News U Can Use
March 2, 2018
The Week that was…
February to 2
Indian Economy
Government data showed that India’s Gross Domestic Product (GDP) grew 7.2% YoY in the
third quarter of FY18, better than upwardly revised growth of 6.5% (6.3% originally reported)
in the previous quarter driven by pick up in manufacturing and spending. On Gross Value
Added (GVA) basis, the economy rose 6.7%, better than upwardly revised growth of 6.2%
(6.1% originally reported) rise in the quarter ended Sep 2017.
The Nikkei India Manufacturing Purchasing Managers' Index (PMI) slightly fell to 52.1 in Feb
2018 from 52.4 in Jan 2018. The slight decline reflects slower pace of growth for factory
output and new business orders. Meanwhile, this is the seventh consecutive month during
which the manufacturing PMI came in above 50, indicating expansion. The expansion
reflected significant rise in manufacturing production and improved underlying demand, with
domestic and external sources driving new business gains.
Government data showed that India's fiscal deficit during Apr to Jan 2018 stood at Rs. 6.77
lakh crore or 113.7% of the budgeted target for FY18. During the corresponding period last
year, fiscal deficit was at 105.6% of the Budget Estimate. Total receipts were Rs. 11.63 lakh
crore or 71.7% of the Budget Estimate, while revenue expenditure amounted to Rs. 15.76
lakh crore or 81.0% of the financial year estimates.
Government data showed that the index of eight core industries grew 6.7% in Jan 2018 from
upwardly revised 4.2% in the previous month (4.0% originally reported) and 3.4% in the same
period of the previous year. The increase in pace of growth reflects 20.7% and 11% growth in
cement and refinery products.
Indian Equity Market
Domestic Equity Market Indices
Indices 1-Mar-18 1 Week Return YTD Return
S&P BSE Sensex 34,046.94 -0.28% 0.69%
Nifty 50 10,458.35 -0.31% 0.22%
S&P BSE Mid-Cap 16,461.27 -0.61% -7.71%
S&P BSE Small-Cap 18,084.94 0.49% -6.20%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
26-Feb-18 1075 738 1.46
27-Feb-18 620 1177 0.53
28-Feb-18 692 1086 0.64
01-Mar-18 690 1072 0.64
Source: NSE
Indian equity markets closed in the red
after India's fiscal deficit during Apr to
Jan 2018 came in at 113.7% of the
budgeted target for FY18. Also, slight
decline in Nikkei India Manufacturing
Purchasing Managers' Index in Feb
2018 weighed on markets.
Sentiment dampened further amid
reports that a state-owned bank has
disclosed that the amount of fraudulent
transactions could be approximately
Rs. 13 billion, higher than the current
estimate. Hawkish comments from
U.S. Federal Reserve Chief also
muted buying interest.
However, losses were capped on
India’s strong GDP data for third
quarter of FY 18 and upbeat eight core
industries’ data for Jan 2018 released
on Feb 28.
Nifty 50
Mid Cap
Small Cap
23.61 25.59 39.13 113.92
3.14 3.53 2.82 2.57
Dividend Yield
1.16 1.19 0.89 0.63
Source: BSE, NSE Value as on Mar 1
, 2018
Indian Equity Market (contd.)
Sectoral Indices
Last Returns (in %)
Closing 1-Wk 1-Mth
S&P BSE Auto
24,819.30 2.02% -1.56%
S&P BSE Bankex
28,072.19 -1.62% -6.15%
21,036.15 0.32% -1.39%
19,026.68 0.72% -4.58%
10,515.05 -0.45% -1.59%
14,031.54 -1.36% -0.26%
12,439.91 -0.52% -0.44%
S&P BSE Metal
15,030.13 -1.94% 0.12%
S&P BSE Oil & Gas
15,521.08 0.90% -0.94%
Source: Thomson Reuters
Eikon Value as on Mar 1, 2018
On the BSE sectoral front, S&P BSE Auto
(2.02%) stood as the major gainer followed
by S&P BSE Oil & Gas (0.90%) and S&P
BSE Capital Goods (0.72%). Meanwhile,
S&P BSE Metal (-1.94%) stood as the major
loser followed by S&P BSE Bankex (-
1.62%) and S&P BSE HC (-1.36%).
Banking stocks fell on announcement by the
finance ministry of a 15-day deadline to
state-run banks to take pre-emptive action,
identify and address operational and
technological risks, thereby negatively
impacting the indices.
Indian Derivatives Market Review
Nifty Mar 2018 Futures were at 10,456.55 points, a discount of 1.80 points below the spot
closing of 10,458.35. The turnover on NSE’s Futures and Options segment stood at Rs. 30.82
lakh crore against Rs. 31.23 lakh crore on Feb 23.
The Put-Call ratio stood at 0.80 compared with the previous week’s close of 0.83.
The Nifty Put-Call ratio stood at 1.29 compared with the previous week’s close of 1.43.
Domestic Debt Market
Debt Indicators
Call Rate
5.91 5.90 5.92 5.83
91 Day T-Bill
6.31 6.32 6.42 6.11
7.80% 2021, (5 Yr GOI)
7.19 7.16 7.16 6.43
7.17% 2028, (10 Yr GOI)
7.74 7.67 7.56 --
Source: Thomson Reuters
Value as on Mar 1, 2018
Bond yields rose following initial rise
in international crude oil prices and
fresh bond supply due to state
development auction. Market
sentiment remained bearish amid
absence of new triggers as well as low
participation from state-run banks.
Sharp fall in rupee and gains in U.S.
Treasury yields due to U.S. Federal
Reserve chairman’s indication on rate
hike also weighed on market
Yield on the 10-year benchmark paper
(7.17% GS 2028) rose 7 bps to close
at 7.74% from the previous week’s
close of 7.67% after trading in a range
of 7.66% to 7.78%.
RBI announced to conduct the auction
of 91-, 182- and 364-day Treasury Bills
for a notified amount of Rs. 7,000
crore, Rs. 3,000 crore and Rs. 4,000
crore, respectively on Mar 7.
26-Feb 27-Feb 28-Feb 1-Mar
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
Domestic Debt Market (Spread Analysis)
G-Sec Yield
Corporate Yield
1 Year 6.71 7.76 105
3 Year 7.32 7.88 56
5 Year 7.66 8.09 43
10 Year 8.01 8.4 40
Source: Thomson Reuters
Eikon Value as on Mar 1, 2018
Yields on gilt securities expanded across
the maturities by up to 10 bps barring 30-
year paper that closed steady. Highest
rise was seen on 19-year paper.
Corporate bond yields closed steady on
1-year paper, fell 1 bps each on 2 to 4
years’ maturities and rose in the range of
11 to 17 bps across 5 to 10 years’
maturities and 15-year paper.
Spread between AAA corporate bond and
gilt contracted across 1 to 4 years’
maturities by up to 6 bps and expanded in
the range of 6 to 14 bps across the
remaining maturities.
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-Mar-18 23-Feb-18
Yield in %
Change in bps
Source: Thomson Reuters Eikon
Regulatory Updates in India
Data from capital market regulator Securities and Exchange Board of India (SEBI) showed that
investment in the domestic capital market through participatory notes plunged to a near eight
and a half year low to Rs. 1.19 lakh crore in Jan 18 from Rs. 1.25 lakh crore in the previous
month. This is at the lowest level since Aug 2009 when investment in the domestic capital
market through participatory notes stood at Rs. 1.10 lakh crore. The steep decline can be
attributed to strict measures taken by SEBI to check misuse of the same.
The Reserve Bank of India soothed concerns over mobile wallet money. The central bank
added that customers do not stand at risk of losing their money even if the wallet companies
are not complaint to its full KYC (Know Your Customer) guidelines. However, the central bank
added that reloading the wallets with money will resume after completing the KYC requirement.
The cabinet has approved an action plan for 12 champion services sectors identified by the
ministry of commerce and industry for special focus. Meanwhile, fund worth Rs. 5,000 crore is
proposed to be established to activate the plan for realising their full potential. The sectors
include IT and IT-enabled services, tourism and hospitality, medical value travel, transport and
logistics, accounting and finance, audio visual, legal, communication, construction and related
engineering, environment, financial and education. The ministries responsible for these sectors
have to come up with the implementation timelines along with the monitoring mechanism.
Regulatory Updates in India (contd..)
The cabinet permitted a strict Fugitive Economic Offenders Bill through which government can
confiscate assets without conviction. The provisions of the bill will apply for the economic
offenders who flee the country and against whom an arrest warrant has been issued for a
scheduled offence as well as wilful bank loan defaulters with outstanding over Rs. 100 crore.
The cabinet has permitted setting up an independent regulator for the auditing profession
called National Financial Reporting Authority (NFRA). The regulator has been formed to fill
various auditing lapses in the banking sector. The jurisdiction of the NFRA would extend to all
listed companies and large unlisted public companies.
Global News/Economy
According to a report from the Commerce Department, U.S. durable goods orders fell more than
market expectations in Jan 2018. It fell 3.7% in Jan as against a revised gain of 2.6% (2.8%
gain originally reported) in Dec 2017. The downside reflects sharp fall in orders for
transportation equipment that plunged by 10% in Jan as against a gain of 6.4% in Dec.
A report from the Conference Board showed that U.S. consumer confidence index surpassed
market expectations and grew to 130.8 in Feb 2018 as against downwardly revised 124.3
(125.4 originally reported) in Jan 2018. This marked the highest level since Nov 2000. The
expectations index grew to 109.7 in Feb as against 104.0 in Jan.
A preliminary report from Destatis showed that Germany’s consumer price index grew 1.4% YoY
in Feb 2018 as against an increase of 1.6% in Jan 2018. This marked the lowest figure since
Nov 2016. Meanwhile, CPI grew 0.5% in Feb MoM.
According to a flash report from the Eurostat, eurozone’s inflation came in at 1.2% in Feb 2018
as against 1.3% in Jan 2018. The inflation remained below the European Central Bank's target
of 'below, but close to 2%’. Meanwhile, core inflation that excludes energy, food, alcohol and
tobacco, held steady at 1% in Feb.
According to a report from the National Bureau of Statistics, China’s manufacturing PMI came in
at 50.3 in Feb 2018 as against 51.3 in Jan 2018. Meanwhile, the non-manufacturing PMI came
in at 54.4 in Jan, down from 55.3 in Dec.
Global Equity Markets
Global Indices
Dow Jones
24,538.06 -3.05% -1.15%
Nasdaq 100
6,811.04 -1.24% 4.60%
FTSE 100
7,069.90 -2.41% -7.56%
DAX Index
11,913.71 -4.57% -7.44%
Nikkei Average
21,181.64 -3.25% -9.89%
Straits Times
3,479.20 -1.53% 2.24%
Source: Thomson Reuters Eikon
Value as on Mar 2, 2018
U.S. markets came under selling
pressure after the new U.S. Federal
Reserve (Fed) chief’s comment raised
speculation that the central bank may
raise rates more than the three times
currently being anticipated.
Meanwhile, the U.S. President’s plan to
impose hefty tariffs on global imports of
steel and aluminum raised concerns
over potential trade war.
European markets too witnessed a sell off triggered by speculations that Fed may be more
aggressive in hiking interest rates. Concerns over potential trade war also prompted
investors to offload riskier assets. Other factors weighing on investor sentiment included
slowdown in growth of eurozone manufacturing sector to a 4-month low in Feb.
Asian markets too felt the heat of global sell off following U.S. President’s plan to impose
tariffs on steel and aluminum imports, igniting worries over a trade war. Renewed
concerns over a faster pace of interest rate increases by Fed also kept investors nervous.
Prospects of Bank of Japan exiting extraordinary stimulus too weighed on buying interest.
Global Debt (U.S.)
Yield on the 10-year U.S. Treasury bond
fell 1 bps to close at 2.86% from the
previous week’s close of 2.87%.
U.S. Treasury prices fell initially after the
new U.S. Federal Reserve chief
maintained an upbeat outlook on the
U.S. economy, which increased the
possibility of a faster than expected
interest rate hike.
However, the trend reversed as the
safe-haven appeal of U.S. Treasuries
improved after the U.S. President’s
decision to impose steep tariffs on
imported steel and aluminum fueled
concerns of an imminent trade war
U.S. Treasury prices fell again as gains
were almost wiped out after the Bank of
Japan trimmed the purchase amount of
long term Japanese government bonds.
26-Feb 27-Feb 28-Feb 1-Mar 2-Mar
U.S. 10-Year Treasury Yield Movement
Source: Thomson Reuters Eikon
Commodities Market
Performance of various commodities
Last Closing 1-Week Ago
Brent Crude($/Barrel)
65.05 66.98
Gold ($/Oz)
1,322.17 1,328.87
Gold (Rs/10 gm)*
30,269 30,390
Silver ($/Oz)
16.49 16.54
Silver (Rs/Kg)*
38,010 38,343
Eikon * Last closing as on Mar 1, 2018 Value as on Mar 2, 2018
Gold prices were hit as the new U.S.
Fed chief’s first testimony before the
House Financial Services Committee
raised speculation that the central bank
may raise rates more than the three
times currently being anticipated,
although he stressed on not prejudging
the new set of projections.
Brent crude prices slumped amid
persisting concerns over supply glut
after the International Energy Agency
(IEA) predicted that the United States
will surpass Russia as the world’s
biggest oil producer by 2019, if not
Baltic Dry Index
The Baltic Dry Index gained on the back
of higher capesize and panamax
2-Feb-18 16-Feb-18 2-Mar-18
Global Commodity Movement
Gold Spot ($/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
65.23 64.82
Pound Sterling
89.71 90.40
79.50 79.76
100 JPY
61.07 60.59
Source: RBI Figures in INR , Value as on Mar 1, 2018
The rupee weakened against the
greenback following losses in the
domestic equity market and concerns that
the U.S. Fed may increase interest rates
at a faster than expected pace.
The euro rose against the greenback after
the U.S. President decided to impose
steep tariffs on imported steel and
aluminum that fueled concerns of an
imminent trade war.
The pound weakened against the
greenback on concerns over a faster than
expected U.S. interest rate hike scenario.
The yen rose against the greenback after
the Bank of Japan trimmed the purchase
amount of long term Japanese
government bonds and indicated an exit
from its ultra-easy monetary policy.
1-Feb-18 15-Feb-18 1-Mar-18
Source: RBI
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
The Week that was…
February to 2
The Week that was (Feb 26 Mar 2)
Date Events Present Value Previous Value
Feb 26, 2018
• U.S. New Home Sales (MoM) (JAN) -7.8% -7.6%
Feb 27, 2018
• Germany Consumer Price Index (YoY) (FEB P) 1.4% 1.6%
• U.S. Consumer Confidence Index (FEB) 130.8 124.3
• U.S. Advance Goods Trade Balance (JAN) -$74.4b -$72.3b
Feb 28, 2018
• India's Gross Domestic Product (Q3’ FY 1) 7.20% 6.50%
• India's Nikkei Manufacturing Purchasing Managers' Index (Feb 2018) 52.1 52.4
• India's fiscal deficit YoY (Apr to Jan 2018) 1.137 1.056
• India's index of eight core industries (Jan 2018) 6.70% 4.20%
China Manufacturing PMI (FEB) 50.3 51.3
• U.S. Gross Domestic Product Price Index (4Q S) 2.30% 2.40%
• Germany Unemployment Claims Rate (FEB) 5.40% 5.40%
• Eurozone Consumer Price Index Estimate (YoY) (FEB) 1.20% 1.30%
Mar 1, 2018
• U.S. PCE Core (YoY) (JAN) 1.50% 1.50%
U.S. ISM Manufacturing (FEB) 60.8 59.1
• China Caixin Manufacturing PMI (FEB) 51.6 51.5
• U.K. Markit Manufacturing PMI (FEB) 55.2 55.3
Mar 2, 2018
• Germany Retail Sales (YoY) (JAN) 2.30% -1.90%
• U.K. Markit/CIPS Construction PMI (FEB) 51.4 50.2
The Week Ahead
March to 9
The Week Ahead
Day Event
March 5, 2018
India Nikkei Services PMI (Feb 18)
U.S. ISM Non-Manufacturing/Services Composite (FEB)
Japan Nikkei Composite PMI (FEB)
China Caixin Composite PMI (FEB)
March 6, 2018
Germany Markit Construction PMI (FEB)
Eurozone Markit Retail PMI (FEB)
U.S. Factory Orders (JAN)
March 7, 2018
Japan Leading Index CI (JAN P)
Eurozone Government Expenditure (QoQ) (4Q)
Eurozone Gross Domestic Product (YoY) (4Q F)
Japan Gross Domestic Product Annualized (QoQ) (4Q F)
March 8, 2018
European Central Bank Rate Decision (MAR 8)
China Foreign Direct Investment (YoY) (FEB)
U.S. Initial Jobless Claims (MAR 3)
March 9, 2018
Bank of Japan Rate Decision (MAR 9)
China Consumer Price Index (YoY) (FEB)
U.S. Change in non-farm Payrolls (FEB)
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