 4.7% on a yearly basis in Apr
2018, up from 4.4% in the previous month and 2.6% in the same month of the previous
year. The cement sector witnessed the maximum growth of 16.6% on a yearly basis
followed by coal sector and natural gas sector that witnessed a growth of 16.0% and 7.4%
The Nikkei Manufacturing Purchasing Managers’ Index (PMI) fell to 51.2 in May 2018 from
51.6 in Apr 2018 due to weaker expansion in output, new orders and employment. This is
the 10th consecutive month when respective index came in above the threshold of 50.0.
India’s fiscal deficit for FY18 accounted 3.53% of GDP. The revenue deficit accounted
2.65% of GDP while the effective revenue deficit accounted 1.50% of GDP. In absolute
terms, India’s fiscal deficit stood at Rs. 5.92 lakh crore or 99.5% of the budget estimates.
Indian Equity Market
Domestic Equity Market Indices
Indices 01-Jun-18 1 Week Return YTD Return
S&P BSE Sensex 35227.26 0.87% 3.44%
Nifty 50 10696.20 0.86% 1.57%
S&P BSE Mid-Cap 15852.51 -0.33% -11.05%
S&P BSE Small-Cap 16978.96 -1.01% -11.71%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
28-May-18 1295 508 2.55
29-May-18 832 967 0.86
30-May-18 760 1043 0.73
31-May-18 646 1146 0.56
01-Jun-18 439 1382 0.32
Source: NSE
Indian equity markets closed in the
green in the week ended Jun 1,
2018. Surge in India’s gross domestic
product for the fourth quarter of FY18
and gains in auto stocks after sales
of two-wheelers and commercial
vehicles accelerated in May boosted
the indices. Decline in oil prices after
the Organization of the Petroleum
Exporting Countries (OPEC) and
non-OPEC country Russia indicated
to raise production level to meet the
shortfall in supply from Iran and
Venezuela added to the gains.
However, decline in banking stocks
as losses of public sector banks
widened for the fourth quarter of
FY18 on higher bad loan provisions
capped the gains. Further, slowdown
in India's manufacturing sector
activity in May 2018 muted buying
Nifty 50
Mid Cap
Small Cap
23.23 27.09 34.06 74.34
3.07 3.68 2.73 2.46
Dividend Yield
1.14 1.23 0.90 0.72
Source: BSE, NSE Value as on
Jun 01, 2018
Indian Equity Market (contd.)
Sectoral Indices
Last Returns (in %)
Closing* 1-Wk 1-Mth
S&P BSE Auto
24,635.29 1.83% -4.64%
S&P BSE Bankex
29,780.74 0.81% 3.94%
20,574.51 -2.54% -8.07%
18,694.89 0.48% -4.34%
11,216.01 -0.07% -0.79%
12,945.45 -0.76% -8.54%
13,326.16 -1.65% -1.78%
S&P BSE Metal
13,506.00 0.06% -5.40%
S&P BSE Oil & Gas
14,342.30 2.90% -0.60%
Source: Thomson Reuters Eikon
*Value as on June 01, 2018
On the BSE sectoral front, indices closed
on a mixed note. S&P BSE Consumer
Durables (-2.54%) stood as the major
loser followed by S&P BSE Information
Technology (-1.65%), S&P BSE Teck (-
1.53%), and S&P BSE Realty (-1.28%).
S&P BSE Oil & Gas Stocks stood as the
major gainer (2.90%), followed by S&P
BSE Auto (1.83%) and S&P BSE Bankex
that grew 0.81%.
Gains in auto stocks were driven by strong
auto sales data for May 2018. Meanwhile,
oil and gas stocks gained amid falling oil
prices and growth in one of the industry
majors due to surge in profits.
Indian Derivatives Market Review
Nifty May 2018 Futures settled at spot closing of 10,736.15 points. Nifty Jun 2018 Futures
were at 10,683.9 points, a discount of 12.30 points, below the spot closing of 10,696.20.
The turnover on NSE’s Futures and Options segment stood at Rs. 54.71 lakh crore as
against Rs. Rs. 44.43 lakh crore on May 25.
The Put-Call ratio stood at 0.83 compared with the previous week’s close of 0.94.
Domestic Debt Market
Debt Indicators
Call Rate
5.98 5.93 6.02 5.89
91 Day T-Bill
6.45 6.39 6.20 6.13
7.80% 2021, (5 Yr GOI)
7.72 7.66 7.57 6.76
7.17% 2028, (10 Yr GOI)
7.85 7.79 7.77 --
Source: Thomson Reuters
Value as on June 01, 2018
Bond yields rose following sharp
decline in rupee on Tuesday amid
political uncertainty in Italy and as
increase in crude oil prices renewed
fears of rise in domestic inflation.
Yields rose further following
increased possibility of rate hike by
the Monetary Policy Committee
(MPC) after strong gross domestic
product data for quarter ended Mar
2018 especially at a time when the
domestic inflation is at high rate.
Yield on the 10-year benchmark
paper (7.17% GS 2028) rose 6 bps to
close at 7.85% from the previous
week’s close of 7.79% after trading in
a range of 7.72% to 7.88%.
28-May 29-May 30-May 31-May 1-Jun
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
Domestic Debt Market (Spread Analysis)
G-Sec Yield
Corporate Yield
1 Year 7.19 8.46 126
3 Year 7.87 8.61 74
5 Year 7.99 8.64 64
10 Year 8.00 8.67 67
Source: Thomson Reuters Eikon
Value as on June 01, 2018
Yields on gilt securities increased across
the maturities by up to 17 bps, barring 1-
and 15-year maturities that fell by up to 2
bps. Yield on 19-year paper closed steady.
Corporate bond yields rose on 2 to 4 years’
maturities and 9 to 15 years’ papers in the
range of 4 bps to 9 bps. Yields was steady
on 8-year and fell across the remaining
maturities by up to 6 bps.
Spread between AAA corporate bond and
gilt contracted across the maturities in the
range of 2 to 16 bps, barring 3-, 10- and
15-year maturities that expanded in the
range of 2 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 01-Jun-18 25-May-18
Yield in %
Change in bps
Source: Thomson Reuters Eikon
Regulatory Updates in India
The Central Board of Indirect Taxes and Customs (CBIC) has directed its field offices to levy
goods and service tax (GST) on goods in customs warehouse during final clearance only.
This move will ensure ease of doing business for importers.
The Securities and Exchange Board of India has permitted debt issuers to review ratings
given by agencies. The move is expected to limit the threat of 'rating shopping' and 'pick-
and-choose' approach in their actions. The move comes after several firms have showed
discontentment against credit rating agencies (CRAs) after ratings on their debt were
changed. With the permission given by SEBI, such firms may approach credit rating
agencies with more supporting documents for a better rating. This is also expected to
enhance the governance, accountability and functioning of credit rating agencies (CRAs).
The Unique Identification Authority of India (UIDAI) has reduced the daily minimum Aadhaar
enrolment or updation target for stipulated bank branches by half to eight. This will be
effective from Jul 1, 2018, and has come as a major sigh of relief for banks.
Regulatory Updates in India (contd..)
The trustees of Employees' Provident Fund Organisation (EPFO), in its meeting on Feb 21,
had decided to reduce the administrative charges to 0.50% from 0.65% of total wage paid
by employers following expanding business and high recovery of such fees. The decision
has now been notified and will be effective from Jun 1. Post this move, 5 lakh employers
altogether will save around Rs. 900 crore annually.
The finance ministry has made it clear in a statement that renting or leasing of land by
farmers for agriculture, forestry, fishing or animal husbandry is excused from the goods and
service tax (GST). The statement also stated that agriculturists are exempted from GST
registration. Agriculturist here means an individual or an HUF (Hindu Undivided Family) who
indulges in cultivation of land by own labour or by the labour of family or by servants or
wages payable in cash or kind or by hired labour under personal supervision or the personal
supervision of any member of the family.
According to an order by the Authority for Advance Ruling (AAR), sale of a going concern by
a business house will not attract Goods and Services Tax (GST). The AAR stated that as
per a notification from government, any transfer of a going concern comprises of a supply of
service and nil tax rate will be applicable on the same.
Global News/Economy
U.S. non-farm payroll employment came in higher than market expectations and grew by
223,000 jobs in May 2018 as against an increase of downwardly revised 159,000 jobs
(addition of 164,000 jobs originally reported) in Apr 2018. The stronger than expected growth
reflects a continued uptrend in employment in several industries, including retail, healthcare,
and construction.
A report from the Institute for Supply Management showed that U.S. purchasing managers
index came in higher than market expectations and surged to 58.7 in May 2018 from 57.3 in
Apr 2018. The surge partly reflects increase in the pace of production growth that grew to
61.5 in May 2018 from 57.2 in Apr 2018.
A flash report from the Eurostat showed that Eurozone’s inflation came in higher than market
expectations and surged 1.9% in May 2018 as against a gain of 1.2% in Apr 2018.
Meanwhile, the European Central Bank targets 'below, but close to 2%' inflation. Core
inflation that excludes prices of energy, food, alcohol and tobacco surged to 1.1% in May as
against 0.7% in Apr.
Official data showed China’s manufacturing PMI came in at 51.9 in May 2018 as against
51.4 in Apr 2018. Non-manufacturing PMI came in at 54.9 in May as against 54.8 in Apr.
Japan's all industry activity remained unchanged in Mar 2018. The all industry activity index
was flat in Mar 2018 after rising 0.4% in Feb 2018. The indicator for construction activity fell
0.8% and that for tertiary industry activity fell 0.3%.
Global Equity Markets
Global Indices
Dow Jones
24,635.21 -0.48% -0.34%
Nasdaq 100
7,083.925 1.77% 10.75%
FTSE 100
7,701.77 -0.37% 0.18%
DAX Index
12,724.27 -1.65% -1.50%
Nikkei Average
22,171.35 -1.24% -2.61%
Straits Times
3,427.51 -2.44% 0.72%
Source: Thomson Reuters Eikon
Value as on Jun 01, 2018
U.S. markets largely remained initially
weak in the wake of the latest
protectionist move adopted by the U.S.
President on the trade front.
Markets reversed the trend later
following report that showed stronger
than expected U.S. job growth in May.
The data instilled confidence among
investors about the strength of the U.S.
economy to withstand further rate hikes.
European markets remained weak initially amid concerns over political situations in Italy
and Spain. Later, sentiment improved following reports that Italy has managed to form a
new government, thereby averting the prospects of the snap election. Nonetheless, buying
interest remained subdued as final data from IHS Markit showed slowdown in the growth
of euro zone manufacturing sector in May.
Asian markets too ended the week on a subdued note as speculations over a global trade
war resurfaced and the U.S. President underplayed the probability of reaching a quick
resolution with North Korea in the upcoming summit. The downturn was cushioned as the
final reading of a private survey showed that China's manufacturing activity expanded at a
steady pace in May.
Global Debt (U.S.)
Yield on the 10-year U.S. Treasury bond
fell 4 bps to close at 2.90% from the
previous week’s close of 2.94%.
U.S. Treasury prices surged initially as
its safe haven appeal improved
following political turmoil in Italy. It
stoked concerns over the country’s
future in the euro zone, which rattled
global financial markets. Treasury prices
rose further after tariffs were imposed
on steel and aluminum imports from the
European Union, Canada and Mexico,
which rekindled fears of a global trade
However, most of the gains were wiped
out as the political crisis in Italy seemed
to cool down after the country sought to
end its turmoil with a plan for a new
government and following upbeat U.S.
jobs data for May 2018.
29-May 30-May 31-May 1-Jun
US 10-Year Treasury Yield Movement
Source: Thomson Reuters Eikon
Commodities Market
Performance of various commodities
Last Closing* 1-Week Ago
Brent Crude($/Barrel)
74.48 77.14
Gold ($/Oz)
1,292.74 1,301.17
Gold (Rs/10 gm)
30,764 31,171
Silver ($/Oz)
16.35 16.48
Silver (Rs/Kg)
39,246 40,229
Source: Thomson Reuters
Eikon *Value as on Jun 01, 2018
Gold prices fell over the week. Main
factors contributed to the fall are easing
concerns on political turmoil in Italy and
possibility of U.S. and North Korea’s
scheduled summit in Jun. Upbeat U.S.
non farm payroll data for May 2018,
increased losses. However, the
downside was limited on fears of
probable trade war of the U.S. with EU,
Canada and Mexico.
Brent crude prices moved down after
the Organization of the Petroleum
Exporting Countries (OPEC) and non-
OPEC country Russia indicated to raise
production level to meet the shortfall in
supply from Iran and Venezuela.
Baltic Dry Index
The Baltic Dry Index gained 1.21% on
the back of improved capesize and
panamax activities.
2-May-18 12-May-18 22-May-18 1-Jun-18
Global Commodity Movement
Gold Spot ($/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
67.18 68.26
Pound Sterling
89.14 91.22
78.41 79.88
100 JPY
61.56 62.38
Source: RBI Figures in INR , *Value as on Jun 01, 2018
The Indian rupee gained against the
greenback following decline in global
crude oil prices and U.S. Treasury yields.
Selling of greenback by corporates and
exporters and upbeat domestic GDP for
Mar 2018 quarter, added to the gains.
Euro initially fell against the greenback
on political uncertainty in Italy and strong
U.S. jobs data. However, the trend
reversed following news that major
parties in Italy would make a renewed
attempt to form a coalition government.
Pound rose against the greenback amid
easing political concerns in Italy and
increase in U.K. manufacturing growth
for the first time in six months in May.
Yen fell against the greenback after
upbeat U.S. non-farm payroll
employment data in May 2018.
2-May-18 12-May-18 22-May-18 1-Jun-18
Source: RBI
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
The Week that was…
May to 01
The Week that was (May 28 – June 01)
Date Events
May 28, 2018
Japan Jobless Rate (Apr) 2.5% 2.5%
May 29, 2018
U.S. Consumer Confidence Index (May) 128.0 125.6
Japan Retail Trade (YoY) (Apr) 1.6% 1.0%
U.S. S&P/Case-Shiller US Home Price Index (YoY) (Mar)
May 30, 2018
Japan Consumer Confidence Index (May)
43.8 43.6
Eurozone German Retail Sales (YoY) (Apr)
1.2% 1.7%
Eurozone German Consumer Price Index (YoY) (May P) 2.2% 1.6%
U.S. Gross Domestic Product Annualized (QoQ) (1Q S) 2.2% 2.3%
May 31, 2018
China Manufacturing PMI (May)
51.9 51.4
Eurozone Consumer Price Index Estimate (YoY) (May)
1.8% 1.8%
U.S. Initial Jobless Claims (May 18)
221k 234k
Japan Housing Starts (YoY) (Apr) 0.3% -8.3%
June 01, 2018
Eurozone Markit Manufacturing PMI (May F) 55.5 55.5
U.S. Change in Non-farm Payrolls (May) 223k 159k
U.S. Unemployment Rate (May) 3.8% 3.9%
U.S. ISM Manufacturing (May) 58.7 57.3
U.K. Markit PMI Manufacturing s.a. (May) 54.4 53.9
The Week Ahead
June to 08
The Week Ahead
Day Event
June 04, 2018
U.K. Markit/CIPS UK Construction PMI (May)
U.S. Factory Orders (Apr)
Japan Overall Household Spending (YoY) (Apr)
June 05, 2018
Japan Nikkei PMI Composite (May)
China Caixin PMI Composite (May
U.K. Markit/CIPS Composite PMI (May)
Eurozone Retail Sales (YoY) (Apr)
U.S. ISM Non-Manufacturing/Services Composite (May)
June 06, 2018
Japan Real Cash Earnings (YoY) (Apr)
U.S. Trade Balance (Apr)
U.S. MBA Mortgage Applications (1 Jun)
June 07, 2018
Eurozone German Factory Orders n.s.a. (YoY) (Apr)
Eurozone Gross Domestic Product s.a. (YoY) (1Q F)
U.S. Consumer Credit (Apr)
Japan Trade Balance - BOP Basis (Yen) (Apr)
Japan Gross Domestic Product Annualized s.a. (QoQ) (1Q F)
June 08, 2018
China Trade Balance (Mar)
Japan Eco Watchers Survey Current (May)
U.K. BoE/TNS Inflation Next 12 Mths (May)
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