Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
NEWS U CAN USE
February 07, 2020
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
2
The Week that was…
03
rd
Feb to 07
th
Feb
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
Indian Economy
• The Monetary Policy Committee (MPC) kept key policy repo rate unchanged in its sixth bi-
monthly monetary policy review. The policy repo rate thus presently stands at 5.15%. The
reverse repo rate remains unchanged at 4.90% while the marginal standing facility rate
and the bank rate remains at 5.40%. However, the MPC decided to continue with its
accommodative stance on the monetary policy.
• MPC raised its retail inflation forecasts for H1FY21 to a range of 5.0% to 5.4%, higher than
its previous projection of 3.8% to 4.0% for the same period as the near-term inflation
outlook remains uncertain. According to MPC, food prices may go up as rise in input costs
may lead to an increase in milk prices while a shortfall in kharif production may lead to an
increase in prices of pulses. Volatility in global crude oil prices and uncertain global
economic outlook are also expected to impact the retail inflation outlook for the country.
• The Nikkei India Manufacturing Purchasing Managers' Index (PMI) rose to 55.3 in Jan 2020
from 52.7 in Dec 2019. This is the highest mark in a little under eight years, said IHS Markit.
The upturn came on the back of strongest growth in new business intakes for over five
years. Companies have attributed the growth to better underlying demand and greater
client requirements.
3
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
4
Domestic Equity Market Indices
Indices
07-Feb-20
1 Week Return
YTD Return
S&P BSE Sensex
41,141.85 3.54% -0.27%
Nifty 50
12,098.35 3.74% -0.58%
S&P BSE Mid
-Cap 15,904.71 5.19% 6.26%
S&P BSE Small
-Cap 14,840.34 3.46% 8.33%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date
Advances
Declines
Advance/Decline Ratio
03-Feb-20 710 1151 0.62
04-Feb-20 1,262 558 2.26
05-Feb-20 1,032 791 1.30
06-Feb-20 1,063 764 1.39
07-Feb-20 923 892 1.03
Source: NSE
• Indian equity markets gained in the
week ended Feb 7, 2020. Upbeat
economic data and the Reserve Bank of
India’s (RBI) steps to boost growth
supported sentiment. India’s
manufacturing Purchasing Managers’
Index (PMI) increased to an almost
eight-year high and services business
activity index saw the fastest increase in
seven years. The central bank though
maintained status quo in interest rates,
considering inflation is on the rise, it
took measures to boost credit to the
real estate sector.
• RBI tweaked maintenance of cash
reserve ratio (CRR) rules by providing
relaxation in calculation of total
deposits. The steps would increase
lending to micro, small and medium
enterprises as well as the auto and
home segments.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
24.49 27.03 28.91 84.28
P/B
3.18 3.41 2.57 2.06
Dividend Yield
1.03 1.26 1.04 1.04
Source: NSE,BSE
Value as on Feb 07, 2020
Indian Equity Market
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
5
Sectoral Indices
Indices
Last Returns (in %)
Closing* 1-Wk 1-Mth
S&P BSE Auto
18,076.79 2.06% 0.73%
S&P BSE Bankex
35,675.44 4.43% -0.24%
S&P BSE CD
27,090.41 4.85% 10.20%
S&P BSE CG
17,099.66 2.85% 0.07%
S&P BSE FMCG
11,585.68 1.81% 2.19%
S&P BSE HC
14,282.78 3.99% 6.18%
S&P BSE IT
16,124.14 0.18% 2.98%
S&P BSE Metal
10,003.48 9.19% -3.37%
S&P BSE Oil & Gas
14,309.32 5.50% -1.24%
Source: BSE * Value as on Feb 07, 2020
• The gains were limited as the virus outbreak in
China impinged sentiment. RBI governor said in a
post-policy interaction that the outbreak and its
spread across geographies will impact tourist
arrivals and global trade.
• S&P BSE Metal was the major gainer, up 9.19%,
followed S&P BSE Oil & Gas and S&P BSE
Consumer Durables, up 5.50% and 4.85%,
respectively. S&P BSE Bankex and S&P BSE
Healthcare gained 4.43% and 3.99%, respectively.
Indian Derivatives Market Review
• Nifty Feb 2020 Futures stood at 12,095.90, a discount of 2.45 points below the spot closing
of 12,098.35. The total turnover on NSE’s Futures and Options segment for the week stood
at Rs. 92.92 lakh crore as against Rs. 97.19 lakh crore for the week to Feb 1.
• The Put-Call ratio stood at 0.92 against the previous week’s close of 0.65.
• The Nifty Put-Call ratio stood at 1.40 against the previous week’s close of 0.86.
Indian Equity Market (contd.)
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
6
Debt Indicators
(%)
Current
Value
1-
Wk
Ago
1-
Mth
Ago
6-
Mth
Ago
Call Rate
5.03 4.97 4.91 5.50
91 Day T
-Bill
5.11 5.13 5.01 5.55
07.32% 2024, (5
Yr GOI)
5.98 6.36 6.41 6.15
06.45% 2029, (10 Yr GOI)
6.44 6.60 6.55 6.37
Source: Thomson Reuters Eikon
Value as on Feb 07, 2020
• Bond yields plunged as investors
cheered the federal government’s
announcement of no additional
borrowing in the present financial year
at the budget. In addition, the fiscal
deficit target also came line with
expectation, thereby lifting the market
sentiment.
• Yields fell further after MPC kept the
policy repo rate unchanged and
maintained an accommodative stance,
while it continues to closely monitor
inflation. The rate-setting panel also
ensured adequate liquidity via long-term
repos.
• Yield on the 10-year benchmark paper
(6.45% GS 2029) fell 16 bps to close at
6.44% compared with the previous
week’s close of 6.60% after trading in a
range of 6.41% to 6.52%.
Domestic Debt Market
6.42
6.48
6.54
6.60
3-Feb 4-Feb 5-Feb 6-Feb 7-Feb
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
7
Maturity
G-
Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 5.45 6.50 104
3 Year 5.94 6.81 88
5 Year 6.13 6.97 84
10 Year 6.54 7.89 135
Source: Thomson Reuters Eikon
Value as on Feb 07, 2020
• Yields on gilt securities fell across the
maturities in the range of 6 bps to 39 bps.
The maximum fall was witnessed on 4-year
paper and the minimum fall was witnessed
on 1 and 2-year paper.
• Corporate bond yields fell across the
maturities in the range 10 bps to 42 bps. The
maximum fall was witnessed on 15-year
paper and the minimum fall was witnessed
on 1-year paper.
Domestic Debt Market (Spread Analysis)
-39
-26
-13
0
5.00
5.80
6.60
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 07-Feb-20 31-Jan-20
Yield
in %
Change
in bps
Source: Thomson Reuters Eikon
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
8
• The Reserve Bank of India (RBI) announced that from the fortnight beginning Feb 15, 2020
it would conduct Long Term Repo Operations (LTROs) for one- and three-year periods for
up to a total amount of Rs. 1 lakh crore at the policy repo rate of 5.15%. The objective of the
move is to improve the monetary transmission and improve credit flows to productive
sectors. RBI in order to improve bank credit to specific sectors has decided to do away with
the cash reserve ratio of 4% for retail loans for automobiles, residential housing and loans to
micro, small and medium enterprises (MSMEs). The exemption will come into effect from Jul
31, 2020. Loans extended to MSMEs will also be linked to an external benchmark and this
will be effective from Apr 1, 2020.
• RBI after considering the important role played by MSMEs towards the growth of the nation
has decided to extend the benefit of one-time restructuring of loans given to them without
an asset classification downgrade. This will be applicable to standard accounts of GST
registered MSMEs that were in default as on January 1, 2020. The move will be
implemented latest by Dec 31, 2020.
• RBI has decided to extend the date of commencement of commercial operations (DCCO) of
project loans for commercial real estate sector that has been delayed due to factors that are
beyond the control of promoters. The extension has been provided for one year and this has
been done without downgrading the asset classification. The move is expected to provide
support to the real estate sector.
Regulatory Updates in India
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
9
• RBI has decided to allow regional rural banks (RRBs) like other commercial banks, to act as
merchant acquiring banks, using Aadhaar Pay – BHIM app and POS terminals. The objective
of the move is providing boost to digital banking and help RRBs to provide cost effective
and user-friendly solutions to their customers.
• RBI has decided to come out with a “Digital Payments Index” (DPI). The index would be
based on multiple parameters and will depict the extent of digitisation of payments. The
index would be made available from Jul 2020. RBI will also put in place a framework for
establishing a Self-Regulatory Organisation (SRO) for Digital Payment System.
• RBI has decided to modify the government securities registry so as to include constituent
details in the Constituent Subsidiary General Ledger accounts. The objective of the move is
to and bring about interoperability of government securities depositories and encourage
retail investors to invest in government securities. The necessary upgrade will be done by
Jul 2020.
• RBI has decided to make operational the Cheque Truncation System (CTS) across the
country by Sep 2020. The move comes after the system helped improve the efficiency of
major clearing houses in which it was currently operational. The move is expected to
accelerate the clearance of cheques.
Regulatory Updates in India (contd..)
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
• According to a report from the Labor Department, U.S. employment surpassed market
expectations and grew by 225,000 jobs in Jan 2020 as against a revised increase of 147,000
jobs in Dec 2019. The upside is driven by notable job in construction, healthcare, and
transportation and warehousing.
• Data from Destatis showed Germany's factory orders fell 2.1% MoM in Dec 2019, following
0.8% drop in Nov 2019. This was the biggest decrease since Feb 2019.
• Latest survey from the Caixin showed manufacturing sector in China continued to expand
in Jan 2020 with a manufacturing PMI score of 51.1. That's down from 51.5 in Dec 2019.
• An Institute for Supply Management report showed U.S. manufacturing activity
unexpectedly expanded for the first time in several months in Jan 2020. The ISM
purchasing managers index surged up to 50.9 in Jan after slipping to 47.8 in Dec 2019.
• Final survey data from IHS Markit showed eurozone output index rose to 51.3 in Jan 2020
from 50.9 in Dec 2019.
• Preliminary data from the Cabinet Office showed Japan's leading index rose to 91.6 in Dec
2019 from 90.8 in Nov 2019.
• An Institute for Supply Management report showed its U.S. non-manufacturing index rose
to 55.5 in Jan 2020 from 54.9 in Dec 2019, with a reading above 50 indicating service
sector growth.
10
Global News/Economy
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
11
Global Indices
Indices
07-Feb-20
1-Week
Return
YTD
Return
Russell 3000
1,507.79 3.70% 5.73%
Nasdaq 100
9,401.10 4.56% 7.65%
FTSE 100
7,466.70 2.48% -1.00%
DAX Index
13,513.81 4.10% 2.00%
Nikkei Average
23,827.98 2.68% 0.72%
Straits Times
3,181.48 0.88% -1.28%
Source: Thomson Reuters Eikon
Value as on Feb 07, 2020
U.S.
• U.S. markets gained as China announced
it will halve tariffs on several U.S.
products and took measures to support
its economy. Strong corporate earnings
and economic data supported sentiment.
Investors cashed in on the recent lows
seen because of concerns around the
corona virus spread. The health
emergency in China threatens the
country’s economic growth and will
impinge upon the global economy.
Europe
• European markets gained as People’s Bank of China announced it will inject 1.2 trillion
yuan (approx. $173 billion) into the markets to help the country’s economy combat the
impact of the virus outbreak. A news report showed a research team in China has found an
effective drug to treat people affected with the new coronavirus.
Asia
• Asian equity markets gained as the Chinese government announced stimulus plans to
support the economy in the wake of the virus outbreak. Sentiment was also supported by
upbeat U.S. economic data and news that a treatment for the virus has been found.
Global Equity Markets
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
12
• Yields on the 10-year U.S. Treasury
Treasuries rose 6 bps to close at 1.58%
compared to the previous week’s close of
1.52%.
• U.S. Treasury prices fell during the week
under review as its safe haven appeal
dwindled following Chinese
government's measures to contain the
coronavirus outbreak and subsequent
reports of "significant breakthrough" in
finding a possible treatment for the
same.
• U.S. Treasury prices fell further following
upbeat U.S. private sector jobs data for
Jan 2020. However, reports that the
coronavirus death toll in mainland China
grew to 637 with a 31,211 cases capped
the gains as it fueled concerns over the
growing coronavirus epidemic and its
impact on global growth.
Global Debt (U.S.)
1.40
1.55
1.70
3-Feb 5-Feb 7-Feb
Yield in %
US 10-Year Treasury Yield
Movement
Source: Thomson Reuters Eikon
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
13
Performance of various commodities
Commodities
Last Closing*
1-Week Ago
Brent Crude($/Barrel)
55.12 58.36
Gold ($/Oz)
1,569.91 1,589.81
Gold (Rs/10 gm)
40,556 40,694
Silver ($/Oz)
17.67 18.03
Silver (Rs/Kg)
46,205 46,383
Source: Thomson Reuters Eikon *
Value as on
Feb 07, 2020
Gold
• Gold prices were down against the
greenback as the latter strengthened
against major currencies after U.S. factory
activity rebounded in Jan 2020. Measures
taken by China to minimize economic
impact from coronavirus epidemic also
improved investor risk sentiment to some
extent.
Brent Crude
• Brent crude prices declined amid reports
that Russia has rejected additional OPEC-
led production cuts. Besides, increasing
death toll and infected population from
coronavirus has raised concerns over its
broader impact on the global front, and in
turn, demand outlook of the commodity.
Baltic Dry Index
• The Baltic Dry Index fell due to lower
capesize and panamax activities.
Commodities Market
7.00
8.00
9.00
10.00
11.00
7-Jan-20 17-Jan-20 27-Jan-20 6-Feb-20
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global
Commodity Prices
Rebased to 10
Source: Thomson Reuters Eikon
-1.98%
-5.55%
-1.25%
7-Feb-20
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
14
Movement of Rupee vs Other Currencies
Currency
Last Closing*
1-Wk Ago
US Dollar
71.25 71.51
Pound Sterling
92.22 93.66
EURO
78.23 78.82
100 Yen
64.79 65.58
Source: RBI Figures in INR , *
Value as on
Feb 07, 2020
Rupee
• The rupee rose against the greenback
following gains in the domestic equity
capital market amid fall in global crude oil
prices.
Euro
• The euro weakened against the greenback
after German industrial output and German
industrial orders plunged in Dec 2020.
Pound
• The pound weakened against the greenback
as concerns about negotiations between
Britain and the European Union for a post-
Brexit trade deal continued to weigh on the
market sentiment.
Yen
• The yen weakened against the greenback as
its safe haven appeal dwindled following
Chinese government's measures to contain
the coronavirus outbreak.
Currencies Markets
9.60
9.80
10.00
10.20
7-Jan-20 17-Jan-20 27-Jan-20 6-Feb-20
USD GBP Euro JPY
Source: Thomson Reuters Eikon
Currency
Prices (
in terms of INR)
Rebased to 10
Currency Movement
-0.75%
-1.20%
-1.53%
-0.37%
7-Feb-20
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
15
The Week that was…
03
rd
Feb to 07
th
Feb
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
16
The Week that was (Feb 03 – Feb 07)
Date Events
Present
Value
Previou
s Value
Monday,
February 03, 2020
• China Caixin Manufacturing PMI (Jan)
51.10 51.50
• Germany Markit Manufacturing PMI (Jan)
45.30 45.20
• U.K. Markit Manufacturing PMI (Jan)
50.00 49.80
• U.S. ISM Manufacturing PMI (Jan)
50.90 47.80
Tuesday,
February 04, 2020
• U.S. Factory Orders (MoM) (Dec)
1.80%
-1.20%
Wednesday,
February 05, 2020
• U.S. ISM Non
-Manufacturing PMI (Jan) 55.50 54.90
• Germany Markit PMI Composite (Jan)
51.20 51.10
• U.S. Markit Services PMI (Jan)
53.40 53.20
• Eurozone Retail Sales (YoY) (Dec)
1.30% 2.30%
• Eurozone Markit PMI Composite (Jan)
51.30 50.90
Thursday,
February 06, 2020
• Germany Factory Orders (MoM) (Dec)
-2.10%
-0.80%
• U.S. Initial Jobless Claims (Jan 31)
202k 217k
• Japan Overall Household Spending (YoY) (Dec)
-4.80%
-2.00%
Friday,
February 07, 2020
• U.S. Nonfarm Payrolls (Jan)
225k 147k
• China Trade Balance USD (Jan)
$39.16 B
$47.21 B
• Germany Trade Balance (Dec)
€19.2 B
€18.50 B
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
17
The Week Ahead
10
th
Feb to 14
th
Feb
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
18
The Week Ahead
Day Event
Monday,
February 10, 2020
•
China Consumer Price Index (YoY) (Jan)
Tuesday,
February 11, 2020
•
U.K. Gross Domestic Product (QoQ) (Q4) (P)
•
U.K. Industrial Production (MoM) (Dec)
Wednesday,
February 12, 2020
•
India Index of Industrial Production (Dec 2019)
•
India Consumer price Index based Inflation (Jan 2020)
•
Eurozone Industrial Production (MoM) (Dec)
Thursday,
February 13, 2020
•
Germany Harmonized Index of Consumer Prices (YoY) (Jan)
•
U.S. Consumer Price Index ex Food & Energy (YoY) (Jan)
•
U.S. Initial Jobless Claims 4-week average (Feb 7)
Friday,
February 14, 2020
•
India Wholesale Price Index based Inflation (Jan 2020)
•
Germany Gross Domestic Product (QoQ) (Q4) (P)
•
Eurozone Gross Domestic Product (YoY) (Q4) (P)
•
U.S. Retail Sales Control Group (Jan)
•
U.S. Michigan Consumer Sentiment Index (Feb) (P)
•
China Industrial Production (YoY) (Jan)
•
China Retail Sales (YoY) (Jan)
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
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 Nippon Life India Asset
Management Limited (NAM India) Formerly Reliance Nippon Life Asset Management Company Limited has not independently verified the accuracy or
authenticity of such information or data, or for that matter the reasonableness of the assumptions upon which such data and information has been
processed or arrive data; NAM India does not in any manner assures the accuracy or authenticity of such data and information. Some of the
statements & assertions contained in these materials may reflect NAM India’s views or opinions, which in turn may have been formed on the basis of
such data or information. The Sponsor(s), the Investment Manager, the Trustee or any of their respective directors, employees, affiliates or
representatives do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such data or information.
Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and
opinions given are fair and reasonable, to the extent possible. This information is not intended to be an offer or solicitation for the purchase or sale
of any financial product or instrument. Recipients of this information should rely on information/data arising out of their own investigations. Before
making any investments, the readers are advised to seek independent professional advice, verify the contents in order to arrive at an informed
investment decision. None of the Sponsor(s), the Investment Manager, the Trustee, their respective directors, employees, affiliates or
representatives shall be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including on
account of lost profits arising from the information contained in this material.
All information contained in this document has been obtained by ICRA Online Limited from sources believed by it to be accurate and reliable.
Although reasonable care has been taken to ensure that the information herein is true, such information is provided ‘as is’ without any warranty of
any kind, and ICRA Online Limited or its affiliates or group companies and its respective directors, officers, or employees in particular, makes no
representation or warranty, express or implied, as to the accuracy, suitability, reliability, timelines or completeness of any such information. All
information contained herein must be construed solely as statements of opinion, and ICRA Online Limited, or its affiliates or group companies and its
respective directors, officers, or employees shall not be liable for any losses or injury, liability or damage of any kind incurred from and arising out of
any use of this document or its contents in any manner, whatsoever. Opinions expressed in this document are not the opinions of our holding
company, ICRA Limited (ICRA), and should not be construed as any indication of credit rating or grading of ICRA for any instruments that have been
issued or are to be issued by any entity.
19
Disclaimer
Thank you for
your time.
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
Thank you for
your time.
