News U Can Use
March 16, 2018
The Week that was…
March to 16
Indian Economy
The Consumer Price Index (CPI) based inflation or retail inflation grew 4.44% in Feb 2018,
down from 5.07% in the previous month and up from 3.65% in the same month of the
previous year. Though retail inflation growth subdued, it surpassed Reserve Bank of
India’s medium-term target of 4% for the fourth consecutive month. The Consumer Food
Price Index also grew 3.26% in Feb 2018, down from 4.70% in the previous month and up
from 2.01% in the same month of the previous year.
India’s Index of Industrial Production (IIP) grew 7.5% in Jan 2018 as against growth of
7.1% in Dec 2017 and 3.5% in the same period of the previous year. The manufacturing
sector also surged 8.7% in Jan 2018 from 2.5% growth in the same period of the previous
year. However, IIP growth for Apr to Jan 2018 slowed to 4.1% from 5.0% in the same
period of the previous fiscal.
India’s export during the month of Feb 2018 increased 4.48% YoY to $25.83 billion from
$24.73 billion in Feb 2017. Similarly, import grew 10.4% YoY to $37.81 billion from $34.25
billion in the same period of the previous year. Trade deficit widened to $12.0 billion as
against $9.52 billion in Feb 2017. However, it narrowed against $16.30 billion in Jan 2018.
Government data showed that India’s Wholesale Price Index-based inflation (WPI) slowed
to a seven-month low of 2.48% in Feb 2018 from 2.84% in the previous month and 5.51%
in the same month of the previous year. Wholesale inflation grew at a slower pace due to
softer rise in food and fuel prices. The WPI Food Index also decreased from 1.65% in Jan
2018 to 0.07% in Feb 2018.
Indian Equity Market
Domestic Equity Market Indices
Indices 16-Mar-18 1 Week Return YTD Return
S&P BSE Sensex 33176.00 -0.39% -1.88%
Nifty 50 10195.15 -0.31% -2.30%
S&P BSE Mid-Cap 16219.13 1.45% -9.06%
S&P BSE Small-Cap 17576.44 1.56% -8.84%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
12-Mar-18 984 832 1.18
13-Mar-18 1215 579 2.10
14-Mar-18 868 896 0.97
15-Mar-18 1100 674 1.63
16-Mar-18 534 1263 0.42
Source: NSE
Indian equity markets closed in the red
as investigative agencies registered a
fresh case of another fraud at a state-
owned bank, thereby raising persisting
concerns over public-sector banks.
Meanwhile, the information technology
sector fell after a big privately held
company sold its stake in a technology
major. Also, global trade war concerns
muted buying interest.
However, losses were capped amid
positive cues from global peers which
moved up on the back of strong U.S.
jobs report for Feb 2018. Encouraging
industrial output data for Jan 2018 and
easing of wholesale price inflation for
the third consecutive month in Feb
2018 further supported buying interest.
Also, announcement of continuation of
a government subsidy for urea that
would give boost to the agriculture
sector boosted indices.
Nifty 50
Mid Cap
Small Cap
22.93 24.87 38.82 113.69
3.04 3.44 2.8 2.52
Dividend Yield
1.18 1.28 0.89 0.66
Source: BSE, NSE Value as on Mar
16, 2018
Indian Equity Market (contd.)
Sectoral Indices
Last Returns (in %)
Closing 1-Wk 1-Mth
S&P BSE Auto
24207.8 -0.19% -2.28%
S&P BSE Bankex
27610.3 0.96% -2.77%
21781.8 2.05% 3.91%
18367.9 -0.52% -4.34%
10298.3 0.19% -2.27%
13505.8 0.42% -5.34%
12317.8 -0.69% 1.81%
S&P BSE Metal
13918.7 -0.56% -7.97%
S&P BSE Oil & Gas
14995.9 -0.37% -3.54%
Source: Thomson Reuters
Eikon Value as on Mar 16, 2018
On the BSE sectoral front, indices closed on
a negative note. S&P BSE Information
Technology (-0.69%) stood as the major
loser followed by S&P BSE Metal (-0.56%),
S&P BSE Capital Goods (-0.52%), and S&P
BSE Oil & Gas (-0.37%).
S&P BSE Metal continued to decline amid
persistent concerns over the imposition of
tariff on steel and aluminium by the U.S.
President. S&P BSE Teck and S&P BSE
FMCG fell 0.23% and 0.19%, respectively.
S&P BSE Consumer Durables (2.05%)
stood as the major gainer followed by S&P
BSE Bankex that grew 0.96%.
Indian Derivatives Market Review
Nifty Mar 2018 Futures were at 10,232.5 points, a premium of 37.35 points, above the spot
closing of 10,195.15. The turnover on NSE’s Futures and Options segment stood at Rs. 41.71
lakh crore against Rs. 42.24 lakh crore on Mar 9.
The Put-Call ratio stood at 0.86 compared with the previous week’s close of 0.78.
The Nifty Put-Call ratio stood at 1.09 compared with the previous week’s close of 1.14.
Domestic Debt Market
Debt Indicators
Call Rate
5.97 5.89 5.96 5.85
91 Day T-Bill
6.19 6.25 6.34 6.37
7.80% 2021, (5 Yr GOI)
7.12 7.22 7.10 6.48
7.17% 2028, (10 Yr GOI)
7.56 7.67 7.58 --
Source: Thomson Reuters
Value as on Mar 16, 2018
Bond yields fell on hopes that retail
inflation would ease in Feb 2018,
which might delay the chances of a
rate hike by the Monetary Policy
Committee in its upcoming monetary
policy review in Apr 2018. Retail
inflation came better than market
expectation and also touched four
month low. .
However, market participants preferred
to book profits from the recent bond
rally and on concerns over higher
global interest rates.
At the end, yields plunged amid media
reports that government might raise
foreign investment limit for government
Yield on the 10-year benchmark paper
(7.17% GS 2028) fell 11 bps to close at
7.56% from the previous week’s close
of 7.67% after trading in a range of
7.56% to 7.71%.
12-Mar 13-Mar 14-Mar 15-Mar 16-Mar
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
Domestic Debt Market (Spread Analysis)
G-Sec Yield
Corporate Yield
1 Year 6.61 7.51 90
3 Year 7.24 7.68 44
5 Year 7.52 7.94 42
10 Year 7.86 8.32 46
Source: Thomson Reuters
Eikon Value as on Mar 16, 2018
Yields on gilt securities fell across the
maturities by up to 13 bps. The maximum
fall was witnessed on 9-year and 19-year
Corporate bond yields fell across the
maturities in the range of 4 bps to 21 bps.
The minimum fall was witnessed on 7-
year paper and the maximum on 3-year
Spread between AAA corporate bond and
gilt expanded across 4-year paper and 7
to 15 years’ maturities by up to 7 bps.
Spread contracted across the remaining
maturities in the range of 3 bps 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 16-Mar-18 09-Mar-18
Yield in
Change in bps
Source: Thomson Reuters Eikon
Regulatory Updates in India
The Reserve Bank of India (RBI) has decided to scrap quasi bank guarantee instruments
like the Letter of Undertaking (LoU) and Letter of Comfort, etc. This is expected to improve
banks’ due diligence in trade credit. However, it can continue to issue guarantees and letter
of credit for trade purposes which are the international norm, and also have features that
makes the claim on the issuer strong.
The Securities and Exchange Board of India (SEBI) has announced that collective
investment vehicles of private banks investing their money through the foreign portfolio
investor (FPI) route cannot have non-resident Indian as beneficial owners. As per the
circular, the client or the investor should have fulfilled know your client norms. Also, the
beneficial owners of client/investor of bank should be identified in accordance with Rule 9 of
Prevention of Money Laundering Rules. Meanwhile, SEBI has provided clarity regarding
investment by some category II foreign portfolio investors.
The cabinet has decided to continue urea subsidy to ensure adequate quantity of the
fertiliser is available to farmers at controlled prices. It approved the proposal of department
of fertilisers to continue urea subsidy scheme from 2017 up to 2020 at a total estimated cost
of Rs. 1,64,935 crore. Also, it has decided to implement direct benefit transfer (DBT) in the
sector to reduce diversion and plug leakages.
Regulatory Updates in India (contd..)
A parliamentary panel has asked the government to assess the Employees Pension
Scheme 1995 and consider a revision of the minimum monthly pension of Rs. 1,000.
According to the panel, the social security benefit is too meagre to fulfil even the basic
needs. Meanwhile, the trade unions have been demanding for a very long time that
minimum pension may be raised to Rs. 3,000 a month. Government has been
recommended to conduct an assessment of the pension scheme with particular reference
to the right to sustenance of the pensioners and based on the findings, consider a revision
of the amount.
The Union cabinet has decided to clear a double taxation avoidance agreement between
India and Iran. The agreement will promote investment and technology flow, from India to
Iran and vice versa, and will prevent double taxation.
The Supreme Court has extended the deadline for Aadhaar linking with mobile or bank
accounts until the disposal of Aadhaar case. Earlier, the deadline to link Aadhaar with
various services was set for Mar 31, 2018. This development comes as a major relief for
those who have not yet linked their Aadhaar. However, the order is not applicable to the
deadline for subsidies and benefits under Section 7, which means that the order will not
apply in cases where subsidies are given by the government.
Global News/Economy
According to a report from the labour department, U.S. consumer price index came in line
with market expectations and grew 0.2% in Feb 2018 as against a gain of 0.5% in Jan 2018.
Meanwhile, core consumer prices, which exclude food and energy prices, also grew 0.2% in
Feb as against an increase of 0.3% in Jan.
According to data from the Commerce Department, U.S. retail sales fell for third consecutive
month by 0.1% in Feb 2018, similar to Jan 2018 that was upwardly revised.
According to data from Eurostat, eurozone industrial production fell for the first time in four
months to 1% MoM in Jan 2018 from 0.4% rise in Dec 2017. All components barring capital
and non-durable consumer goods fell in Jan. On a yearly basis, industrial production growth
slowed to 2.7% in Jan from 5.3% in Dec.
According to data from Eurostat, Germany's consumer price inflation slowed for the third
consecutive month to 1.4% YoY in Feb 2018 from 1.6% in Jan 2018. On monthly basis,
consumer prices rose 0.5% mainly due to higher prices of package holidays.
According to the Ministry of Economy, Trade and Industry, Japan’s tertiary industry activity
index fell 0.6% MoM in Jan 2018 as against Dec 2017 that remained flat. This marked the
first decline since Sep 2017. Meanwhile, broad-ranging personal services inched down 0.1%
and broad-ranging business services fell 0.8% in Jan. On a yearly basis, tertiary industry
activity growth surged 1.6% in Jan as against a gain of 1.3% in Dec.
Global Equity Markets
Global Indices
Dow Jones
24946.51 -1.54% 0.49%
Nasdaq 100
7019.95 -1.14% 7.81%
FTSE 100
7164.14 -0.84% -6.33%
DAX Index
12389.58 0.35% -3.74%
Nikkei Average
21676.51 0.97% -7.78%
Straits Times
3512.14 0.76% 3.21%
Source: Thomson Reuters Eikon
Value as on Mar 16,
U.S. markets fell over the week on
concerns that trade tensions between
the U.S. and China could increase after
the U.S. government asked China to
reduce its trade surplus with the U.S. by
$100 billion and decided to put heavy
tariffs on Chinese imports. Political
concerns also dented sentiment after
the U.S. President decided to replace
U.S. Secretary of State.
European markets mostly traded in the green because of positive economic data of
eurozone and Germany. Meanwhile, the Organisation for Economic Co-operation and
Development (OECD) has stated in its latest Interim Economic Outlook that the global
economy will grow 3.9% in 2018 as well as 2019 as against previous expectation for
growth of 3.7% for 2018 and 3.6% for 2019.
Most of the Asian markets gained after geopolitical tension eased as the North Korean
leader offered to halt nuclear and missile tests. Some of the positive economic data also
helped sentiment as China's industrial production expanded more than expected in the
first two months of the year while core machine orders in Japan rose a seasonally
adjusted 8.2% in Jan.
Global Debt (U.S.)
Yield on the 10-year U.S. Treasury bond
fell 5 bps to close at 2.85% from the
previous week’s close of 2.89%.
U.S. Treasury prices rose initially as its
safe-haven appeal improved over rising
diplomatic tension between Britain and
Russia. Gains were extended following
fall in U.S. retail sales in Feb 2018 and
concerns over U.S. political and trade
However, gains were capped on
growing possibility that the U.S. Federal
Reserve might increase interest rates in
its monetary policy review due next
12-Mar 13-Mar 14-Mar 15-Mar 16-Mar
US 10-Year Treasury Yield Movement
Source: Thomson Reuters Eikon
Commodities Market
Performance of various commodities
Last Closing 1-Week Ago
Brent Crude($/Barrel)
64.32 65.28
Gold ($/Oz)
1313.00 1323.64
Gold (Rs/10 gm)
30299 30369
Silver ($/Oz)
16.30 16.60
Silver (Rs/Kg)
37980 38313
Source: Thomson Reuters
Eikon Value as on Mar 16, 2018
Gold prices fell on expectations that the
U.S. Federal Reserve will increase
interest rates in the upcoming policy
meeting. Better than expected economic
data also lowered the safe-haven
appeal of the metal.
Brent crude prices moved down as
investors remained cautious after the
International Energy Agency said in its
monthly report that U.S. crude oil
production jumped above 10 million
barrels per day (bpd) at the end of 2017
and separately, the U.S. Energy
Information Administration mentioned
that U.S. shale production is expected
to rise by 131,000 bpd in Apr from the
previous month to a record 6.95 million
Baltic Dry Index
The Baltic Dry Index fell on the back of
lower capesize and panamax activities.
16-Feb-18 2-Mar-18 16-Mar-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
64.87 65.08
Pound Sterling
90.49 89.85
79.91 80.16
100 JPY
61.27 60.97
Source: RBI Figures in INR , Value as on Mar 16, 2018
The Indian rupee strengthened against
the greenback as slower U.S. wage
growth data minimized concerns of
acceleration in U.S. inflation, which
lowered chances of faster than expected
pace of U.S. interest rate hikes.
Euro weakened against the greenback
following concerns of a possible rate hike
by the U.S. Federal Reserve in its
upcoming meeting next week.
Pound strengthened against the
greenback after the British Prime Minister
upgraded growth forecasts and trimmed
his budget deficit expectations.
Yen strengthened against the greenback
amid concerns over suspected cronyism
scandal in Japan involving the sale of
state-owned land.
16-Feb-18 2-Mar-18 16-Mar-18
Source: RBI
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
The Week that was…
March to 16
The Week that was (Mar 12 – Mar 16)
Date Events Present Value Previous Value
Mar 12, 2018
• India Consumer Price Index (Feb) 4.4% 5.1%
• India Index of Industrial Production (Jan) 7.5% 7.1%
• Japan Machine Tool Orders (YoY) (Feb P) 2.9% -5.0%
Mar 13, 2018
• U.S. Consumer Price Index (YoY) (Feb) 2.2% 2.1%
• Japan Machine Orders (YoY) (Jan) 2.9% -5.0%
• Japan Tertiary Industry Index (MoM) (Jan) -0.6% -0.2%
Mar 14, 2018
• India Wholesale Price Index (Feb) 2.5% 2.8%
• U.S. Retail Sales Advance (MoM) (Feb) -0.1% -0.1%
• China Retail Sales YTD (YoY) (Feb) 9.7% 10.2%
• China Industrial Production YTD (YoY) (Feb) 7.2% 6.6%
• Eurozone Industrial Production (YoY) (Jan) 2.7% 5.3%
• U.S. Business Inventories (Jan) 0.6% 0.6%
Mar 15, 2018
• U.S. Export Price Index (YoY) (Feb) 3.3% 3.4%
• U.S. Initial Jobless Claims (Mar 10) 226k 230k
Mar 16, 2018
• U.S. University of Michigan Sentiment (Mar P) 102.0 99.7
• U.S. Housing Starts (MoM) (Feb) 1.236M 1.329M
• U.S. Industrial Production (MoM) (Feb) 1.1% -0.3%
The Week Ahead
March to 23
The Week Ahead
Day Event
March 19, 2018
U.K. Rightmove House Prices (YoY) (Mar)
March 20, 2018
U.K. Consumer Price Index (YoY) (Feb)
German ZEW Survey Expectations (Mar)
Euro zone Consumer Confidence (Mar A)
March 21, 2018
U.S. FOMC Interest Rate Decision
U.K. Public Sector Net Borrowing (Feb)
U.K. ILO Unemployment Rate 3Mths (Jan)
U.S. Existing Home Sales (MoM) (Feb)
March 22, 2018
Japan Nikkei Japan PMI Manufacturing (Mar P)
Japan All Industry Activity Index (MoM) (Jan)
Markit Eurozone Manufacturing PMI (Mar P)
U.S. Markit US Manufacturing PMI (Mar P)
Markit/BME Germany Manufacturing PMI (Mar P)
Japan National Consumer Price Index (YoY) (Feb)
U.K. Bank of England Interest Rate Decision
March 23, 2018
U.S. Durable Goods Orders (Feb P)
U.S. New Home Sales (Feb)
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