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NEWS U CAN USE
December 11, 2020
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The Week that was…
7
th
Dec to 11
th
Dec
2
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Indian Economy
• Index of Industrial production (IIP) expanded 3.6% in Oct 2020 compared with 6.6%
contraction in Oct 2019 mostly attributed to rise in manufacturing and electricity
generation sectors. Manufacturing and electricity generation sectors recorded a rise of
3.5% and 11.2%, respectively. Mining sector contracted 1.5% in Oct 2020.
• According to the Centre for Monitoring Indian Economy, India’s employment contracted
for the second straight month in Nov 2020. In Nov 2020, the count of the employed had
dropped by 0.9% compared with 0.1% in Oct 2020. This raised questions on the recent
optimism around recovery in job markets in the aftermath of COVID-19 pandemic.
• According to a global rating agency, India's Gross Domestic Product (GDP) projected to fall
9.4% in FY21, better than previous forecast of 10.5% contraction after the domestic
economy showed a sharper rebound in the Sep quarter. Agency said the coronavirus
recession has inflicted severe economic scarring and the country needs to repair balance
sheets and increase caution about long-term planning.
• In the past seven months, over Rs. 21,000 crore of dues have been paid by the Union
government agencies and Central Public Sector Enterprises to micro, small and medium
enterprises (MSMEs) for procurement from these firms.
• Union Cabinet sanctioned an expenditure of Rs. 22,810 crore for Atmanirbhar Bharat
RojgarYojana from FY20 to FY23. The cabinet approved Rs. 1,584 crore for FY21.
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4
Domestic Equity Market Indices
Indices 11-Dec-20 1 Week Return YTD Return
S&P BSE Sensex 46,099.01 2.26% 11.75%
Nifty 50 13,513.85 1.93% 11.06%
S&P BSE Mid-Cap 17,521.32 0.76% 17.06%
S&P BSE Small-Cap 17,552.58 1.36% 28.13%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
07-Dec-20 1412 532 2.65
08-Dec-20 941 1014 0.93
09-Dec-20 1152 809 1.42
10-Dec-20 732 1214 0.60
11-Dec-20 1125 817 1.38
Source: NSE
• Indian equity markets extended the
rally with Sensex and Nifty 50 touching
fresh record highs and settling above
46,000 and 13,500 mark respectively.
• Investor sentiments were buoyed by
growing foreign institutional fund
inflow in the domestic bourses. They
also cheered news of progress in
coronavirus vaccines.
• Market participants also showed
renewed interest in PSUs across
different sectors on hopes of
divestment and dividend expectations
from cash-rich PSU companies.
• Nonetheless, bouts of profit booking
across sectors and stocks restricted
gains. Buying interest was also affected
by weak global cues amid recent surge
in coronavirus cases in U.S.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
32.98 37.16 63.04 1021.02
P/B
3.07 3.82 2.64 2.40
Dividend Yield
0.88 1.18 1.04 0.94
Source: BSE, NSE Va
lue as on Dec 11, 2020
Indian Equity Market
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5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
S&P BSE Auto
20,776.1 -1.16% 11.61%
S&P BSE Bankex
35,025.6 1.94% 5.77%
S&P BSE CD
28,143.0 -0.46% 10.57%
S&P BSE CG
17,771.2 1.14% 13.51%
S&P BSE FMCG
12,685.5 6.07% 11.49%
S&P BSE HC
21,027.2 0.24% 7.92%
S&P BSE IT
22,666.7 1.80% 4.76%
S&P BSE Metal
11,159.6 1.09% 20.45%
S&P BSE Oil & Gas
14,434.6 2.97% 11.76%
Source:
Refinitiv *Value as on Dec 11, 2020
• On the BSE sectoral front, majority of the
sectors settled for the week in the green. S&P
BSE FMCG was the top gainer, up 6.07%,
followed by S&P BSE Realty and S&P BSE Oil &
Gas, which went up 3.16% and 2.97%.
• FMCG sector witnessed strong buying interest
as the industry is seeing a steep growth in
some segments as households are spending
more on consumer-packaged goods, health,
hygiene, and nutritional products.
Indian Derivatives Market Review
• Nifty Dec 2020 Futures stood at 13,518.35, a premium of 4.50 points above the spot closing
of 13,513.85. The total turnover on NSE’s Futures and Options segment for the week stood
at Rs. 143.75 lakh crore as against Rs. 113.75 lakh crore for the week to Dec 4.
• The Put-Call ratio stood at 0.95 compared with the previous week’s close of 0.87.
• The Nifty Put-Call ratio stood at 1.52 compared with the previous week’s close of 1.57.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-Wk
Ago
1-Mth
Ago
6-Mth
Ago
Call Rate
3.13 3.06 3.18 3.59
91 Day T-Bill
3.11 3.01 3.21 3.37
05.22% 2025, (5 Yr GOI)
5.08 5.03 5.18 5.00
05.77% 2030, (10 YrGOI)
5.96 5.90 5.90 5.78
Source: Refinitiv Value as on Dec 11, 2020
• Bond yields rose as the Reserve Bank
of India (RBI) failed to announce any
open market operation (OMO) for this
week.
• Yields rose further even as the delayed
announcement of a special OMO next
week failed to enthuse market
participants.
• However, losses were limited
following media reports that in order
to support development, government
is considering recommending a
loosening of the RBI’s inflation target.
• Yield on the 10-year benchmark paper
(5.77% GS 2030) rose 6 bps to close at
5.96% from the previous week’s close
of 5.90% after moving in a range of
5.90% to 5.96%.
Domestic Debt Market
5.88
5.92
5.96
7-Dec 8-Dec 9-Dec 10-Dec 11-Dec
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 3.76 4.93 117
3 Year 4.54 5.47 92
5 Year 5.21 6.36 116
10 Year 6.04 7.07 102
Source: Refinitiv Value as on
Dec 11, 2020
• Yields on gilt securities increased across
the maturities by up to 8 bps barring 15-
year paper which closed steady and 19-
year paper which fell 2 bps.
• Corporate bond yields increased across
the maturities in the range of 2 bps to 18
bps barring 5 and 15-year paper which fell
1 bps and 9 bps respectively while the
same on 6-year paper closed steady.
Domestic Debt Market (Spread Analysis)
-4
4
12
2.00
5.00
8.00
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-Dec-20 04-Dec-20
Yield in %
Change in bps
Source: Thomson Reuters Eikon
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8
• The National Stock Exchange launched weekly futures and options contracts on three
currency pairs-- Euro-Indian Rupee, Japanese Yen- Indian Rupee and Pound Sterling-Indian
Rupee. Apart from reducing time related costs, the weekly derivatives on currency pairs will
help market participants hedge their currency exposure from short term market
movements.
• Chairman N K Singh of the 15th Finance Committee called for a revision of the constitutional
provisions governing the basic federal structure through advisory dialogues. He also called
for a change to the fiscal spectrum rather than a single point in order to better judge the
states' spending performance.
• The Reserve Bank of India (RBI) has confirmed that the outstanding credit stipulation for the
use of the Emergency Credit Line Guarantee Scheme 2.0 credit guarantee would not extend
to the funds used under On Tap Targeted Long-Term Repo Operation. At present, only
organizations with loans pending between Rs. 50 crore and Rs. 500 crore are eligible for a
credit guarantee under ECLGS 2.0.
• Central Board of Indirect Taxes & Custom chairman said that MSME taxpayers with nil
liability, can file Goods and Services Tax (GST) return by a mere SMS. The move will improve
the ease of doing business, particularly during the Covid-19 onslaught.
Regulatory Updates in India
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9
• According to a media report, government is considering a proposal to lower the consumer
price inflation band tracked by the Reserve Bank of India (RBI) from the current range of
2% to 6%. The move is to allow the government to concentrate more on economic growth
despite price pressures.
• The Union Cabinet approved the proposal for setting up public Wi-Fi networks across the
length and breadth of the country is expected to be more business-friendly and in line
with efforts for ease of doing business and take another step towards Digital India. This
public Wi-Fi Access Network Interface will be known as PM-WANI.
• In order to identify goods that can be produced indigenously as cost-effective import
replacements, Union Minister Nitin Gadkari called for more creativity and research. He said
the government has decided to go through a tendering phase to offer effective private
players with an excellent track record to government technology centers consisting of tool
rooms.
Regulatory Updates in India (contd..)
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• The European Central Bank (ECB) in its monetary policy review increased the size of asset
purchases under its pandemic emergency purchase program, or PEPP, by €500 billion to a
total of €1,850 billion. The purchase horizon was extended to at least the end of Mar 2022
from Mar 2021.
• ECB projected the annual real gross domestic product (GDP) growth at -7.3% in 2020, 3.9%
in 2021, 4.2% in 2022 and 2.1% in 2023. ECB expects the GDP to decline by 2.2% in the
fourth quarter of 2020 and rebound marginally in the first quarter of 2021.
• Data from the General Administration of Customs showed that exports from China grew
21.1% on a yearly basis in Nov 2020 after rising 11.4% in Oct 2020. Imports grew 4.5% on a
yearly bass in Nov 2020, slower than a growth of 4.7% in Oct 2020. As a result, the trade
surplus increased to $75.4 billion in Nov 2020 from $58.44 billion in the previous month.
• Data from Eurostat showed that the gross domestic product of the euro zone economy
grew sharply by 12.5% in the third quarter of 2020 following a contraction of 11.7% in the
second quarter of 2020. On a yearly basis, the gross domestic product of the euro zone
economy fell 4.3% following a decline of 14.7% in the second quarter of 2020.
• Data from the Cabinet Office showed that Japan's gross domestic product (GDP) surged
an annualized 22.9% in the third quarter of 2020 following a plunge of 28.8% in the second
quarter of 2020. On a sequential basis, Japan’s GDP grew 5% following a decline of 8.2% in
the previous quarter.
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Global News/Economy
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11
Global Indices
Indices
11-Dec-20
1-Week
Return
YTD
Return
Russell 3000 1,878.97 -0.64% 31.76%
Nasdaq 100 12,375.41 -1.22% 41.71%
FTSE 100 6,546.75 -0.05% -13.20%
DAX Index 13,114.30 -1.39% -1.02%
Nikkei Average 26,652.52 -0.37% 12.66%
Straits Times 2,821.70 -0.64% -12.45%
Source: Refinitiv Value as on Dec 11, 2020
U.S.
• U.S. markets settled for the week in the
red as surge in COVID-19 cases across
the country overshadowed positive
developments on the vaccine front.
• Stalemate over negotiation in the U.S.
for a coronavirus relief package too
weighed on investor sentiments.
Europe
• European markets largely went down as investors remained cautious amid uncertainty
over a Brexit deal and anxiety about a fiscal stimulus in the U.S. Nonetheless, the fall was
cushioned by reports on U.K. commencing immunization program against the coronavirus
pandemic.
Asia
• Asian markets too settled for the week in the red amid uncertainty over the fate of Brexit
negotiation and ongoing negotiations in the U.S. for a coronavirus relief package.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury fell 8
bps to close at 0.89% compared with
the previous week’s close of 0.97%.
• U.S. Treasury prices rose on increasing
COVID-19 caseloads and as market
participants contemplated how quickly
vaccines could be distributed to fight
the COVID-19 pandemic.
• Moreover, strong demand at an auction
for the $24 billion in 30-year U.S.
Treasury bonds pushed longer-dated
yields lower.
• The U.S. Federal Reserve may announce
adjustments to its Treasury purchases at
next week's meeting, boosted treasury
prices further.
Global Debt (U.S.)
0.87
0.91
0.95
7-Dec 8-Dec 9-Dec 10-Dec 11-Dec
US 10-Year Treasury Yield Movement
Source: Refinitiv
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13
Performance of various commodities
Commodities
Last Closing* 1-Week Ago
Brent Crude($/Barrel)
50.73 49.27
Gold ($/Oz)
1,839.03 1,837.61
Gold (Rs/10 gm)
48,985 49,153
Silver ($/Oz)
23.91 24.17
Silver (Rs/Kg)
62,215 62,992
Source: Refinitiv *Value as on Dec 11, 2020
Gold
• Gold prices rose initially as the greenback
remained under pressure on expectations
of fresh fiscal stimulus in the U.S.
• However, optimism over the rollout of a
COVID-19 vaccine neutralised most of the
gains.
Brent Crude
• Brent crude prices rose above $50 a barrel
for the first time since Mar 2020 as
optimism over COVID-19 vaccine
developments fuelled expectations of a
faster economic recovery which improved
the demand outlook of the commodity.
Baltic Dry Index
• The index fell during the week due to
sluggish capesize and panamax activities.
Commodities Market
9.00
11.00
13.00
11-Nov-20 26-Nov-20 11-Dec-20
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
Source: Refinitiv
-1.05%
2.96%
0.08%
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing* 1-Wk Ago
US Dollar
73.59 73.74
Pound Sterling
98.00 99.26
EURO
89.47 89.64
100 Yen
70.73 70.99
Source: RBI Figures in INR , *
Value as on Dec 11, 2020
Rupee
• The Indian rupee rose against the U.S.
dollar, supported by continuous foreign
fund inflows into domestic equity market.
Euro
• The euro fell against the U.S. dollar on
vaccine news and prospects of more U.S.
fiscal stimulus next year.
Pound
• Pound plunged against the U.S. dollar as
market participants remained cautious of
U.K. breaking away from the European
Union without a trade agreement.
Yen
• Yen rose marginally against the U.S. dollar
due to rise in coronavirus inflicted daily U.S.
death toll heightened already grim
expectations of a difficult winter with the
pandemic.
Currencies Markets
9.80
10.05
10.30
11-Nov-20 26-Nov-20 11-Dec-20
USD GBP Euro JPY
Source: Refinitiv
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
-0.19%
-0.37%
-0.20%
-1.26%
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15
The Week that was…
7
th
Dec to 11
th
Dec
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16
The Week that was (Dec 7 – Dec 11)
Date Events Present Value Previous Value
Monday,
December 7, 2020
• Germany Industrial Production s.a. (MoM)(Oct) 3.20% 1.60%
• Japan Leading Economic Index(Oct) PREL 93.8 93.3
• Japan Gross Domestic Product (QoQ)(Q3) 5.30% 5.00%
Tuesday,
December 8, 2020
• Euro Zone ZEW Survey – Economic Sentiment(Dec) 54.4 32.8
• Eurozone Gross Domestic Product s.a. (YoY)(Q3) -4.30% -4.40%
• U.S. Nonfarm Productivity(Q3) 4.60% 4.90%
• Japan Machinery Orders (MoM)(Oct) 17.10% -4.40%
Wednesday,
December 9, 2020
• U.S. Wholesale Inventories(Oct) 1.10% 0.90%
• Japan Machine Tool Orders (YoY)(Nov) 8% -5.90%
Thursday,
December 10, 2020
• Britain Gross Domestic Product (MoM)(Oct) 0.40% 1.10%
• Britain Manufacturing Production (MoM)(Oct) 1.70% 0.20%
• U.S. Initial Jobless Claims(Dec 4) 853 K 716 K
• European Central Bank Interest Rate Decision 0.00% 0.00%
• Britain Construction Output YoY(Oct) -7.50% -10%
Friday,
December 11, 2020
• Germany Inflation Rate YoY Final(Nov) -0.30% -0.20%
• India Industrial Production YoY(Oct) 3.60% 0.50%
• U.S. Michigan Consumer Sentiment Prel(Dec) 81.40 76.90
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17
The Week Ahead
14
th
Dec to 18
th
Dec
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18
Day Event
Monday,
Dec 14, 2020
• Japan Industrial Production (YoY)(Oct)
• Euro Zone Industrial Production w.d.a. (YoY)(Oct)
• Japan Capacity Utilization (Oct)
Tuesday,
Dec 15, 2020
• China Industrial Production (YoY)(Nov)
• U.K. ILO Unemployment Rate (3M) (Oct)
• U.S. Industrial Production (MoM)(Nov)
• U.S. Capacity Utilization (Nov)
Wednesday,
Dec 16, 2020
• Japan Jibun Bank Manufacturing PMI(Dec) PREL
• Germany Markit Manufacturing PMI(Dec) PREL
• Euro Zone Markit Manufacturing PMI(Dec) PREL
• Britain Markit Manufacturing PMI(Dec) PREL
Thursday,
Dec 17, 2020
• Bank of England Monetary Policy Review
• U.S. Initial Jobless Claims (Dec 11)
• U.S. Philadelphia Fed Manufacturing Survey (Dec)
Friday,
Dec 18, 2020
• Bank of Japan Monetary Policy Review
• Germany IFO – Business Climate (Dec)
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
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