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NEWS U CAN USE
Jan 10, 2020
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The Week that was…
06
th
Jan to 10
th
Jan
2
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Indian Economy
• Government data released showed Index of Industrial Production (IIP) grew 1.8% in Nov
2019 compared with 0.2% in Nov 2018. Mining and manufacturing grew 1.7% and 2.7%,
respectively, in Nov 2019, while electricity contracted 5.0%. From Apr to Nov 2019, IIP
growth came in at 0.6% YoY from 5.0% recorded in the corresponding period last year.
• The IHS Markit Services Purchasing Managers' (PMI) rose to 53.3 in Dec 2019 from 52.7 in
Nov 2019. The Composite PMI Output Index rose to 53.7 from 52.7 in Nov 2019. This is the
second-strongest rate of increase in output in more than a year and came on the back of
better market conditions and new business growth.
• The government released its advance economic growth estimate for the fiscal year ending
Mar 31, 2020, media reports showed. Gross domestic product growth is set to come in at
5.0% in FY20 versus 6.8% in FY19. In December, the Reserve Bank of India had sharply
lowered its real GDP growth outlook for FY20 to 5% from 6.1%, citing a delay in revival of
domestic demand, a further slowdown in global economic activity and geo-political
tensions as downside risks.
• Media reports showed the government could ask the Reserve Bank of India for another
interim dividend. The government is struggling to meet its expenditure commitments
amid a steep revenue shortfall. This comes only months after RBI approved a Rs. 1.76
trillion ($24.8 billion) dividend payment to the government, including Rs. 1.48 trillion for
FY20.
3
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4
Domestic Equity Market Indices
Indices 10-Jan-20 1 Week Return YTD Return
S&P BSE Sensex
41,599.72 0.33% 0.84%
Nifty 50
12,256.80 0.25% 0.73%
S&P BSE Mid-Cap
15,158.92 0.29% 1.28%
S&P BSE Small-Cap
14,147.64 1.13% 3.27%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines Advance/Decline Ratio
06-Jan-20 360 1502 0.24
07-Jan-20 1248 578 2.16
08-Jan-20 725 1109 0.65
09-Jan-20 1372 475 2.89
10-Jan-20 1024 811 1.26
Source: NSE
• Indian equity markets gained in the
week ended Jan 10, 2020. The U.S.-Iran
embroilment ruled market sentiment
throughout the week. The week
started weak as markets were fresh on
the heels of the U.S. attack in Iraq
killing a top Iranian military general on
Jan 3, 2020.
• The U.S. President threatened to
impose sanctions on Iraq amid
escalating tensions with Iran. The
conflict pushed gold and crude oil
prices up.
• By the end of the week, markets gained
as concerns around Middle East
tensions eased a little in the absence of
any new altercation between the
countries. Oil prices stabilized as well.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
26.32 28.51 28.64 46.70
P/B
3.25 3.78 2.46 2.03
Dividend Yield
1.01 1.23 1.08 1.06
Source: BSE, NSE Value as on Jan 10, 2020
Indian Equity Market
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5
Sectoral Indices
Indices
Last Returns (in %)
Closing* 1-Wk 1-Mth
S&P BSE Auto
18,441.79 0.71% 5.46%
S&P BSE Bankex
36,598.47 0.21% 3.00%
S&P BSE CD
24,859.08 1.04% -0.29%
S&P BSE CG
17,253.99 -0.45% 3.34%
S&P BSE FMCG
11,513.71 0.73% 1.16%
S&P BSE HC
13,579.10 -0.02% 2.72%
S&P BSE IT
15,760.45 -0.11% 6.18%
S&P BSE Metal
10,550.08 -0.46% 12.64%
S&P BSE Oil & Gas
14,620.72 -1.31% 0.53%
Source: Thomson Reuters Eikon *Value as on Jan 10, 2020
• S&P BSE Realty was the major gainer, up
3.67% followed by S&P BSE Consumer
Durables, up 1.04% and S&P BSE FMCG, up
0.73%. S&P BSE Oil & Gas was the major loser,
down 1.31% followed by S&P BSE Metal, down
0.46%.
• The realty sector gained as investors are
pinning hopes on government’s multiple
reform measures to propel growth in the
sector. Oil & gas and metal sectors suffered
because of the U.S.-Iran tensions, which sent
crude oil prices up by a good measure.
Indian Derivatives Market Review
• Nifty Jan 2020 Futures stood at 12,290.00, a premium of 33.20 points above the spot
closing of 12,256.80. The total turnover on NSE’s Futures and Options segment for the
week stood at Rs. 92.44 lakh crore as against Rs. 71.64 lakh crore for the week to Jan 3.
• The Put-Call ratio stood at 0.97 against the previous week’s close of 1.10.
• The Nifty Put-Call ratio stood at 1.55 against the previous week’s close of 1.37.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-Wk
Ago
1-Mth
Ago
6-Mth
Ago
Call Rate
4.99 4.94 5.00 5.62
91 Day T-Bill
5.05 4.99 5.04 5.88
07.32% 2024, (5 Yr GOI)
6.43 6.36 6.50 6.50
06.45% 2029, (10 Yr GOI)
6.59 6.51 6.71 6.54
Source: Thomson Reuters Eikon Value as on Jan 10, 2020
• Initially, bond yields surged amid rise
in crude oil prices as the U.S-Iran
geopolitical tension flares up.
However, losses were capped led by
the central bank’s third special open
market operation and fall in in crude
oil prices after the U.S. president’s
comment indicated easing tension in
the Middle East.
• At the end, yields rose again on
uncertainty over the timing and
quantum of the RBI’s special open
market operations. In addition,
inflationary concern amid surging oil
prices also weighed on the market
sentiment.
• Yield on the 10-year benchmark paper
(6.45% GS 2029) rose 8 bps to close at
6.59% compared with the previous
week’s close of 6.51%.
Domestic Debt Market
6.50
6.55
6.60
6-Jan 7-Jan 8-Jan 9-Jan 10-Jan
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year
5.50 6.65 115
3 Year
6.40 7.28 88
5 Year
6.51 7.48 98
10 Year
6.69 7.95 126
Source: Thomson Reuters Eikon
Valueason
Jan 10, 2020
• Yields on gilt securities fell on 1 and 2-year
paper by 11 and 7 bps respectively and
rose on remaining papers in the range of 3
to 18 bps.
• Corporate bond yields fell on 2 to 6-year
maturities by up to 7 bps and increased
across the remaining maturities in the
range of 2 to 10 bps.
• Spread between AAA corporate bond and
giltroseon1and10-yearby13and1bps
respectively while it fell on remaining
papers in the range of 3 to 14 bps.
Domestic Debt Market (Spread Analysis)
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-2
10
4.70
6.00
7.30
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 10-Jan-20 03-Jan-20
Yield in %
Change in bps
Source: Thomson Reuters Eikon
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8
• The Securities and Exchange Board of India (Sebi) is mulling three options to implement new
rules on the separation of the roles of chairman and managing director, media reports
showed. The final choice will depend on the next chief of the regulator.
• The government has approved the promulgation of Mineral Laws (Amendment) Ordinance
2020. This paves the way for coal mining by any company present in sectors other than steel
and power. It does away with the captive end-use criteria.
• Reserve Bank of India (RBI) governor has called for reforms in the agriculture market. He
said maintaining price stability, financial stability and economic growth is important not only
from the macroeconomic perspective but also for the objective of inclusive growth.
Initiatives towards wider rural roads network, better communication facilities for faster
exchange of information, and easier access to micro credit will contribute to better price
realisation for farmers. This ongoing process needs to be sustained together with further
agricultural market reforms.
• The government has decided to constitute a panel of centre and state officials for designing
a detailed standard operating procedure (SOP) to check fraudulent GST refund claims. The
decision in this regard was taken in the 2nd National GST Conference of the Commissioners
of State Tax and Chief Commissioners of Central Tax headed by revenue secretary.
Regulatory Updates in India
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9
• Food and consumer affairs minister said the Centre has rolled out the ‘one nation, one
ration card’ initiative in 12 states including Madhya Pradesh and Maharashtra. At present,
the initiative is being implemented on a pilot basis in a cluster of six states and will be
rolled out across the country from Jun 1, 2020. Under the initiative, eligible beneficiaries
would be able to avail their entitled foodgrains under the National Food Security Act
(NFSA) from any Fair Price Shop using the same ration card.
• The Commerce and Industry Ministry is looking into revamping the Special Economic Zone
(SEZ) policy. This is being done to meet global challenges faced by Indian exporters, media
reports showed. It has also discussed ways for implementation of the remaining
recommendations of Baba Kalyani report on SEZ to enhance ease of doing business.
Regulatory Updates in India (contd..)
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• A Labor Department report showed non-farm payroll employment climbed 145,000 jobs in
Dec 2019 after spiking 256,000 in Nov 2019.
• The Institute for Supply Management Service sector activity in the U.S. grew at a faster
than expected pace in Dec 2019 to 55.0 after dipping to 53.9 in Nov 2019.
• A report by payroll processor ADP showed private sector employment jumped by much
more than anticipated in Dec 2019 by 202,000 jobs after climbing by 124,000 jobs in Nov
2019.
• The U.K. service sector stabilized at the end of the year. The final IHS Markit/ Chartered
Institute of Procurement & Supply services Purchasing Managers' Index improved to the
neutral level of 50.0 from 49.3 a month ago.
• Final data from IHS Markit showed U.K. private sector contracted in Dec 2019. The final IHS
Markit/Chartered Institute of Procurement & Supply composite output index held steady
at 49.3 in Dec.
• Data from the Cabinet Office showed Japan's leading index fell to 90.9 in Nov 2019 from
91.6 in Oct 2019. The latest index was the lowest since Nov 2009, when it was 90.5.
• Data from Destatis showed Germany retail sales recovered in Nov 2019 after falling in the
previous month. Retail turnover advanced 2.1% in Nov, offsetting the 1.3% decline in
October.
10
Global News/Economy
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11
Global Indices
Indices
10-Jan-20
1-Week
Return
YTD
Return
Russell 3000 1,459.76 1.79% 2.36%
Nasdaq 100 8,966.64 1.96% 2.67%
FTSE 100 7,587.85 -0.45% 0.60%
DAX Index 13,523.16 2.30% 2.07%
Nikkei Average 23,850.57 0.82% 0.82%
Straits Times 3,255.95 0.53% 1.03%
Source: Thomson Reuters Eikon
Valueason
Jan 10, 2020
U.S.
• U.S. equity markets gained in the week
ended Jan 10, 2020. The U.S.-Iran
conflict though kept investors on their
toes did not affect the markets much in
the week. This happened as oil prices
dipped from the level seen when the
U.S. attack killed an Iranian general in
Iraq. Iran struck an Iraq airbase housing
U.S. troops but U.S.’ President’s
comments eased concerns of further
escalation.
Europe
• European markets were mixed in the week as investors remained cautious of the rising
tensions between the U.S. and Iran. Iran firing missiles on Iraqi airbases housing U.S. troops
spooked investors but details about the attack showed no casualties.
Asia
• Asian equity markets gained in a volatile week. The start was shaky as Iran said it would
take "severe revenge" against the U.S. for killing its top commander and the U.S. President
threatened Iraq with harsh sanctions. This enhanced the appeal of safe-haven assets such
as gold and the yen.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury
Treasuries rose 4 bps to close at 1.83%
compared to the previous week’s close
of 1.79%.
• U.S. Treasury prices fell as geopolitical
tensions between U.S. and Iran eased to
some extent. Geopolitical tensions
between U.S. and Iran intensified earlier
after air strikes in Baghdad by U.S. killed
Iran’s most prominent military
commander.
• Losses were extended after U.S. trade
deficit fell to a more than three year low
in Nov 2019 and U.S. services sector
grew more than expected in Dec 2019.
However, further losses were restricted
after U.S. nonfarm payroll employment
slowed more than expected in Dec
2019.
Global Debt (U.S.)
1.80
1.85
1.90
6-Jan 7-Jan 8-Jan 9-Jan 10-Jan
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) 68.16 70.27
Gold ($/Oz) 1562.03 1551.40
Gold (Rs/10 gm) 39607 39948
Silver ($/Oz) 18.09 18.03
Silver (Rs/Kg) 46155 47307
Source: Thomson Reuters Eikon *Value as on Jan 10, 2020
Gold
• Gold prices grew on disappointing U.S.
jobs report for Dec 2019. Further,
escalating geopolitical tensions between
U.S. and Iran boosted the safe haven
appeal of the yellow metal. Safe haven
appeal improved after air strikes by U.S.
in Iran killed a prominent Iranian
commander which fuelled concerns of a
wider conflict in the Middle East.
Brent Crude
• Brent crude prices plunged on growing
possibility that oil supply disruption from
Iran might not be as severe as
apprehended amid escalating
geopolitical tensions in the Middle East.
Baltic Dry Index
• The Baltic Dry Index fell due to lower
capesize and panamax activities.
Commodities Market
9.20
9.60
10.00
10.40
10.80
11.20
10-Dec-19 26-Dec-19
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Source: Thomson Reuters Eikon
Global Commodity prices
Rebased to 10
Commodity Movement
10-Jan-20
0.69%
-3.00%
0.32%
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14
Movement of Rupee vs Other Currencies
Currency Last Closing* 1-Wk Ago
US Dollar
71.11 71.69
Pound Sterling
93.06 93.99
EURO
79.00 80.05
100 Yen
64.90 66.32
Source: RBI Figures in INR , *Value as on Jan 10, 2020
Rupee
• The rupee fell against the greenback
following gains in the domestic equity
market and fall in global crude oil prices.
Euro
• The euro fell against the greenback on
upbeat U.S. service sector and private
sector job in Dec 2019 and factory orders
fell less than expected in Nov 2019.
Pound
• The pound fell against the greenback as
investors focus shifted towards Brexit
after European Union policymakers
warned that Brexit could happen
without a trade deal in place by the end
of 2020.
Yen
• The yen fell against the greenback as
geopolitical tensions between U.S. and
Iran eased.
Currencies Markets
9.80
9.90
10.00
10.10
10.20
10.30
10-Dec-19 26-Dec-19
USD GBP Euro JPY
Source: Thomson Reuters Eikon
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
10-Jan-20
-0.99%
-0.81%
-2.14%
-1.31%
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15
The Week that was…
06
th
Jan to 10
th
Jan
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16
The Week that was (Jan 06– Jan 10)
Date Events
Present
Value
Previous
Value
Monday,
January 06, 2020
• China Caixin Services PMI (Dec) 52.5 53.5
• Euro Zone Markit Services PMI (Dec) 52.8 52.4
• U.S. Markit Services PMI (Dec) 52.8 51.6
• Germany Markit Services PMI (Dec) 52.9 52.0
• Germany Retail Sales (YoY) (Nov) 2.8% 0.8%
Tuesday,
January 07, 2020
• Euro Zone Retail Sales (YoY) (Nov) 2.2% 1.7%
• Euro Zone Consumer Price Index (YoY) (Dec) (P) 1.3% 1.0%
• U.S. Trade Balance (Nov) -$43.1b -$46.9b
• U.S. ISM Non-Manufacturing PMI (Dec) 55.0 53.9
• U.S. Factory Orders (MoM) (Nov) -0.7% 0.2%
Wednesday,
January 08, 2020
• U.S. ADP Employment Change (Dec) 202k 124k
• Euro Zone Consumer Confidence (Dec F) -8.1 -8.1
• Germany Factory Orders s.a. (MoM) (Nov) -1.3% 0.2%
• U.S. MBA Mortgage Applications (Jan 03) 13.5% -5.3%
Thursday,
January 09, 2020
• Euro Zone Unemployment Rate (Nov) 7.5% 7.5%
• Germany Industrial Production s.a. (MoM) (Nov) 1.1% -1.7%
• China Consumer Price Index (MoM) (Dec) 4.5% 4.5%
• China Producer Price Index (YoY) (Dec) -0.5% -1.4%
Friday,
January 10, 2020
• U.S. Nonfarm Payrolls (Dec) 145k 256k
• U.S. Average Hourly Earnings (YoY) (Dec) 2.9% 3.1%
• Japan Leading Index CI (Nov P) 90.9 91.6
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17
The Week Ahead
13
th
Jan to 17
th
Jan
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18
Day Event
Monday,
Jan 13, 2020
• U.K. Industrial Production (YoY) (Nov)
• U.K. Monthly GDP (MoM) (Nov)
Tuesday,
Jan 14, 2020
• China Trade Balance (Dec)
• Japan Eco Watchers Survey Outlook SA (Dec)
• U.S. Consumer Price Index (YoY) (Dec)
Wednesday,
Jan 15, 2020
• U.K. Consumer Price Index (YoY) (Dec)
• U.K. House Price Index (YoY) (Nov)
• Eurozone Industrial Production w.d.a. (YoY) (Nov)
Thursday,
Jan 16, 2020
• Japan Machine Orders (YoY) (Nov)
• China New Home Prices (MoM) (Dec)
• U.S. Retail Sales Advance (MoM) (Dec)
• U.S. NAHB Housing Market Index (Jan)
Friday,
Jan 17, 2020
• China Gross Domestic Product (YoY) (4Q)
• China Industrial Production (YoY) (Dec)
• China Retail Sales (YoY) (Dec)
• Eurozone Consumer Price Index (YoY) (Dec)
• U.S. U. of Mich. Sentiment (Jan P)
The Week Ahead
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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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