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NEWS U CAN USE
Jan 17, 2020
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The Week that was…
13
th
Jan to 17
th
Jan
2
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Indian Economy
• Consumer price index-based inflation rate increased to 7.35% in Dec 2019 form 5.54% in
Nov 2019 and 2.11% in Dec 2018. The increase came on account of rising food prices and
the figure is well above the Reserve Bank of India’s medium target of 4%. Consumer Food
Price Index increased to 14.12% in Dec 2019 from 10.01% in Nov 2019 and a decline of
2.65% in the same period of the previous year.
• Government data showed that India’s Wholesale Price Index (WPI) based inflation
increased to 2.59% in Dec 2019 from 0.58% in Nov 2019 and 3.46% during the same
month of the previous year. The WPI Food Index grew from 9.02% in Nov to 11.05% in
Dec. Food inflation increased to 13.24% in Dec from 11.08% in Nov.
• Government data showed that India’s trade deficit narrowed to $11.25 billion in Dec 2019
from $14.49 billion in the same period of the previous year. India’s trade deficit narrowed
as exports came down for the fifth consecutive month and fell 1.80% to $27.36 billion in
Dec 2019 while imports came down at a comparative higher rate of 8.83% to $38.61 billion
in the same month.
• According to United Nations World Economic Situation and Prospects (WESP) 2020 report,
global growth rate of 2.5% is expected in 2020. However, as per the report, trade tensions
and geopolitical uncertainty might adversely impact the growth prospects. It expects GDP
for India to be 5.7% and 6.6% as against previous expectation of 7.6% and 7.4% for FY20
and FY21, respectively.
3
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4
Domestic Equity Market Indices
Indices
17-Jan-20
1 Week Return
YTD Return
S&P BSE Sensex
41,945.37 0.83% 1.68%
Nifty 50
12,352.35 0.78% 1.51%
S&P BSE Mid
-Cap
15,708.97 3.63% 4.95%
S&P BSE Small
-Cap
14,708.70 3.97% 7.37%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
13-Jan-20 1207 665 1.82
14-Jan-20 1072 755 1.42
15-Jan-20 1090 742 1.47
16-Jan-20 1083 750 1.44
17-Jan-20 946 886 1.07
Source: NSE
• Indian equity markets gained in the
week ended Jan 17, 2020. Upbeat
industrial output data and the U.S. and
China signing a phase one trade deal
buoyed sentiment.
• Markets started the week with record
highs on upbeat economic data and
good start to the earnings season.
India’s industrial output grew after
three months of contraction. The
country’s leading IT company beat
expectations in its third quarter
numbers.
• Investors looked forward to the Union
Budget 2020-21. Some weakness was
seen on news that the U.S. will maintain
tariffs until the phase two deal is
completed. However, the signing of the
phase one deal on Jan 15, 2020, lifted
sentiment.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
26.13 28.61 29.49 48.15
P/B
3.25 3.67 2.55 2.09
Dividend Yield
1.01 1.24 1.05 1.03
Source: BSE, NSE Va
lue as on Jan 17, 2020
Indian Equity Market
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5
Sectoral Indices
Indices
Last Returns (in %)
Closing* 1-Wk 1-Mth
S&P BSE Auto
18,900.98 2.49% 5.03%
S&P BSE Bankex
36,035.94 -1.54% -1.72%
S&P BSE CD
25,833.67 3.92% 4.85%
S&P BSE CG
17,343.89 0.52% 1.39%
S&P BSE FMCG
11,921.87 3.55% 4.28%
S&P BSE HC
14,051.24 3.48% 5.22%
S&P BSE IT
16,117.28 2.26% 4.39%
S&P BSE Metal
10,621.74 0.68% 6.85%
S&P BSE Oil & Gas
14,748.75 0.88% -0.57%
Source: Thomson Reuters Eikon
*Value as on Jan 17, 2020
• S&P BSE Realty was the major gainer, up
4.42%, followed by S&P BSE Consumer
Durables, up 3.92% and S&P BSE FMCG, up
3.55%. S&P BSE Healthcare gained 3.48%. S&P
BSE Bankex was the only loser, down 1.54%.
• The realty sector gained on hopes that the
stimulus announced by the government in Nov
2019 for the sector will boost growth. The
banking sector lost as the third quarter
earnings season had a lukewarm start with a
leading private sector bank reporting higher
provisioning against bad loans.
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
5.02 4.99 5.06 5.56
91 Day T
-Bill
5.10 5.05 5.03 5.80
07.32% 2024, (5 Yr GOI)
6.41 6.43 6.54 6.38
06.45% 2029, (10
Yr GOI)
6.63 6.59 6.75 6.34
Source: Thomson Reuters Eikon
Value as on Jan 17, 2020
• Bond yields surged following higher-
than-expected spike in retail inflation.
The country’s CPI came in at 7.35%,
which is more than 5-year high and
way beyond the RBI’s tolerance limit
of 4%. This further raised concerns
over future policy rate cuts. In
addition, fiscal worries and the
quantum of government borrowings
kept the market under pressure.
• However, losses were restricted on
speculations of a fourth round of
special open market operation by the
RBI ahead of the federal budget.
• Yield on the 10-year benchmark paper
(6.45% GS 2029) rose 4 bps to close at
6.63% compared with the previous
week’s close of 6.59% after trading in
a range of 6.58% to 6.69%.
Domestic Debt Market
6.55
6.61
6.67
6.73
13-Jan 14-Jan 15-Jan 16-Jan 17-Jan
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-
Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 5.55 6.61 105
3 Year 6.37 7.20 84
5 Year 6.49 7.45 96
10 Year 6.73 8.04 131
Source: Thomson Reuters Eikon
Value as on
Jan
17, 2020
• Yields on gilt securities fell across 3 to 6-
year paper and 11, 14-year maturities by
up to 3 bps and increased across the
remaining maturities by up to 7 bps
barring 30-year paper which closed steady.
• Corporate bond yields fell across 1 to 5-
year maturities and 15-year paper in the
range of 3 bps to 9 bps and increased
across the remaining maturities in the
range of 4 bps to 10 bps.
Domestic Debt Market (Spread Analysis)
-3
1
5
9
4.80
5.70
6.60
7.50
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 17-Jan-20 10-Jan-20
Yield
in %
Change
in bps
Source: Thomson Reuters Eikon
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8
• Securities and Exchange Board of India (SEBI) mandated that specific overseas government
agencies and their related entities will be barred from clubbing of investment limit which is
applicable for foreign portfolio investors. The exemption would be applicable for those
cases where the Indian government has entered into agreements or treaties with overseas
governments or there is an order.
• The Securities and Exchange Board of India (SEBI) has permitted stocks exchanges to launch
‘option in goods’ in their commodity derivatives segment. Also, it has allowed options on
commodity futures.
• Reserve Bank of India (RBI) governor has said the country should strive and become a part of
the global manufacturing value chain to push growth. He said India had been insulated from
the global value chain in the past, which though protected it from global slowdown, cannot
be a justification for remaining permanently away from it.
• Niti Aayog chairman has said India needs the active participation of the manufacturing
sector to achieve the goal of $5 trillion economy. Service sector is the largest component of
India’s GDP but the manufacturing sector offers a huge base for employment generation.
He said 115 districts of India are backward and it will be difficult for India to transform
without significant improvements in these districts.
Regulatory Updates in India
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9
• Media reports showed the Parliamentary standing committee on labour has invited
suggestions from all stakeholders and the public in general on the Industrial Relations
Code, 2019 and the Code on Social Security, 2019. This comes after the two labour codes
were referred to the standing committee after introduction in the Lok Sabha in the last
Winter session.
• The housing ministry has launched an e-commerce platform to help homebuyers identify
genuine properties. This is being done to bring the trust back in the real estate sector. The
online platform is for projects that have received occupancy certificates and is expected to
create a seamless, safe and transparent home-buying experience for home buyers.
• Media reports showed the National Highways Authority of India (NHAI) plans to settle
most of its arbitration cases through conciliation. The move could reduce NHAI’s liabilities
and save time, its chairman said. NHAI has about 180 cases in arbitration with claims at
over Rs. 70,000 crore.
• Media reports showed India has imposed anti-subsidy duty for a period of five years on
copper wire rods from Indonesia, Malaysia, Thailand and Vietnam. This comes after a probe
concluded that these imports have impacted domestic players.
Regulatory Updates in India (contd..)
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• A Labor Department report showed consumer prices in the U.S. increased by slightly less
than anticipated in Dec 2019. The consumer price index rose 0.2% in Dec after climbing
0.3% in Nov 2019.
• A Labor Department report showed U.S. initial jobless claims fell to 204,000, a decrease of
10,000 from the previous week's 214,000.
• Final data from the Federal Statistical Office showed Germany's consumer price inflation
rose in Dec 2019. The consumer price index rose 1.5% YoY, following a 1.1% increase in
Nov and Oct 2019.
• Data from the Office for National Statistics showed the U.K. economy contracted in Nov
2019 due to weakness in services and industrial output. Gross domestic product dropped
0.3% MoM after rising 0.1% each in Sep and Oct 2019.
• Office for National Statistics reported U.K. consumer price inflation eased to a three-year
low in Dec 2019 to 1.3% from 1.5% in Nov 2019.
• Data from the National Bureau of Statistics showed China’s Gross Domestic Product (GDP)
grew 6.1% in 2019, which was well within the target of 6-6.5%.
• The Cabinet Office said core machine orders in Japan jumped a seasonally adjusted 18.0%
MoM - coming in at 942.7 billion yen. That compares with 6.0% slide in Oct 2019.
10
Global News/Economy
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11
Global Indices
Indices
17-Jan-20
1-Week
Return
YTD
Return
Russell 3000
1,493.78 2.33% 4.75%
Nasdaq 100
9,173.73 2.31% 5.05%
FTSE 100
7,674.56 1.14% 1.75%
DAX Index
13,526.13 0.32% 2.09%
Nikkei Average
24,041.26 0.80% 1.63%
Straits Times
3,281.03 0.77% 1.81%
Source: Thomson Reuters Eikon
Value as on
Jan 17, 2020
U.S.
• U.S. markets closed higher as investors
cheered after U.S. President and
Chinese Vice Premier officially signed
the phase one trade agreement in a
ceremony at the White House. A series
of upbeat U.S. economic data also
contributed to the buying interest,
including data showing an unexpected
decrease in initial jobless claims in the
week to Jan 11.
Europe
• European markets too witnessed buying interest with easing concerns over imposition of
tariff by U.S. on European auto companies, but temporarily. The minutes of the European
Central Bank's latest policy meeting that revealed the central bank's policymaker's mild
optimism regarding the euro area economic outlook also aided sentiment.
Asia
• Asian markets too witnessed global rally as upbeat GDP data instilled confidence on the
Chinese economy. Buying interest found additional support following the signing of the
long-awaited trade deal between the U.S. and China.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury
Treasuries inched up 1 bps to close at
1.84% compared to the previous week’s
close of 1.83%.
• U.S. Treasury prices rose initially against
the greenback after retail inflation in
U.S. slowed in Dec 19 which increased
the possibility that the U.S. Federal
Reserve might keep interest rates on
hold for the time being.
• However the trend reversed and U.S.
Treasury prices came down on the back
of upbeat U..S economic data as the U.S.
retail sales rose more than expected in
Dec 2019, weekly jobless claims in U.S.
fell more than expected in the week
ended Jan 11, 2019 and U.S. housing
starts skyrocketed in Dec 2019.
Global Debt (U.S.)
1.75
1.80
1.85
1.90
13-Jan 14-Jan 15-Jan 16-Jan 17-Jan
US 10-Year Treasury Yield Movement
Source: Thomson Reuters EikonSource: Thomson Reuters Eikon
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13
Performance of various commodities
Commodities
Last Closing*
1-Week Ago
Brent Crude($/Barrel)
64.34 68.16
Gold ($/Oz)
1,556.22 1562.03
Gold (Rs/10 gm)
39,804 39607
Silver ($/Oz)
18.00 18.09
Silver (Rs/Kg)
46,527 46155
Source: Thomson Reuters Eikon *
Value as on Jan
17, 2020
Gold
• Gold prices fell after U.S. retail sales rose
for a third consecutive month in Dec
2019 and U.S. and China moved ahead
with the signing of a preliminary trade
deal. Easing geopolitical tensions
between the U.S. and Iran also
dampened the bullion’s appeal.
Brent Crude
• Brent crude prices dipped after the
American Petroleum Institute data
revealed a 1.1 million barrels rise in U.S.
crude stockpiles in the week ended Jan
10. In addition, OPEC’s projection of
lower oil demand in 2020 also failed to
lend support.
Baltic Dry Index
• The Baltic Dry Index fell due to lower
capesize and panamax activities.
Commodities Market
8.70
9.50
10.30
11.10
17-Dec-19 27-Dec-19 6-Jan-20 16-Jan-20
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global
Commodity Prices
Rebased to 10
Source: Thomson Reuters Eikon
-0.52%
-5.60%
-0.37%
17-Jan-20
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing*
1-Wk Ago
US Dollar
71.04 71.11
Pound Sterling
92.95 93.06
EURO
79.14 79.00
100 Yen
64.45 64.90
Source: RBI Figures in INR , *
Value as on Jan
17, 2020
Rupee
• The rupee strengthened against the
greenback following gains in the
domestic equity market after U.S and
China signed the Phase one trade deal.
Euro
• The euro weakened against the
greenback on the back of upbeat U.S.
economic data.
Pound
• The pound weakened against the
greenback after Britain’s economy
contracted in Nov 2019.
Yen
• The yen weakened against the greenback
as its safe haven appeal fell after U.S and
China signed the Phase one trade deal to
ease their 18-month long trade dispute.
Currencies Markets
9.60
9.90
10.20
10.50
17-Dec-19 27-Dec-19 6-Jan-20 16-Jan-20
USD GBP Euro JPY
Source: Thomson Reuters Eikon
Currency
Prices (
in terms of INR)
Rebased to 10
Currency Movement
-0.12%
-0.10%
-0.69%
0.17%
17-Jan-20
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15
The Week that was…
13
th
Jan to 17
th
Jan
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16
The Week that was (Jan 13– Jan 17)
Date Events
Present
Value
Previous
Value
Monday,
January 13, 2020
• India CPI Inflation (Dec 2019)
7.35% 5.54%
• U.K. Manufacturing Production (MoM) (Nov)
-1.70% 0.50%
• U.K. Industrial Production (MoM) (Nov)
-1.20% 0.40%
Monday,
January 14, 2020
• India WPI Inflation (Dec 2019)
2.59% 0.58%
• China Trade Balance USD (Dec)
$46.79 B $37.93 B
• U.S. Consumer Price Index ex Food & Energy (MoM) (Dec)
0.10% 0.20%
Monday,
January 15, 2020
• U.K. Consumer Price Index (YoY) (Dec)
1.30% 1.50%
• U.K. Retail Price Index (MoM) (Dec)
0.30% 0.20%
• Eurozone Industrial Production (MoM) (Nov)
0.20% -0.90%
• Japan Machinery Orders (YoY) (Nov)
5.30% -6.10%
Monday,
January 16, 2020
• Germany Harmonized Index of Consumer Prices (YoY) (Dec)
1.50% 1.50%
• U.S. Initial Jobless Claims (Jan 10)
204k 214k
Monday,
January 17, 2020
• China Gross Domestic Product (YoY) (Q4)
6.00% 6.00%
• China Retail Sales (YoY) (Dec)
8.0% 8.0%
• U.K. Retail Sales (YoY) (Dec)
0.9% 0.8%
• China Industrial Production (YoY) (Dec)
6.90% 6.20%
• U.S. Michigan Consumer Sentiment Index (Jan) (P)
99.10 99.30
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17
The Week Ahead
20
th
Jan to 24
th
Jan
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18
Day Event
Monday,
Jan 20, 2020
•
China PBoC Interest Rate Decision
•
Japan Industrial Production (YoY) (Nov)
Tuesday,
Jan 21, 2020
•
Bank of Japan Interest Rate Decision
•
U.K. ILO Unemployment Rate (3M) (Nov)
•
Germany ZEW Survey - Economic Sentiment (Jan)
Wednesday,
Jan 22, 2020
•
Japan Merchandise Trade Balance Total (Dec)
•
U.S. Existing Home Sales (MoM) (Dec)
Thursday,
Jan 23, 2020
•
European Central Bank Interest Rate Decision
•
Bank of Japan Monetary Policy Meeting Minutes
•
Japan All Industry Activity Index (MoM) (Nov)
•
U.S. Initial Jobless Claims (Jan 17)
•
Japan Leading Economic Index (Nov)
Friday,
Jan 24, 2020
•
Germany Markit Manufacturing PMI (Jan) (P)
•
Germany Markit PMI Composite (Jan) (P)
•
Eurozone Markit PMI Composite (Jan) (P)
•
U.K. Markit Services PMI (Jan) (P)
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 Nippon Life India Asset
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