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NEWS U CAN USE
Feb 21, 2020
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The Week that was…
17
th
Feb to 21
st
Feb
2
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Indian Economy
• Monetary Policy Committee’s (MPC) recently held meeting minutes showed its members
discussed on whether policy space was available for further rate action in the current cycle
and if the budget toed the right fiscal line. They agreed that the inflation outlook
remained ‘highly uncertain’.
• The International Monetary Fund (IMF) has said multiple rates, exemptions and
implementation challenges are affecting goods and services tax (GST) collections in India .
The study of India’s resource mobilization for next five years has estimated that in 2018-
19, GST collections were 5.8% of GDP, which was better than some of the comparable
developing countries, but far below the potential of 8.2% of GDP, indicating that the
efficiency gains from the new regime have not fully accrued.
• The Directorate General of Civil Aviation (DGCA) data showed domestic air passenger
traffic in Jan 2020 increased 2.2% to 1.27 crore compared with the same month in 2019. In
comparison, the growth in domestic traffic in Dec 2019 was 2.56% compared with Dec
2018.
• A major global rating agency has reduced India’s growth projection for 2020 to 5.4% from
6.6% forecast earlier. This comes amid growing concerns over the economic fallout of the
coronavirus outbreak. The agency expects a lower recovery in India given that global
growth will likely take a hit following the coronavirus outbreak in China.
3
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4
Domestic Equity Market Indices
Indices 20-Feb-20 1 Week Return YTD Return
S&P BSE Sensex
41,170.12 -0.21% -0.20%
Nifty 50
12,080.85 -0.27% -0.72%
S&P BSE Mid-Cap
15,694.41 0.21% 4.85%
S&P BSE Small-Cap
14,746.52 0.44% 7.64%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
17-Feb-20 548 1,324 0.41
18-Feb-20 631 1,236 0.51
19-Feb-20 1,188 634 1.87
20-Feb-20 929 906 1.03
Source: NSE
• Indian equity markets declined in the
holiday-truncated week ended Feb 20,
2020. Domestic economic growth
concerns and worries over the impact
of the coronavirus outbreak on the
global economy dented market
sentiments. A major global rating
agency cut its 2020 growth projection
for India, citing growing concerns over
the economic consequences of the
coronavirus outbreak in China.
• The Monetary Policy Committee
meeting minutes held in Feb 2020
showed the committee is concerned
about economic activity as it feels the
economy has not yet bottomed out
added to the woes. Global cues were
weak too as fears over the spread of
the coronavirus intensified.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
25.11 27.50 29.23 555.08
P/B
3.19 3.40 2.54 2.05
Div idend Y ield
1.04 1.26 1.07 1.06
Source: BSE, NSE Va
lue as on Feb 20, 2020
Indian Equity Market
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5
Sectoral Indices
Indices
Last Returns (in %)
Closing* 1-Wk 1-Mth
S&P BSE Auto
17,365.3 -1.27% -6.17%
S&P BSE Bankex
35,518.5 0.45% 0.61%
S&P BSE CD
27,517.6 2.06% 7.27%
S&P BSE CG
16,654.4 -0.76% -3.30%
S&P BSE FMCG
11,496.0 -0.31% -2.83%
S&P BSE HC
14,535.1 0.83% 3.78%
S&P BSE IT
16,346.4 0.08% 2.65%
S&P BSE Metal
9,634.9 -0.05% -7.19%
S&P BSE Oil & Gas
13,888.6 -1.38% -4.57%
Source: Thomson Reuters Eikon
*Value as on Feb 20, 2020
• SS&P BSE Realty was the major loser, down
1.59%, followed by S&P BSE Oil & Gas and S&P
BSE Auto, down 1.38% and 1.27%,
respectively. S&P BSE Capital Goods and S&P
BSE Power lost 0.76% and 0.54%, respectively.
• S&P BSE Consumer Durables gained 2.06%,
followed by S&P BSE Healthcare and S&P BSE
Bankex, up 0.83% and 0.45%, respectively. The
oil and gas sector gained as reports showed
India’s top energy firm’s talks to sell minority
stake in its oil-to-chemical division to a Saudi
behemoth have gathered steam.
Indian Derivatives Market Review
• Nifty Feb 2020 Futures stood at 12,079.00, a discount of 1.85 points below the spot closing
of 12,080.85. The total turnover on NSE’s Futures and Options segment for the week stood
at Rs. 76.19 lakh crore as against Rs. 74.56 lakh crore for the week to Feb 14.
• The Put-Call ratio stood at 0.76 against the previous week’s close of 0.91.
• The Nifty Put-Call ratio stood at 1.12 against the previous week’s close of 1.28.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-Wk
Ago
1-Mth
Ago
6-Mth
Ago
Call Rate
5.04 5.03 4.94 5.32
91 Day T -Bill
5.07 5.11 5.10 5.45
07.32% 2024, (5 Y r GOI)
5.95 5.92 6.42 6.29
06.45% 2029, (10 YrGOI)
6.42 6.37 6.64 6.57
Source: Thomson Reuters Eikon Value as on Feb 20, 2020
• Bond yields rose in a truncated week
as market participants preferred to
book profits from the recent bond
rally. Bond yields fell for the past two
weeks as market sentiment remained
upbeat after the Reserve Bank of India
announced that it will infuse Rs.
1,00,000 crores in the banking system
through long-term repos.
• Yield on the 10-year benchmark paper
(6.45% GS 2029) rose 5 bps to close at
6.42% compared with the previous
week’s close of 6.37% after trading in
a range of 6.35% to 6.42%.
• Data from the Reserve Bank of India
showed that reserve money grew
12.0% for the week ended Feb 14,
2020 compared to an increase of
16.6% in the same period of the
previous year.
Domestic Debt Market
6.00
6.25
6.50
17-Feb 18-Feb 20-Feb
Y ield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year
5.48 6.43 95
3 Year
5.85 6.77 92
5 Year
6.07 6.96 89
10 Year
6.53 7.88 135
Source: Thomson Reuters Eikon
Value as on
Feb 20, 2020
• Yields on gilt securities increased across
the maturities by up to 9 bps barring 2, 3
and 30-year paper which fell by up to 12
bps.
• Corporate bond yields fell across 5 to 10-
year maturities in the range of 2 bps to 5
bps and increased across the remaining
maturities in the range of 2 bps to 7 bps
barring 1-year paper which closed steady.
Domestic Debt Market (Spread Analysis)
-20
-10
0
10
4.80
6.00
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 20-Feb-20 14-Feb-20
Yield in %
Change in bps
Source: Thomson Reuters Eikon
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8
• The Securities and Exchange Board of India (SEBI) has cleared regulations for investment
advisers, proposing client level segregation. This practice will end and replace the old
system in which the same client could either be on the advisory side or the distribution side.
Previously, corporate advisers, including individuals who were conducting their business
through corporate structures like LLPs, could distribute products and render advisory
servicesto the same client; provided the two services were separated from each other.
• The government approved a Rs. 4,558-crore scheme to promote the dairy sector. This will
benefit about 95 lakh farmers. Cabinet, Information and Broadcasting minister said the
scheme will take the "White revolution" to the next level. He further said that the Cabinet
has also decided to raise the benefit under the interest subvention scheme from 2% to
2.5%. Both the decisions are aimed at benefitting the farming community.
• The government approved major changes in the Pradhan Mantri Fasal Bima Yojana (PMFBY),
making it optional for farmers. Under PMFBY, launched in Feb 2016, it is mandatory for
loanee farmers to take insurance cover. Currently, 58% of the total farmers are loanee.
• As per media reports, the Insurance Regulatory and Development Authority (IRDAI)
reported a growth of 7.2% in the premium collection of the country’s non-life insurance
companies for Jan 2020. The total collection stood at Rs. 17,225.75 crore for the first month
of the year.
Regulatory Updates in India
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9
• As per media reports, the IRDAI chief has asked insurance companies to put in efforts on
improving the operating efficiency by lowering costs. The insurance regulator’s chief also
stressed that insurers should focus on and work towards launching better designed
products that will reduce and ultimately eliminate their underwriting losses rather than
increasing prices.
• According to media reports, India is considering higher scrutiny of foreign direct
investment in sectors crucial to national security. There has been growing unease about
China’s acquisition of tech assets. The industries department is in talks with the ministries
looking at finance and internal security, and any changes would include transactions under
the so-calledautomatic route.
• India has approved a plan to sign an initial pact on intellectual property rights with the
U.S., media reports showed. This comes a few days ahead of a visit by the U.S. President.
The U.S. has for long urged India to strengthen protection for intellectual property and
that has been a cause of friction on top of trade disputes between the two countries
• As India leapfrogs straight to Euro-VI emission compliant fuels from Euro-IV grades, it will
start to use the world's cleanest petrol and diesel from Apr 1, 2020. India will join a select
league of nations using petrol and diesel containing just 10 parts per million of sulphur.
This is being done to cut vehicular emissions that is said to be one of the reasons for the
steep pollution in major cities.
Regulatory Updates in India (contd..)
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• T he People's Bank of China cut the interest rate on medium term loans by 10 basis points
to 3.15%. The bank did this to lessen the impact of the coronavirus outbreak on the
economy. The bank offered CNY 200 billion worth of one-year loans to commercial lenders
through this.
• Results from the ZEW - Leibniz Centre for European Economic Research showed that
Germany's economic sentiment fell sharply in Feb 2020. The investor confidence indicator
plunged to 8.7 in Feb 2020 from 26.7 in Jan 2020. The move comes amid concerns over the
coronavirus outbreak in China and its impact on global growth.
• U.S. Federal Reserve meeting’s minutes that was held in Jan 2020 showed officials feel
leaving interest rates at their current levels is likely to be appropriate for some time. The
minutes made several references to the coronavirus outbreak.
• Cabinet Office said Japan's gross domestic product was down an annualized 6.3% in the
fourth quarter of 2019 compared with 0.5% increase in the three months prior. On a
seasonally adjusted quarterly basis, GDP sank 1.6% following 0.1% gain in the third
quarter.
• A Labor Department report showed U.S. initial jobless claims for the week ended Feb 15,
2020 crept up to 210,000, an increase of 4,000 from the previous week's 206,000.
• T he Cabinet Office said the value of core machine orders in Japan was down 12.5% MoM in
Dec 2019 - coming in at 824.8 billion yen, following the 18.0% surge in Nov 2019.
10
Global News/Economy
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11
Global Indices
Indices
21-Feb-20
1-Week
Return
YTD
Return
Russell 3000 1,519.47 -1.48% 6.55%
Nasdaq 100 9,446.69 -1.84% 8.17%
FT SE 100 7,403.92 -0.07% -1.84%
DAX Index 13,579.33 -1.20% 2.49%
Nikkei Av erage 23,386.74 -1.27% -1.14%
Straits T imes 3,181.03 -1.21% -1.30%
Source: Thomson Reuters Eikon Value as on Feb 21, 2020
U.S.
• U.S. markets fell in the holiday-
truncated week as the number of new
coronavirus cases climbed up, leading to
worries that a pronounced global
economic slowdown could be imminent.
Investors got worried over a global tech
behemoth revising its sales target
downwards because of the health
emergency.
Europe
• European markets lost ground in the week ended Feb 21, 2020. A global tech giant
downgraded its sales forecast citing slowdown in production amid the coronavirus
outbreak in China. The downside was limited after the People’s Bank of China took
measures to shield the economy from the consequences of the coronavirus outbreak.
Asia
• Asian equity markets declined in the week ended Feb 21, 2020, on coronavirus-outbreak
worries as China reported an increase in new coronavirus cases. New cases are going
beyond China in countries such as Japan and South Korea.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury
plunged 12 bps to close at 1.47%
compared to the previous closing of
1.59%.
• U.S. Treasury prices rose in a truncated
week after a major American
multinational technology company
warned that it might miss its sales
guidance due to manufacturing
slowdowns in China.
• The safe haven appeal of U.S. Treasuries
was further boosted on persisting
concerns over the coronavirus outbreak
in China and other nations coupled with
worries of its adverse impact on global
growth. According to reports, a central
Beijing hospital had reported 36 new
cases while South Korea reported 100
new coronavirus cases.
Global Debt (U.S.)
1.45
1.50
1.55
1.60
18-Feb 19-Feb 20-Feb 21-Feb
Yield in %
US 10-Year Treasury Yield Movement
Source: Thom son Reuters Eikon
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13
Performance of various commodities
Commodities
Last Closing* 1-Week Ago
Brent Crude($/Barrel) 59.54 57.96
Gold ($/Oz) 1,643.32 1,584.32
Gold (Rs/10 gm)
1
41,590 40,676
Silver ($/Oz) 18.46 17.73
Silver (Rs/Kg)
1
47,551 45,928
Source: Thomson Reuters Eikon *Value as on Feb 21, 2020
1
Value as on Feb 20, 2020
Gold
• Gold prices surged on persisting
concerns over the impact of coronavirus
outbreak in China on global growth. It
surged to a seven year high during intra-
day session at the last day of the week
following reports that coronavirus has
spread threateningly outside of China.
Brent Crude
• Brent crude prices surged on growing
possibility of deeper supply cuts from
the Organization of the Petroleum
Exporting Countries and allied
producers. However, concerns that the
coronavirus outbreak in China might
impact global growth capped the gains.
Baltic Dry Index
• The Baltic Dry Index rose due to higher
capesize and panamax activities.
Commodities Market
8.00
9.00
10.00
11.00
21-Jan-20 31-Jan-20 10-Feb-20 20-Feb-20
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
Source: Thomson Reuters Eikon
4.13%
2.73%
3.72%
21-Feb-20
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14
Movement of Rupee vs Other Currencies
Currency Last Closing* 1-Wk Ago
US Dollar
71.59 71.39
Pound Sterling
92.40 93.13
EURO
77.25 77.35
100 Yen
64.21 65.03
Source: RBI Figures in INR , *Value as on Feb 20, 2020
Rupee
• The rupee weakened against the
greenback following increase in global
crude oil prices and losses in the
domestic equity market.
Euro
• The euro rose against the greenback as
the latter remained under pressure after
preliminary data showed that U.S.
business activity in the manufacturing
and services sectors stalled in Feb 2020.
Pound
• The pound weakened against the
greenback amid uncertainty over the
outcome of the trade talks between
Britain and European Union.
Yen
• The yen weakened against the
greenback on expectations of more
stimulus measuresfrom China.
Currencies Markets
9.70
9.85
10.00
10.15
10.30
21-Jan-20 5-Feb-20 20-Feb-20
USD GBP Euro JPY
Source: Thomson Reuters Eikon
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
-0.13%
0.28%
-0.79%
-1.26%
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15
The Week that was…
17
th
Feb to 21
st
Feb
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16
The Week that was (Feb 17– Feb 21)
Date Events Present Value Previous Value
Monday,
February 17, 2020
• Japan Industrial Production (Y oY) (Dec) -3.10% -3.00%
Tuesda y ,
February 18, 2020
• Germany ZEW Survey - Economic Sentiment (Feb) 8.7 26.7
• Japan Machinery Orders (MoM) (Dec) -12.50% 18%
• Japan Merchandise T rade Balance T otal (Jan) ¥-1312.6 B ¥-154.6 B
• U.K. ILO Unemployment Rate (3M) (Dec) 3.80% 3.80%
Wednesday,
February 19, 2020
• U.K. Consumer Price Index (YoY) (Jan) 1.80% 1.30%
• U.K. Producer Price Index - Input (YoY) (Jan) 2.10% 0.90%
• U.K. Retail Price Index (MoM) (Jan) -0.40% 0.30%
• U.S. Housing Starts (MoM) (Jan) 1.567 M 1.626 M
Thursday,
February 20, 2020
• China PBoC Interest Rate Decision 4.05% 4.15%
• U.S. Initial Jobless Claims (Feb 14) 210 K 206 K
• Japan National Consumer Price Index (YoY) (Jan) 0.70% 0.80%
Friday,
February 21, 2020
• Germany Markit Manufacturing PMI (Feb) (P) 47.8 45.3
• Japan All Industry Activity Index (MoM) (Dec) 0% 0.90%
• Eurozone Markit Composite PMI (Feb) (P) 51.6 51.3
• U.K. Markit Services PMI (Feb) (P) 53.3 53.9
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17
The Week Ahead
24
th
Feb to 28
th
Feb
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18
Day Event
Monday,
Feb 24, 2020
• China Industrial Production (YoY) (Jan)
• China Retail Sales (YoY) (Jan)
• Germany IFO - Expectations (Feb)
Tuesday,
Feb 25, 2020
• Germany Gross Domestic Product (YoY) (Q4)
• U.S. Housing Price Index (MoM) (Dec)
• U.S. Consumer Confidence
• U.S. Housing Price Index (MoM) (Dec)
Wednesday,
Feb 26, 2020
• U.S. New Home Sales (MoM) (Jan)
Thursday,
Feb 27, 2020
• U.S. Gross Domestic Product Annualized (Q4) (P)
• Japan Tokyo CPI ex Fresh Food (YoY) (Feb)
• U.S. Durable Goods Orders ex Defense (Jan)
Friday,
Feb 28, 2020
• India Gross Domestic Product (Q3 FY20)
• Germany Harmonized Index of Consumer Prices (YoY) (Feb) (P)
• Germany Unemployment Rate (Feb)
• U.S. Personal Income (MoM) (Jan)
The Week Ahead
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T he information herein is meant onl y for general reading purposes and contains all factual and statistical information pertaining to Ind ustry and
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