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NEWS U CAN USE
Nov 22, 2019
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The Week that was…
18
th
Nov to 22
nd
Nov
2
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Indian Economy
• The government after taking stock of the current financial stress faced by the Indian
telecom sector and on the basis of the recommendation put forward by the Committee of
Secretaries granted relief to the telecom sector by giving its nod to a two-year moratorium
on spectrum payments. The deferred amounts would be spread equally over the
remaining instalments that needs to be paid by the telecom companies. However, those
telecom companies that are opting for a two-year deferred payment need to provide a
bank guarantee.
• Public sector banks (PSBs) reported frauds of more than Rs. 95,700 crore in the first six
months of FY20, the finance minister informed the parliament. Reserve Bank of India (RBI)
data showed PSBs reported 5,743 incidents of fraud involving a total amount of Rs.
95,760.49 crore from Apr 1 to Sep 30, 2019.
• According to a study by a domestic credit rating agency, the pace of employment growth
in India slowed in the last two years with job creation growing 3.9% in 2017-18 and 2.8% in
2018-19. Based on a set of 1,938 companies spread across sectors, the study said the value
of sales in FY19 was Rs. 69 lakh crore thus covering the entire corporate sector.
• Media reports showed the Asian Infrastructure Investment Bank (AIIB) is planning to invest
up to $2.5 billion in urban transport projects. These would include Metro commuter-rail
networks and radial roads, giving a boost to New Delhi’s Smart City initiative.
3
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4
Domestic Equity Market Indices
Indices 22-Nov-19 1 Week Return YTD Return
S&P BSE Sensex 40,359.41 0.01% 11.90%
Nifty 50 11,914.40 0.16% 9.68%
S&P BSE Mid-Cap 14,738.67 -0.23% -4.53%
S&P BSE Small-Cap 13,353.79 0.21% -9.20%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date
Advances
Declines
Advance/Decline Ratio
18-Nov-19 847 1,019 0.83
19-Nov-19 855 987 0.87
20-Nov-19 886 967 0.92
21-Nov-19 730 1,099 0.66
22-Nov-19 846 961 0.88
Source: NSE
• Indian equity markets were little
changed as cautiousness around India’s
economic growth in the second quarter
of FY20 overshadowed the positives.
Various forecasts for the second
quarter GDP numbers of FY19 have
painted a poor picture of the economy
and investors fear that these would
come true. Uncertainty over the
direction of U.S.-China trade dealings
also dragged the bourses down. The
U.S.’ support to pro-democracy activists
in Hong Kong stoked fears about the
possibility of "phase one" trade deal
between U.S. and China.
• However, the telecom sector provided
some support to the market sentiment
as two of the leading telcos announced
increase in tariffs from Dec 2019, which
soothed investor nerves worried over
the earnings of these companies.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
28.14 27.77 28.56 38.99
P/B
2.93 3.68 2.34 1.86
Dividend Yield
1.15 1.25 1.10 1.13
Source: NSE,BSE
Value as on Nov 22, 2019
Indian Equity Market
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5
Sectoral Indices
Indices
Last Returns (in %)
Closing* 1-Wk 1-Mth
S&P BSE Auto
17,990.9 -1.56% 1.02%
S&P BSE Bankex
35,198.8 0.16% 5.87%
S&P BSE CD
24,779.3 -1.98% -8.14%
S&P BSE CG
17,725.4 -0.60% -4.24%
S&P BSE FMCG
11,651.6 -1.50% -2.97%
S&P BSE HC
13,400.5 3.06% 4.43%
S&P BSE IT
14,869.9 -2.52% 3.48%
S&P BSE Metal
9,377.4 0.82% 3.14%
S&P BSE Oil & Gas
15,110.1 0.01% -2.09%
Source: BSE * Value as on Nov 22, 2019
• S&P BSE IT was the major loser, down 2.52%
followed by S&P BSE Consumer Durables and
S&P BSE Auto that fell 1.98% and 1.56%,
respectively.
• The IT sector fell after reports showed that
the U.S. could tighten visa rules to protect U.S.
workers. Consumer durables and auto sectors
have been hit by slowing demand, which even
the festive season has not been able to
redeem. S&P BSE Healthcare was the major
gainer, up 3.06%.
Indian Derivatives Market Review
• Nifty Nov 2019 Futures stood at 11,914.50, a premium of 0.10 points above the spot closing
of 11,914.40. The total turnover on NSE’s Futures and Options segment for the week stood
at Rs. 61.50 lakh crore as against Rs. 63.06 lakh crore for the week to Nov 15.
• The Put-Call ratio stood at 0.94 against the previous week’s close of 0.84.
• The Nifty Put-Call ratio stood at 1.31 against the previous week’s close of 1.39.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-Wk
Ago
1-Mth
Ago
6-Mth
Ago
Call Rate
5.04 5.09 5.10 5.94
91 Day T-Bill
5.04 5.06 5.09 6.35
07.32% 2024, (5 Yr GOI)
6.19 6.22 6.28 6.99
06.45% 2029, (10 Yr GOI)
6.50 6.52 6.54 --
Source: Thomson Reuters Eikon Value as on Nov 22, 2019
• Bond yields fell after the country’s
minister of state of finance said that
the government proposes to meet its
fiscal deficit target of 3.3% in this
financial year.
• Expectations of a policy rate cut in the
upcoming monetary policy review also
boosted market sentiments.
• However, gains were capped due to
profit booking as market participants
remained concerned of additional
borrowing by the government.
• Yield on the new 10-year benchmark
paper (6.45% GS 2029) fell 2 bps to
close at 6.50% compared with the
previous week’s close of 6.52% after
trading in a range of 6.45% to 6.52%.
Domestic Debt Market
6.44
6.47
6.50
6.53
18-Nov 19-Nov 20-Nov 21-Nov 22-Nov
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 5.49 6.71 122
3 Year 6.10 7.16 106
5 Year 6.40 7.50 110
10 Year 6.60 7.83 123
Source: Thomson Reuters Eikon
Value as on Nov 22, 2019
• Yields on gilt securities fell across the
maturities by up to 16 bps barring 5 and
11-year paper which increased 1 bps and 5
bps respectively.
• Corporate bond yields increased across 5
to 8-year maturities by up to 3 bps and fell
across the remaining maturities by up to 3
bps as well.
Domestic Debt Market (Spread Analysis)
-18
-11
-4
3
4.00
5.20
6.40
7.60
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 22-Nov-19 15-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) increased minimum
investment limit by clients in a portfolio management service (PMS) to Rs. 50 lakh from the
previous limit of Rs. 25 lakh. Subsequently, the base net worth requirement of portfolio
managers has also been increased to Rs. 5 crore from Rs. 2 crore. SEBI further mandated
that portfolio managers now cannot invest more than 25% of their assets under
management (AUM) in unlisted securities. SEBI also tightened the disclosure norms on loan
defaults. SEBI mandated that any default in repayment of principal or interest on loans from
banks and financial institutions that goes beyond 30 days from pre-agreed payment date
needs to be disclosed within 24 hours from the 30th day of such default. The capital market
regulator also approved the reduction in timeline for completion of rights issue to T+31
days from T+55 days.
• The Union Cabinet gave its approval for the sale of government’s 53.29% stake in Bharat
Petroleum Corp. Ltd (BPCL). In addition, the government will also sell its 30.90% stake (out
of 54.80%) in Container Corporation, of India Ltd. and the entire 63.75% stake in Shipping
Corporation of India (SCI). In addition, the government will sell its entire holding in THDC
India and North Eastern Electric Power Corp Ltd (NEEPCO) to state power generator NTPC
Ltd.
Regulatory Updates in India
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9
• According to a draft prepared by the Department for Promotion of Industry and Internal
Trade and Invest India, the government proposes to provide manufacturers land to set up
a factory along with power, water and road access. India is planning to offer 324
companies incentives to set up factories in the country to capitalize from the trade war
between China and the U.S.
• Government’s think tank NITI Aayog has zeroed in on a few focus areas on future health
systems. This includes delivering on unfinished public health agenda, empowering citizens
to become better buyers of health services, and harnessing the power of digital
healthcare. NITI Aayog released its report ‘Health Systems for a New India: Building
Blocks—Potential Pathways to Reforms". The department recommended a change in
health financing and integrating health services delivery.
• SEBI could hire an agency to process and maintain records of investor complaints received
by the regulator, media reports showed. The mandate for the agency would be to receive
grievances from investors through physical or electronic mode and categorise them. Also,
the agency will be responsible for tracking complaints' status online and conduct follow-
ups, besides preparing action taken reports and updating the status of grievances on
SEBI's online platform for complaints, SCORES.
Regulatory Updates in India (contd..)
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• The Organization for Economic Co-operation and Development (OECD) said the global
economy is set to expand at the slowest pace in 2019 since the financial crisis. World GDP
growth is forecast to be 2.9% in 2019, its lowest annual rate since the financial crisis, and
remain at 2.9% to 3.0% in 2020 and 2021. The global economy had expanded 3.5 percent
in 2018, the organization said.
• A Labor Department report showed first-time claims for U.S. unemployment benefits came
in unchanged in the week ended Nov 16, 2019 at 227,000, unchanged from the previous
week's level.
• U.S. Federal Reserve's Oct 2019 monetary policy meeting minutes showed the decision to
remove the "act as appropriate" language from the statement was seen as consistent with
the view that the current stance of monetary policy was likely to remain appropriate as
long as the economy performed broadly in line with the Fed's expectations, thus rates are
widely expected to remain unchanged.
• The People's Bank of China unexpectedly cut its short-term lending rate, the first
reduction in more than four years. The People's Bank of China lowered the seven-day
repurchase rate to 2.50% from 2.55%, the first cut since Oct 2015.
• The Bundesbank said Germany's economy is set to remain weak in the final three months
of the year, but a recession is unlikely. The bank expects "The current period of weakness
in the German economy to continue in the final quarter of 2019".
10
Global News/Economy
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11
Global Indices
Indices
22-Nov-19
1-Week
Return
YTD
Return
Russell 3000 1,364.19 -0.25% 28.37%
Nasdaq 100 8,272.05 -0.52% 30.68%
FTSE 100 7,326.81 0.33% 8.90%
DAX Index 13,163.88 -0.59% 24.67%
Nikkei Average 23,112.88 -0.82% 15.48%
Straits Times 3,225.65 -0.41% 5.11%
Source: Thomson Reuters Eikon Value as on Nov 22, 2019
U.S.
• U.S. markets fell on trade worries as a
partial deal with China looked difficult
to fructify in 2019.
• A news agency reported that the
signing of a partial trade deal between
the U.S. and China could be pushed into
2020 as China is looking for more
extensive tariff rollbacks.
Europe
• European markets were mostly down on waning trade optimism. Media reports showed
Beijing is pessimistic of the chances of striking a trade deal with the U.S. as it is troubled by
U.S. President’s reluctance to roll back tariffs. U.S.-China relations looked strained over
U.S. passing a legislation in favor of Hong Kong protestors.
Asia
• Asian equity markets fell as no clear direction emanated from U.S.-China trade
negotiations. Things got worse after the U.S. Senate passed a legislation supporting
protesters in Hong Kong, a move condemned by China.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury bond
fell 6 bps to close at 1.77% compared to
the previous week’s close of 1.83%.
• U.S. Treasury prices rose during the
week under review amid persisting
uncertainty over trade negotiations
between U.S. and China. The safe haven
appeal of the U.S. Treasuries improved
further after U.S. Senate unanimously
passed legislation aimed at protecting
human rights in Hong Kong which was
strongly condemned by China.
• However, gains were capped as
uncertainty over trade negotiations
between U.S. and China eased to some
extent after both U.S. and China
expressed hopes of reaching an initial
bilateral trade agreement which
lowered the safe haven appeal of U.S.
Treasuries to some extent.
Global Debt (U.S.)
1.73
1.76
1.79
1.82
18-Nov 19-Nov 20-Nov 21-Nov 22-Nov
Yield in %
US 10-Year Treasury Yield
Movement
Source: Thomson Reuters EikonSource: Thomson Reuters Eikon
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13
Performance of various commodities
Commodities
Last Closing* 1-Week Ago
Brent Crude($/Barrel) 66.07 63.46
Gold ($/Oz) 1,462.04 1,467.12
Gold (Rs/10 gm) 38,157 38,096
Silver ($/Oz) 17.00 16.95
Silver (Rs/Kg) 44,942 44,323
Source: Thomson Reuters Eikon *Value as on Nov 22, 2019
Gold
• Gold prices fell after minutes of U.S.
Federal Reserve’s latest policy meeting
indicated very little prospects of rate cut
in Dec.
• However, uncertainty of U.S-China trade
deal restricted further losses.
Brent Crude
• Brent crude prices surged following
Russian President’s indication that
Moscow will support OPEC in its efforts
on production cuts.
• However, concerns over U.S.-China trade
talks capped the gains.
Baltic Dry Index
• The Baltic Dry Index fell due to lower
capesize and panamax activities.
Commodities Market
9.50
10.00
10.50
11.00
23-Oct-19 2-Nov-19 12-Nov-19 22-Nov-19
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
Source: Thomson Reuters Eikon
0.33%
4.11%
-0.35%
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14
Movement of Rupee vs Other Currencies
Currency Last Closing* 1-Wk Ago
US Dollar
71.85 71.71
Pound Sterling
92.83 92.37
EURO
79.52 79.04
100 Yen
66.14 66.04
Source: RBI Figures in INR , *Value as on Nov 22, 2019
Rupee
• The rupee weakened against the
greenback amid rising tensions between
the U.S. and China over Hong Kong.
However, consistent dollar selling by state
run banks restricted further losses.
Euro
• The euro fell against the greenback amid
uncertainty over a trade deal between U.S.
and China.
Pound
• The pound fell against the U.S. dollar on
preliminary reports that U.K. private sector
contracted at the fastest pace in more
than two years in Nov.
Yen
• The yen rose against the greenback on
waning optimism that U.S. and China are
close to reaching a trade deal.
Currencies Markets
9.90
10.00
10.10
10.20
23-Oct-19 2-Nov-19 12-Nov-19 22-Nov-19
USD GBP Euro JPY
Source: Thomson Reuters Eikon
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
0.60%
0.50%
0.20%
0.15%
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15
The Week that was…
18
th
Nov to 22
nd
Nov
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16
The Week that was (Nov 18 –Nov 22)
Date Events
Present
Value
Previous
Value
Monday,
November 18, 2019
• U.S. NAHB Housing Market Index (Nov) 70 71
• U.K. Rightmove House Price Index (YoY) (Nov) 0.3% -0.2%
Tuesday,
November 19, 2019
• U.S. Housing Starts (MoM) (Oct) 1.314 M 1.266 M
• U.S. Building Permits (MoM) (Oct) 1.461 M 1.391 M
Wednesday,
November 20, 2019
• China PBoC Interest Rate Decision 4.15% 4.20%
• Japan Foreign Bond Investment (Nov 15) ¥119.4 B ¥530 B
Thursday,
November 21, 2019
• Japan All Industry Activity Index (MoM) (Sep) 1.50% 0.00%
• U.S. Philadelphia Fed Manufacturing Survey
(Nov)
10.4 5.6
• U.S. Initial Jobless Claims (Nov 15) 227 K 227 K
• U.S. Existing Home Sales (MoM) (Oct) 5.46 M 5.36 M
• Japan National Consumer Price Index (YoY)
(Oct)
0.2% 0.2%
Friday,
November 22, 2019
• Germany Gross Domestic Product (YoY) (Q3) 1.0% 1.0%
• Germany Markit PMI Composite (Nov) P 49.2 48.9
• Euro zone Markit PMI Composite (Nov) P 50.3 50.6
• U.S. Markit PMI Composite (Nov) P 51.9 50.9
• U.S. Michigan Consumer Sentiment Index (Nov) 96.8 95.7
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17
The Week Ahead
25
th
Nov to 29
th
Nov
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
18
Day Event
Monday,
Nov 25, 2019
• Japan Leading Economic Index (Sep)
• Euro zone IFO - Current Assessment (Nov)
Tuesday,
Nov 26, 2019
• U.S. Housing Price Index (MoM) (Sep)
• U.S. S&P/Case-Shiller Home Price Indices (YoY) (Sep)
• U.S. New Home Sales (MoM) (Oct)
Wednesday,
Nov 27, 2019
• U.S. Durable Goods Orders (Oct)
• U.S. Gross Domestic Product Price Index (Q3) P
• U.S. Personal Income (MoM) (Oct)
• Japan Retail Trade (YoY) (Oct)
Thursday,
Nov 28, 2019
• Euro zone Business Climate (Nov)
• Germany Harmonized Index of Consumer Prices (YoY) (Nov) P
• Japan Unemployment Rate (Oct)
• Japan Industrial Production (YoY) (Oct) P
Friday,
Nov 29, 2019
• Germany Unemployment Change (Nov)
• Euro zone Consumer Price Index (YoY) (Nov) P
• Euro zone Unemployment Rate (Oct)
• U.S. Chicago Purchasing Managers' Index (Nov)
The Week Ahead
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