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NEWS U CAN USE
Nov 15, 2019
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The Week that was…
11
th
Nov to 15
th
Nov
2
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Indian Economy
• India’s trade deficit narrowed to $11.01 billion in Oct 2019 from $18.00 billion in the same
period of the previous year. India’s trade deficit narrowed as imports fell 16.31% to $37.39
billion in Oct 2019 while exports came down at a comparatively slower rate of 1.11% to
$26.38 billion in the same month. Oil imports fell 31.74% to $9.63 billion in Oct 2019 from
$14.11 billion in the year-ago period.
• India’s Wholesale Price Index (WPI) based inflation slowed to 0.16% in Oct 2019 from
0.33% in the previous month and 5.54% during the same month of the previous year. WPI
inflation thus plunged to its lowest level in more than 3 years. However, the WPI Food
Index grew from 5.98% in Sep 2019 to 7.65% in Oct 2019.
• Consumer price index-based inflation rate increased to 4.62% in Oct 2019 from 3.99% in
Sep 2019 and 3.38% in Oct 2018. This marked a 16-month high and crossed the Reserve
Bank of India’s medium target of 4%. Consumer Food Price Index increased to 7.89% in
Oct 2019 from 5.11% rise in Sep 2019 and a decline of 0.86% in the same period of the
previous year.
• Government data showed Index of Industrial production (IIP) shrunk 4.3% in Sep 2019
compared with 1.4% decline in Aug 2019. Manufacturing and electricity declined 3.9% and
2.6% in Oct 2019 respectively while the mining sector also contracted 8.5% in the same
month. From Apr to Sep 2019, IIP growth eased to 1.3% YoY from 5.2% recorded in the
corresponding period last year.
3
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4
Domestic Equity Market Indices
Indices
15-Nov-19
1 Week Return
YTD Return
S&P BSE Sensex
40,356.69 0.08% 11.89%
Nifty 50
11,895.45 -0.11% 9.51%
S&P BSE Mid
-Cap 14,772.99 0.28% -4.31%
S&P BSE Small
-Cap 13,326.40 -1.10% -9.39%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date
Advances
Declines
Advance/Decline Ratio
11-Nov-19 882 954 0.92
13-Nov-19 679 1175 0.58
14-Nov-19 711 1133 0.63
15-Nov-19 844 1042 0.81
Source: NSE
• Indian equity markets closed flat while
Nifty dipped marginally. Investors were
concerned over Reserve Bank of India’s
future interest rate stance as retail
inflation surpassed its medium target
of 4% in Oct. Meanwhile, disappointing
Sep 2019 industrial output (IIP) data
coupled with soft wholesale inflation
data in Oct 2019 raised expectations of
stimulus measures by the central bank.
• Investors also grew hopeful that the
government may pitch in to support
telecom companies. Couple of leading
telecom companies have posted one of
the worse earnings with the deepest
losses in the sector’s history.
Meanwhile, a major credit rating
agency reportedly cut India's economic
growth forecast for FY20.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
26.77 27.32 28.22 41.34
P/B
2.93 3.67 2.37 1.76
Dividend Yield
1.14 1.26 1.10 1.15
Source: NSE,BSE
Value as on Nov 15, 2019
Indian Equity Market
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5
Sectoral Indices
Indices
Last Returns (in %)
Closing* 1-Wk 1-Mth
S&P BSE Auto
18,275.9 -0.45% 5.99%
S&P BSE Bankex
35,142.6 0.88% 8.90%
S&P BSE CD
25,280.7 1.36% -2.63%
S&P BSE CG
17,832.3 -2.70% -1.72%
S&P BSE FMCG
11,828.6 -2.20% 1.07%
S&P BSE HC
13,002.7 -0.66% 5.33%
S&P BSE IT
15,253.6 0.12% 0.19%
S&P BSE Metal
9,301.5 -4.58% 4.15%
S&P BSE Oil & Gas
15,108.6 -0.40% 1.44%
Source: BSE * Value as on Nov 15, 2
019
• S&P BSE Consumer Durables was the major
gainer that grew 1.36% followed by S&P BSE
Bankex and S&P BSE Teck that grew 0.88%
and 0.71%, respectively.
• However, S&P BSE Metal was the major loser
that fell 4.58% followed by S&P BSE Capital
Goods that fell 2.70%. Metal stocks remained
under pressure due to slowdown in China
amid China’s industrial output data for Oct.
S&P BSE Power and S&P BSE FMCG fell 2.35%
and 2.20%, respectively.
Indian Derivatives Market Review
• Nifty Nov 2019 Futures stood at 11,942.60, a premium of 47.15 points above the spot
closing of 11,895.45. The total turnover on NSE’s Futures and Options segment for the
week stood at Rs. 63.06 lakh crore as against Rs. 71.19 lakh crore for the week to Nov 8.
• The Put-Call ratio stood unchanged compared with the previous week’s close at 0.84.
• The Nifty Put-Call ratio stood at 1.39 against the previous week’s close of 1.26.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-
Wk
Ago
1-
Mth
Ago
6-
Mth
Ago
Call Rate
5.09 5.02 5.05 5.95
91 Day T
-Bill
5.06 5.08 5.13 6.39
07.32% 2024, (5
Yr GOI)
6.22 6.27 6.26 7.15
06.45% 2029, (10 Yr GOI)
6.52 6.56 6.49
Source: Thomson Reuters Eikon
Value as on Nov 15, 2019
• Bond yields fell after the index of
industrial production fell more than
expected in Sep 2019 which increased
hopes of more monetary easing by the
Monetary Policy Committee. However,
increase in domestic inflationary
pressures which breached the Reserve
Bank of India’s medium-term target of
4% for the first time in fifteen months
and worries that the government may
breach its fiscal deficit target for this
financial year capped the gains.
• Yield on the new 10-year benchmark
paper (6.45% GS 2029) fell 4 bps to
close at 6.52% compared with the
previous week’s close of 6.56%.
• Yield on the old 10-year benchmark
paper (7.26% GS 2029) fell 6 bps to
6.69% compared with the previous
close of 6.75%.
Domestic Debt Market
6.49
6.54
6.59
11-Nov 13-Nov 14-Nov 15-Nov
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-
Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 5.53 6.77 124
3 Year 6.16 7.17 102
5 Year 6.39 7.50 111
10 Year 6.63 7.85 122
Source: Thomson Reuters Eikon
Value as on Nov 15
, 2019
• Yields on gilt securities increased on 15-
year paper by 1 bps each. Yield fell across
the remaining maturities by up to 9 bps
barring 3, 11 and 19-year paper which
closed steady.
• Corporate bond yields increased across 4
to 10-year paper in the range of 2 bps to 6
bps and fell across the remaining
maturities by up to 10 bps barring 3-year
paper which closed steady.
Domestic Debt Market (Spread Analysis)
-12
-3
6
4.80
6.30
7.80
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 15-Nov-19 08-Nov-19
Yield
in %
Change
in bps
Source: Thomson Reuters Eikon
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8
• Capital market regulator Securities and Exchange Board of India (SEBI) has decided to give
more flexibility to stock exchanges so that they can modify contract specifications for all
commodity derivatives contracts. However, such modifications that the exchanges decided
to carry out need to be intimated to SEBI and market participants at least 10 days in
advance.
• SEBI is considering putting a mechanism for stock exchanges and depositories to map the
unique client code (UCC) with the demat account of a client. The objective of the move is to
address the complaints of the clients with regard to UCC mapping with their demat
accounts. The move will also eliminate inactive, non-operational UCCs.
• The government is considering reducing its stake to below 51% in a major state-owned oil
marketing company. The move comes as the government is considering to bridge the fiscal
deficit gap in the current financial year after the government announced a massive cut in
corporate tax rates in Sep 2019.
• The Indian government has decided to extend the due dates of filing of Form GSTR-9
(Annual Return) and Form GSTR-9C (Reconciliation Statement) for FY18 to Dec 31, 2019 and
for FY19 to Mar 31, 2020. In addition, the government has also decided to simplify these
forms by making various fields of thse forms optional. There are expectations that extension
of deadline and adoption of the above mentioned changes will help all the GST (Goods and
Services Tax) taxpayers to file their annual returns along with reconciliation statement for
FY18 and FY19 in time.
Regulatory Updates in India
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9
• The government could make changes to dividend distribution tax that will raise returns for
investors, media reports showed. This comes as authorities try to revive foreign fund
inflows. The budget statement due in Feb 2019 may include a proposal to tax dividends
once they are paid to shareholders, rather than where the company pays the levy. This will
allow individuals to claim refunds in their home jurisdictions.
• The government has extended the moratorium period for repayments for sugar mills by
six more months, media reports said. This comes as the Rs. 15,000 crore soft loan scheme
is moving very slow. The moratorium period has been extended to one-and-a-half years
now. A moratorium period is a time during the loan term when the borrower is not
required to make any repayment.
• The rural development ministry plans to institutionalize social audits in major schemes of
rural development. It will include the National Social Assistance Programme and Pradhan
Mantri Awas Yojana-Gramin to begin with.
• The government could lower penalties under the Companies Act in its efforts to improve
compliance, media reports showed. Concessions will be offered to startups, smaller
entities and farmer producer companies. A company law panel is expected to recommend
lower penalties—half of that levied on larger companies-—for startups, smaller entities,
single-person companies and farmer producer organisations.
Regulatory Updates in India (contd..)
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• A Commerce Department report showed U.S. retail sales rebounded by slightly more than
expected in Oct 2019 by 0.3% in Oct 2019, reversing the 0.3% drop in Sep 2019.
• According to a report released by the Federal Reserve, industrial production in the U.S. fell
by much more than expected in Oct 2019. Industrial production tumbled 0.8% in Oct after
falling by 0.3% in September.
• Latest data from the Eurostat showed euro zone's inflation slowed in Oct 2019 to its
lowest level in nearly three years. The consumer price index rose 0.7% YoY following a
0.8% increase in Sep 2019. The flash inflation rate was left unrevised.
• Eurostat data showed euro area trade surplus declined in Sep 2019 on higher imports.
Trade surplus fell to a seasonally adjusted EUR 18.3 billion from EUR 19.7 billion in Aug
2019. Compared to previous month, exports increased 0.6%, while imports advanced 1.5%.
• Final data from the Ministry of Economy, Trade and Industry showed Japan's industrial
production grew more than initially estimated in Sep 2019. Industrial production rose 1.7%
MoM in Sep. According to the initial estimate, production had increased 1.4%.
• Figures from the National Bureau of Statistics showed China's house prices logged a
moderate growth in Oct 2019. In 70 major cities, house prices increased 0.5% in Oct from
the previous month. Among 70 cities surveyed by the NBS, prices increased in 50 cities
compared to 53 in Sep.
10
Global News/Economy
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11
Global Indices
Indices
15-Nov-19
1-Week
Return
YTD
Return
Russell 3000
1,367.60 1.45% 28.69%
Nasdaq 100
8,315.52 0.72% 31.37%
FTSE 100
7,302.94 -0.77% 8.54%
DAX Index
13,241.75 0.10% 25.41%
Nikkei Average
23,303.32 -0.38% 16.43%
Straits Times
3,238.86 -0.78% 5.54%
Source: Thomson Reuters Eikon
Value as on Nov 15, 2019
U.S.
• U.S. markets gained on U.S.-China trade
optimism seen towards weekend. The
White House economic advisor said
China and the U.S. were getting closer
to cracking a trade deal. However,
intermittent uncertainties on the trade
deal, seen during the week, restricted
gains. Meanwhile, corporates are seeing
a better than expected earnings season.
Europe
• European markets were mostly up after reports that the U.S. President could delay auto
tariffs on the European Union by six months and U.S.-China trade deal optimism. In
between the week, conflicting reports on progress in U.S.-China trade talks restricted
market gains.
Asia
• Asian equity markets bucked the trend and fell in the week on intermittent U.S.-China
trade uncertainties and Hong Kong violence. Growing unrest in Hong Kong and weak data
from China and Japan dampened sentiment.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury bond
fell 10 bps to close at 1.83% compared
to the previous week’s close of 1.93%.
• U.S. Treasury prices grew amid
uncertainty over cracking of U.S and
China trade deal. Investors reassessed
the possibility that the two countries
are close to reaching a deal. Earlier in
the week, U.S. president had stated that
both the countries are close to a deal
that weighed on the prices. However, he
also stated that if the same is not
clinched, it will raise tariffs on Chinese
imports, thereby neutralizing the effect.
• Towards the end of the week, optimism
that U.S. China will reach a deal boosted
risk appetite, restricted the gains.
Global Debt (U.S.)
1.80
1.87
1.94
12-Nov 13-Nov 14-Nov 15-Nov
US 10-Year Treasury Yield Movement
Source: Thomson Reuters Eikon
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13
Performance of various commodities
Commodities
Last Closing*
1-Week Ago
Brent Crude($/Barrel)
63.46 62.29
Gold ($/Oz)
1467.12 1458.41
Gold (Rs/10 gm)
38096 37919
Silver ($/Oz)
16.95 16.80
Silver (Rs/Kg)
44323 44240
Source: Thomson Reuters Eikon *
Value as on
Nov 15, 2019
Gold
• Gold prices grew following its growing
safe haven appeal in the midst of the
developments on the U.S.- China trade
deal.
Brent Crude
• Brent crude prices surged after data
from American Petroleum Institute
showed that U.S. crude oil inventories
fell by around 500,000 barrels for the
week ended Nov 8. However, report
from International Energy Agency
showing that non-OPEC supply growth
would grow to 2.3 million barrels per day
in 2020 as against 1.8 million bpd in
2019 restricted the gains.
Baltic Dry Index
• The Baltic Dry Index fell due to lower
capesize and panamax activities.
Commodities Market
9.50
10.15
10.80
16-Oct-19 26-Oct-19 5-Nov-19 15-Nov-19
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global
Commodity Prices
Rebased to 10
Source: Thomson Reuters Eikon
0.91%
1.88%
0.60%
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing*
1-Wk Ago
US Dollar
71.71 71.25
Pound Sterling
92.37 91.27
EURO
79.04 78.73
100 Yen
66.04 65.21
Source: RBI Figures in INR , *
Value as on
Nov 15, 2019
Rupee
• The rupee weakened against the
greenback following weak industrial
output data for Sep 2019 and consumer
price inflation for Oct 2019.
Euro
• The euro rose against the greenback as
optimism for trade deal getting closed
rose following comments from U.S.
economic advisor.
Pound
• The pound rose against the U.S. dollar as
investors were optimistic over the Britain’s
election scheduled on Dec 12.
Yen
• The yen rose against the greenback as its
safe-haven appeal got boosted on reports
that the U.S. and China are struggling to
finalize the trade deal.
Currencies Markets
9.80
9.90
10.00
10.10
10.20
10.30
16-Oct-19 26-Oct-19 5-Nov-19 15-Nov-19
USD GBP Euro JPY
Source: Thomson Reuters Eikon
Currency
Prices (
in terms of INR)
Rebased to 10
Currency Movement
0.40%
1.21%
0.65%
1.27%
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15
The Week that was…
11
th
Nov to 15
th
Nov
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16
The Week that was (Oct 07 –Oct 11)
Date Events
Present
Value
Previous
Value
Monday,
November 11, 2019
• India Index of Industrial Production (Sep)
-4.3% -1.4%
• U.K. Gross Domestic Product (YoY) (Q3) P
1.0% 1.3%
• U.K. Manufacturing production (YoY) (Sep)
-1.8% -1.6%
• U.K. Industrial production (YoY) (Sep)
-0.3% -0.7%
Tuesday,
November 12, 2019
• U.K. ILO Unemployment Rate (3M) (Sep)
3.8% 3.9%
• Germany ZEW Survey
- Economic Sentiment (Nov) -2.10 -22.80
• Eurozone ZEW Survey
- Economic Sentiment (Nov) -1 -23.5
Wednesday,
November 13, 2019
• India Consumer Price Index (Oct)
4.62% 3.99%
• U.K. Consumer Price Index (YoY) (Oct)
1.5% 1.7%
• U.S. Consumer Price Index (YoY) (Oct)
1.8% 1.7%
• Japan Gross Domestic Product Annualized (Q3) P
0.2% 1.8%
Thursday,
November 14, 2019
• India Wholesale Price Index (Oct)
0.16% 0.33%
• Germany Gross Domestic Product (YoY) (Q3) P
1.0% -0.1%
• Eurozone Gross Domestic Product s.a. (YoY) (Q3) P
1.2% 1.1%
Friday,
November 15, 2019
• U.S. Retail Sales Control Group (Oct)
0.3% -0.1%
• Japan Industrial Production (YoY) (Sep)
1.3% 1.1%
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17
The Week Ahead
18
th
Nov to 22
nd
Nov
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18
Day Event
Monday,
Nov 18, 2019
•
U.S. NAHB Housing Market Index (Nov)
•
U.K. Rightmove House Price Index (YoY) (Nov)
Tuesday,
Nov 19, 2019
•
U.S. Housing Starts (MoM) (Oct)
•
U.S. Building Permits (MoM) (Oct)
•
Japan Merchandise Trade Balance Total (Oct)
Wednesday,
Nov 20, 2019
•
China PBoC Interest Rate Decision
•
Euro zone Producer Price Index (YoY) (Oct)
•
Japan Foreign Bond Investment (Nov 15)
Thursday,
Nov 21, 2019
•
U.S. Initial Jobless Claims (Nov 15)
•
U.S. Existing Home Sales (MoM) (Oct)
•
Japan National Consumer Price Index (YoY) (Oct)
Friday,
Nov 22, 2019
•
Germany Gross Domestic Product (YoY) (Q3)
•
Germany Markit PMI Composite (Nov) P
•
Euro zone Markit PMI Composite (Nov) P
•
U.S. Markit PMI Composite (Nov) P
•
U.S. Michigan Consumer Sentiment Index (Nov)
The Week Ahead
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