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NEWS U CAN USE
December 25, 2020
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The Week that was…
21
st
Dec to 25
th
Dec
2
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Indian Economy
• Data from the Ministry of Petroleum & Natural Gas showed that crude oil production
during Nov 2020 was 2,486.01 thousand metric tonnes (TMT), which was 7.25% lower than
target and 4.91% lower when compared with the same period of the previous year. The
cumulative crude oil production during the period from Apr to Nov of 2020 was 20,426.50
TMT which was 5.28% lower than the target for the period and 5.98% lower than
production during corresponding period of last year respectively. Crude Oil processed
during Nov 2020 was 20,781.77 TMT which was 1.57% higher than the target for the
month but 5.11% lower compared to the same period of the previous year. Cumulative
crude processed during the period from Apr to Nov of 2020 was 1,39,337.10 TMT which
was 15.94% lower than the target and 17.82% lower than the corresponding period of last
year respectively.
• Government data showed that 11.75 lakh new members joined the Employees’ State
Insurance Scheme in Oct 2020, up from 11.49 lakh members in the previous month. Gross
new enrolments with the Employees’ State Insurance Scheme consistently increased from
2.63 lakh in Apr 2020 (barring Jul 2020) as restrictions on coronavirus lockdowns were
gradually relaxed.
• A major domestic rating agency projected the growth of the Indian economy for FY21 at -
7.8% compared to its earlier projection of -11.8%. The improvement in projection comes
due to gradual easing of restrictions on coronavirus lockdowns.
3
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4
Domestic Equity Market Indices
Indices 24-Dec-20 1 Week Return YTD Return
S&P BSE Sensex
46,973.54 0.03% 13.86%
Nifty 50
13,749.25 -0.08% 12.99%
S&P BSE Mid-Cap
17,676.70 -0.70% 18.10%
S&P BSE Small-Cap
17,675.53 -0.53% 29.02%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
21-Dec-20 259 1729 0.15
22-Dec-20 1,031 900 1.15
23-Dec-20 1,631 322 5.07
24-Dec-20 1,116 825 1.35
Source: NSE
• Indian equity markets settled for the
week on a flat note. Bourses witnessed
sharp decline initially, tracking weak
global cues after scientists in the
United Kingdom discovered a new
strain of COVID-19 leading to several
nations restricting flight services to
Britain. India has joined the growing list
of countries that have already
announced restrictions on travel to the
U.K.
• However, markets managed to erase
almost all the loses later following
reports that Britain and the European
Union are on the verge of striking a
new Brexit trading arrangement, more
than four years after the U.K. voted to
leave the bloc. According to media
reports, Britain and European Union
later agreed on a Brexit trade deal.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
32.89 37.81 64.43 215.42
P/B
3.22 3.89 2.69 2.41
Dividend Yield
0.84 1.15 1.02 0.94
Source: BSE, NSE Va
lue as on Dec 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
20,316.5 -2.03% 2.77%
S&P BSE Bankex
34,926.5 -0.76% 4.39%
S&P BSE CD
29,205.8 -1.51% 11.67%
S&P BSE CG
18,390.2 -1.17% 9.05%
S&P BSE FMCG
12,590.1 0.10% 8.34%
S&P BSE HC
21,617.3 0.66% 8.70%
S&P BSE IT
24,013.3 3.39% 10.35%
S&P BSE Metal
11,294.6 -0.67% 15.12%
S&P BSE Oil & Gas
13,964.7 -3.01% 4.97%
Source:
Refinitiv *Value as on Dec 24, 2020
• On the BSE sectoral front, majority of the
indices closed in the red. S&P BSE Oil & Gas
was the major loser, down 3.01%, followed by
S&P BSE Auto and S&P BSE Consumer
Durables, which slipped 2.03% and 1.51%,
respectively.
• Oil & gas sector remained under pressure with
government data showing that crude oil
production during Nov 2020 was 2,486.01
thousand metric tonnes (TMT), which was
7.25% lower than target and 4.91% lower
when compared with the same period of the
previous year.
Indian Derivatives Market Review
• Nifty Dec 2020 Futures stood at 13,763.75, a premium of 14.50 points above the spot
closing of 13,749.25. The total turnover on NSE’s Futures and Options segment for the
week stood at Rs. 157.85 lakh crore as against Rs. 128.28 lakh crore for the week to Dec 18.
• The Put-Call ratio stood at 1.03 compared with the previous week’s close of 0.96.
• The Nifty Put-Call ratio stood at 1.58 compared with the previous week’s close of 1.62.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-Wk
Ago
1-Mth
Ago
6-Mth
Ago
Call Rate
3.23 3.22 3.12 3.57
91 Day T-Bill
3.13 3.11 2.98 3.18
05.22% 2025, (5 Yr GOI)
5.07 5.05 5.05 5.18
05.77% 2030, (10 Yr GOI)
5.93 5.96 5.89 5.89
Source: Refinitiv Value as on Dec 24, 2020
• Bond yields remained steady initially
as market participants awaited more
open market operations (OMO) by the
Reserve Bank of India (RBI). However,
the yields fell later as the Reserve
Bank of India did not accept any bids
for new 10-year 5.85% 2030 paper at
the auction which reflected the central
bank's discomfort with high bond
yields.
• Yield on the 10-year benchmark paper
(5.77% GS 2030) fell 3 bps to 5.93%
from the previous close of 5.96% after
trading in the range of 5.93% to
5.98%.
• RBI announced the auction of 91 days,
182 days and 364 days Treasury Bills
auction for a notified amount of Rs.
9,000, Rs. 3,000 and Rs. 4,000 crore,
respectively on Dec 30, 2020.
Domestic Debt Market
5.90
5.94
5.98
21-Dec 22-Dec 23-Dec 24-Dec
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 3.92 4.93 101
3 Year 4.50 5.43 92
5 Year 5.20 6.37 117
10 Year 6.02 7.13 111
Source: Refinitiv Value as on
Dec 24, 2020
• Yields on gilt securities rose across maturities by
up to 5 bps barring 2-, 6- and 30-year papers that
stood steady and 7- and 13-year papers that fell
by 1 bps and 4 bps, respectively.
• Corporate bond yields rose across maturities by
up to 10 bps barring 1- to 3-year paper that fell
by up to 5 bps.
• Difference in spread between AAA corporate
bond and gilt expanded across maturities in the
range of 2 bps to 5 bps barring 1- to 4-year that
fell in the range of 2 bps to 7 bps.
Domestic Debt Market (Spread Analysis)
-4
11
26
2.80
4.80
6.80
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 24-Dec-20 18-Dec-20
Yield in %
Change in bps
Source: Refinitiv
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8
• Capital market regulator Securities and Exchange Board of India (SEBI) has come out with
norms to improve the risk management system in limited purpose clearing corporation
(LPCC). According to the new norms, LPCC would have the flexibility to collect clearing
member primary contribution. This implies that LPCC will have the flexibility to either collect
the contribution upfront or staggered over a period of time. In case the LPCC seeks
staggered contribution or is not seeking contribution from clearing members then the
remaining balance should be met by LPCC to ensure adequacy of total Settlement
Guarantee Fund (SGF) corpus at all times.
• SEBI came out with new stress testing perimeters for commodity derivatives. The objective
of the move is to counter extreme volatility in price movements. According to the new
norms, the margin period of risk will now be 15 years instead of 10 years and all the price
movements during the last 15 years will be scanned for stress testing.
• The Ministry of Finance has released the 8th weekly instalment of Rs. 6,000 crore to the
States to meet the compensation shortfall of Goods and Services Tax. A total amount of Rs.
48,000 crore has thus been released so far to all States and Union Territories with
legislation. This is in addition to additional borrowing permission of Rs. 1,06,830 crore which
was granted to the states.
Regulatory Updates in India
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9
• According to media reports, the Ministry of Finance has asked central public sector
undertakings to clear payment dues of vendors and contractors. The Finance Minister also
asked them to spend the budgeted capital expenditure without any delay.
• The central government gave approval to two states namely Andhra Pradesh and Madhya
Pradesh to borrow additional financial resources to the tune of Rs. 4,898 crore. The move
comes as the two states successfully completed the set of reforms which was required for
the functioning of the urban local bodies. Out of Rs. 4,898 crore, Andhra Pradesh has
received permission of Rs. 2,525 crore while Madhya Pradesh has been permitted to
mobilize additional Rs. 2,373 crore.
• The World Bank and the government of India signed a $500 million project under which
safe and green national highway corridors will be built in the states of Rajasthan, Himachal
Pradesh, Uttar Pradesh and Andhra Pradesh. The project will assist in the construction of
783 km of highways in various geographies. The construction will be carried out by
integrating safe and green technology designs such as local and marginal materials,
industrial byproducts, and other bioengineering solutions. This will help bring down
greenhouse gas emissions in the construction and maintenance of highways.
• According to media reports, Insurance Regulatory and Development Authority (IRDAI) may
not implement a blanket ban or prohibition on the sale of credit-linked health insurance
products. Instead, the insurance regulator may consider modifying the mechanism in
which credit-linked health insurance products are sold in the country.
Regulatory Updates in India (contd..)
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• According to media reports, Britain and European Union have agreed on a Brexit trade
deal. However, the trade agreement needs to be ratified by the U.K. and European Union
parliaments in the coming days.
• Data from the U.S. Commerce Department showed that the gross domestic product of the
U.S. economy in the third quarter of 2020 was upwardly revised to 33.4% from the
previously reported 33.1%. The U.S. economy contracted 31.4% in the second quarter of
2020.
• According to the Office for National Statistics, U.K.’s Gross domestic product (GDP) surged
16% QoQ instead of 15.5% expansion estimated previously in the Sep quarter of 2020. In
the Jun quarter, GDP contracted by revised 18.8%. Rise reflected the effects of the easing
of lockdown restrictions and also some recovery of activity from the steep contraction in
Apr 2020.
• Data from the U.S. Labour Department showed that initial jobless claims in U.S. for the
week ended Dec 19, 2020 fell by 89,000 to 803,000 from the previous week's revised level
of 892,000 (885,000 originally reported for the previous week).
• Data from the U.S. Commerce Department showed that durable goods orders in U.S. grew
0.9% in Nov 2020 after rising by an upwardly revised 1.8% in Oct 2020. Excluding orders
for transportation equipment, durable goods orders grew 0.4% in Nov 2020 after
increasing 1.9% in Oct 2020.
10
Global News/Economy
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11
Global Indices
Indices
24-Dec-20
1-Week
Return
YTD
Return
Russell 3000 1,940.38 0.18% 36.07%
Nasdaq 100 12,711.01 -0.21% 45.55%
FTSE 100 6,502.11 -0.41% -13.79%
DAX Index* 13,587.23 -0.32% 2.55%
Nikkei Average** 26,656.61 -0.40% 12.68%
Straits Times 2,842.04 -0.24% -11.82%
Source: Refinitiv
Value as on Dec 24, 2020
**
Value as on Dec 25, 2020; * Value as on Dec 23, 2020
U.S.
• U.S. markets witnessed a mixed trend
over the week. Market sentiments were
boosted amid positive vibes generated
from reports regarding approval of a
USD 900 billion COVID-19 relief package
for the world's biggest economy by the
U.S. lawmakers. However, discovery of
new variant of coronavirus strain in U.K
weighed on the market sentiment.
Europe
• European markets came under selling pressure amid worries about a rapid surge in a new
variant of the coronavirus in the U.K. However, further losses were restricted amid news
about U.S. Senate's nod to a coronavirus aid package and hopes that Britain and the
European Union may reach a post-Brexit trade agreement.
Asia
• Asian markets settled for the week in the red amid fears over the coronavirus mutation
that was first identified in Britain. However, further losses were restricted amid reports
that Britain and the European Union have reached a post-Brexit trade agreement.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury fell 2
bps to close at 0.93% compared with
the previous week’s close of 0.95%.
• U.S. Treasury prices rose as market
participants weighed the possibility of
new lockdowns stemming from a more
infectious variant of the coronavirus in
the U.K.
• However, gains were limited as U.K.
clinched a deal to leave the European
Union, and as France reopened its
border with Britain.
Global Debt (U.S.)
0.90
0.94
0.98
21-Dec 22-Dec 23-Dec 24-Dec
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)
50.43 52.54
Gold ($/Oz)**
1,875.83 1,880.66
Gold (Rs/10 gm)
49,787 49,939
Silver ($/Oz)**
25.85 25.77
Silver (Rs/Kg)
66,223 66,431
Source: Refinitiv
*
Value as on Dec 24, 2020 ;
**
Value as on Dec 25, 2020 ;
Gold
• Gold prices fell as fears of a new
coronavirus strain strengthened the safe
haven greenback. Losses were extended
amid reports that Britain and the
European Union have reached a post-
Brexit trade agreement.
Brent Crude
• Brent crude prices fell as a fast-
spreading new coronavirus strain led to
tighter restrictions in Europe. The fall
was restricted by data from the Energy
Information Administration showing U.S.
crude inventories fell by 562,000 barrels
in the week ended Dec 18, 2020 to 499.5
million barrels.
Baltic Dry Index
• The index rose due to improved capesize
and panamax activities.
Commodities Market
9.60
10.00
10.40
10.80
11.20
11.60
25-Nov-20 10-Dec-20 25-Dec-20
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
Source: Refinitiv
0.32%
-4.02%
-0.26%
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14
Movement of Rupee vs Other Currencies
Currency Last Closing* 1-Wk Ago
US Dollar
73.58 73.51
Pound Sterling
99.75 99.50
EURO
89.81 90.03
100 Yen
71.05 71.10
Source: Refinitiv Figures in INR , *Value as on Dec 24, 2020
Rupee
• The Indian rupee was largely unchanged
as fall due to diminishing risk appetite in
the region after new covid-19 virus-
related lockdowns in the U.K. neutralized
the rise on dollar sales by foreign banks
along with equity portfolio flows.
Euro
• Euro fell against the U.S. dollar amid
concerns about a new coronavirus
variant in U.K.
Pound
• Sterling rose against the U.S. dollar after
Britain and the European Union clinched
a Brexit trade deal.
Yen
• Yen fell against the safe haven U.S. dollar
on concerns about a coronavirus variant
in U.K. that has caused lockdowns and
travel restrictions.
Currencies Markets
9.90
10.00
10.10
10.20
10.30
24-Nov-20 9-Dec-20 24-Dec-20
USD GBP Euro JPY
Source: Refinitiv
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
0.25%
0.09%
-0.07%
-0.25%
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15
The Week that was…
21
st
Dec to 25
th
Dec
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16
The Week that was (Dec 21 – Dec 25)
Date Events Present Value Previous Value
Monday,
December 21, 2020
• China PBoC Interest Rate Decision 3.85% 3.85%
• U.S. Chicago Fed National Activity Index (Nov) 0.27 1.01
Tuesday,
December 22, 2020
• U.K. Gross Domestic Product (YoY)(Q3) -8.6% -20.8%
• U.K. Total Business Investment (YoY)(Q3) -19.2% -25.2%
• U.K. Public Sector Net Borrowing (Nov) £-31.6B £-21.7B
• Germany GfK Consumer Confidence (Jan) -7.3 -6.8
• U.S. Gross Domestic Product Annualized(Q3) 33.4% -31.4%
• U.S. CB Consumer Confidence (Dec) 88.6 92.9
• U.S. Existing Home Sales MoM (Nov) -2.5% 4.4%
• U.S. Richmond Fed Manufacturing Index(Dec) 19 15
Wednesday,
December 23, 2020
• Japan Leading Economic Index (Oct) 94.3 93.3
• U.S. Initial Jobless Claims (Dec 19) 803K 892K
• U.S. Personal Income (MoM)(Nov) -1.10% -0.60%
Thursday,
December 24, 2020
• Japan Unemployment Rate (Nov) 2.9% 3.1%
• U.S. Durable Goods Orders (Nov) 0.9% 1.8%
Friday,
December 25, 2020
• Japan Housing Starts YoY (Nov) -3.7% -8.3%
• Japan Retail Sales YoY (Nov) 0.7% 6.4%
• Japan Construction Orders YoY (Nov) -4.7% -0.1%
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17
The Week Ahead
28
th
Dec, 2020 to 1
st
Jan, 2021
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18
Day Event
Monday,
December 28, 2020
• Japan Industrial Production YoY Prel (Nov)
Tuesday,
December 29, 2020
• U.S. S&P/Case-Shiller Home Price YoY (Oct)
Wednesday,
December 30, 2020
• U.K. Nationwide Housing Prices YoY (Dec)
• U.S. MBA Mortgage Applications (25/Dec)
• U.S. Goods Trade Balance Adv (Nov)
• U.S. Pending Home Sales YoY (Nov)
Thursday,
December 31, 2020
• China NBS Manufacturing PMI (Dec)
• China Non-Manufacturing PMI (Dec)
• India Government Budget Value (Nov)
• India Infrastructure Output YoY (Nov)
• India Current Account (Q3)
• India External Debt (Q3)
• U.S. Initial Jobless Claims (26 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
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
processed or arrive data; NAM India does not in any manner assures the accuracy or authenticity of such data and information. Some of the
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representatives do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such data or information.
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