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NEWS U CAN USE
Oct 11, 2019
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The Week that was…
7
th
Oct to 11
th
Oct
2
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Indian Economy
• Government data released showed Index of Industrial production (IIP) shrunk 1.1% in Aug
2019 compared with 4.3% growth in Jul 2019 and 4.8% in Aug 2018. Manufacturing and
electricity fell 1.2% and 0.9% in Aug against 5.2% and 7.6% growth in Aug 2018,
respectively. From Apr to Aug 2019, IIP growth eased to 2.4% YoY from 5.3% recorded in
the corresponding period last year. USE-based classification showed, consumer durables
output dropped 9.1% YoY in Aug 2019 compared with 5.5% rise a year ago while
infrastructure/construction goods output fell 4.5% from 8.0% rise in the year-ago period.
• India’s passenger vehicle sales declined 23.7% YoY in Sep 2019 to 2,23,317 units compared
with 2,92,660 units sold in the year-ago period, media reports cited Society of Indian
Automobile Manufacturers (SIAM) data. This marks the 11th straight consecutive month of
decline. Passenger car sales declined 33.4% to 1,31,281 units in Sep, according to SIAM.
Vehicle sales across categories in Sep fell 22.4% YoY to 2,004,932 units due to a slowdown
in the economy, floods in some states and lack of credit availability from financial
institutions.
• The government has hiked the dearness allowance (DA) to 17% from 12% effective from
Jul 2019. The decision was approved in a cabinet meet chaired by the Prime Minister. The
move will benefit at least 50 lakh government employees and 65 lakh pensioners. It will
cost the exchequer Rs. 16,000 crore and the increase is based on the recommendations of
the 7th Pay Commission.
3
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4
Domestic Equity Market Indices
Indices
11-Oct-19
1 Week Return
YTD Return
S&P BSE Sensex
38,127.08 1.20% 5.71%
Nifty 50
11,305.05 1.17% 4.07%
S&P BSE Mid
-Cap
13,780.99 0.49% -10.74%
S&P BSE Small
-Cap
12,772.07 -0.29% -13.15%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date
Advances
Declines
Advance/Decline Ratio
07-Oct-19 608 1245 0.49
09-Oct-19 986 862 1.14
10-Oct-19 644 1188 0.54
11-Oct-19 879 952 0.92
Source: NSE
• Indian equity markets gained in the
holiday-truncated week ended Oct 11,
2019, mainly on account of positive
global cues. Brexit concerns eased and
investors expected U.S. and China to
crack a partial trade deal in their
ongoing negotiations. Markets were
also upbeat over the good start to the
earnings season with the leading IT
company beating expectations.
• Sentiment boosted ahead of the
second quarter earnings of a major
private bank and others. The
government increasing dearness
allowance by 5% also supported
sentiment.
• However, gains were restricted after
the non-performing assets (NPA)
problem of banks resurfaced together
with economic growth concerns.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
26.78 26.11 25.93 40.18
P/B
2.87 3.49 2.31 1.71
Dividend Yield
1.21 1.32 1.18 1.14
Source: BSE, NSE Value as on Oct
11, 2019
Indian Equity Market
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5
Sectoral Indices
Indices
Last Returns (in %)
Closing* 1-Wk 1-Mth
S&P BSE Auto
16,575.9 0.03% -0.54%
S&P BSE
Bankex
31,732.6 1.37% 1.65%
S&P BSE CD
25,709.4 1.02% 10.52%
S&P BSE CG
18,038.4 -0.02% 4.14%
S&P BSE FMCG
11,520.6 0.17% 5.19%
S&P BSE HC
12,152.3 -0.99% -6.94%
S&P BSE IT
15,466.2 -0.10% -2.82%
S&P BSE Metal
8,703.9 1.85% -3.08%
S&P BSE Oil & Gas
14,619.0 -1.34% 9.05%
Source: Thomson Reuters Eikon
*Value as on Oct 11, 2019
• S&P BSE Metal was the major gainer that grew
1.85% followed by S&P BSE Bankex and S&P
Teck, which grew 1.37% and 1.20%,
respectively. S&P BSE Consumer Durables and
S&P BSE Power grew 1.02% and 0.98%,
respectively. S&P BSE Oil & Gas was the major
loser and fell 1.34% followed by S&P BSE
Healthcare that fell 0.99%.
• The metal sector gained on renewed trade
deal hopes as U.S. and China prepared to
come back on the negotiations table. The
banking sector gained on expectations of
good earnings by a major private sector bank.
Indian Derivatives Market Review
• Nifty Oct 2019 Futures stood at 11,311.70, a premium of 6.65 points above the spot closing
of 11,305.05. The total turnover on NSE’s Futures and Options segment for the week stood
at Rs. 18.16 lakh crore as against Rs. 56.40 lakh crore for the week to Oct 4.
• The Put-Call ratio stood at 0.90 compared with the previous week’s close of 0.88.
• The Nifty Put-Call ratio stood at 1.14 against the previous week’s close of 0.97.
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 5.19 5.32 6.02
91 Day T
-Bill
5.20 5.24 5.38 6.32
07.32% 2024, (5 Yr GOI)
6.32 6.27 6.29 7.12
07.26% 2029, (10 Yr GOI)
6.73 6.69 6.68 7.37
Source: Thomson Reuters Eikon
Value as on Oct 11, 2019
• Bond yields remained range bound
during most of the sessions as market
participants preferred to remain on
the side-lines ahead of the release of
domestic retail inflation data for Sep
2019 which is due next week.
• At the end, bond yields rose with the
surge in U.S. Treasury yields. In
addition, speculations of rise in retail
inflation and worries over a fiscal
slippage adversely impacted market
sentiment.
• Yield on the 10-year benchmark paper
(7.26% GS 2029) rose 4 bps to 6.73%
compared with the previous close of
6.69% after trading in a range of
6.64% to 6.73%.
Domestic Debt Market
6.00
6.40
6.80
7-Oct 9-Oct 10-Oct 11-Oct
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-
Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year
5.73 6.67 94
3 Year
6.07 7.32 125
5 Year
6.48 7.59 111
10 Year
6.84 8.07 123
Source: Thomson Reuters Eikon
Value as on Oct 11, 2019
• Yields on gilt securities increased across
the maturities in the range of 4 bps to 41
bps barring 2-year paper, 3-year paper and
6-year maturities that fell in the range of 3
bps to 10 bps.
• Corporate bond yields increased across
the maturities in the range of 3 bps to 32
bps barring 1-year paper which fell 12 bps.
• Difference in spread between AAA
corporate bond and gilt expanded across
most of the maturities in the range of 6
bps to 41 bps.
Domestic Debt Market (Spread Analysis)
-5
2
9
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 11-Oct-19 04-Oct-19
Yield
in
%
Change
in bps
Source: Thomson Reuters Eikon
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8
• Capital market regulator Securities and Exchange Board of India came out with a detailed
framework for issuance of depository receipts (DRs). The new framework is expected to
provide Indian companies increased access to foreign funds. According to the framework,
only a listed company can issue permissible securities or their holders may transfer such
securities for the issuance of DRs. However, this is subject to the condition that their
promoters, directors and selling shareholders are not banned from the capital markets or
they are not wilful defaulters or economic offenders. Further the entity issuing DRs, will give
an opportunity to its equity shareholders to tender their shares so that they can also
participate in such listing of DRs.
• RBI has decided to disburse more granular information on payment data for the payment
systems that are authorized by it. Such data will be made available on the RBI website and
RBI bulletin. The move comes after RBI took note of the rapid developments in the digital
payments space.
• RBI in consultation with the stakeholders has decided to create an Acceptance Development
Fund (ADF). This will ensure growth of acceptance infrastructure across the country
especially in Tier III to Tier VI centres, given the rapid growth in issuance of cards. Growth of
acceptance infrastructure will give a fillip to digitization in such areas.
Regulatory Updates in India
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9
• RBI decided that State/UT Level Bankers Committees (SLBCs/ UTLBCs) shall identify one
district in their respective States/UTs on a pilot basis after discussing the same with banks
and stakeholders. This district may be allocated to a bank having a significant footprint.
The bank will take the necessary steps to make the district 100% digitally enabled. The
objective of the move is to expand and deepen the digital payment ecosystem.
• According to media report, the Insurance Regulatory and Development Authority of India
(IRDAI) is eyeing to develop a standard structure for title insurance, which is mandatory for
Real Estate (Regulation and Development) Act, 2016 (RERA)-registered projects. Title
insurance provides protection to developers and succeeding buyers of the property
against losses due to flaws in the title arising out of third-party challenges.
• According to media report, the Insurance Regulatory and Development Authority of India
(IRDAI) has issued several new regulations defining the new laws and policies around
Exclusions and Pre-existing Diseases (PED) in health insurance policies. As per the new
guidelines, the definition of PED has been altered to cater to meet requirements of
different customers. In accordance with the new guidelines, any disease/s or ailment/s
that is/are diagnosed by a physician in the last 48 months before the issuance of policy will
be classified under PED.
Regulatory Updates in India (contd..)
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• The Organization for Economic Cooperation and Development (OECD) said unemployment
rate in the OECD area reached its lowest level on record in Aug 2019. The jobless rate fell
to 5.1% in Aug, the lowest since 1998, from 5.2%in Jul 2019. Unemployment rate for youth
aged below 24 was stable at 11.2% in Aug.
• The World Bank has forecast economic growth across Europe and Central Asia to ease in
2019, reflecting the slowdown in both Russia and Turkey. Growth in the emerging and
developing countries of Europe and Central Asia is set to ease to a four-year low of 1.8% in
2019 from 3.2% in 2018.
• According to the minutes of U.S. Federal Reserve’s meeting, a few participants at the Fed’s
monetary policy meeting in Sep 2019 expressed concerns that the markets expect more
interest rate cuts than are appropriate. The minutes said those participants felt it might
become necessary for the Fed to seek a better alignment of market expectations
regarding the path of rates with policymakers' own expectations.
• Office for National Statistics data showed the U.K. economy expanded in three months to
Aug 2019 for the second consecutive time, suggesting it could avoid a recession ahead of
Brexit. Rolling three-month gross domestic product growth increased to 0.3% from 0.1% in
three months to Jul 2019.
10
Global News/Economy
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11
Global Indices
Indices
11-Oct-19
1-Week
Return
YTD
Return
Russell 3000
1,299.38 0.78% 22.27%
Nasdaq 100
7,843.88 1.16% 23.92%
FTSE 100
7,247.08 1.28% 7.71%
DAX Index
12,451.34 3.65% 17.92%
Nikkei Average
21,798.87 1.82% 8.91%
Straits Times
3,113.97 1.16% 1.47%
Source: Thomson Reuters Eikon
Value as on Oct 11, 2019
U.S.
• U.S. markets rose as investors continued
to focus on the U.S.- China trade
development, which showed signs of
improvement later during the week.
The U.S. government is hoping that
both the nations could at least reach a
partial deal that includes the U.S. calling
off a planned increase in tariffs on
Chinese goods.
Europe
• European markets rose led by developments on the Brexit deal. The British government
hinted that it intends to bring a revised Brexit deal back to Parliament. According to media
reports, the European Union is willing to make a major concession to a Brexit deal.
Asia
• Optimism over positive breakthrough of the U.S.- China trade deal led to rally in the Asian
markets. While, U.S. President hinted at progress in his high-stakes trade battle with China
and Chinese news agency reported that Beijing was willing to reach an agreement to
avoid further escalation.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury bond
rose 24 bps to 1.75% compared with
the previous week’s close of 1.51%.
• U.S. Treasury prices fell over the week
as market participants grew optimistic
for a resolution to the U.S.-China trade
war which eased concerns of a
slowdown in global growth to some
extent.
• Hopes that Britain would be able to
come to an agreement with the
European Union before its exit from the
euro zone further boosted market
sentiments and lowered the safe haven
appeal of U.S. Treasuries.
• However, further losses were restricted
on growing possibility of a rate cut by
the U.S. Federal Reserve later in the
month.
Global Debt (U.S.)
1.50
1.64
1.78
7-Oct 8-Oct 9-Oct 10-Oct 11-Oct
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($/Barrel)
61.48 60.02
Gold ($/Oz)
1489.45 1504.35
Gold (Rs/10 gm)
38154 38151
Silver ($/Oz)
17.54 17.55
Silver (Rs/Kg)
45257 45086
Source: Thomson Reuters Eikon *
Value as on Oct 11,
2019
Gold
• Gold prices fell as easing concerns
around trade conflict between U.S. and
China reduced the safe haven appeal of
the bullion.
Brent Crude
• Brent crude prices surged following
media reports of an explosion on an
Iranian tanker and optimism that U.S and
China can agree at least on a partial
trade deal. Gains were extended after
Turkey launched a military operation
against Kurdish fighters in northeast
Syria.
Baltic Dry Index
• The Baltic Dry Index rose on the back of
improved capesize and panamax
activities.
Commodities Market
9.00
10.00
11.00
11-Sep-19 26-Sep-19 11-Oct-19
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global
Commodity Prices
Rebased to 10
Source: Thomson Reuters Eikon
-0.06%
2.43%
-0.99%
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing*
1-Wk Ago
US Dollar
71.03 70.87
Pound Sterling
88.43 87.52
EURO
78.24 77.78
100 Yen
65.78 66.36
Source: RBI Figures in INR , *
Value as on Oct 11,
2019
Rupee
• The rupee weakened following sharp
surged in crude oil prices. However,
losses were restricted following gains in
domestic equity market.
Euro
• The euro rose against the greenback as
market participants remained optimistic
about progress toward a U.S.-China trade
deal and agreement on Britain's exit
from the European Union.
Pound
• The pound gained against the greenback
after British and Irish prime ministers
revived hopes of a possible Brexit deal.
Yen
• The yen fell against the greenback as
investors were optimistic about a trade
deal between U.S. and China.
Currencies Markets
9.70
9.90
10.10
11-Sep-19 21-Sep-19 1-Oct-19 11-Oct-19
USD GBP Euro JPY
Source: Thomson Reuters Eikon
Currency
Prices (
in terms of INR)
Rebased to 10
Currency Movement
0.59%
1.04%
0.22%
-0.87%
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15
The Week that was…
07
th
Oct to 11
th
Oct
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16
The Week that was (Oct 07 –Oct 11)
Date Events
Present
Value
Previous
Value
Monday,
October 07, 2019
• Japan Leading Economic Index (Aug) (P)
91.7 93.7
• Germany Factory Orders (MoM) (Aug)
-0.60% -2.10%
• U.K. BRC Like
-For-Like Retail Sales (YoY) (Sep) -1.70% -0.50%
• Japan Overall Household Spending (YoY) (Aug)
1.00% 0.80%
Tuesday,
October 08, 2019
• China Caixin Services PMI (Sep)
51.30 52.10
• Germany Industrial Production (MoM) (Aug)
0.30% -0.40%
• U.S. Producer Price Index ex Food & Energy (YoY) (Sep)
2.00% 2.30%
Wednesday,
October 09, 2019
• Japan Foreign Bond Investment (Oct 4)
¥-428.3B ¥870.9B
• Japan Machinery Orders (YoY) (Aug)
-14.50% 0.30%
Thursday,
October 10, 2019
• U.S. Consumer Price Index ex Food & Energy (YoY) (Sep)
2.40% 2.40%
• Germany Trade Balance (Aug)
€18.1B €20.5B
• U.K. Manufacturing Production (YoY) (Aug)
-1.70% -0.90%
• U.K. Industrial Production (MoM) (Aug)
-0.60% 0.10%
• U.K. Gross Domestic Product (MoM) (Aug)
-0.10% 0.40%
• U.S. Initial Jobless Claims (Oct 4)
210k 220k
Friday,
October 11, 2019
• India Index of Industrial Production (Aug)
-1.10% 4.60%
• Germany Harmonized Index of Consumer Prices (YoY) (Sep)
0.90% 0.90%
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
17
The Week Ahead
14
th
Oct to 18
th
Oct
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18
Day Event
Monday,
Oct 14, 2019
•
India Consumer Price Index (Sep)
•
India Wholesale Price Index (Sep)
•
China Trade Balance USD (Sep)
Tuesday,
Oct 15, 2019
•
Germany ZEW Survey Economic Sentiment (Oct)
•
Japan Industrial Production (YoY) (Aug)
•
China Producer Price Index (YoY) (Sep)
Wednesday,
Oct 16, 2019
•
U.K. Consumer Price Index (YoY)
•
U.S. Retail Sales Control Group (Sep)
•
U.K. Retail Price Index (YoY) (Sep)
Thursday,
Oct 17, 2019
•
U.K. Retail Sales (YoY) (Sep)
•
U.S. Housing Starts (MoM) (Sep)
•
U.S. Initial Jobless Claims (Oct 11)
•
U.S. Industrial Production (MoM) (Sep)
Friday,
Oct 18, 2019
•
China Gross Domestic Product (YoY) (Q3)
The Week Ahead
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The information herein is meant only for general reading purposes and contains all factual and statistical information pertaining to Industry and
markets which have been obtained from independent third party sources and which are deemed to be reliable. The information provided cannot be
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19
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