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NEWS U CAN USE
February 19, 2021
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The Week that was…
15
th
Feb to 19
th
Feb
2
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Indian Economy
• The wholesale price index (WPI) based inflation rose to 2.03% in Jan 2021 from 1.22% in
the previous month and 3.52% in the same month of the previous year. The WPI Food
Index contracted 0.26% in Jan 2021 from growth of 0.92% in the previous month and
4.79% in Nov 2020. Under food articles, WPI inflation for vegetables contracted 20.82% in
Jan 2021 as compared to contraction of 13.20% in the previous month. WPI inflation for
potato contracted 22.04% as compared to growth of 37.75% in the previous month. WPI
inflation for fuel and power contracted 4.78% in Jan 2021 and this was the seventh
consecutive month of contraction.
• Trade deficit narrowed to $14.54 billion in Jan 2021 from $15.30 billion in the same period
of the previous year. Trade deficit narrowed as exports grew to $27.45 billion in Jan 2021
over the year from $25.85 billion in Jan 2020. However, imports rose to $41.99 billion in
Jan 2021 over the year from $41.15 billion in Jan 2020. For the period from Apr 2020 to
Jan of 2021, trade deficit narrowed sharply to $72.01 billion from $141.21 billion in the
same period of the previous year. Imports fell 25.92% on a yearly basis during the period
from Apr 2020 to Jan 2021 while exports came down 13.58%.
• The Prime Minister of India announced his planning to spend around Rs. 7.5 trillion to build
oil and gas infrastructure over the next five years. The Prime Minister further added that
India is working to meet its rising demand for energy and is also reducing its dependency
on imports of energy.
3
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4
Domestic Equity Market Indices
Indices 19-Feb-21 1 Week Return YTD Return
S&P BSE Sensex
48,878.54 -0.32% 2.36%
Nifty 50
14,371.90 -0.43% 2.79%
S&P BSE Mid-Cap
18,761.87 -0.75% 4.57%
S&P BSE Small-Cap
18,422.05 -1.39% 1.79%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
15-Feb-21 862 1116 0.77
16-Feb-21 822 1115 0.74
17-Feb-21 914 1010 0.90
18-Feb-21 1064 862 1.23
19-Feb-21 646 1286 0.50
Source: NSE
• Indian equity markets settled with
modest losses after witnessing gains
for two consecutive weeks. Bourses
witnessed bull rally initially with Sensex
breaching the 52,000-mark and Nifty 50
settling above 15,300-mark for the first
time. Better than expected December
IIP number and CPI number for Jan,
boosted market sentiment.
• Additionally, strong corporate earnings
ignited hopes of faster economic
recovery while buoyant global markets
also aided risk sentiment.
• Trend reversed later as investors were
seen booking profits at record highs in
recent outperforming banking and
financial services shares. Sentiments
remained bearish, dragged by weak
global cues resulting from spike in U.S.
bond yield and disappointing U.S. data.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
35.64 40.88 57.01 -164.37
P/B
3.45 4.24 2.95 2.70
Dividend Yield
0.70 1.06 0.92 0.88
Source: BSE, NSE Va
lue as on Feb 19, 2021
Indian Equity Market
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5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
S&P BSE Auto
23,795.80 -3.41% 4.03%
S&P BSE Bankex
40,333.67 -1.23% 9.81%
S&P BSE CD
31,837.19 -2.65% 3.26%
S&P BSE CG
21,786.39 -0.04% 9.26%
S&P BSE FMCG
12,283.06 -1.79% -3.76%
S&P BSE HC
21,332.21 -2.04% -2.39%
S&P BSE IT
25,444.21 -2.04% -2.55%
S&P BSE Metal
12,806.51 2.10% 5.05%
S&P BSE Oil & Gas
15,433.88 4.24% 3.36%
Source: Refinitiv *Value as on Feb 19, 2021
• On the BSE sectoral front, majority of the
sectors closed in the red. S&P BSE Auto was
the major loser, down 3.41%, followed by S&P
BSE Consumer Durables and S&P BSE
Healthcare, which fell 2.65% and 2.04%,
respectively.
• Major stocks in the auto sector witnessed
selling pressure as the external environment
remains challenging, leading to demand
contraction. Meanwhile, S&P BSE Power was
the top gainer, up 7.33%, followed by S&P BSE
Oil & Gas and S&P BSE Metal, which rose
4.24% and 2.10%, respectively.
Indian Derivatives Market Review
• Nifty Feb 2021 Futures stood at 14,987.00, a premium of 5.25 points above the spot closing
of 14,981.75. The total turnover on NSE’s Futures and Options segment for the week stood
at Rs. 211.71 lakh crore as against Rs. 195.02 lakh crore for the week to Feb 12.
• The Put-Call ratio stood at 0.98 compared with the previous week’s close of 0.87.
• The Nifty Put-Call ratio stood at 1.19 compared with the previous week’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
3.21 3.31 3.16 3.42
91 Day T-Bill
3.23 3.33 3.33 3.27
05.22% 2025, (5 Yr GOI)
5.56 5.43 5.22 5.24
05.85% 2030, (10 Yr GOI)
6.13 5.99 5.91 5.97
Source: Refinitiv Value as on Feb 18, 2021
• Bond yields rose following increase in
U.S. Treasury yields and crude oil prices.
U.S. Treasury yields rose on expectations
of a further fiscal boost in the U.S.
economy.
• Yields jumped further after the Reserve
bank of India (RBI) at its weekly
government auctions devolves Rs.
21,593.58 involving two securities on
primary dealers. This indicated weakness
in investor appetite after lack of support
from the central bank.
• RBI conducted the auction of four
government securities- 3.96% GS 2022,
5.15% GS 2025, 5.85% GS 2030 and New
GS 2061 for a cumulative amount of Rs.
31,000 crore, which was not completely
accepted with devolvement on primary
dealers.
Domestic Debt Market
5.70
6.00
6.30
15-Feb 16-Feb 17-Feb 18-Feb
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 4.12 4.69 56
3 Year 4.94 5.76 83
5 Year 5.78 6.77 99
10 Year 6.23 7.38 116
Source: Refinitiv Value as on
Feb 18, 2021
• Yields on gilt securities rose by up to 20 bps
across maturities, barring 3-year paper that
fell 27 bps. Yield rose the most on 5-year
paper.
• Corporate bond yields surged in the range of
2 to 23 bps across the curve. Yield increase
the most on 7- & 8-year papers.
• Spread between AAA corporate bond and gilt
expanded by up to 30 bps across the
segments, barring 4-, 5- & 15-year papers that
contracted 4 or 2 bps.
Domestic Debt Market (Spread Analysis)
-14
5
24
2.60
4.90
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 18-Feb-21 12-Feb-21
Yield in %
Change in bps
Source: Refinitiv
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8
• The Reserve Bank of India has set up an expert committee on urban co-operative banks
(UCBs) to provide a roadmap for strengthening the sector and also to assess the prospects
for consolidating the sector. Within three months, the expert committee was asked to
submit its findings. Among the terms of reference, it was requested to review the
regulatory steps taken by the central bank in relation to the UCBs and to assess their effect
over the five-year period.
• The Reserve Bank of India (RBI) published detailed guidelines to tighten India's digital
payments infrastructure and improve security, control and enforcement among banks,
gateways, wallets and other non-banking entities that are at the vanguard of helping New
Delhi achieve its goal of a 'less-cash' economy. The laws apply specifically to scheduled
commercial banks, small finance banks, payment banks and NBFCs issuing credit cards. The
new set of standards also lays down the requirements under which controlled entities, such
as mobile applications, payment operators and gateways, can form partnerships and
communicate with third-party apps and ecosystem players.
• The Securities and Exchange Board of India said that its board has decided to recommend
changes in the Securities Contracts Regulations 1957 to make it easier for large companies
with market capitalisation of more than Rs. 1 lakh crore to list on the Indian stock exchange.
Through an initial public offering by a firm with a post-issue market capitalisation of more
than Rs. 1 lakh crore, the board has agreed to reduce the minimum public offer to Rs 10,000
crore plus 5% of the incremental sum above Rs. 1 lakh crore.
Regulatory Updates in India
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9
• The Reserve Bank of India (RBI) has tightened norms for housing finance companies
(HFCs), especially those that collect public deposits. In terms of the master directions
given, if they are not in a position to repay fixed deposit holders, HFCs must cease lending.
The central bank came out with a comprehensive rule book for HFCs. The comprehensive
rule book for HFCs is in the wake of the central bank taking over the regulation and
supervision of these specialized lenders from the National Housing Bank in 2019. The
norms require all HFCs to have a minimum capital adequacy ratio of 14% by Mar 31, 2021.
The master directions include liquidity coverage prescriptions, asset classification and
other prudential criteria that are nearly compatible with what is recommended for banks.
• The Ministry of Aviation and the Directorate of Civil Aviation granted conditional approval
for the real-time crop yield assessment under Pradhan Mantri Fasal Bima Yojana to the
Ministry of Agriculture for Flying Drones (PMFBY). The flying drone exemption will be valid
for a duration of one year from the date of issuance of the letter of permission. Drones
can initially be used over agricultural areas of 100 districts of 10 states where an estimate
of gram panchayat level yield is required to calculate insurance claims. This will help to
accurately obtain real-time estimates of crop yields from villages, speeding up insurance
claims.
Regulatory Updates in India (contd..)
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• According to the U.S. Federal Reserve's Jan 2021 monetary policy meeting minutes, the
economy was described by participants as far from achieving the Fed's objective of
maximum jobs. Participants noted that achieving this goal would take some time, even
with a brisk rate of change in the labor market. The minutes said that the participants
doubt that by early next year the Fed will start tapering its asset purchases and expect that
the first rate hike will be postponed until 2024.
• According to the minutes of the latest European Central Bank policy meeting,
policymakers continued to evaluate that there was a case for retaining sufficient stimulus
and also emphasized that measures that were opted in Dec 2020 should be given time to
take full effect. Policymakers agreed that there was no space for complacency, even if
there were signs of recovery that accelerated the roll-out of coronavirus pandemic
vaccinations. The euro exchange rate remained a worry for policymakers, the minutes
showed.
• According to flash estimate by Eurostat, eurozone’s gross domestic product (GDP) fell
0.6% QoQ for the quarter ended Dec 2020 as against 12.4% rebound seen in the previous
quarter. On a yearly basis, GDP fell 5% in the fourth quarter of 2020 as against 4.3%
decline in the third quarter of 2020. In 2020, GDP was down 6.8%.
• According to the Cabinet Office, Japan’s gross domestic product expanded a seasonally
adjusted 3% QoQ in the fourth quarter of 2020 following the 5.3% gain in the previous
three months. On an annualized basis, GDP rose 12.7% following 22.9% surge in the three
months prior.
10
Global News/Economy
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11
Global Indices
Indices
19-Feb-21
1-Week
Return
YTD
Return
Russell 3000 2,038.73 -1.72% 4.41%
Nasdaq 100 13,580.78 -1.64% 5.37%
FTSE 100 6,624.02 0.52% 2.53%
DAX Index 13,993.23 -0.40% 2.00%
Nikkei Average 30,017.92 1.69% 9.38%
Straits Times 2,880.64 -1.53% 1.30%
Source: Refinitiv Value as on Feb 19, 2021
U.S.
• U.S. markets largely traded lower amid
inflationary concern and after a series of
upbeat economic data led to
speculation that the lawmakers may go
slow on passing additional stimulus.
• Additionally, official data showing initial
jobless claims came in well above
estimates in the week to Feb 13.
Europe
• European markets largely went up as encouraging news on the corporate front lifted
sentiment and prompted investors to pick up stocks. Gains were set-off to an extent amid
concerns over U.S. inflation and rising U.S. Treasury yields.
Asia
• Majority of the Asian markets rose with expectations for more U.S. fiscal stimulus and
global efforts to contain the spread of the coronavirus offering support. Gains were
largely restricted with investors remaining cautious and monitoring U.S. bond yields
following a recent rise. The move up in yields has been driven by increasing inflationary
concerns.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury rose
19 bps to close at 1.35%, from the
previous week’s close of 1.16%. Yield rose
to its highest level in nearly a year.
• U.S. Treasury prices plunged as
expectations of extended fiscal and
monetary stimulus along with hopes of an
economic improvement added
momentum to the reflation trade.
• Treasury prices fell further as Congress
was poised to act on a massive fiscal
stimulus package.
Global Debt (U.S.)
1.28
1.30
1.32
16-Feb 17-Feb 18-Feb 19-Feb
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)
^
64.42 62.40
Gold ($/Oz)
1782.31 1823.46
Gold (Rs/10 gm)
45954 47193
Silver ($/Oz)
27.21 27.35
Silver (Rs/Kg)
68173 68353
Source: Refinitiv *Value as on Feb 19, 2021
Gold
• Gold prices fell as hopes of a pickup in
global economic activity dampened the
safe haven appeal of the yellow metal.
Elevated yields on U.S. Treasuries also
contributed to the downside.
Brent Crude
• Brent crude prices rose as hopes of an
improvement in demand due to COVID-19
vaccinations improved the demand outlook
of the commodity. A major supply
disruption in the southern U.S. due to
severe cold weather in Texas also
contributed to the upside.
Baltic Dry Index
• The index rose WoW due to improved
capesize and panamax activities.
Commodities Market
9.50
10.00
10.50
11.00
11.50
12.00
19-Jan-21 4-Feb-21
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
Source: Refinitiv
-0.51%
3.24%
-2.26%
19-Feb-21
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing* 1-Wk Ago
US Dollar
72.73 72.80
Pound Sterling
100.71 100.45
EURO
87.61 88.29
100 Yen
68.68 69.44
Source: Refinitiv
Figures in INR , *Value as on Feb 18, 2021
Rupee
• The Indian rupee rose against the U.S. dollar
supported by equity related greenback inflows
and foreign banks greenback sales likely on
behalf of their clients.
Euro
• Euro rose against the U.S. dollar on
disappointing U.S. weekly jobless claims data
but gains reversed on signs of strengthening
U.S. inflation.
Pound
• Pound surged against the U.S. dollar on U.K.’s
success in rolling out the COVID-19 vaccine,
which increased expectations of a faster
economic recovery in the country.
Yen
• Yen fell against the U.S. dollar on rise in U.S.
Treasury yields that touched pre-pandemic
highs.
Currencies Markets
9.60
9.70
9.80
9.90
10.00
10.10
10.20
10.30
19-Jan-21 3-Feb-21 18-Feb-21
USD GBP Euro JPY
Source: Thomson Reuters Eikon
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
-0.76%
0.27%
-0.09%
-1.09%
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15
The Week that was…
15
th
Feb to 19
th
Feb
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16
The Week that was (Feb 15 – Feb 19)
Date Events
Present
Value
Previous
Value
Monday,
February 15, 2021
• India Wholesale Price Inflation (YoY) (Jan) 2.03% 1.22%
• Japan Industrial Production (YoY)(Dec) -2.6% -3.2%
• Eurozone Industrial Production (MoM) (Dec) -1.6% 2.6%
Tuesday,
February 16, 2021
• India Trade Deficit (USD) (Jan) 14.54B 15.44B
• Eurozone Gross Domestic Product (YoY)(Q4) PREL -5% -5.1%
• Germany ZEW Survey – Current Situation (Feb) -67.2 -66.4
• Germany ZEW Survey – Economic Sentiment (Feb) 71.2 61.8
Wednesday,
February 17, 2021
• U.K. Consumer Price Index (YoY) (Jan) 0.7% 0.6%
• U.K. Retail Price Index (MoM) (Jan) -0.3% 0.6%
• U.S. Retail Sales (MoM) (Jan) 5.3% -1.0%
• U.S. Industrial Production (MoM)(Jan) 0.9% 1.3%
Thursday,
February 18, 2021
• U.S. Housing Starts (MoM)(Jan) 1.58M 1.68M
• Eurozone Consumer Confidence (Feb) PREL 14.8 -15.5
• Japan National Consumer Price Index (YoY) (Jan) -0.6% -1.2%
Friday,
February 19, 2021
• Germany Markit PMI Composite (Feb) PREL 51.3 50.8
• Eurozone Markit PMI Composite (Feb) PREL 48.1 47.8
• U.S. Markit PMI Composite (Feb) PREL 58.8 58.7
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17
The Week Ahead
22
nd
Feb to 26
th
Feb
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18
Day Event
Monday,
Feb 22, 2021
• People’s Bank of China Interest Rate Decision
• Germany IFO – Business Climate (Feb)
Tuesday,
Feb 23, 2021
• U.K. ILO Unemployment Rate (3M) (Dec)
• Eurozone Consumer Price Index (MoM) (Jan)
• U.S. Housing Price Index (MoM) (Dec)
Wednesday,
Feb 24, 2021
• Germany Gross Domestic Product (QoQ) (Q4)
• U.S. New Home Sales (MoM) (Jan)
Thursday,
Feb 25, 2021
• U.S. Durable Goods Orders (Jan)
• U.S. Gross Domestic Product Annualized (Q4) PREL
• U.S. Core Personal Consumption Expenditures (QoQ) (Q4) PREL
• Germany Gfk Consumer Confidence Survey (Mar)
• Eurozone Consumer Confidence (Feb)
• Japan Retail Trade (YoY) (Jan)
• Japan Industrial Production (YoY) (Jan) PREL
Friday,
Feb 26, 2021
• U.S. Personal Income (MoM) (Jan)
• U.S. Personal Spending (Jan)
• U.S. Michigan Consumer Sentiment Index (Feb)
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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