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NEWS U CAN USE
Feb 28, 2020
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The Week that was…
24
th
Feb to 28
th
Feb
2
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Indian Economy
• Government data showed Gross Domestic Product (GDP) grew 4.7% in the Dec 2019
quarter of FY20, down from the revised 5.1% (4.5% originally reported) in the previous
quarter and 5.6% in the same period of the previous year. The GDP growth rate for the
first quarter of FY20 was revised to 5.6% from 5% originally reported. On the sectoral
front, the gross value added growth in the manufacturing sector came in at 0.9% in the
third quarter of this fiscal from 5.7% in the same period of the previous year. The gross
value added growth in the agriculture sector came in at 3.7% from 2.4% in the
corresponding period of the previous year.
• Government data showed that India’s fiscal deficit for the period from Apr 2019 to Jan
2020 stood at Rs. 9.85 lakh crore or 128.5% of the budget estimate compared with 121.5%
of the budget estimate in the corresponding period of the previous year. The revenue
deficit in the same period stood at Rs. 7.50 lakh crore or 150.0% of the budget estimate
compared with 143.4% of the budget estimate in the corresponding period of the
previous year.
• Government data showed that the growth in the index of eight core industries grew 2.2%
in Jan 2020 against a growth of 2.1% in Dec 2019, and 1.5% in the same period of the
previous year. Crude oil growth fell 6.0% followed natural gas and coal that went down
4.3% and 2.4%, respectively. The steel sector witnessed the maximum growth of 5.3%
followed by fertilisers and cement, which grew 4.2% and 1.1%, respectively.
3
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4
Domestic Equity Market Indices
Indices
28-Feb-20
1 Week Return
YTD Return
S&P BSE Sensex
38,297.29 -6.98% -7.17%
Nifty 50
11,201.75 -7.28% -7.94%
S&P BSE Mid
-Cap
14,600.02 -6.97% -2.46%
S&P BSE Small
-Cap
13,709.01 -7.04% 0.07%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
24-Feb-20 478 1,382 0.35
25-Feb-20 683 1,153 0.59
26-Feb-20 557 1,289 0.43
27-Feb-20 589 1,240 0.48
28-Feb-20 233 1,654 0.14
Source: NSE
• Indian equity markets witnessed one of
their worse weekly declines on the back
of global sell-off. Investors across the
world shied away from riskier assets
over concerns that the rapid spread of
the coronavirus across countries could
take the shape of a pandemic. Markets
feared the economic fallout of such an
event could be severe. The number of
people infected with the virus outside
of China, in countries such as S. Korea,
Italy and Iran, increased alarmingly.
• Even the International Monetary Fund
sounded warning alarms that the
epidemic could put an already fragile
global economy recovery at risk. F&O
expiry, and expectations of another
quarter of subdued GDP growth further
dented sentiment. News of the
infection spreading to the U.S. was the
final blow on the last day of the week.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
23.21 25.49 27.02 419.64
P/B
2.95 3.15 2.35 1.90
Dividend Yield
1.15 1.36 1.18 1.19
Source: BSE, NSE Va
lue as on Feb 28, 2020
Indian Equity Market
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5
Sectoral Indices
Indices
Last Returns (in %)
Closing* 1-Wk 1-Mth
S&P BSE Auto
15,568.50
-10.35%
-15.02%
S&P BSE
Bankex
33,416.19 -5.92% -4.96%
S&P BSE CD
26,151.16 -4.97% 0.39%
S&P BSE CG
15,397.57 -7.55%
-11.78%
S&P BSE FMCG
10,963.84 -4.63% -6.51%
S&P BSE HC
13,480.10 -7.26% -5.58%
S&P BSE IT
14,987.20 -8.31% -7.34%
S&P BSE Metal
8,240.65
-14.47%
-15.65%
S&P BSE Oil & Gas
12,620.01 -9.13%
-13.10%
Source: Thomson Reuters Eikon
*Value as on Feb 28, 2020
• All the sectors ended deep in the red, with
S&P BSE Metal being the worse hit, down
14.47%, followed by S&P BSE Auto and S&P
BSE Oil & Gas, down 10.35% and 9.13%,
respectively. S&P BSE IT and S&P BSE FMCG
were down 8.31% and 4.63%, respectively.
• Investors got jittery that the wide spread of
the virus across countries will hit trade and
normal business, which was supported by the
earnings downgrade by a few global
behemoths.
Indian Derivatives Market Review
• Nifty Mar 2020 Futures stood at 11,149.15, a discount of 52.60 points below the spot
closing of 11,201.75. The total turnover on NSE’s Futures and Options segment for the
week stood at Rs. 90.35 lakh crore as against Rs. 76.19 lakh crore for the week to Feb 21.
• The Put-Call ratio stood at 0.82 compared with the previous session’s close of 0.75.
• The Nifty Put-Call ratio stood at 1.1 compared with the previous session’s close of 1.03.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-
Wk
Ago
1-
Mth
Ago
6-
Mth
Ago
Call Rate
5.01 5.04 4.94 5.36
91 Day T
-Bill
5.08 5.07 5.11 5.43
07.32% 2024, (5 Yr GOI)
5.85 5.95 6.36 6.27
06.45% 2029, (10
Yr GOI)
6.37 6.42 6.58 6.57
Source: Thomson Reuters Eikon
Value as on Feb 28, 2020
• Bond yields fell following decline in
the U.S. Treasury yields and crude oil
prices amid the ongoing concern over
the global spread of coronavirus. The
RBI’s announcement to conduct repos
also aided the sentiment.
• However, gains were restricted as
market participants resorted to profit
booking to capitalize on the recent
rally. In addition, lack of fresh triggers
also prompted investors to book
profit.
• Yield on the 10-year benchmark paper
(6.45% GS 2029) fell 5 bps to close at
6.37% compared with the previous
week’s close of 6.42% after trading in
a range of 6.33% to 6.40%.
Domestic Debt Market
6.30
6.34
6.38
6.42
24-Feb 25-Feb 26-Feb 27-Feb 28-Feb
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-
Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year
5.30 6.45 115
3 Year
5.74 6.71 98
5 Year
5.95 6.81 85
10 Year
6.47 7.84 137
Source: Thomson Reuters Eikon
Value as on
Feb 28
, 2020
• Yields on gilt securities fell across the
maturities by up to 18 bps barring 14-year
paper which closed steady and 19-year
paper that increased 2 bps.
• Corporate bond yields fell across the
maturities by up to 15 bps barring 15-year
paper which increased 2 bps.
Domestic Debt Market (Spread Analysis)
-19
-11
-3
5
4.80
5.60
6.40
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 28-Feb-20 20-Feb-20
Yield
in %
Change
in bps
Source: Thomson Reuters Eikon
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8
• Media reports showed the Department for Promotion of Industry and Internal Trade (DPIIT)
has amended the foreign direct investment (FDI) policy to allow 100% FDI for insurance
intermediaries, which includes insurance brooking, insurance companies, third party
administrators, surveyors and loss assessors.
• The Reserve Bank of India may introduce another European Central Bank-styled facility
called Targeted Longer-Term Refinancing Operations to expand credit to businesses and
households, after concluding an ongoing program to lend $14 billion at the policy rate,
media reports showed. A mix of a Federal Reserve-style ‘Operation Twist’ and the ECB-like
cash boost to banks has led to term spreads — the gap between 10-year debt and 364-day
Treasury bill yields — shrinking from a decade-high in Dec 2019.
• India and the U.S. signed three agreements in health and oil sectors, media reports showed.
A memorandum of understanding (MoU) was signed on mental health between the health
departments of the countries. Another memorandum of understanding on the safety of
medical products was signed between the Central Drugs Standard Control Organization
with the U.S. Food and Drug Administration. A letter of cooperation was signed between
two oil companies from both sides.
Regulatory Updates in India
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9
• According to media reports, India will block the European Union’s request for a dispute
settlement panel at the World Trade Organization (WTO) against New Delhi’s customs
duties on imports of certain information and communications technology (ICT) products.
The request is scheduled to come up this week.
• The Monetary Policy Committee (MPC) of the Reserve Bank of India could consider the
developments around COVID-19, a prominent bank said in a report. The impact on India is
felt through supply chain disruptions from China as well as regional players, who in turn
are net importers from China.
Regulatory Updates in India (contd..)
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• A Commerce Department report showed U.S. real gross domestic product increased 2.1%
in the fourth quarter of 2019, unchanged from the estimate provided last month and in
line with economist estimates.
• Preliminary estimates from Destatis showed Germany's consumer price inflation was
unchanged in Feb 2020. The consumer price index rose 1.7% YoY, same as in Jan 2020,
which was the highest since Jul 2019.
• The Bank of Japan said producer prices in Japan were up 2.3% YoY in Jan 2020. That
exceeded expectations and compared with a gain of 2.1% in Dec 2019.
• According to a Labor Department report, U.S. initial jobless claims in the week ended Feb
22, 2020, rose to 219,000, an increase of 8,000 from the previous week's 211,000.
• Survey data from the ifo institute showed Germany's business confidence improved
marginally in Feb 2020 despite fears about the coronavirus outbreak. The business climate
index rose to 96.1 in Feb from a revised 96.0 in Jan 2020. The initial estimate was 95.9.
• A Commerce Department report showed new home sales in the U.S. jumped to their
highest level in over 12 years in Jan 2020. New home sales spiked 7.9% to an annual rate of
764,000 after jumping 2.3% to 708,000 in Dec 2019.
• A Commerce Department report showed U.S. personal income increased 0.6% in Jan 2020
after inching up 0.1% in Dec 2019.
10
Global News/Economy
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11
Global Indices
Indices
28-Feb-20
1-Week
Return
YTD
Return
Russell 3000
1,352.84 -10.97% -5.13%
Nasdaq 100
8,461.83 -10.43% -3.11%
FTSE 100
6,580.61 -11.12% -12.75%
DAX Index
11,890.35 -12.44% -10.25%
Nikkei Average
21,142.96 -9.59% -10.63%
Straits Times
3,011.08 -5.34% -6.57%
Source: Thomson Reuters
Eikon
Value as on
Feb 28, 2020
U.S.
• U.S. markets witnessed their worse
week since the financial crisis of 2008 as
the virus outbreak reached the
country’s shores. Worries over the
spread of the coronavirus and its impact
on the economy continue to pummel
investor sentiment. A series of
corporate and analyst warnings on the
virus pulled major averages down,
bringing them into correction territory.
Europe
• European markets too saw a historic week of losses as the coronavirus spread intensified
outside of China as well. Italy saw a sudden surge in the number of people affected,
together with S. Korea and Iran. Estonia and Denmark too reported their first confirmed
cases of coronavirus and the U.K. reported more cases.
Asia
• Asian equity markets were very much a part of the global sell-off in the week. Investors
feared the coronavirus outbreak could intensify and become a pandemic as the number of
new coronavirus cases in South Korea, Italy and Iran increased and the outbreak spread to
more countries.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury
plunged 24 bps to close at 1.13%
compared to the previous week’s close
of 1.47%. This marked an all time low.
• U.S. Treasury prices grew on concerns
the coronavirus epidemic would have a
significant impact on global growth.
Safe haven appeal of U.S. treasury prices
improved after more coronavirus cases
were reported worldwide, according to
media reports.
• Gains were extended as the U.S. Centres
for Disease Control and Prevention
urged Americans to prepare for the
virus to spread in the U.S.
Global Debt (U.S.)
1.00
1.08
1.16
1.24
1.32
1.40
24-Feb 25-Feb 26-Feb 27-Feb 28-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)
52.30 59.54
Gold ($/Oz)
1,584.74 1,643.32
Gold (Rs/10 gm)
42,352 41,590
Silver ($/Oz)
16.66 18.46
Silver (Rs/Kg)
45,509 47,551
Source: Thomson Reuters Eikon
Value as on Feb 28, 2020
Gold
• Gold prices fell due to investors’ profit
booking and over expectations that the
central banks across the globe would cut
interest rates in an endeavour to boost
economic growth. However, the rapid
spread of coronavirus outside China
cushioned the bullion’s fall.
Brent Crude
• Brent crude prices were down with the
rapid spread of coronavirus outside
China, which fuelled concerns over
global economic growth and a
subsequent fall in global energy
demand. The virus has reportedly spread
to more than 50 countries, which has
dampened the demand outlook for fuel.
Baltic Dry Index
• The Baltic Dry Index rose due to higher
capesize and panamax activities.
Commodities Market
8.00
8.50
9.00
9.50
10.00
10.50
11.00
28-Jan-20 7-Feb-20 17-Feb-20 27-Feb-20
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global
Commodity Prices
Rebased to 10
Source: Thomson Reuters Eikon
-9.76%
-12.16%
-3.56%
28-Feb-20
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing*
1-Wk Ago
US Dollar
72.19 71.59
Pound Sterling
93.01 92.40
EURO
79.44 77.25
100 Yen
66.30 64.21
Source: RBI Figures in INR , *
Value as on Feb
28, 2020
Rupee
• The rupee weakened against the greenback
following losses in domestic equity market.
Euro
• The euro rose against the greenback on
growing expectations that the U.S. Fed might
lower interest rates to offset the impact of
the coronavirus infections.
Pound
• The pound weakened against the greenback
as market participants remained doubtful
that the new finance minister of Britain may
not increase spending as much as expected
in its upcoming budget on Mar 11, 2020.
Yen
• The yen surged against the greenback as
worries over the spread of the coronavirus
beyond China and across the globe fuelled
concerns of global recession that boosted its
safe haven appeal.
Currencies Markets
9.50
10.00
10.50
28-Jan-20 7-Feb-20 17-Feb-20 27-Feb-20
USD GBP Euro JPY
Source: Thomson Reuters Eikon
Currency
Prices (
in terms of
INR)
Rebased to 10
Currency Movement
0.67%
2.83%
0.84%
3.25%
28-Feb-20
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15
The Week that was…
24
th
Feb to 28
th
Feb
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16
The Week that was (Feb 24– Feb 28)
Date Events
Present
Value
Previous
Value
Monday,
February 24, 2020
• Germany IFO
- Expectations (Feb) 93.40 92.90
Tuesday,
February 25, 2020
• Germany Gross Domestic Product (YoY) (Q4)
0.30% 0.30%
• U.S. Housing Price Index (MoM) (Dec)
0.60% 0.30%
Wednesday,
February 26, 2020
• U.S. New Home Sales (MoM) (Jan)
0.764 M
0.694 M
Thursday,
February 27, 2020
• U.S. Nondefense Capital Goods Orders ex Aircraft (Jan)
1.10% -0.50%
• U.S. Gross Domestic Product Annualized (Q4) (P)
2.10% 2.10%
• Eurozone Business Climate (Feb)
-0.04 -0.19
• U.S. Initial Jobless Claims (Feb 21)
219 K 211 K
• U.S. Durable Goods Orders (Jan)
-0.20% 2.90%
• Japan Unemployment Rate (Jan)
2.40% 2.20%
• Japan Retail Trade (YoY) (Jan)
-0.40% -2.60%
• Japan Tokyo CPI ex Fresh Food (YoY) (Feb)
0.50% 0.70%
Friday,
February 28, 2020
• India Gross Domestic Product (Q3)
4.70% 5.10%
• Germany Harmonized Index of Consumer Prices (YoY) (Feb) (P)
1.70% 1.60%
• U.K. GfK Consumer Confidence (Feb)
-7.00 -9.00
• Germany Unemployment Rate (Feb)
5.00% 5.00%
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17
The Week Ahead
02
nd
Mar to 06
th
Mar
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18
Day Event
Monday,
Mar 02, 2020
•
India Manufacturing PMI (Feb)
•
China Caixin Manufacturing PMI (Feb)
•
U.S ISM Manufacturing PMI (Feb)
•
Germany Markit Manufacturing PMI (Feb)
•
U.K. Markit Manufacturing PMI (Feb)
Tuesday,
Mar 03, 2020
•
Eurozone Consumer Price Index (YoY) (Feb) (P)
•
Eurozone Unemployment Rate (Jan)
Wednesday,
Mar 04, 2020
•
India Services PMI (Feb)
•
U.S. ISM Non-Manufacturing PMI (Feb)
•
China Caixin Services PMI (Feb)
•
Germany Retail Sales (MoM) (Jan)
Thursday,
Mar 05, 2020
•
U.S. Initial Jobless Claims (Feb 28)
•
U.S. Factory Orders (MoM) (Jan)
•
Japan Overall Household Spending (YoY) (Jan)
Friday,
Mar 06, 2020
•
U.S. Nonfarm Payrolls (Feb)
•
Germany Industrial Production (MoM) (Jan)
•
Germany Factory Orders (MoM) (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
considered as guidelines, recommendations or as a professional guide for the readers. It may be noted that since Reliance Nippon Life Asset
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19
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