News U Can Use
November 09, 2018
The Week that was…
November to 09
Indian Economy
The Nikkei India Services Purchasing Managers' Index (PMI) grew to 52.2 in Oct 2018
from 50.9 in Sep 2018 on the back of improvement in new orders and robust jobs growth.
The rise is the highest pace of growth since Jul 2018 and fifth month of consecutive
growth. Seasonally adjusted Nikkei India Composite PMI Output Index grew to 53.0 in Oct
2018 as against 51.6 in Sep 2018 because of strongest expansion in private sector activity
since Jul 2018.
World Bank signed an agreement with the Centre and the government of Andhra Pradesh
to forward a loan of $172.2 million (Rs. 1,257 crore) to help make farming in Andhra
financially viable. The programme called the Andhra Pradesh Integrated Irrigation and
Agriculture Transformation Project will help two lakh families of poor and marginalised
farmers, agro-entrepreneurs, women and other vulnerable groups. It will be implemented
in rural areas that are largely dependent upon rain-fed agriculture. Through it resilience of
poor and marginalised farmers against adverse climate events will be strengthened
through improved access to irrigation, drought seed varieties and post-harvest technology.
The government cleared that it is not seeking Rs. 3.6 lakh crore capital from the Reserve
Bank of India (RBI). It said there are discussions going on to fix appropriate economic
capital framework of the central bank. Media had been reporting that the government has
asked RBI to transfer Rs. 3.6 lakh crore as it struggles with the fiscal deficit target.
Indian Equity Market
Domestic Equity Market Indices
Indices 09-Nov-18 1 Week Return YTD Return
S&P BSE Sensex 35158.55 0.42% 3.23%
Nifty 50 10585.2 0.31% 0.52%
S&P BSE Mid-Cap 14944.2 0.37% -16.15%
S&P BSE Small-Cap 14671.85 1.43% -23.71%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
05-Nov-18 869 913 0.95
06-Nov-18 890 884 1.01
09-Nov-18 943 847 1.11
Source: NSE
Indian equity markets witnessed
gains during the truncated trading
week. Markets were supported by
strong quarterly earnings and gains
in large-cap stocks. Fall in global
crude oil also supported sentiment.
Additionally, during Muhurat Trading,
the one-hour trading session on the
occasion of Diwali on Nov 7, equity
markets gained and all the sectors
ended in the green.
The upside was limited after the U.S.
Federal Reserve (Fed) iterated its
hawkish stance on interest rates and
differences between the European
Union and the Italian government
seemed to deepen.
Nifty 50
Mid Cap
Small Cap
22.84 25.46 31.73 -70.84
2.96 3.35 2.62 2.20
Dividend Yield
1.26 1.25 0.94 0.83
Source: BSE, NSE Value as on
Nov 09, 2018
Indian Equity Market (contd.)
Sectoral Indices
Last Returns (in %)
Closing* 1-Wk 1-Mth
S&P BSE Auto
20845.20 0.72% 6.38%
S&P BSE Bankex
29098.32 0.28% 6.15%
19512.03 -0.95% 8.98%
18246.28 0.64% 11.71%
11210.37 -0.11% 5.73%
14692.79 0.89% 1.93%
14185.47 0.71% -6.19%
S&P BSE Metal
12863.10 -1.60% 0.05%
S&P BSE Oil & Gas
13584.52 -0.61% 10.41%
Source: Thomson Reuters Eikon
*Value as on Nov 09, 2018
On the BSE sectoral front, indices
witnessed a mixed trend as S&P BSE
Realty (2.49%) stood as the major gainer
followed by S&P BSE HC (0.89%) and
S&P BSE Auto (0.72%).
Meanwhile, S&P BSE Metal (-1.60%)
stood as the major loser followed by S&P
BSE CD (-0.95%) and S&P BSE Power (-
0.59%). In the banking space, State Bank
of India posted higher than expected
Indian Derivatives Market Review
Nifty Nov 2018 Futures settled at 10,623.75, a premium of 38.55 points, above the spot
closing of 10,585.20. The total turnover on NSE’s Futures and Options segment for the
week stood at Rs. 26.15 lakh crore as against Rs. 49.00 lakh crore for the week to Nov 2.
The Put-Call ratio stood at 0.95 compared with the previous week’s close of 0.92.
The Nifty Put-Call ratio stood at 1.60 against the previous week’s close of 1.63.
Domestic Debt Market
Debt Indicators
Call Rate
6.47 6.41 6.39 5.91
91 Day T-Bill
6.95 6.96 6.87 6.24
7.80% 2021, (5 Yr GOI)
7.57 7.52 7.86 7.62
7.17% 2028, (10 Yr GOI)
7.76 7.78 8.08 7.71
Source: Thomson Reuters
Value as on Nov 09, 2018
Initially, bond yields increased as
rupee depreciated on better-than-
expected U.S. jobs data. The rise in
the U.S. Treasury yield also pulled
the bond prices lower.
However, losses were reversed
following the appreciation in rupee
and the central bank’s purchase of
securities under open market
operation, which lifted the market
Yields also fell due to continuous
decline in crude oil prices, which
lowered inflationary concerns.
Yield on the 10-year benchmark
paper (7.17% GS 2028) fell 2 bps to
close at 7.76% from the last week’s
close at 7.78%, after trading in a
range of 7.76% to 7.81%.
5-Nov 6-Nov 9-Nov
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
Domestic Debt Market (Spread Analysis)
G-Sec Yield
Corporate Yield
1 Year 7.47 8.72 125
3 Year 7.65 8.59 93
5 Year 7.81 8.58 77
10 Year 7.92 8.50 58
Source: Thomson Reuters Eikon
Value as on Nov 09, 2018
Yields on gilt securities fell across
maturities by up to 15 bps barring 2-year
paper that increased 1 bps.
Corporate bond yields fell across the
maturities in the range of 6 1o 19 bps.
Difference in spread between AAA
corporate bond and gilt contracted across
most of the maturities in the range of 7
bps to 16 bps. Spread expanded on 3-
and 5-year papers by 3 bps and 9 bps,
respectively, while it closed steady on 4-
year paper.
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 09-Nov-18 02-Nov-18
Yield in %
Change in bps
Source: Thomson Reuters Eikon
Regulatory Updates in India
The Reserve Bank of India (RBI) allowed banks to be partial guarantors for some of their
existing debt. The central bank has done this to ease the credit crunch affecting non-
banking financial companies (NBFCs). The step will make refinancing easier. RBI said
banks will be able to give partial credit enhancement to refinance bonds issued by NBFCs
and housing finance companies having tenors of not less than three years. Credit
enhancement to NBFCs was not allowed for banks till now.
According to corporate affairs secretary, RBI might have to provide a special window to
India’s housing finance companies (HFCs) since they are facing liquidity stress,. The
secretary asked finance companies to review their funding models to be on a path of
sustainable growth. The government has sought a special refinance window for non-
banking financial companies and housing finance companies of up to 1% of the net time
and demand liabilities of banks.
The government has approved Rs. 500-crore ‘Operations Greens’ project. The project is a
part of the government’s efforts to stabilise supplies and prices of onions, tomatoes and
potatoes. The government wants to bring farmers closer to the marketplace through better
logistics and processing facilities. The ‘Operation Greens’ programme was announced by
the finance minister in the 2018-19 Budget.
Regulatory Updates in India (contd..)
The Union cabinet has approved a proposal to manage Ahmedabad, Jaipur, Lucknow and
three other airports under public private partnership (PPP). The other three aerodromes are
at Guwahati, Thiruvananthapuram and Mangaluru. The aerodromes are owned by the
Airports Authority of India and the operation, management and development of these will be
done under PPP.
Global News/Economy
The U.S. Federal Reserve in its monetary policy review kept interest rates on hold at 2% to
2.25%. The U.S. Fed maintained its upbeat outlook on the U.S. economy and kept the door
open for a rate hike in its monetary policy review scheduled in Dec 2018. The central bank
however noted that the growth of business fixed investment has moderated from its rapid
pace earlier in the year. On the inflation front, the U.S. Fed is of the view that both overall
inflation and inflation for items other than food and energy remain near 2% on an annual
According to the Institute for Supply Management, U.S. non-manufacturing index fell to 60.3
in Oct 2018 after rising to 61.6 in Sep 2018. The modest slowdown in the business activity
growth was due to decline in business activity index to 62.5 in Oct 2018 from 65.2 in Sep
2018. The employment index also fell to 59.7 in Oct 2018 from 62.4 in Sep 2018.
The U.K. economy expanded at the fastest pace in nearly two years in the third quarter of
2018, which can be attributed to household spending and exports. Gross Domestic Product
(GDP) grew 0.6% in the third quarter of 2018 after expanding 0.4% a quarter ago. On a
yearly basis, GDP grew 1.5% in the third quarter of 2018, was in line with expectations.
Consumer Price Index (CPI)-based inflation in China on a yearly basis remained unchanged
at 2.5% in Oct 2018. CPI thus remained below the government's full year-target of around
3%. However, on a monthly basis, CPI slowed to 0.2% in Oct 2018 from 0.7% in Sep 2018.
IHS Markit data showed China's private sector expanded at the weakest pace in more than
two years in Oct 2018. Both services and manufacturing posted weaker performances. The
Caixin composite output index dipped to 28-month low of 50.5 in Oct 2018 from 52.1 in Sep.
Global Equity Markets
Global Indices
Dow Jones
25989.30 2.84% 5.14%
Nasdaq 100
7039.15 1.06% 10.05%
FTSE 100
7105.34 0.16% -7.58%
DAX Index
11529.16 0.09% -10.75%
Nikkei Average
22250.25 0.03% -2.26%
Straits Times
3077.97 -1.23% -9.55%
Source: Thomson Reuters Eikon
Value as on Nov 09, 2018
U.S. markets traded higher as the
results of the highly anticipated mid-
term elections, held during the week,
came largely in line with expectations.
The Democratic candidates managed to
regain confidence of a number of
suburban districts across the country,
thereby paving way for control of the
House of Representatives.
European markets too witnessed buying interest on the back of results of the U.S.
midterm elections, which saw Democrats reclaim control of the House of Representatives
and the Republicans retaining control of the Senate. Additionally, U.K. Gross Domestic
Product (GDP) for the third quarter of 2018 came in line with market expectations.
Asian markets closed mostly lower unlike global peers. Investor sentiment was dented
after the U.S. Fed reiterated its hawkish stance on interest rate outlook. Additionally, the
populist government in Italy dismissed the European Union's (EU) negative outlook for the
Italian economy, thereby deepening a rift with EU. Chinese markets declined as
policymakers’ efforts to instil confidence among investors with promises of tax cuts and
greater bank lending failed could not do much.
Global Debt (U.S.)
Yield on the 10-year U.S. Treasury bond
fell 2 bps to close at 3.19% from the
previous close of 3.21%.
U.S. Treasury prices rose initially as its
safe haven appeal improved ahead of
the U.S. midterm elections, which was
due on Nov 6, 2018.
The trend reversed soon following
selling of longer-dated government debt.
U.S. Treasury prices fell further after the
U.S. Fed kept rates on hold in its policy
review but kept the door open for a rate
hike in Dec 2018 as it reiterated its
upbeat outlook on the U.S. economy.
Losses were neutralized as U.S.
Treasury prices rose on the penultimate
day of the week as a consistent fall in
global crude oil prices rekindled worries
about a possible slowdown in the global
economy which boosted the safe haven
appeal of U.S. Treasuries.
5-Nov 6-Nov 7-Nov 8-Nov 9-Nov
US 10-Year Treasury Yield Movement
Source: Thomson Reuters Eikon
Commodities Market
Performance of various commodities
Last Closing* 1-Week Ago
Brent Crude($/Barrel)
68.10 70.20
Gold ($/Oz)
1209.21 1232.48
Gold (Rs/10 gm)
31773 31565
Silver ($/Oz)
14.16 14.71
Silver (Rs/Kg)
38205 38299
Eikon *Value as on Nov 09, 2018
Gold prices traded lower after the
Federal Reserve (Fed) left its current
interest rate unchanged but reiterated
its stance for hiking interest rates soon.
In addition, improved Chinese import
and export growth data reduced the
bullion’s appeal although the country’s
producer price inflation slowed for the
fourth consecutive month in Oct 2018.
Brent crude fell following concerns over
global oil oversupply. In addition, worries
over global economic slowdown amid
the ongoing geopolitical uncertainties
and persistent trade tension between
U.S. and its trading partners dented the
demand outlook for oil.
Baltic Dry Index
The Baltic Dry Index fell 15.51% on the
back of lower capesize and panamax
10-Oct-18 20-Oct-18 30-Oct-18 9-Nov-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
72.73 72.88
Pound Sterling
94.87 94.75
82.52 83.23
100 JPY
63.84 64.47
Source: RBI Figures in INR , *Value as on Nov 09, 2018
The Indian rupee inched up against the
U.S. dollar in a truncated week following
decline in global crude oil prices and
subsequent gains in the domestic equity
The euro fell against the greenback after
the European Commission downgraded
its growth forecasts for Italy for 2018 and
the next two years, lower than what Italy
itself had projected in its draft budget.
The pound inched up against the
greenback on hopes that a Brexit deal
between U.K. and the EU was imminent.
The yen fell against the U.S. dollar after
the U.S. Fed kept rates on hold in its
policy review but reiterated its upbeat
outlook on the U.S. economy thereby
keeping the door open for the fourth rate
hike of 2018 in Dec 2018.
10-Oct-18 20-Oct-18 30-Oct-18 9-Nov-18
Source: RBI
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
The Week that was…
Nov to 09
The Week that was (Nov 05 Nov 09)
Date Events Present Value Previous Value
November 05, 2018
Nikkei India Services PMI (Oct 18) 52.2 50.9
Caixin China PMI Composite (Oct) 50.5 52.1
U.K. Markit/CIPS UK Composite PMI (Oct) 52.1 54.1
Japan Nikkei Japan PMI Composite (Oct) 52.5 50.7
U.S. ISM Non-Manufacturing/Services Composite (Oct) 60.3 61.6
November 06, 2018
Eurozone Producer Price Index (YoY) (Sep) 4.5% 4.3%
Eurozone German Factory Orders n.s.a. (YoY) (Sep) -2.2% -2.1%
November 07, 2018
Japan Labor Cash Earnings (YoY) (Sep) 1.1% 0.8%
Eurozone German Industrial Production (YoY) (Sep) 0.8% -0.1%
Eurozone Retail Sales (YoY) (Sep) 0.8% 2.2%
U.S. Consumer Credit (Sep) $10.923b $22.877b
Japan Machine Orders (YoY) (Sep) -7.0% 12.6%
November 08, 2018
China Trade Balance (Oct) $34.01b $31.69b
Japan Eco Watchers Survey Current (Oct) 49.5 48.6
U.S. FOMC Rate Decision 2.25% 2.25%
November 09, 2018
China Consumer Price Index (YoY) (Oct) 2.5% 2.5%
U.K. Industrial Production (YoY) (Sep) 0.0% 1.3%
U.K. Gross Domestic Product (YoY) (3Q P) 1.5% 1.4%
U.S. U. of Mich. Sentiment (Nov P) 98.3 98.6
The Week Ahead
Nov to 16
The Week Ahead
Day Event
Nov 12, 2018
Japan Machine Tool Orders (YoY) (Oct P)
India Consumer Price Index (Oct)
India Index of Industrial Production (Sep)
Nov 13, 2018
Eurozone German Consumer Price Index (YoY) (Oct F)
Eurozone German ZEW Survey Expectations (Nov)
Japan Gross Domestic Product Annualized s.a. (QoQ) (3Q P)
Nov 14, 2018
India Wholesale Price Index (Oct)
China Retail Sales (YoY) (Oct)
China Industrial Production (YoY) (Oct)
Japan Industrial Production (YoY) (Sep F)
Eurozone German Gross Domestic Product (YoY) (3Q P)
U.K. Consumer Price Index (YoY) (Oct)
Eurozone Gross Domestic Product s.a. (YoY) (3Q P)
U.S. Consumer Price Index (YoY) (Oct)
Nov 15, 2018
India Trade Deficit (Oct)
U.S. Retail Sales Advance (MoM) (Oct)
Nov 16, 2018
Eurozone Consumer Price Index (YoY) (Oct F)
U.S. Industrial Production (MoM) (Oct)
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