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NEWS U CAN USE
February 01, 2020
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The Week that was…
27
th
Jan to 01
st
Feb
2
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Indian Economy
• According to the Economic Survey, the economic growth of the Indian economy is
expected to improve to 6% to 6.5% in FY21 from 5% in the current fiscal. The economic
growth is expected to go up on the back of increase in foreign direct investment, pick up in
demand, improvement in rural consumption, growth of industrial activity, higher foreign
exchange reserves and growth in merchandise exports. However, the economic survey
also warned that global trade tensions, geopolitical tensions between U.S. and Iran, rise in
short-term interest rates in advanced economies and slow progress in implementation of
the insolvency and bankruptcy code.
• According to the Union Budget, India is the 5th largest economy in the world in terms of
GDP at current US $ 2.9 trillion and that the fundamentals of the economy remained
strong. The debt of the central government has come down to 48.7% in Mar 2019 from
52.2% in Mar 2018. The finance minister further added that India was able to raise 271
million people out of poverty in between 2006 and 2016. In addition, the finance minister
opined that the GST benefit of Rs 1 lakh crore extended to consumers and that a new
simplified GST return system will come into effect from Apr 2020.
• The government in the Union Budget pegged India’s fiscal deficit target at 3.8% of GDP
for FY20. For FY21, India’s fiscal deficit target is pegged at 3.5%. Nominal GDP for FY21
projected at 10%. Net borrowings for FY20 was projected at Rs. 4.99 lakh crore and for
FY21 at Rs. 5.36 lakh crore.
3
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4
Domestic Equity Market Indices
Indices
01-Feb-20
1 Week Return
YTD Return
S&P BSE Sensex
39,735.53 -4.51% -3.68%
Nifty 50
11,661.85 -4.79% -4.16%
S&P BSE Mid
-Cap 15,119.65 -4.44% 1.01%
S&P BSE Small
-Cap 14,344.7 -3.38% 4.71%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date
Advances
Declines
Advance/Decline Ratio
27-Jan-20 761 1100 0.69
28-Jan-20 619 1234 0.50
29-Jan-20 994 842 1.18
30-Jan-20 532 1314 0.40
31-Jan-20 670 1127 0.59
01-Feb-20 589 1,750 0.34
Source: NSE
• Indian equity markets plunged as the
finance minister’s budget 2020-21 did
not fulfill investors’ expectations.
Factors that played on investors’ mind
included rise in custom duty in most
sectors, marginal relief for income
taxpayers, and less than expected rise in
infrastructure spending.
• Global cues were weak too as the
spread of the coronavirus threatened
China’s economic growth and investors
feared its ripple effect on other
countries. The virus that originated in
China has taken many lives there and
many others are in danger.
• The World Health Organization declared
the coronavirus a global health
emergency. Investors also remained on
the sidelines on subdued third quarter
earnings.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
23.92 25.75 28.46 85.66
P/B
3.08 3.28 2.46 2.00
Dividend Yield
1.07 1.31 1.09 1.06
Source: NSE,BSE
Value as on Feb 01, 2020
Indian Equity Market
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5
Sectoral Indices
Indices
Last Returns (in %)
Closing* 1-Wk 1-Mth
S&P BSE Auto
17,712.17
-4.60%
-3.70%
S&P BSE Bankex
34,161.38
-4.22%
-6.60%
S&P BSE CD
25,837.12
-1.96%
4.76%
S&P BSE CG
16,625.91
-6.21%
-2.38%
S&P BSE FMCG
11,380.1
-4.70%
-0.72%
S&P BSE HC
13,734.31
-2.65%
2.00%
S&P BSE IT
16,094.92
-0.86%
3.37%
S&P BSE Metal
9,161.83
-11.60%
-11.94%
S&P BSE Oil & Gas
13,563.33
-7.08%
-7.78%
Source: BSE * Value as on Feb 01, 2020
• All the sectors fell. S&P BSE Metal was the major
loser, down 11.60%, followed by S&P BSE Realty
and S&P BSE Oil & Gas, down 7.46% and 7.08%,
respectively.
• S&P BSE Power and S&P BSE Capital Goods fell
6.83% and 6.21%, respectively.
• Metal fell as the coronavirus outbreak is going to
hit demand in one of the world’s largest markets,
China, and is also posing challenge to world trade.
Indian Derivatives Market Review
• Nifty Feb 2020 Futures stood at 11,654.90, a discount of 6.95 points below the spot closing
of 11,661.85. The total turnover on NSE’s Futures and Options segment for the week stood
at Rs. 97.19 lakh crore as against Rs. 86.51 lakh crore for the week to Jan 24.
• The Put-Call ratio stood at 0.65 against the previous week’s close of 0.91.
• The Nifty Put-Call ratio stood at 0.86 against the previous week’s close of 1.42.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-
Wk
Ago
1-
Mth
Ago
6-
Mth
Ago
Call Rate
4.97 4.96 5.10 5.61
91 Day T
-Bill
5.13 5.12 5.05 5.73
07.32% 2024, (5
Yr GOI)
6.36 6.36 6.47 6.30
06.45% 2029, (10 Yr GOI)
6.60 6.58 6.56 6.37
Source: Thomson Reuters Eikon
Value as on Jan 31, 2020
• Bond yields rose during the week
under review as concerns over fiscal
slippage on the market sentiment.
However, further losses were
restricted as global crude oil prices
plunged amid fears that the spread of
the coronavirus in China and other
countries might affect global
economic growth.
• Yield on the 10-year benchmark paper
(6.45% GS 2029) rose 2 bps to close at
6.60% compared with the previous
week’s close of 6.58%.
• Data from Reserve Bank of India
showed that India's foreign exchange
reserves rose for the 18th consecutive
week to a fresh record high of $466.69
billion for the week ended Jan 24,
2020, from $462.16 billion in the
previous week.
• .
Domestic Debt Market
6.40
6.55
6.70
27-Jan 28-Jan 29-Jan 30-Jan 31-Jan
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-
Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 5.51 6.59 108
3 Year 6.31 7.03 72
5 Year 6.50 7.36 86
10 Year 6.71 8.09 138
Source: Thomson Reuters Eikon
Value as on Jan 31, 2020
• Yields on gilt securities increased across 5, 6
and 10 to 15-year maturities in the range of
2 bps to 6 bps and fell across the remaining
maturities by up to 4 bps barring 4-year
paper which closed steady.
• Corporate bond yields increased across the
maturities in the range of 4 bps to 84 bps
barring 2 and 3-year paper which fell 10 bps
and 9 bps respectively.
Domestic Debt Market (Spread Analysis)
-6
0
6
4.80
6.10
7.40
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 31-Jan-20 24-Jan-20
Yield
in
%
Change
in bps
Source: Thomson Reuters Eikon
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8
• The government in the Union Budget proposed new and simplified income tax regime with
reduced tax rates for individual taxpayers who forgo certain deductions and exemptions. In
case the assesses opts for certain deductions and exemptions, he/she can continue with
existing tax regime. The government also did away with the Dividend Distribution Tax
system and adopted the classical system of dividend taxation. The dividend shall be taxed
only in the hands of the recipients at their applicable rate.
• The government announced measures to deepen the corporate debt market. Specified
categories of Government securities would be opened fully for non-resident investors, apart
from being available to domestic investors as well. The limit for Foreign portfolio investors
in corporate bonds was increased to 15% of the outstanding stock of corporate bonds from
the present 9%. The government also proposed to launch a new Debt-ETF consisting
primarily of government securities.
• The government proposed to sell a part of its holding in LIC by way of Initial Public Offer
(IPO). It also announced to sell the balance holding of Government of India IDBI Bank to
private, retail and institutional investors through the stock exchange. The Deposit Insurance
Coverage for a depositor, was also increased from Rs. 1 lakh to Rs. 5 lakh per depositor.
• The government in the Union Budget allocated Rs. 69,000 crore for the healthcare sector
under which Prime Minister Jan Arogya Yojana will get Rs. 6,400 crore. The government
committed to end TB by 2025 in the country and added that steps will be taken to
strengthen the “TB Harega, Desh Jeetega” campaign.
Regulatory Updates in India
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9
• The government in the Union Budget committed to double the farmer income by 2022. It
also announced that “Kisan Rail” and “Krishi Udaan” would be launched by Indian Railways
and Ministry of Civil Aviation respectively for a seamless national cold supply chain for
perishables. The government allocated Rs. 2.83 lakh crore for agriculture and allied
activities for FY21. It also allocated Rs. 3.6 lakh crore for Jal Jeevan Mission for
augmenting local water resources, water harvesting, desalination and renewing older
sources in FY21. The agri credit target for FY21 has been set at Rs. 15 lakh crore. The
finance minister further informed that 6.11 crore farmers were insured under Pradhan
Mantri Fasal Bima Yojna.
• The government in the Union Budget allocated Rs. 1.70 lakh crore for transport
infrastructure sector while Rs. 22,000 crore was allocated for power and renewable energy
sector. The government proposed development of 2,500 km access control highways,
9,000 km of economic corridors, 2,000 km of coastal and land port roads and 2,000 km of
strategic highways. It was also proposed to replace conventional energy meters by prepaid
smart meters which will give freedom to consumers to choose supplier and rate as per
their requirement.
• The government in the Union Budget proposed an allocation of Rs. 8,000 crore for setting
up the National Mission on Quantum Computing and Technology.in addition, the
government allocated Rs. 6,000 crore for BharatNet. According to the government, in
FY21 Fibre to home through BharatNet will link 100,000 Gram Panchayats.
Regulatory Updates in India (contd..)
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• The U.S. Federal Reserve left interest rates unchanged and maintained the target range for
the federal funds rate at 1-0.5% to 1-0.75%.
• The Bank of England kept its interest rate and quantitative easing unchanged at 0.75% in a
split vote of 7-2.
• A Commerce Department report showed U.S. real gross domestic product climbed 2.1% in
the fourth quarter, unchanged from the third quarter and in line with estimates.
• According to a report released by the U.S. Commerce Department, new home sales in U.S.
fell by 0.4% to an annual rate of 694,000 in Dec 2019 from a downwardly revised 697,000
in Nov 2019 (719,000 originally reported for the previous month). The unexpected
decrease was largely due to a steep drop in new home sales in the south, which fell 15.4%
to a rate of 347,000.
• Flash estimates from the Federal Statistical Office showed Germany's consumer price
inflation climbed to its highest level in six months in Jan 2020. The consumer price index
rose 1.7% YoY following a 1.5% increase in Dec 2019.
• According to Eurostat preliminary flash estimate, gross domestic product in the 19-nation
bloc grew 0.1% sequentially, the slowest since early 2013.
• Eurostat preliminary data showed euro zone inflation accelerated in Jan 2020 to 1.4% from
1.3% in Dec 2019. Headline inflation remained well below the European Central Bank's
target of "below, but close to 2%."
10
Global News/Economy
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11
Global Indices
Indices
31-Jan-20
1-Week
Return
YTD
Return
Russell 3000
1,453.94 -1.86% 1.96%
Nasdaq 100
8,991.51 -1.64% 2.96%
FTSE 100
7,286.01 -3.95% -3.40%
DAX Index
12,981.97 -4.38% -2.02%
Nikkei Average
23,205.18 -2.61% -1.91%
Straits Times
3,153.73 -2.66% -2.14%
Source: Thomson Reuters Eikon
Value as on Jan 31, 2020
U.S.
• U.S. markets lost in the middle of the
virus scare. Investors panicked over the
economic impact of the Chinese virus
outbreak. The death toll because of the
virus is rising at an alarming speed and
WHO has declared the situation to be a
global emergency. Meanwhile, the U.S.
Federal Reserve kept interest rates
unchanged and sounded upbeat on the
health of the U.S. economy.
Europe
• European markets fell as the first two cases of the coronavirus were confirmed in the U.K.
The virus that originated in China has been wreaking havoc in the middle eastern country
and fast spreading to other parts of the world.
Asia
• Asian equity markets fell after the World Health Organization declared the coronavirus
outbreak a global emergency. The corona virus is fast spreading in China and other
countries. In China, it has claimed many lives while many more are in critical condition. The
virus has spread to more than 10 countries.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury
Treasuries plunged 9 bps to close at
1.52% compared to the previous week’s
close of 1.61%.
• Concerns about the spreading of
coronavirus boosted the safe haven
appeal of the bullion. The virus has
spread to more than 20 countries and
regions and as of Jan 31, China had
reported 213 deaths and 9,800 cases.
• Uncertainty over the economic impact of
the virus has weighed on the risk appetite
of the investors over the last few days.
• Gains were extended following reports
that a gauge of U.S. Midwest
manufacturing activity fell to four-year
low in Jan 2020 with decline in new
orders and production.
Global Debt (U.S.)
1.50
1.55
1.60
1.65
27-Jan 29-Jan 31-Jan
Yield in %
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)
58.36 59.63
Gold ($/Oz)
1,589.81 1,570.37
Gold (Rs/10 gm)
40,694 40,002
Silver ($/Oz)
18.03 18.08
Silver (Rs/Kg)
46,383 46,116
Source: Thomson Reuters Eikon *
Value as on
Jan 31, 2020
Gold
• Gold prices were up amid growing concerns
over the coronavirus outbreak in China,
which may impact global economic growth.
The virus has spread to more than 20
countries and regions and as of Jan 31,
China had reported 213 deaths and 9,800
cases.
Brent Crude
• Oil prices lowered amid concerns over the
coronavirus outbreak in China that may
impact global growth and the commodity’s
demand outlook. In addition, data from the
U.S. Energy Information Administration
showing that crude inventory rose 3.5
million barrels in the week to Jan 24 added
to the gains.
Baltic Dry Index
• The Baltic Dry Index fell due to lower
capesize and panamax activities.
Commodities Market
8.20
8.80
9.40
10.00
10.60
31-Dec-19 10-Jan-20 20-Jan-20 30-Jan-20
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Source: Thomson Reuters Eikon
Currency
Prices
( in terms of INR)
Rebased to 10
Commodities Movement
31-Jan-20
-0.28%
-2.13%
1.24%
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing*
1-Wk Ago
US Dollar
71.51 71.24
Pound Sterling
93.66 93.51
EURO
78.82 78.69
100 Yen
65.58 65.04
Source: RBI Figures in INR , *
Value as on Jan 31,
2020
Rupee
• The Indian rupee weakened against the U.S.
dollar following losses in the domestic
equity market on concerns over the rising
death toll from the coronavirus outbreak in
China.
Euro
• The euro rose against the greenback after
Germany's consumer price inflation rose to
its highest level in six months in Jan 20.
Pound
• Sterling gained after the Bank of England
kept interest rates at 0.75% contrary to the
expectations of a cut to support the
economy.
Yen
• The yen rose against the greenback as its
safe haven appeal improved due to the
spread of coronavirus in China, which
dampened risk appetite.
Currencies Markets
9.80
9.90
10.00
10.10
10.20
31-Dec-19 15-Jan-20 30-Jan-20
USD GBP Euro JPY
Source: Thomson Reuters Eikon
Currency
Prices (
in terms of INR)
Rebased to 10
Currency Movement
31-Jan-20
0.16%
0.38%
0.16%
0.83%
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15
The Week that was…
27
th
Jan to 01
st
Feb
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16
The Week that was (Jan 27 – Feb 1)
Date Events
Present Value
Previous Value
Monday,
January 27, 2020
• Germany IFO
- Expectations (Jan) 92.90 93.90
• U.S. New Home Sales (MoM) (Dec)
0.694 M 0.697 M
Tuesday,
January 28, 2020
• U.S. Nondefense Capital Goods Orders ex Aircraft
(Dec) -0.90% 0.10%
• U.S. Durable Goods Orders (Dec)
2.40% -3.10%
Wednesday,
January 29, 2020
• U.S. Fed Interest Rate Decision
1.75% 1.75%
• Germany Gfk Consumer Confidence Survey (Feb)
9.90 9.70
• U.S. Pending Home Sales (MoM) (Dec)
-4.90% 1.20%
Thursday,
January 30, 2020
• Bank of England interest Rate Decision
0.75% 0.75%
• Germany Harmonized Index of Consumer Prices (YoY)
(Jan) (P)
1.60% 1.50%
• U.S. Gross Domestic Product Annualized (Q4) (P)
2.10% 2.10%
• Eurozone Business Climate (Jan)
-0.23 -0.32
• Germany Unemployment Change (Jan)
-2000 -8000
Friday,
January 31, 2020
• Eurozone Consumer Price Index (YoY) (Jan) (P)
1.40% 1.30%
• Eurozone Gross Domestic Product s.a. (YoY) (Q4) (P)
1.00% 1.20%
• U.S. Personal Spending (Dec)
0.30% 0.40%
• U.S. Michigan Consumer Sentiment Index (Jan)
99.80 99.10
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17
The Week Ahead
27
th
Jan to 31
st
Jan
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18
Day Event
Monday,
February 3, 2020
•
India IHS Markit Manufacturing PMI (Jan)
•
China Caixin Manufacturing PMI (Jan)
•
U.S. ISM Manufacturing PMI (Jan)
•
Germany Markit Manufacturing PMI (Jan)
Tuesday,
February 4, 2020
•
U.S. Factory Orders (MoM) (Dec)
Wednesday,
February 5, 2020
•
India IHS Markit Services PMI (Jan)
•
U.S. ISM Non-Manufacturing PMI (Jan)
•
China Caixin Services PMI (Jan)
•
Germany Markit Composite PMI (Jan)
•
U.K. Markit Services PMI (Jan)
•
Eurozone Retail Sales (YoY) (Dec)
Thursday,
February 6, 2020
•
India Sixth Bi-monthly Monetary Policy Statement for FY20
•
Germany Factory Orders (MoM) (Dec)
•
U.S. Initial Jobless Claims (Jan 31)
Friday,
February 7, 2020
•
U.S. Nonfarm Payrolls (Jan)
•
Germany Trade Balance (Dec)
•
China Trade Balance USD (Jan)
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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