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NEWS U CAN USE
February 26, 2021
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The Week that was…
22
nd
Feb to 26
th
Feb
2
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Indian Economy
• Government data showed that gross domestic product (GDP) of the Indian economy at
constant (2011-12) prices witnessed growth of 0.4% in the third quarter of FY21 as
compared to a contraction of 7.3% in the preceding quarter and a growth of 3.3% in the
same period of the previous year. Most of the sectors witnessed growth in economic
activity barring the mining sector, trade and hotel sector and public administration and
defence sector. The manufacturing sector witnessed a growth of 1.6% in Q3FY21 as
compared to a contraction of 1.5% in the preceding quarter and a contraction of 2.9% in
the same period of the previous year. The agriculture sector witnessed a growth of 3.9% in
Q3FY21 as compared to growth of 3% in the preceding quarter and a growth of 3.4% in
the same quarter of the previous year. According to reports, the country now exits the
"technical recession".
• Government data showed that India's infrastructure output grew 0.1% in Jan 2021 as
compared to growth of 0.2% in Dec 2020 and an expansion of 2.2% in the same period of
the previous year. The cement sector witnessed the maximum contraction of 5.9%
followed by crude oil and refinery products sector which contracted 4.6% and 2.6%,
respectively. The sectors which witnessed expansion over the month are fertilizers, steel
and electricity sector which grew 2.7%, 2.6% and 5.1%, respectively.
• Government data showed that India’s fiscal deficit for the period from Apr to Jan of 2021
came in at Rs. 12.34 lakh crore or 66.8% of the budget estimate for FY21 as compared to
128.5% in the corresponding period of the previous year.
3
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4
Domestic Equity Market Indices
Indices
26-Feb-21
1 Week Return
YTD Return
S&P BSE Sensex
49,099.99 -3.52% 2.82%
Nifty 50
14,529.15 -3.02% 3.92%
S&P BSE Mid
-Cap
19,978.65 -0.28% 11.35%
S&P BSE Small
-Cap
20,155.35 1.47% 11.37%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
22-Feb-21 569 1,395 0.41
23-Feb-21 1,156 755 1.53
24-Feb-21 1,200 632 1.90
25-Feb-21 1,258 677 1.86
26-Feb-21 580 1,368 0.42
Source: NSE
• Indian markets slumped with Sensex
retreating towards the 49,000 level.
Indices were dragged by news of fresh
COVID-19 restrictions in parts of the
country.
• The domestic bourses also mirrored
losses in other global markets triggered
by a sharp rise in U.S. bond yields.
• Increasing geopolitical tension between
the U.S. and Syria aggravated the selling.
• Q3 GDP data released post trading hours
on Feb 26 also added volatility.
• The downturn was cushioned with some
amount of buying interest seen in stocks
of private banks after the government
lifted the restriction on private sector
banks for the conduct of government-
related banking transactions.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
33.86 39.65 55.87 -168.69
P/B
3.28 4.12 2.90 2.70
Dividend Yield
0.74 1.09 0.93 0.88
Source: BSE, NSE Va
lue as on Feb 26, 2021
Indian Equity Market
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5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
S&P BSE Auto
22,937.66 -3.61% -2.44%
S&P BSE Bankex
38,981.16 -3.35% 10.21%
S&P BSE CD
31,758.21 -0.25% 3.10%
S&P BSE CG
21,518.96 -1.23% 7.78%
S&P BSE FMCG
11,966.59 -2.58% -4.81%
S&P BSE HC
20,855.65 -2.23% -3.14%
S&P BSE IT
24,423.97 -4.01% -6.30%
S&P BSE Metal
13,719.16 7.13% 18.60%
S&P BSE Oil & Gas
15,543.42 0.71% 9.47%
S&P BSE Teck
11,232.82 -4.04% -6.16%
Source:
Refinitiv *Value as on Feb 26, 2021
• On the BSE sectoral front, barring S&P BSE
Metal and S&P BSE Oil & Gas, all the major
indices closed in the red.
• S&P BSE Teck was the major loser, down
4.03%, followed by S&P BSE IT and S&P BSE
Auto, which slipped 4.01% and 3.61%,
respectively.
• Meanwhile, S&P BSE Metal was the top gainer
up 7.13% followed by S&P BSE Oil & Gas up
0.71%.
Indian Derivatives Market Review
• Nifty Mar 2021 Futures stood at 14,578.45, a premium of 49.30 points above the spot
closing of 14,529.15. The total turnover on NSE’s Futures and Options segment for the
week stood at Rs. 221.51 lakh crore as against Rs. 211.71 lakh crore for the week to Feb 19.
• The Put-Call ratio stood at 1.11 compared with the previous week’s close of 0.98.
• The Nifty Put-Call ratio stood at 0.93 compared with the previous week’s close of 1.19.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-
Wk
Ago
1-
Mth
Ago
6-
Mth
Ago
Call Rate
3.24 3.21 3.25 3.44
91 Day T
-Bill
3.17 3.23 3.37 3.28
05.22% 2025, (5 Yr GOI)
5.66 5.56 5.24 5.43
05.85% 2030, (10
Yr GOI)
6.24 6.13 5.92 6.19
Source:
Refinitiv Value as on Feb 26, 2021
• Bond yields jumped on absence of
support by the Reserve Bank of India
(RBI) along with selling from foreign
institutional investor’s (FII). Yields rose
further following consistent rise in U.S.
Treasury yields and global crude oil
prices. At the end, bond prices also
declined amid weak demand and partial
devolvement of government securities at
the weekly auction.
• However, losses restricted on value
buying and as RBI conducted special
open market operation on Thursday.
• Yield on the 10-year benchmark paper
(5.85% GS 2030) surged 11 bps to close
at 6.24% from the previous week’s close
of 6.13% after moving in a range of
6.14% to 6.24%.
Domestic Debt Market
6.12
6.18
6.24
22-Feb 23-Feb 24-Feb 25-Feb 26-Feb
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-
Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 4.07 4.27 23
3 Year 5.12 5.44 32
5 Year 5.85 6.23 38
10 Year 6.33 7.52 119
Source:
Refinitiv
Value as on
Feb 26, 2021
• Yields on gilt securities rose in the range of 2
to 19 bps across maturities, barring 1-year
paper that fell 1 bps.
• Corporate bond yields fell in the range of 8 to
56 bps across the curve, leaving 10- & 15-year
papers that increased 9 & 70 bps,
respectively.
• Spread between AAA corporate bond and gilt
contracted by up to 66 bps across the
segments, barring 15-year paper that
expanded 58 bps. Spread fell the most on 6-
year paper.
Domestic Debt Market (Spread Analysis)
-10
0
10
20
2.80
5.00
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 26-Feb-21 18-Feb-21
Yield
in %
Change
in bps
Source: Thomson Reuters Eikon
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8
• According to minutes from the Reserve Bank of India (RBI), India's economic growth
momentum needs to strengthen further. The RBI decided to keep the benchmark interest
rate unchanged at 4% during the monetary policy meeting, but retained an accommodative
posture, suggesting rate cuts in the future if necessary, to help the Covid-19 pandemic's
effect on the economy. RBI remains committed to ensuring the availability of sufficient
liquidity in the economy, consistent with the accommodative role of monetary policy, in
order to foster congenial financial conditions, such that recovery can gain traction.
• The Securities and Exchange Board of India (Sebi) has reported that stock exchanges would
have to enforce pre-expiry margins on cash-settled contracts in which the underlying
product is considered to be priced at near zero or negative rates. The regulator said that five
days before the expiry date, these margins will have to be levied and they will rise every day
by 5%.
• According to the chairman of Securities Exchange Board of India, before they become a
standard in the post-pandemic world, the privacy and security issues of virtual board
meetings need to be discussed. He said that in the face of the pandemic, there has been
widespread acceptance of technical inputs in businesses, with both board meetings and
annual general meetings going virtual. Other issues found by the Chairman included
whether investor voices were properly heard at virtual meetings of shareholders and
whether shareholders had ample opportunity to ask management questions at those
meetings.
Regulatory Updates in India
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9
• The Chairman of the Securities and Exchange Board of India said that a single market for
government securities (G-Sec) and corporate bonds would allow both securities to be
exchanged on the same platform and would use common infrastructure for securities
trading, clearing, settlement and holding.
• Union Cabinet approved production-linked incentive (PLI) scheme for pharmaceuticals
over a period of eight years (FY21-FY29). The scheme will benefit domestic producers, help
create jobs and is expected to contribute to making a wider range of affordable medicines
available to consumers. Under the scheme, the total reward sum is around Rs. 15,000
crore.
• The Finance Minister has allowed the entire private sector to carry out government-
related banking transactions, such as tax and pension payments. Furthermore, the Finance
Minister said that private banks could be equal partners in developing the Indian economy,
promoting initiatives in the government's social sector and improving customer
convenience.
• The Chief Minister of Rajasthan presented the first paperless Budget 2021-22 in the state
Assembly. The Chief Minister has announced the free distribution of girls' sanitary napkins
and has also confirmed that the budget for agriculture will be announced separately from
next year. The other important announcement made by the Chief Minister was to
introduce a Rs 3,500 crore universal health coverage for all Rajasthan citizens in which
each family would earn an insurance benefit of Rs 5 lakh by paying an annual premium of
Rs 850.
Regulatory Updates in India (contd..)
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• According to the Commerce Department, U.S. gross domestic product (GDP) rose 4.1% in
the fourth quarter of 2020 as against 4% rise previously reported. GDP rise, which was
slightly stronger than previously expected, reflected upward revisions to fixed residential
investment, private inventory investment, and government and local government.
• According to the Office for National Statistics, U.K. unemployment rate rose 5.1% in the
quarter ended Dec 2020, 0.4% points higher than the previous quarter. At the same time,
the employment rate fell 0.3% points from the prior quarter to 75% in the quarter ended
Dec 2020.
• According to the Cabinet Office, Japan’s leading index, which measures the future
economic activity, fell to 95.3 in Dec 2020 from 96.1 in Nov 2020. The coincident index
decreased to 88.3 in Dec from 89.0 in the previous month.
• According to Destatis, Germany’s gross domestic product (GDP) rose 0.3% sequentially in
the quarter ended Dec 2020 as against 0.1% rise estimated previously. On a yearly basis,
decline in GDP slowed to 3.7% in the quarter ended Dec 2020 from 4%.
• According to final data from Eurostat, eurozone’s consumer prices rose 0.9% YoY in Jan
2021 as against 0.3% fall in Dec 2020. Eurozone’s core inflation rose 1.4% in Jan 2021 from
0.2% in Dec 2020.
• According to data released by the National Bureau of Statistics, China’s industrial profits
rose 20.1% YoY in Dec 2020 as against 15.5% increase in Nov 2020. In the whole year of
2020, profits of industrial firms increased 4.1% as against 3.3% fell in 2019.
10
Global News/Economy
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11
Global Indices
Indices
26-Feb-21
1-Week
Return
YTD
Return
Russell 3000
1,946.85 -4.51% -0.29%
Nasdaq 100
12,909.44 -4.94% 0.16%
FTSE 100
6,483.43 -2.12% 0.35%
DAX Index
13,786.29 -1.48% 0.49%
Nikkei Average
28,966.01 -3.50% 5.55%
Straits Times
2,949.04 2.37% 3.70%
Source: Refinitiv
Value as on Feb 26, 2021
U.S.
• U.S. markets traded lower amid a
continued increase in treasury yields,
which led to renewed concerns about
interest rates.
• The downturn was restricted as U.S.
Federal Reserve Chairman reiterated that
the central bank is likely to maintain its
ultra-easy monetary policy for the
foreseeable future.
Europe
• European markets largely closed lower as rising U.S. bond yields overshadowed optimism
about quick economic recovery.
Asia
• Asian markets largely closed for the week in negative territory as a spike in yields of U.S.
and Japanese long-term bonds triggered concerns about market stability.
• Nonetheless, dovish comments by U.S. Fed Chief soothed worries around inflation and
interest rates to some extent.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury rose
11 bps to close at 1.46%, from the
previous week’s close of 1.35%. Yield rose
to its highest level in nearly a year.
• U.S. Treasury prices plunged as fears over
rising U.S. inflation continued along with a
disappointing auction of 7-year notes.
• However, rise was restricted to some
extent as the U.S. Federal Reserve
Chairman continued signaling that the
central bank will leave interest rates
unchanged for a long time.
Global Debt (U.S.)
1.34
1.44
1.54
22-Feb 23-Feb 24-Feb 25-Feb 26-Feb
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($/Barrel)
66.81 64.42
Gold ($/Oz)
1,733.49 1,782.31
Gold (Rs/10 gm)
46,425 45,954
Silver ($/Oz)
26.62 27.21
Silver (Rs/Kg)
68,551 68,173
Source: Refinitiv *
Value as on Feb 26, 2021
Gold
• Gold prices fell as a surge in yields on U.S.
Treasuries and better than expected
economic data in the U.S. dented the safe
haven appeal of bullion. However,
prospects of another stimulus package in
U.S. restricted further losses.
Brent Crude
• Brent crude prices rose due to continued
outages in the U.S. However, gains were
capped after data from the American
Petroleum Institute (API) showed that
crude stockpiles in U.S. rose by 1 million
barrels in the week ended Feb 19, 2021.
Baltic Dry Index
• The index rose marginally WoW due to
improved capesize and panamax activities.
Commodities Market
9.00
10.00
11.00
12.00
13.00
26-Jan-21 11-Feb-21
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global
Commodity Prices
Rebased to 10
Source: Thomson Reuters Eikon
-2.17%
3.71%
-2.74%
26-Feb-21
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing*
1-Wk Ago
US Dollar
73.04 72.73
Pound Sterling
101.90 100.71
EURO
88.80 87.61
100 Yen
68.78 68.68
Source: Refinitiv Figures in INR , *
Value as on
Feb 26, 2021
Rupee
• The Indian rupee weakened against the U.S.
dollar following plunge in domestic equity
market and on concerns that a broad selloff in
global bond markets could prompt foreign debt
and equity outflows from the country.
Euro
• Euro eased against the U.S. dollar following an
increase in U.S. Treasury bond yields, however,
losses were limited as dovish stance from the
U.S. Federal Reserve Chairman indicated fears
of inflation.
Pound
• Sterling fell against a stronger dollar on sell-off
in global bond markets and the Bank of England
warned of inflation risks.
Yen
• Yen fell against a stronger dollar following an
increase in U.S. Treasury bond yields and dovish
stance from the U.S. Federal Reserve Chairman.
Currencies Markets
9.60
10.00
10.40
26-Jan-21 11-Feb-21
USD GBP Euro JPY
Source: Thomson Reuters Eikon
Currency
Prices (
in terms of INR)
Rebased to 10
Currency Movement
1.35%
0.42%
1.17%
0.15%
26-Feb-21
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15
The Week that was…
22
nd
Feb to 26
th
Feb
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16
The Week that was (Feb 22 – Feb 26)
Date Events
Present Value
Previous Value
Monday,
February 22, 2021
• Germany Ifo Business Climate (FEB)
92.40 90.30
• U.S. CB Leading Index MoM (JAN)
0.50% 0.40%
• Chicago Fed National Activity Index (JAN)
0.66 0.41
• U.S. Dallas Fed Manufacturing Index (Feb)
17.20 7.00
Tuesday,
February 23, 2021
• U.K. Employment Change (Nov)
-114K -88K
• U.K. Unemployment Rate (Dec)
5.10% 5.00%
• Euro Zone Core Inflation Rate YoY Final (Jan)
1.40% 0.20%
Wednesday,
February 24, 2021
• Germany GDP Growth Rate YoY Final (Q4)
-3.7% -4.0%
• Germany GDP Growth Rate QoQ Final (Q4)
0.3% 8.5%
• U.S. New Home Sales MoM (Jan)
4.3% 5.5%
• U.S. MBA Mortgage Applications (19/Feb)
-11.4% -5.1%
Thursday,
February 25, 2021
• Germany GfK Consumer Confidence (Mar)
-12.90 -15.50
• U.S. Durable Goods Orders MoM (Jan)
3.40% 1.20%
• U.S. Initial Jobless Claims (20/Feb)
730K 841K
• U.S. GDP Growth Rate QoQ 2nd Est (Q4)
4.1% 33.4%
Friday,
February 26, 2021
• U.S. Core PCE Price Index YoY (Jan)
1.5% 1.4%
• U.K. PCE Price Index YoY (Jan)
1.5% 1.3%
• U.S. Michigan Consumer Sentiment Final (Feb)
76.80 79.00
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17
The Week Ahead
01
st
Mar to 05
th
Mar
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18
Day Event
Monday,
Mar 01, 2021
•
India Markit Manufacturing PMI (Feb)
•
Germany Harmonized Index of Consumer Prices (YoY) (Feb) PREL
•
U.S. ISM Manufacturing PMI (Feb)
•
China Caixin Manufacturing PMI (Feb)
•
U.K. Markit Manufacturing PMI (Feb)
Tuesday,
Mar 02, 2021
•
Germany Retail Sales (YoY) (Jan)
•
Eurozone Consumer Price Index (YoY)(Feb) PREL
Wednesday,
Mar 03, 2021
•
India Markit Services PMI (Feb)
•
U.S. ADP Employment Change (Feb)
•
U.S. ISM Services PMI (Feb)
•
Germany Markit PMI Composite (Feb)
•
Eurozone Markit PMI Composite (Feb)
Thursday,
Mar 04, 2021
•
Eurozone Retail Sales (YoY) (Jan)
•
Eurozone Unemployment Rate (Jan)
•
U.S. Factory Orders (MoM)(Jan)
Friday,
Mar 05, 2021
•
U.S. Nonfarm Payrolls (Feb)
•
U.S. Unemployment Rate (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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19
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