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NEWS U CAN USE
Apr 24, 2020
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The Week that was…
20
th
Apr to 24
th
Apr
2
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
Indian Economy
Central government has put on hold the rise in dearness allowance (DA) at 17% for its 4.8
million employees and 6.5 million pensioners till Jul 1, 2021 due to financial crisis caused
by the coronavirus pandemic.
According to a data released by the Petroleum Planning and Analysis Cell, India’s crude oil
and natural gas production fell 5.5% and 14.38%, respectively in Mar 2020. Crude oil
production during 2019-20 fell 5.95% YoY to 32.1 million tonne. Similarly, natural gas
production fell 5.2% to 31179.96 million metric standard cubic meter (MMSCM).
The Reserve Bank of India (RBI) increased the short-term borrowing capacity of the central
government in the first half of the FY21 (Apr to Sep) by 65% to Rs. 2 lakh crore from Rs 1.2
lakh crore limit fixed in Mar 2020 through the Ways and Means Advances (WMA). This
move could relieve the pressure on bond markets as there were market fears that
excessive borrowing by the government to fight Covid-19 could put pressure on interest
rates.
According to the payroll data of the Employees' State Insurance Corporation (ESIC),
around 11.56 lakh new members joined the social security scheme in Feb 2020 against
12.19 lakh members in the prior month. The report said gross enrolments of new
subscribers with ESIC were 1.49 crore during FY18-19.
3
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4
Domestic Equity Market Indices
Indices 24-Apr-20 1 Week Return YTD Return
S&P BSE Sensex
31,327.22 -0.83% -24.06%
Nifty 50
9,154.40 -1.21% -24.77%
S&P BSE Mid-Cap
11,464.20 -3.04% -23.41%
S&P BSE Small-Cap
10,633.54 -1.55% -22.38%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
20-Apr-20 1,157 723 1.60
21-Apr-20 503 1,345 0.37
22-Apr-20 960 868 1.11
23-Apr-20 1,193 650 1.84
24-Apr-20 541 1,328 0.41
Source: NSE
Domestic equity markets ended the
week in the red. The increasing number
of COVID-19 infections in India and the
resultant deaths put pressure on
bourses. Uncertainty about lifting the
nation-wide lockdown also kept
investors on tenterhooks.
Markets witnessed additional selling
pressure as investors panicked after a
domestic mutual fund asset
management company decided to wind
up 6 of its debt mutual fund schemes.
The fall was cushioned by the media
reports stating that a U.S. social media
and technology company showed
interest in expanding its presence in
India by investing around $5.7 billion in
the wholly owned subsidiary of a
bluechip company.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
18.90 20.48 21.70 168.37
P/B
2.41 2.61 1.86 1.56
Dividend Yield
1.24 1.66 1.53 1.57
Source: BSE, NSE Va
lue as on Apr 24, 2020
Indian Equity Market
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5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
S&P BSE Auto
12,218.0 -5.14% 14.25%
S&P BSE Bankex
22,469.5 -5.13% 14.46%
S&P BSE CD
19,305.6 -5.55% 9.32%
S&P BSE CG
11,630.6 -5.66% 17.31%
S&P BSE FMCG
10,771.8 -2.11% 20.45%
S&P BSE HC
15,421.7 3.57% 36.91%
S&P BSE IT
12,957.1 1.86% 8.15%
S&P BSE Metal
5,925.5 -9.86% 9.01%
S&P BSE Oil & Gas
11,120.6 -0.91% 23.95%
Source:
Refinitiv *Value as on Apr 24, 2020
On the BSE sectoral front, S&P BSE Metal was
the major loser, down 9.86%, followed by S&P
BSE Capital Goods and S&P BSE Consumer
Durables, which slipped 5.66% and 5.55%,
respectively. Metal stocks, remained under
pressure on concerns of weak demand due to
the COVID-19 outbreak.
Meanwhile, S&P BSE Healthcare was the top
gainer, up 3.57%, followed by S&P BSE IT and
S&P BSE Teck, which rose 1.86% and 1.08%,
respectively.
Indian Derivatives Market Review
Nifty Apr 2020 Futures stood at 9,138.25, a discount of 16.15 points below the spot closing
of 9,154.40. The total turnover on NSE’s Futures and Options segment for the week stood
at Rs. 53.75 lakh crore as against Rs. 44.35 lakh crore for the week to Apr 17.
The Put-Call ratio stood at 0.82 compared with the previous session’s close of 0.88.
The Nifty Put-Call ratio stood at 1.34 compared with the previous session’s close of 1.38.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-Wk
Ago
1-Mth
Ago
6-Mth
Ago
Call Rate
4.04 4.24 5.10 5.06
91 Day T-Bill
3.65 3.90 5.05 5.08
07.32% 2024, (5 Yr GOI)
5.13 5.33 6.06 6.27
06.45% 2029, (10 Yr GOI)
6.17 6.35 6.30 6.50
Source: Refinitiv Value as on Apr 24, 2020
Bond yields plumetted during the
week under review on hopes that the
RBI would continue to purchase
government securities to manage the
yield curve. Market sentiments were
further boosted after RBI announced a
special open market purchase and sale
of government securities for an
aggregate amount of Rs. 10,000 crore
each on Apr 27, 2020.
However, a decision taken by a major
domestic asset management company
decided to wind up six of its schemes
under debt category capped the gains.
Yield on the 10-year benchmark paper
(6.45% GS 2029) plunged 18 bps to
close at 6.17% compared with the
previous week’s close of 6.35% after
trading in a range of 6.02% to 6.29%.
Domestic Debt Market
6.00
6.10
6.20
6.30
20-Apr 21-Apr 22-Apr 23-Apr 24-Apr
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year
4.07 5.62 155
3 Year
4.71 6.41 170
5 Year
5.26 6.93 167
10 Year
6.26 7.37 111
Source: Refinitiv Value as on
Apr 24, 2020
Yields on gilt securities plunged across the
maturities in the range of 14 to 35 bps,
barring 2-year paper that increased 1 bps.
Corporate bond yields fell across the curve
in the range of 2 to 31 bps.
Spread between AAA corporate bond and
gilt expanded across the segments in the
range of 6 to 32 bps, leaving 15-year paper
that contracted 9 bps. Spread on 10-year
paper was steady. Spread rose the most
on 3-year paper.
Domestic Debt Market (Spread Analysis)
-40
-30
-20
-10
3.00
4.40
5.80
7.20
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 24-Apr-20 17-Apr-20
Yield in %
Change in bps
Source: Refinitiv
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8
The RBI in a circular asked banks and non-banking financial companies (NBFC) to identify,
assess and take effective measures to mitigate its money laundering and terrorist financing
risk for clients, countries or geographic areas, products, services, and transactions or
delivery channels. This risk assessment exercise to be carried out periodically.
Amid the lockdown, the Central Board of Indirect Taxes and Customs extended the deadline
till May 15, 2020 for allowing importers and exporters to submit undertakings instead of
bonds required by customs to assess and clear goods. Proper bonds will be required to be
submitted by May 30.
The RBI in a notification has asked banks to extend the benefit of interest subvention of 2%
and prompt repayment incentive of 3% to farmers till May 31, 2020, in view of the lockdown
to combat coronavirus.
Central government permitted the conversion of surplus rice available with the Food
Corporation of India (FCI) to ethanol, which will be used to make alcohol-based hand-
sanitizers and for blending in petrol. The move will lead to the utilisation of part of a huge
stockpile of 30.57 million tonnes (MT) of rice, as on Mar 10, 2020, which is almost 128%
more than the buffer stock and strategic requirement norms.
Regulatory Updates in India
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9
The Ministry of Corporate Affairs (MCA) allowed companies whose financial year ended in
Dec, to hold their first Annual General Meeting (AGMs) within Sep 30, without it being
viewed as a violation under the Companies Act owing to the social distancing norms and
the lockdown resulting from the Covid-19 outbreak.
The Union Cabinet cleared an ordinance to impose severe penalties, including a maximum
jail term of 7 years and a fine up to Rs. 5 lakh, on those found guilty of attacking or
harassing health workers treating persons infected with the coronavirus disease (Covid-
19). It makes violent offences cognisable and non-bailable.
The Insurance Regulatory and Development Authority of India (IRDAI) gave permission to
insurance companies to avail the Aadhaar-based authentication services of the Unique
Identification Authority of India (UIDAI) to fulfill the Know Your Customer (KYC) norms.
The objective of the move is to ease the process of insurance purchase as the COVID-19
pandemic has forced companies and people to resort to online facilities.
The IRDAI has given the approval for the payment of health insurance premiums in
instalments. The decision comes after IRDAI took into account the challenging conditions
due to the coronavirus outbreak across the country .
Regulatory Updates in India (contd..)
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According to the Commerce Department, U.S. durable goods fell 14.4% in Mar 2020, after
rising by a downwardly revised 1.1% in Feb 2020.
According to IHS Markit, eurozone’s flash composite output index fell to 13.5 in Apr 2020
from 29.7 in Mar 2020. The euro area private sector suffered its steepest fall in activity
over two decades due to the measures taken to contain the spread of coronavirus.
According to IHS Markit, Germany’s flash composite output index fell to 17.1 in Apr 2020
from 35.0 in Mar 2020. The private sector fell as both services and manufacturing activity
fell due to the COVID-19 lockdown.
According to IHS Markit, U.K. flash composite output index fell to a record low 12.9 in Apr
2020 from 36.0 in Mar 2020.
According to the Office for National Statistics, U.K. retail sales fell 5.1% MoM in Mar 2020
following a 0.3% decline in Feb 2020. This was the biggest monthly fall on record. On a
yearly basis, retail sales fell 5.8%in Mar following nil growth in the previous month.
According to the Commerce Department, U.S. new home sales fell 15.4% to an annual rate
of 627,000 in Mar 2020 after falling 4.6% to a revised rate of 741,000 in Feb 2020.
The People's Bank of China has lowered one-year loan prime rate by 20 basis points (bps)
to 3.85% and the five-year loan prime rate was cut by 10 bps to 4.65%. The benchmark
lending rates were reduced as the economy contracted for the first time at least since
1992 amid coronavirus outbreak.
10
Global News/Economy
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11
Global Indices
Indices
24-Apr-20
1-Week
Return
YTD
Return
Russell 3000 1,350.90 -0.57% -5.27%
Nasdaq 100 8,786.60 -0.52% 0.61%
FTSE 100 5,752.23 -0.60% -23.74%
DAX Index 10,336.09 -2.73% -21.99%
Nikkei Average 19,262.00 -3.19% -18.58%
Straits Times 2,518.16 -3.69% -21.86%
Source: Refinitiv Value as on Apr 24, 2020
U.S.
U.S. markets remained under pressure
with investors concerned about the
deep economic damage being done by
the coronavirus shutdowns. Bourses
were also hit by massive losses in the
U.S. oil market due to the
unprecedented fall in demand.
Investors’ sentiment dented further,
amid uncertainty over prospects of a
potential coronavirus treatment.
Europe
Majority of the European markets fell as investors remained concerned over dramatic fall
in oil prices. The coronavirus pandemic has dented demand and concerns over production
storage increased.
Asia
Asian markets ended the week in the red after U.S. crude oil futures turned negative for
the first time and U.S. government suspended all immigration into the U.S. for an
indefinite period. Chinese markets retreated amid mounting economic uncertainty
sparked by the coronavirus pandemic.
Global Equity Markets
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12
Yields on the 10-year U.S. Treasury
declined for the second consecutive
week and fell 6 bps to close at 0.60%
compared to the previous week’s close
of 0.66%.
U.S. Treasury prices rose earlier during
the week under review as its safe haven
appeal improved on concerns over the
difficulties of lifting the lockdown of the
U.S. economy amid the ongoing COVID-
19 pandemic.
U.S. Treasury prices rose further
following a historic collapse in oil prices
which pushed U.S. crude futures into
negative territory for the first time ever
that can be attributed to a dramatic fall
in demand due to the coronavirus
outbreak and a glut of global crude
supply.
Global Debt (U.S.)
0.55
0.60
0.65
20-Apr 21-Apr 22-Apr 23-Apr 24-Apr
Yield in %
US 10-Year Treasury Yield
Movement
Source: Refinitiv
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13
Performance of various commodities
Commodities
Last Closing* 1-Week Ago
Brent Crude($/Barrel)
12.29 16.14
Gold ($/Oz)
1,727.43 1,684.19
Gold (Rs/10 gm)
#
40,989 40,989
Silver ($/Oz)
15.24 15.13
Silver (Rs/Kg)
#
36,871 36,871
Source: Refinitiv *Value as on Apr 24, 2020
#
Domestic spot market of Gold and Silver are closed. Values as on Mar 20, 2020
Gold
Gold prices rose amid persisting
concerns over a global recession. Most
of the countries across the globe
remained in lockdown due to the
coronavirus outbreak.
Brent Crude
Brent crude prices plunged to an all-time
low and plummeted below 10$ per
barrel mark during the week after U.S.
crude oil futures turned negative for the
first time in history as worries over the
coronavirus induced lockdowns across
the globe led to unprecedented demand
loss.
Baltic Dry Index
The Baltic Dry Index fell due to sluggish
capesize and panamax activities.
Commodities Market
0.00
4.00
8.00
12.00
24-Mar-20 3-Apr-20 13-Apr-20 23-Apr-20
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
0.73%
-23.85%
2.57%
Source: Refinitiv
24-Apr-20
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14
Movement of Rupee vs Other Currencies
Currency Last Closing* 1-Wk Ago
US Dollar
76.42 76.54
Pound Sterling
94.22 95.47
EURO
82.21 83.05
100 Yen
71.00 71.04
Source: Refinitiv Figures in INR , *Value as on Apr 24, 2020
Rupee
The rupee rose against the greenback
following intermittent gains in the
domestic equity market.
Euro
The euro weakened against the U.S.
dollar after a European Union meeting to
build an emergency fund for combating
the COVID-19 pandemic ended without
any agreement.
Pound
The pound weakened against the
greenback as Britain's death toll from
the novel coronavirus increased and a
historic collapse in oil prices.
Yen
The yen was almost steady against the
greenback as a historic collapse in oil
prices weighed on the market sentiment.
Currencies Markets
9.80
10.00
10.20
10.40
10.60
10.80
11.00
24-Mar-20 2-Apr-20 11-Apr-20 20-Apr-20
USD GBP Euro JPY
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
-1.30%
-0.17%
-0.06%
-1.01%
Source: Refinitiv
24-Apr-20
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15
The Week that was…
20
th
Apr to 24
th
Apr
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16
The Week that was (Apr 20 Apr 24)
Date Events Present Value Previous Value
Monday,
April 20, 2020
• U.K. Rightmove House Prices (YoY) (Apr) 2.10% 3.50%
• Japan Trade Balance (Yen) (Mar) 4.9B 1108.8B
Tuesday,
April 21, 2020
• Eurozone ZEW Survey (Economic Sentiment) (Apr) 25.2 -49.5
• Germany ZEW Survey Expectations (Apr) 28.2 -49.5
• U.S. Existing Home Sales (MoM) (Mar) -8.50% 6.30%
Wednesday,
April 22, 2020
• U.K. Consumer Price Index (YoY) (Mar) 1.50% 1.70%
• U.K. House Price Index (YoY) (Feb) 1.10% 1.30%
• U.S. MBA Mortgage Applications (Apr 17) -0.30% 7.30%
• Eurozone Consumer Confidence (APR A) -22.7 -11.6
• U.S. House Price Index (MoM) (Feb) 0.70% 0.50%
Thursday,
April 23, 2020
• Japan Nikkei PMI Manufacturing (Apr P) 43.7 44.8
• Germany GfK Consumer Confidence (May) -23.4 2.3
• Germany Markit Composite PMI (Apr P) 17.1 35.0
• U.K. Markit Composite PMI (Apr P) 12.9 36
• U.S. Markit Composite PMI (Apr P) 27.4 40.9
• U.S. New Home Sales (MoM) (Mar) -15.40% -4.60%
• Eurozone Markit Composite PMI (Apr P) 13.5 29.7
Friday,
April 24, 2020
• U.S. Durable Goods Orders (Mar P) -14.40% 1.10%
• Japan National Consumer Price Index (YoY) (Mar) 0.40% 0.40%
• Japan All Industry Activity Index (MoM) (Feb) -0.60% 0.60%
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
17
The Week Ahead
27
th
Apr to 1
st
May
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18
Day Event
Monday,
Apr 27, 2020
Germany Retail Sales (YoY) (Mar)
China Industrial Profits (YoY) (Mar)
Tuesday,
Apr 28, 2020
Bank of Japan Rate Decision
U.S. Advance Goods Trade Balance (Mar)
U.S. Consumer Confidence Index (Apr)
Japan Jobless Rate (Mar)
Wednesday,
Apr 29, 2020
U.S. Federal Reserve Rate Decision
U.S. Gross Domestic Product Annualized (QoQ) (1Q A)
U.S. Pending Home Sales (YoY) (Mar)
Thursday,
Apr 30, 2020
European Central Bank Rate Decision
China Manufacturing PMI (Apr)
Germany Unemployment Change (000's) (Apr)
Eurozone Gross Domestic Product (YoY) (1Q A)
Friday,
May 1, 2020
China New Yuan Loans China (Mar)
China Consumer Price Index (YoY) (Mar)
U.S. Consumer Price Index (YoY) (Mar)
Japan Consumer Confidence Index (Apr)
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
considered as guidelines, recommendations or as a professional guide for the readers. It may be noted that since Nippon Life India Asset
Management Limited (NAM India) (formerly Reliance Nippon Life Asset Management Limited) has not independently verified the accuracy or
authenticity of such information or data, or for that matter the reasonableness of the assumptions upon which such data and information has been
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