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NEWS U CAN USE
Apr 10, 2020
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The Week that was…
6
th
Apr to 10
th
Apr
2
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Indian Economy
India's Index of industrial production (IIP) rose 4.5% YoY in Feb 2020 compared with 0.2%
rise in Feb 2019. The rise was the fastest since Jul 2019, mainly due to rise in mining,
manufacturing activity and power generation. Manufacturing sector output went up 3.2%
YoY in Feb 2020 compared with a 0.3% fall in the same month a year ago. Industrial output
growth during Apr 2019 to Feb 2020 slowed to 0.9% from 4% rise in the same period of
2018-19.
Data from a private survey showed, IHS Markit India Services Business Activity Index fell to
49.3 in Mar 2020 from 57.5 in the previous month. This can be attributed to the
coronavirus outbreak across the country that pulled the India's service sector into
contraction. The Composite Purchasing Managers’ Index (PMI) Output Index that maps
both the manufacturing and services sector also fell to 50.6 in Mar from 57.6 in the
previous month.
The Finance Ministry has permitted all 28 states to raise a cumulative Rs. 3,20,481 crore
from market between Apr to Dec 2020. The decision comes after states asked for higher
funds from the Centre to meet the expenses in dealing with coronavirus pandemic.
Amount is raised on the basis of 50% the Net Borrowing Ceiling fixed for the year 2020-21
for financing the states’s annual plan for the fiscal. Accordingly, West Bengal can borrow
Rs. 20,362 crore, Maharashtra (Rs. 46,182 crore), Uttar Pradesh (Rs. 29,108 crore),
Karnataka (Rs. 27,054 crore), Gujarat (Rs. 26,112 crore) and Rajasthan (Rs. 16,387 crore).
3
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4
Domestic Equity Market Indices
Indices
09-Apr-20
1 Week Return
YTD Return
S&P BSE Sensex
31,159.62 12.93% -24.47%
Nifty 50
9,111.90 12.72% -25.12%
S&P BSE Mid
-Cap
11,374.35 11.31% -24.01%
S&P BSE Small
-Cap
10,293.75 9.40% -24.86%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
07-Apr-20 1,555 337 4.61
08-Apr-20 1,217 627 1.94
09-Apr-20 1,522 322 4.73
Source: NSE
Domestic equity markets surged during
the holiday truncated week with Nifty
regaining the psychological 9,000 mark
while the Sensex moved above 31,000
level. Buying rose in line with global
peers, on hopes that the coronavirus
pandemic is gradually losing its steam
globally. Further, hopes of second
stimulus package by the government
expected to help small and medium
business also kept the investor
sentiment upbeat.
However, gains were restricted as
coronavirus cases continued to rise in
India. Meanwhile, a multinational
investment bank has slashed its real
GDP forecast for India to 1.6% in FY21
from 3.3% earlier forecast.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
18.74 20.53 21.32 159.91
P/B
2.39 2.60 1.84 1.49
Dividend Yield
1.40 1.67 1.55 1.63
Source: BSE, NSE Va
lue as on Apr 9, 2020
Indian Equity Market
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5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
S&P BSE Auto
12,637.10
-15.54%
S&P BSE Bankex
22,904.32
-24.62%
S&P BSE CD
20,854.04
-17.03%
S&P BSE CG
11,219.30 6.00%
-22.75%
S&P BSE FMCG
10,878.65 8.98% 3.93%
S&P BSE HC
14,553.34
7.76%
S&P BSE IT
12,753.98 8.26%
-12.37%
S&P BSE Metal
6,163.78
-16.91%
S&P BSE Oil & Gas
11,087.93
-4.44%
Source:
Refinitiv *Value as on Apr 9, 2020
On the BSE sectoral front, all the indices
closed in the green. S&P BSE Auto was the
major gainer, up 23.05%, followed by S&P BSE
Healthcare and S&P BSE Bankex, which soared
17.41% and 15.95%, respectively. Auto sector
soared on hopes that government will take
measures to revive demand and restore
normalcy in the marketplace.
Pharma and healthcare sectors played crucial
role in supporting the government and people
and are doing the needful in managing
medicine supplies as demand remains strong.
Indian Derivatives Market Review
Nifty Apr 2020 Futures stood at 9,086.70, a discount of 25.20 points below the spot closing
of 9,111.90. The total turnover on NSE’s Futures and Options segment for the week stood
at Rs. 37.16 lakh crore as against Rs. 28.21 lakh crore for the week to Apr 3.
The Put-Call ratio stood at 0.89 compared with the previous session’s close of 0.79.
The Nifty Put-Call ratio stood at 1.53 compared with the previous session’s close of 1.18.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-
Wk
Ago
1-
Mth
Ago
6-
Mth
Ago
Call Rate
4.34 4.25 4.96 5.07
91 Day T
-Bill
4.25 4.29 4.90 5.19
07.32% 2024, (5 Yr GOI)
5.84 5.70 5.59 6.27
06.45% 2029, (10
Yr GOI)
6.49 6.31 6.07 6.46
Source:
Refinitiv Value as on Apr 9, 2020
Bond yields surged as heavy supply
from both states and centre
dampened investor’s sentiment.
Concerns about a likely fiscal slippage
added to the losses.
Yield on the 10-year benchmark paper
(6.45% GS 2029) rose 18 bps to close
at 6.49% compared with the previous
week’s close of 6.31% after trading in
a range of 6.36% to 6.50%.
Data from Reserve Bank of India
showed that India’s reserve money
grew 9.3% in the week ended Apr 3,
2020 as compared to an increase of
15.7% in the same period of the
previous year. The currency in
circulation grew 14.4% in the same
time period as compared to an
increase of 16.6% in the same period
of the previous year.
Domestic Debt Market
6.00
6.25
6.50
7-Apr 8-Apr 9-Apr
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-
Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year
4.61 6.17 156
3 Year
5.60 6.80 119
5 Year
6.03 7.36 133
10 Year
6.60 7.76 116
Source:
Refinitiv
Value as on
Apr 9, 2020
Yields on gilt securities increased across the
maturities by up to 37 bps, barring 1- and 11-
year papers that fell by up to13 bps.
Corporate bond yields rose across the curve
in the range of 15 bps to 23 bps, leaving 2-
and 3-year papers that fell by 29 bps and 7
bps, respectively and 1-year paper that
stood steady.
Spread between AAA corporate bond and
gilt contracted across maturities by up to 20
bps papers, barring 1-, 2- and 15-year papers
that fell by up to 13 bps and 5-year paper
that stood steady.
Domestic Debt Market (Spread Analysis)
-6
0
6
4.00
5.60
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 09-Apr-20 03-Apr-20
Yield in %
Change in bps
Source: Thomson Reuters Eikon
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8
The Reserve Bank of India has eased overdraft facilities to India states and Union Territories
help them tide over their cash flow mismatches. States can now avail overdraft facilities of
21 working days as compared to the current 14 working days. In a quarter, State/ Union
Territories overdraft facility has been increased to 50 working days from the current
stipulation of 36 working days. The arrangement will remain valid till 30 Sep 2020.
The Ministry of Finance has released funds to the tune of Rs. 34,000 crore in two phases to
states as a compensation for the loss incurred in the revenue that they earn though goods
and services tax. The funds are also expected to provide assistance to states to combat the
coronavirus outbreak across the country. While the first tranche of Rs. 19,950 crore was paid
on Feb 17, 2020 the second tranche of Rs. 14,103 was paid on Apr 7, 2020.
Centre government has sanctioned Covid-19 Emergency Response and Health System
Preparedness Package worth Rs. 15,000 crore. This package will be given to state
governments and Union Territories in three phases. Money will be used to develop Covid-19
hospitals, spend on buying personal protective equipment, setting up of laboratories,
procurement of essential medical supplies, medicines and consumables for Covid-19
patient.
According to a Niti Aayog member, government has taken several measures to protect
farmers from any adverse impact of the ongoing lockdown. The farm sector is expected to
report a growth of little more than 3% in FY20.
Regulatory Updates in India
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9
According to media reports, the exporters want intervention from the Indian government
and has sought a comprehensive package due to the coronavirus outbreak across the
country. This is because most of the export orders have got cancelled on account of global
lockdown due to the COVID-19 pandemic.
Government has sanctioned to increase the daily purchasing limit of pulses and oil seeds
from 25 quintal to 40 quintal per farmer under the Price Support Scheme. In this scheme
government agencies like Nafed, SFAC and other state owned agencies do physical
procurement at minimum support price (MSP) announced by the central government. The
daily will be applicable only for this Rabi season as farmers are facing problems in selling
their produce in market due to nationwide lock down.
According to a former finance secretary, central government may require to borrow 2-
2.5% of GDP or about Rs. 4 to 5 lakh crore additionally to support people and businesses
impacted by the coronavirus outbreak and nationwide lockdown. He suggested to borrow
this amount directly from the RBI instead of borrowing from the market. Hence he added,
the FRBM (Fiscal Responsibility and Budget Management) Act should be amended to
enable this.
As per media reports, India’s direct tax collections has declined to Rs. 10.27 lakh crore in
FY20 which 12.2% less from the target. The collections missed the revised estimate of Rs.
11.7 lakh crore in the Union Budget presented in Feb 2020 by Rs 1.42 lakh crore. The
collection was were also 8% less than the Rs. 11.17 lakh crore collected in FY19.
Regulatory Updates in India (contd..)
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The Federal Reserve will provide loans up to $2.3 trillion to support households and
employers of all sizes and also boost the ability of state and local governments to deliver
critical services during the coronavirus pandemic.
Data from the U.S. Labour Department showed that employment in U.S. plunged by
701,000 jobs in Mar 2020 after increasing by an upwardly revised 275,000 jobs in Feb 2020
(273,000 jobs originally reported). The unemployment rate also surged up to 4.4% in Mar
2020 from 3.5% in Feb 2020.
Data from the National Bureau of Statistics showed, China's consumer inflation touched
five month low at 4.3% YoY in Mar 2020 compared with 5.2% in Feb 2020 as measures to
contain the spread of coronavirus lowered household demand. Sequentially, consumer
prices contracted for the first time in 9 month by 1.2%. Food prices and non-food prices
rose 18.3% and 0.7%, respectively.
Data from the Office for National Statistics showed, U.K.’s Gross Domestic Product (GDP)
declined unexpectedly by 0.1% sequentially in Feb 2020 due to a sharp fall in construction.
The fall came even before the government resorted to measures linked to lockdown to
contain the spread of coronavirus.
The outlook on Australia's sovereign ratings has been downgraded to negative from stable
by S&P Global Ratings as the outbreak of coronavirus weakens public finances. The
downgrade reflects a 'substantial deterioration' of its fiscal headroom at the 'AAA' rating
level.
10
Global News/Economy
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11
Global Indices
Indices
03-Apr-20
1-Week
Return
YTD
Return
Russell 3000
1,293.17 11.66% -9.32%
Nasdaq 100
8,238.53 9.44% -5.66%
FTSE 100
5,842.66 7.89% -22.54%
DAX Index
10,564.74 10.91% -20.26%
Nikkei Average
19,498.50 9.42% -17.58%
Straits
Times* 2,571.32 7.62% -20.22%
Source:
Refinitiv Value as on Apr 9, 2020; * As on Apr 10, 2020
U.S.
U.S. markets edged higher amid
optimism that some of the countries
which are hit hardest by the coronavirus
pandemic are now flattening the
infection curve. Further buying interest
was generated in reaction to news
Senator Bernie Sanders, I-Vt., has
dropped out of the race for the
Democratic presidential nomination.
Europe
European markets too witnessed gains following release of data showing the rate of new
coronavirus infections and deaths in the region was slowing. Further, U.S. Federal Reserve
announced a massive $2.3 trillion stimulus plan to contain the economic impact of the
coronavirus pandemic on the world's largest economy
Asia
Asian markets reflected gains of the global peers after the reported death tolls in some of
the world's coronavirus infected areas showed signs of easing. Investors reacted positively
to reports suggesting a slowing daily death toll from the coronavirus in Europe.
Global Equity Markets
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12
Yields on the 10-year U.S. Treasury rose
by 13 bps to close at 0.72% compared
to the previous week’s close of 0.59%.
U.S. Treasury prices fell earlier during
the week as its safe haven appeal
dwindled to some extent on
expectations that the coronavirus
outbreak may slow down. Reports of
decreases in the number of new
infections and deaths in U.S. and in
some European countries like Italy and
Spain also contributed to the downside.
However, further losses were restricted
as U.S. Treasury prices rose towards the
end of the week after the U.S. Federal
Reserve rolled out a $2.3 trillion
stimulus program to provide support to
local governments and small and mid-
sized businesses amid the coronavirus
outbreak across the country.
Global Debt (U.S.)
0.63
0.69
0.75
0.81
6-Apr 7-Apr 8-Apr 9-Apr
US 10-Year Treasury Yield Movement
Source: Thomson Reuters Eikon
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13
Performance of various commodities
Commodities
Last Closing 1-Week Ago
Brent Crude($/Barrel)
18.71 19.24
Gold ($/Oz) *
1,688.90 1,616.45
Gold (Rs/10 gm)
40,989 40,989
Silver ($/Oz) *
15.32 14.39
Silver (Rs/Kg)
36,871 36,871
Source:
Refinitiv Value as on Apr 9, 2020, *As on Apr 10, 2020
Gold
Gold prices surged as its safe-haven
appeal improved on concerns over a
global economic slowdown due to the
coronavirus outbreak across the globe
Brent Crude
Brent crude prices fell over the week as
mounting fears over the COVID-19
pandemic across the globe fuelled
concerns over the demand outlook of
the commodity. However, further losses
were restricted after OPEC and allies
agree to historic 10 million barrel per
day production cut.
Baltic Dry Index
The Baltic Dry Index rose due to
improved capesize and panamax
activities.
Commodities Market
0.00
2.00
4.00
6.00
8.00
10.00
12.00
10-Mar-20 20-Mar-20 30-Mar-20 9-Apr-20
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
Source: Thomson Reuters Eikon
6.46%
-2.75%
4.48%
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14
Movement of Rupee vs Other Currencies
Currency
Last
Closing*
1-Wk Ago
US Dollar
76.46 75.83
Pound Sterling
94.54 93.88
EURO
82.92 82.22
100 Yen
70.18 70.27
Source:
Refinitiv Figures in INR , *Value as on Apr 9, 2020
Rupee
The rupee weakened against the
greenback following persistent buying of
the greenback by foreign banks.
Euro
The euro rose against the greenback
after U.S. Fed rolled out a $2.3 trillion
stimulus program to provide support.
Pound
The pound rose against the greenback
after the U.S. Fed unveiled new stimulus
measures worth up to $2.3 trillion to
combat the COVID-19 pandemic.
Yen
The yen was almost steady against the
greenback as initial hopes of a slowdown
were almost neutralized after the Prime
Minister of Japan declared a state of
emergency to fight coronavirus
infections in major population centres.
Currencies Markets
8.00
8.50
9.00
9.50
10.00
10.50
10-Mar-20 20-Mar-20 30-Mar-20 9-Apr-20
USD GBP Euro JPY
Source: Thomson Reuters Eikon
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
0.85%
-0.13%
0.83%
0.70%
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15
The Week that was…
6
th
Apr to 10
th
Apr
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16
The Week that was (Apr 6 Apr 10)
Date Events
Present
Value
Previous
Value
Monday,
April 06, 2020
• India IHS Markit Services PMI (Mar)
49.3 57.5
• U.K. GfK Consumer Confidence (Mar F)
-34 -9
• Germany Markit Construction PMI (Mar)
42.0 55.8
• U.K. Markit/CIPS UK Construction PMI (Mar)
39.3 52.6
Tuesday,
April 07, 2020
• Japan Overall Household Spending (YoY) (Feb)
-0.3% -3.9%
• German Industrial Production n.s.a. and w.d.a. (YoY) (Feb)
-1.2% -1.3%
• Japan Coincident Index (Feb P)
95.8 95.2
Wednesday,
April 08, 2020
• U.S. Consumer Credit (Feb)
$22.331b $12.060b
• Japan Machine Orders (YoY) (Feb)
-2.40% -0.30%
• Japan Eco Watchers Survey Current (Mar)
14.2 27.4
• U.S. DOE U.S. Crude Oil Inventories (Apr 3)
15177k 13833k
Thursday,
April 09, 2020
• Japan Machine Tool Orders (YoY) (Mar P)
-40.8% -29.6%
• India Index of Industrial Production (YoY) (Feb)
4.5% 2.1%
• U.K. Industrial Production (YoY) (Feb)
-2.8% -2.8%
• U.S. Initial Jobless Claims (Apr 4)
6606k 6867k
• U.S. U. of Mich. Sentiment (Apr P)
71.0 89.1
Friday,
April 10, 2020
• China New Yuan Loans (Mar)
2850.0b 905.7b
• China Consumer Price Index (YoY) (Mar)
4.3% 5.2%
• U.S. Consumer Price Index (YoY) (Mar)
1.5% 2.3%
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
17
The Week Ahead
13
th
Apr to 17
th
Apr
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18
Day Event
Monday,
Apr 13, 2020
China Foreign Direct Investment (YoY) (Mar)
India Consumer Price Index Inflation YoY (Mar)
Tuesday,
Apr 14, 2020
India Wholesale Price Index Inflation YoY (Mar)
China Trade Balance (Mar)
Wednesday,
Apr 15, 2020
U.S. Retail Sales Advance (MoM) (Mar)
U.S. Industrial Production (MoM) (Mar)
U.S. NAHB Housing Market Index (Apr)
Thursday,
Apr 16, 2020
China New Home Prices (MoM) (Mar)
Eurozone German Consumer Price Index (YoY) (Mar F)
Eurozone Euro-Zone Industrial Production w.d.a. (YoY) (Feb)
U.S. Initial Jobless Claims (Apr 11)
Friday,
Apr 17, 2020
China Gross Domestic Product (YoY) (1Q)
Japan Industrial Production (YoY) (Feb F)
Japan Tertiary Industry Index (MoM) (Feb)
Eurozone Euro-Zone Consumer Price Index (YoY) (Mar F)
China Retail Sales (YoY) (Mar)
U.S. Leading Index (Mar)
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
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19
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