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NEWS U CAN USE
Oct 25, 2019
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The Week that was…
21
st
Oct to 25
th
Oct
2
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Indian Economy
• A major global rating agency has cut India's GDP growth forecast for FY20 to 5.5%. It cited
a large credit squeeze arising from shadow banks pushing economic growth to a six-year
low. The agency had in Jun 2019 put India's GDP growth at 6.6% for FY20. It added that
the recent government measures to boost economy, including a cut in corporate tax rates,
will gradually nudge growth. The projection is lower than 6.1% estimated by the Reserve
Bank of India in early Oct 2019.
• The World Bank said China and India have made to the top 10 list of governments that
have improved the most in the past year in the ease of doing business. Despite a bitter
trade war, China has made to the top 10 list for the second year in a row. India has
featured on the most-improved list for the third year in a row, easing the process of doing
business by abolishing filing fees, lowering the time and cost of seeking construction
permits and making trade easier with port improvements and an improved electronic
platform for submitting documents.
• A major global rating agency said Indian financial sector is facing rising risk of contagion
and failure of any large finance company will adversely impact economic growth. A bank
failure could disturb interbank market, payments, upset credit availability and unfavorably
affect economic growth, according to the report.
3
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4
Domestic Equity Market Indices
Indices
25-Oct-19
1 Week Return
YTD Return
S&P BSE Sensex
39,058.06 -0.61% 8.29%
Nifty 50
11,583.90 -0.67% 6.64%
S&P BSE Mid
-Cap
14,341.76 -0.54% -7.10%
S&P BSE Small
-Cap
13,153.06 0.20% -10.56%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date
Advances
Declines
Advance/Decline Ratio
22-Oct-19 912 942 0.97
23-Oct-19 911 910 1.00
24-Oct-19 775 1,030 0.75
25-Oct-19 746 1,018 0.73
Source: NSE
• Indian equity markets closed on a weak
note in the week ended Oct 25, 2019.
Investors remained cautious amid a
mixed bag of earnings results by major
corporates from various sectors.
Uncertainty over results of assembly
election in two states also kept the
investors on their toes.
• Further, reports that supreme court
has upheld the definition of adjusted
gross revenue (AGR) provided by the
department of telecommunications
weighed on the market sentiment. This
meant that telcos will have to shell out
a hefty Rs. 92,000 crore in past dues to
the government.
• However, investor sentiment got a
boost after an auto major beat
estimates for its second quarter.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
26.76 26.70 26.45 42.11
P/B
2.85 3.58 2.34 1.75
Dividend Yield
1.18 1.29 1.14 1.13
Source: BSE, NSE Value as on Oct
25, 2019
Indian Equity Market
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5
Sectoral Indices
Indices
Last Returns (in %)
Closing* 1-Wk 1-Mth
S&P BSE Auto
17,902.7 0.11% 7.01%
S&P BSE
Bankex
33,271.6 1.13% -0.32%
S&P BSE CD
26,855.2 1.07% 4.15%
S&P BSE CG
18,254.1 -1.77% -1.45%
S&P BSE FMCG
11,977.5 0.41% 2.60%
S&P BSE HC
12,897.9 2.08% 0.70%
S&P BSE IT
14,574.2 -5.69% -5.86%
S&P BSE Metal
8,964.1 -2.00% -0.57%
S&P BSE Oil & Gas
15,190.4 -0.81% 5.93%
S&P BSE Teck
7,128.2 -5.93% -5.26%
Source: Thomson Reuters Eikon
*Value as on Oct 25, 2019
• S&P BSE Teck was the major loser that fell
5.93% followed by S&P BSE Information
Technology that fell 5.69%. A whistleblowers
group accused an information technology
majors’ CEO of shoring up profits through
irregular accounting which kept the sector
under pressure.
• However, S&P BSE Healthcare was the major
gainer that grew 2.08% followed by S&P BSE
Bankex that grew 1.13%. The largest public
sector bank gained after its second quarter
earnings increased three-fold as provisions for
bad loans went down.
Indian Derivatives Market Review
• Nifty Oct 2019 Futures stood at 11,611.15, a premium of 27.25 points above the spot
closing of 11,583.90. The total turnover on NSE’s Futures and Options segment for the
week stood at Rs. 10.27 lakh crore as against Rs. 63.87 lakh crore for the week to Oct 18.
• The Put-Call ratio stood at 0.93 compared with the previous week’s close of 0.81 .
• The Nifty Put-Call ratio stood at 1.02 against the previous week’s close of 1.44.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-
Wk
Ago
1-
Mth
Ago
6-
Mth
Ago
Call Rate
5.10 5.10 5.33 6.14
91 Day T
-Bill
5.10 5.08 5.42 6.39
07.32% 2024, (5 Yr GOI)
6.27 6.29 6.43 7.40
07.26% 2029, (10 Yr GOI)
6.68 6.70 6.76 7.45
Source: Thomson Reuters Eikon
Value as on Oct 25, 2019
• Bond yields rose initially amid
concerns over fiscal slippage following
increase in global crude oil prices.
• However, the trend reversed after the
Reserve Bank of India issued a sharply-
lower-than-scheduled quantum of a
new 10-year note which eased supply
concerns in the domestic debt market
to some extent. According to reports,
India issued only around Rs. 58 billion
of the 6.45% 2029 paper at a debt
switch auction, against the planned
quantum of up to Rs. 200 billion.
• Yield on the 10-year benchmark paper
(7.26% GS 2029) fell 2 bps to 6.68%
compared with the previous close of
6.70% after trading in a range of
6.66% to 6.71%.
Domestic Debt Market
6.55
6.65
6.75
22-Oct 23-Oct 24-Oct 25-Oct
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-
Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year
5.63 6.80 117
3 Year
6.01 7.24 122
5 Year
6.43 7.52 110
10 Year
6.78 8.16 138
Source: Thomson Reuters Eikon
Value as on Oct 25, 2019
• Yields on gilt securities fell across the
maturities by up to 10 bps barring 7 and 12-
year paper that rose1 bps each while the
yield on 1-year paper closed steady.
• Corporate bond yields rose on 1-year and 5
to 9-year papers by up to 6 bps. Yield fell
across the remaining papers by up to 21 bps
barring 4-year paper which closed steady.
• Difference in spread between AAA
corporate bond and gilt expanded across the
maturities by up to 6 bps barring 2, 3 and 15-
year papers which contracted in the range of
2 bps to 17 bps.
Domestic Debt Market (Spread Analysis)
-6
-3
0
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 25-Oct-19 18-Oct-19
Yield
in %
Change
in bps
Source: Thomson Reuters Eikon
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8
• The Securities & Exchange Board of India (SEBI) has levied a total penalty of Rs. 62 lakh on
seven entities for failing to make public announcement with regard to an acquisition. The
firms have violated Substantial Acquisition of Shares and Takeovers (SAST) rules, media
reports cited a SEBI order.
• The Securities & Exchange Board of India (SEBI) has introduced a framework for listing of
commercial papers on stock exchanges, media reports showed. This has been done to
broaden investor participation in such securities. SEBI said it is important that issuers, who
intend to list securities, make the right disclosures at the time of listing and on a continuous
basis to enable listing of commercial papers (CPs) and to ensure investor protection. The
disclosure framework is based on the recommendation of the Corporate Bonds and
Securitisation Advisory Committee. It also directed stock exchanges to monitor disclosures
and compliance.
• The Cabinet has approved agreements signed with other countries in various fields like
traditional medicine, and science and technology. These included administrative
arrangement on cooperation in the field of Railways between the Ministry of Railways and
the Directorate General for Mobility and Transport of the European Commission.
Regulatory Updates in India
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9
• Media reports showed the Reserve Bank of India (RBI) has prohibited banks from
deploying direct selling agents (DSAs) to sell retail loans and verifying borrowers'
documents. At present, a large proportion of retail assets such as personal loans, credit
cards and consumer credit are sourced via DSAs. The aim of the move is to bring down
cases of data theft and reduce operational risks.
• Media reports showed the government has relaxed fuel retailing regulations to allow non-
oil companies to set up petrol pumps. This is being done to increase competition.
Information & Broadcasting minister said the opening of fuel retailing will increase
investment and competition. Presently, to get a fuel retailing licence in India, a company
needs to invest Rs. 2,000 crore in either hydrocarbon exploration and production, refining,
pipelines or liquefied natural gas (LNG) terminals.
• The government is looking into stringent regulations for pharmaceutical products
manufactured using nanotechnology. The Ministry of Science and Technology is
strengthening the regulatory system for nanopharmaceuticals on the lines of other drugs
in order to attract private investments. The ministry has launched “Guidelines for
Evaluation of Nanopharmaceuticals in India". It said the general requirements and
guidelines specified for approval of manufacture/import of any new drug or to undertake
clinical trial as specified in the New Drugs and Clinical Trials Rules, 2019, will apply to
nanopharmaceuticals as well.
Regulatory Updates in India (contd..)
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• According to a report from the University of Michigan, U.S. consumer sentiment improved
slightly less than preliminary expectations and came in at 95.5 in Oct 2019. However, it was
up against reading of 93.2 in Sep 2019.
• The European Central Bank left its key interest rates, forward guidance, and stimulus
measures unchanged, as expected, in the final policy session chaired by the outgoing
President. The main refinancing rate was retained at its record low 0% and the deposit rate
at -0.50%.
• The International Monetary Fund has downgraded Asia's growth outlook. The body cited
prolonged global policy uncertainty and slowing growth in China and India as the reasons.
It highlighted rising downside risks to growth. According to the latest assessment for Asia
and the Pacific, Asia will grow 5% in 2019 instead of 5.4% projected earlier due to weak
trade and investment. This will be the slowest expansion since the global financial crisis in
2008.
• Japan's leading index fell less than estimated in Aug 2019 but remained at the lowest level
in nearly 10 years in Aug 2019, final data from the Cabinet Office showed. The leading
index fell to 91.9 in Aug from 93.7 in Jul 2019.
• Survey data from IHS Markit showed euro area private sector remained close to stagnation
in Oct 2019 as manufacturing continued to shrink amid subdued expansion in services
activity. The flash composite output index rose slightly to 50.2 in Oct from 50.1 in Sep
2019.
10
Global News/Economy
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11
Global Indices
Indices
25-Oct-19
1-Week
Return
YTD
Return
Russell 3000
1,317.77 1.07% 24.00%
Nasdaq 100
8,029.22 2.04% 26.84%
FTSE 100
7,324.47 2.43% 8.86%
DAX Index
12,894.51 2.07% 22.12%
Nikkei Average
22,799.81 1.37% 13.91%
Straits Times
3,185.53 2.29% 3.81%
Source: Thomson Reuters Eikon
Value as on Oct 25, 2019
U.S.
• The latest developments on the U.S.-
China trade deal set the moods right for
weekly gains of the U.S. markets.
According to the U.S. Trade
Representative's office, U.S. and China
have made progress toward finalizing a
phase one trade deal. The U.S. President
is hopeful that an agreement would be
signed by the time the Asia-Pacific
Economic Cooperation meetings take
place in Chile on Nov 16-17.
Europe
• European markets traded higher, led by announcements of the corporate earning
numbers and continued optimism about U.S. and China signing the first phase of a trade
deal in Nov. Buying interest was also impacted by the European Central Bank's decision to
leave rates unchanged.
Asia
• Majority of the Asian markets reflected gains of its global peers as upbeat corporate
earnings results helped offset concerns about the Brexit uncertainty.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury bond
rose 5 bps to close at 1.80% compared
to the previous week’s close of 1.75%.
• U.S. Treasury prices fell initially during
the week as its safe-haven appeal
dwindled on optimism about a potential
trade deal between U.S. and China.
• U.S. Treasury prices fell further as
market participants preferred to remain
on the sidelines and awaited the
outcome of the U.S. Federal Reserve
monetary policy review which is due Oct
30, 2019.
• However, further losses were restricted
amid persistent uncertainty surrounding
Britain's long-delayed exit from the
European Union after the U.K.
Parliament rejected the government's
proposed Brexit timetable.
Global Debt (U.S.)
1.70
1.74
1.78
1.82
21-Oct 22-Oct 23-Oct 24-Oct 25-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($/Barrel)
62.90 60.50
Gold ($/Oz)
1,504.33 1,489.70
Gold (Rs/10 gm)
38,630 38,241
Silver ($/Oz)
18.02 17.54
Silver (Rs/Kg)
46,820 45,203
Source: Thomson Reuters Eikon *
Value as on
Oct 25, 2019
Gold
• Gold prices were up on growing
possibility of a rate cut by the U.S.
Federal Reserve in its upcoming
monetary policy review and renewed
uncertainty over Brexit. Prices got
further support after Japan’s
manufacturing activity fell at the fastest
rate in three years during Oct.
Brent Crude
• Brent crude prices surged following data
from the U.S Energy Information
Administration which showed domestic
crude stockpiles fell by 1.7 million
barrels compared with market
expectations for a 2.2-million-barrel
build in the week to Oct 18.
Baltic Dry Index
• The Baltic Dry Index fell on the back of
lower capesize and panamax activities.
Commodities Market
8.80
9.20
9.60
10.00
10.40
25-Sep-19 5-Oct-19 15-Oct-19 25-Oct-19
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global
Commodity Prices
Rebased to 10
Source: Thomson Reuters Eikon
2.73%
3.97%
0.98%
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing*
1-Wk Ago
US Dollar
70.96 71.20
Pound Sterling
91.19 91.52
EURO
78.81 79.19
100 Yen
65.30 65.58
Source: RBI Figures in INR , *
Value as on
Oct 25, 2019
Rupee
• The rupee rose against the greenback as
investor risk appetite improved amid signs
of progress in the U.S.-China trade talks.
Euro
• The euro weakened against the greenback
amid renewed uncertainty over Brexit after
the U.K. Parliament accepted a Brexit
withdrawal deal in principle but rejected the
government's timetable to legislate on the
agreement.
Pound
• The pound weakened against the greenback
after the U.K. Parliament rejected the
government's proposed Brexit timetable.
Yen
• The yen weakened against the greenback as
the safe-haven appeal of the latter
strengthened amid renewed uncertainty
over Brexit.
Currencies Markets
9.20
9.60
10.00
10.40
10.80
25-Sep-19 5-Oct-19 15-Oct-19 25-Oct-19
USD GBP Euro JPY
Source: Thomson Reuters Eikon
Currency
Prices (
in terms of INR)
Rebased to 10
Currency Movement
-0.47%
-0.36%
-0.43%
-0.34%
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15
The Week that was…
21
st
Oct to 25
th
Oct
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16
The Week that was (Oct 21 –Oct 25)
Date Events
Present
Value
Previous
Value
Monday,
October 21, 2019
• China PBoC Interest Rate Decision
4.20% 4.20%
• Japan All Industry Activity Index (MoM) (Aug)
0.00% 0.20%
• Germany Producer Price Index (MoM) (Sep)
0.10% -0.50%
Tuesday,
October 22, 2019
• U.K. Public Sector Net Borrowing (Sep)
£8.734B
£4.918B
• U.S. Existing Home Sales (MoM) (Sep)
5.38M 5.49M
Wednesday,
October 23, 2019
• U.S. Housing Price Index (MoM) (Aug)
0.20% 0.40%
• Germany 10
-y Bond Auction -0.41% -0.61%
Thursday,
October 24, 2019
• ECB Interest Rate Decision
0.00% 0.00%
• Germany Markit Manufacturing PMI (Oct) (P)
41.9 41.7
• U.S. Nondefense Capital Goods Orders ex Aircraft (Sep)
-0.50% -0.60%
• Japan Leading Economic Index (Aug)
91.9 93.7
• U.S. Initial Jobless Claims (Oct 18)
212K 218K
• U.S. Durable Goods Orders (Sep)
-1.10% 0.30%
• U.S. Markit Services PMI (Oct) (P)
51.00 50.90
• U.S. New Home Sales (MoM) (Sep)
0.701M
0.706M
Friday,
October 25, 2019
• U.S. Michigan Consumer Sentiment Index (Oct)
95.50 96
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17
The Week Ahead
28
th
Oct to 01
st
Nov
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18
Day Event
Monday,
Oct 28, 2019
•
Japan Tokyo CPI ex Fresh Food (YoY) (Oct)
Tuesday,
Oct 29, 2019
•
U.S. Consumer Confidence
•
U.S. Pending Home Sales (MoM) (Sep)
•
Japan Retail Trade (YoY) (Sep)
Wednesday,
Oct 30, 2019
•
U.S. Fed Interest Rate Decision
•
U.S. Gross Domestic Product Annualized (Q3) (P)
•
Germany Harmonized Index of Consumer Prices (YoY) (Oct)
•
Germany Unemployment Rate (Oct)
Thursday,
Oct 31, 2019
•
Bank of Japan Interest Rate Decision
•
U.K. GfK Consumer Confidence (Oct)
•
Germany Retail Sales (MoM) (Sep)
•
U.S. Initial Jobless Claims (Oct 25)
Friday,
Nov 01, 2019
•
India Manufacturing PMI (Oct)
•
U.S. ISM Manufacturing PMI (Oct)
•
China Caixin Manufacturing PMI (Oct)
•
U.S. Nonfarm Payrolls (Oct)
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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