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NEWS U CAN USE
January 22, 2021
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The Week that was…
18
th
Jan to 22
nd
Jan
2
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Indian Economy
• Data from the Ministry of Labor & Employment showed that the All-India Consumer Price
Index Numbers for Agricultural Laborers (CPI-AL) and Rural Laborers and (CPI-RL)
decreased to 3.25% and 3.34% in Dec 2020 from 6.00% and 5.86% respectively in Nov
2020. Inflation based on food index of CPI-AL and CPI-RL stood at 2.97% and 2.96%
respectively in Dec 2020.
• Government data showed that the Employees' Provident Fund Organization (EPFO) added
around 10.11 lakh net subscribers in Nov 2020. For the current fiscal from Apr 2020 to Nov
2020, EPFO added around 45.29 lakh net subscribers.
• According to media reports, the Centre aims to complete the awarding of the projects
envisaged under its flagship development program for highways, Bharatmala, by 2023. In
addition to 10,000 km of road balance works under the National Highway Development
Programme, the first phase of the Bharatmala scheme approved in 2017 involves the
construction of 24,800 km of national highways (NHDP).
• According to a rating agency report, the budget must shift the government's focus on
solving demand-side issues by moving away from addressing the supply side problem that
has been the priority since March when the pandemic started to pummel the economy. In
the June quarter, the pandemic caused lockdowns resulted in the economy tanking 23.9%
but made a drastic turnaround with the contraction improving to just 7.5% in Q2 and is
likely to re-enter the green zone in the second half, which could help the economy close
FY21 with a 7.5%-8% contraction.
3
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4
Domestic Equity Market Indices
Indices 22-Jan-21 1 Week Return YTD Return
S&P BSE Sensex
48,878.54 -0.32% 2.36%
Nifty 50
14,371.90 -0.43% 2.79%
S&P BSE Mid-Cap
18,761.87 -0.75% 4.57%
S&P BSE Small-Cap
18,422.05 -1.39% 1.79%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines Advance/Decline Ratio
18-Jan-21 420 1579 0.27
19-Jan-21 1431 517 2.77
20-Jan-21 997 937 1.06
21-Jan-21 601 1369 0.44
22-Jan-21 477 1472 0.32
Source: NSE
• Indian equity markets settled with
modest losses, although Sensex
breached the 50,000-mark for the first
time during the week.
• Bourses went down with investors
booking profit after a record-breaking
streak ahead of Union Budget
presentation on Feb 1.
• Weak global cues also kept market
participants wary as growing
coronavirus infections around the
world sparked worries about a slow
recovery from the pandemic.
• Towards the weekend investor
sentiments were hurt by news reports
of a massive fire at the Pune-based
Serum Institute of India, the
manufacturer of Covidshield vaccine.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
33.76 38.86 69.07 190.57
P/B
3.32 4.07 2.79 2.50
Dividend Yield
0.81 1.10 0.96 0.92
Source: BSE, NSE Value as on Jan 22, 2021
Indian Equity Market
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5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
S&P BSE Auto
23,705.20 3.24% 18.75%
S&P BSE Bankex
35,379.59 -3.18% 4.03%
S&P BSE CD
30,977.74 2.71% 7.24%
S&P BSE CG
20,098.96 2.39% 10.69%
S&P BSE FMCG
12,668.59 -0.66% 3.09%
S&P BSE HC
21,334.09 -3.18% 1.41%
S&P BSE IT
26,412.50 0.23% 11.90%
S&P BSE Metal
11,545.60 -6.48% 6.23%
S&P BSE Oil & Gas
14,512.24 -2.97% 5.78%
Source: Refinitiv *Value as on Jan 22, 2021
• On the BSE sectoral front, majority of the
indices closed in the red.
• S&P BSE Metal was the major loser, down
6.48%, followed by S&P BSE Realty and S&P
BSE Healthcare, which slipped 3.20% and
3.18%, respectively.
• The major sectors were weighed down by
profit booking following recent gains.
Indian Derivatives Market Review
• Nifty Jan 2021 Futures stood at 14,380.15, a premium of 8.25 points above the spot closing
of 14,371.90. The total turnover on NSE’s Futures and Options segment for the week stood
at Rs. 188.27 lakh crore as against Rs. 175.71 lakh crore for the week to Jan 15.
• The Put-Call ratio stood at 1.03 compared with the previous week’s close of 1.04.
• The Nifty Put-Call ratio stood at 1.14 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
3.20 3.22 3.26 3.48
91 Day T-Bill
3.32 3.29 3.14 3.25
05.22% 2025, (5 Yr GOI)
5.22 5.24 5.06 4.94
05.77% 2030, (10 Yr GOI)
5.94 5.99 5.95 5.82
Source: Refinitiv Value as on Jan 22, 2021
• Bond yields fell initially during the week
under review after the Reserve Bank of
India (RBI) decided to conduct purchase
of Government securities under Open
Market Operations (OMO) for an
aggregate amount of Rs. 21,000 crore on
Jan 21, 2021.
• Yields fell further after RBI did not
accept any bid for the 10-year 5.85%
2030 bond at the weekly debt auction on
Jan 22, 2021. The move was aimed at
retaining yields in sync with policy
benchmarks and it also indicated the
discomfort of RBI with higher yields.
• Yield on the 10-year benchmark paper
(5.77% GS 2030) fell 5 bps to close at
5.94% from the previous week’s close of
5.99%.
Domestic Debt Market
5.90
5.95
6.00
18-Jan 19-Jan 20-Jan 21-Jan 22-Jan
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 4.00 4.77 77
3 Year 4.77 5.56 80
5 Year 5.38 6.53 116
10 Year 6.03 7.11 108
Source: Refinitiv
Valueason
Jan 22, 2021
• Yields on gilt securities rose on 1 to 3-, 6- and
13-year papers by up to 6 bps while it fell on
remaining maturities by up to 9 bps, barring
12 and 30-year paper which closed steady.
• Corporate bond yields fell across the
maturities by up to 14 bps. The maximum fall
was witnessed on 1-year paper and the
minimum fall was witnessed on 3-year paper.
• Spread between AAA corporate bond and gilt
contracted across the maturities by up to 20
bps barring 5-year that expanded 1 bps.
Domestic Debt Market (Spread Analysis)
-10
-1
8
3.00
5.00
7.00
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 22-Jan-21 15-Jan-21
Yield in %
Change in bps
Source: Refinitiv
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8
• According to the Reserve Bank of India (RBI)’s Jan 2021 bulletin, the disconnect between
the real and financial sectors could narrow as high-frequency indicators such as government
spending on growth-oriented ventures, merchandise trade and bank credit pick-ups, higher
PMIs for Dec 2021 indicate that recovery is gaining momentum, and India is moving ahead of
other economies. As expected in its Dec 2020 assessment, the revised 27-indicator
economic activity index projected real GDP growth for Q3 of FY21 at 0.1%. This optimism is
focused on the fact that the second wave of COVID-19 and a large-scale vaccination
campaign against the COVID pandemic have so far been successful in ducking India.
• According to the Reserve Bank of India (RBI)’s Jan 2021 bulletin, RBI continued to remain a
net buyer of the U.S. currency in Nov 2020 after it bought USD 10.261 billion from the spot
market. In Nov, RBI purchased USD 14.289 billion and sold USD 4.028 billion. In Oct 2020,
though RBI had purchased USD 15.64 billion from the spot market, it did not sell the U.S.
currency.
• Capital market regulator Securities and Exchange Board of India (SEBI), extended
relaxations for companies with regards to compliance with procedural norms pertaining to
rights issues opening till Mar 31, 2020.
• According to SEBI, investment through participatory notes (P-notes) in the domestic capital
market rose to a 31-month high of Rs. 87,132 crore at Dec 2020-end from Rs. 83,114 crore
at the Nov 2020-end. Dec-end reading reflects the bullish stance of FPIs.
Regulatory Updates in India
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9
• The Union Cabinet has approved the signing of Memorandum of Understanding between
India and Uzbekistan for cooperation in the field of Solar Energy. On the basis of the
mutual agreement, both the countries would work for implementation and deployment of
pilot project in International Solar Alliance (ISA) member countries.
• The government launched a Regulatory Compliance Portal. This is a first-of-its-kind central
online repository of all Central and State-level compliances. The objective of the move is to
reduce the burden of regulatory compliance for businesses and citizens and improve the
ease of doing business within the country.
• As per media reports, government is evaluating the relaxation of import duties payment
schedules so that many importers can hang on to the status of their authorized economic
operator (AEO). A delay in the payment of duties leads to a higher level of interest, fines
and the risk of the AEO certification being cancelled.
• According to media reports, the Indian government is considering tightening the foreign
direct investment (FDI) rules for e-commerce sector. The move comes amid reports that
there are some e-commerce companies who are being non-compliant and are holding
indirect stakes in different affiliates.
Regulatory Updates in India (contd..)
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• The European Central Bank (ECB) as expected announced to keep its key interest rates and
asset purchases unchanged and reaffirmed its willingness to adjust the policy tools when
necessary. ECB left the main refi rate unchanged at a record low zero percent and the
deposit rate was kept at -0.50%. The lending rate was held steady at 0.25%. The Governing
Council retained its forward interest rate guidance, saying it expects key ECB interest rates
to remain at their current or lower levels until the inflation outlook has seen a robust
convergence to a level close enough to, but below, 2%. The size of the pandemic
emergency purchase program (PEPP) was retained at EUR 1,850 billion by the bank.
• The Bank of Japan has agreed to keep its monetary policy unchanged, but has increased its
growth forecasts, citing the impetus of fiscal stimulus measures. Without setting an upper
limit, the bank will continue to buy the appropriate amount of Japanese government
bonds, so that 10-year JGB yields will remain at around zero percent. In its quarterly
Outlook for Economic Activity and Prices, the bank reported that the expected growth
rates were somewhat higher compared to Oct 2020, mainly for fiscal 2021, reflecting the
impact of government economic initiatives. The outlook assumes that by the end of the
prediction era, the effect of the pandemic will gradually decrease and then almost subside.
• China’s gross domestic product (GDP) rose 6.5% YoY in the fourth quarter of 2020 up from
4.9% growth posted in the third quarter of 2020. By the end of 2020, the economy had
gained more traction as domestic demand started to rebound from the downturn driven
by Covid-19. GDP grew 2.3% in the whole year of 2020, making China the only big economy
in the Covid-19 pandemic to escape a contraction.
10
Global News/Economy
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11
Global Indices
Indices
22-Jan-21
1-Week
Return
YTD
Return
Russell 3000 2,014.53 3.83% 3.17%
Nasdaq 100 13,366.40 4.39% 3.71%
FTSE 100 6,695.07 -0.60% 3.63%
DAX Index 13,873.97 0.63% 1.13%
Nikkei Average 28,631.45 0.39% 4.33%
Straits Times 3,017.15 0.41% 6.10%
Source: Refinitiv Value as on Jan 22, 2021
U.S.
• U.S. markets went up as optimism about
ramped up efforts to combat the
coronavirus under new U.S. President,
supported the upside. Such positive
vibes offset concerns about higher
taxes and increased regulation under a
Democratic administration.
• However, gains were restricted on some
profit booking after recent run to new
record highs.
Europe
• European markets largely went down as worries about growth outlook amid rising
coronavirus cases and prospects for tighter lockdown measures in several places
overshadowed buoyancy about additional stimulus from new U.S. administration.
Asia
• Asian markets largely closed in the green as the swear-in of the 46th U.S. President
spurred hopes for more U.S. fiscal stimulus to fight the coronavirus-led economic slump
and stimulate growth in the world's largest economy.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury fell 1
bps to close at 1.09% compared with the
previous week’s close of 1.10%.
• U.S. Treasury prices fell on higher inflation
expectations as the market anticipated
the prospect for more debt supply under
U.S. President Joe Biden's administration.
• However, losses reversed at the end on
dampening risk sentiment due to
coronavirus concerns and a rough road
ahead for President Joe Biden's massive
economic rescue package.
Global Debt (U.S.)
1.08
1.10
1.12
19-Jan 20-Jan 21-Jan 22-Jan
US 10-Year Treasury Yield Movement
Source: Refinitiv
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13
Performance of various commodities
Commodities Last Closing* 1-Week Ago
Brent Crude($/Barrel)
^
55.25 54.52
Gold ($/Oz) 1,852.55 1,826.59
Gold (Rs/10 gm) 48,920 49,285
Silver ($/Oz) 25.40 24.74
Silver (Rs/Kg) 65,477 65,174
Source: Refinitiv *Value as on Jan 22, 2021
Gold
• Gold prices continued to remain at
elevated levels as market participants
awaited the passage of U.S. President
proposed $1.9 trillion dollar stimulus
package.
Brent Crude
• Brent crude prices rose on hopes that the
new U.S. government will adopt additional
stimulus measures which will improve the
growth prospects of the global economy.
Growing prospects of production curbs by
OPEC also contributed to the upside.
Baltic Dry Index
• The index rose during the week due to
improved capesize and panamax activities.
Commodities Market
9.60
10.00
10.40
10.80
11.20
22-Dec-20 7-Jan-21
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
Source: Refinitiv
2.69%
1.34%
1.42%
22-Jan-21
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14
Movement of Rupee vs Other Currencies
Currency Last Closing* 1-Wk Ago
US Dollar
73.04 73.02
Pound Sterling
100.06 99.83
EURO
88.86 88.64
100 Yen
70.49 70.37
Source: Refinitiv Figures in INR , *Value as on Jan 22, 2021
Rupee
• The Indian rupee was little changed against the
U.S. dollar as fall due to importers demand for
greenback was neutralised by rise on portfolio
inflows and a broad dollar decline.
Euro
• Euro rose against the U.S. dollar on improved
risk appetite, as investors praised comments
from U.S. Treasury Secretary nominee Janet
Yellen on the need for major fiscal stimulus.
Pound
• Pound rose against the U.S. dollar as vaccine
and global growth optimism underpin the risk-
sensitive pound. However, gains restricted on
worse than expected U.K. flash manufacturing
PMI.
Yen
• Yen was little changed against the U.S. dollar as
initial broader risk appetite offset recovery in
safe haven appeal at the end.
Currencies Markets
9.70
9.80
9.90
10.00
10.10
10.20
22-Dec-20 7-Jan-21
USD GBP Euro JPY
Source: Refinitiv
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
0.25%
0.23%
0.02%
0.17%
22-Jan-21
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15
The Week that was…
18
th
Jan to 22
nd
Jan
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16
The Week that was (Jan 18 – Jan 22)
Date Events Present Value Previous Value
Monday,
January 18, 2021
• China Gross Domestic Product (QoQ)(Q4) 2.6% 2.7%
• China Industrial Production (YoY)(Dec) 7.3% 7.0%
• China Retail Sales (YoY)(Dec) 4.6% 5.0%
• Japan Industrial Production w.d.a. (YoY)(Nov) -3.9% -3.4%
Tuesday,
January 19, 2021
• Germany Harmonized Index of Consumer Prices (YoY)(Dec) -0.7% -0.7%
• Eurozone ZEW Survey – Economic Sentiment(Jan) 58.3 54.4
• Germany ZEW Survey – Economic Sentiment(Jan) 61.8 55
Wednesday,
January 20, 2021
• U.K. Consumer Price Index (YoY)(Dec) 0.6% 0.3%
• U.K. Retail Price Index (MoM)(Dec) 0.6% -0.3%
• Germany Producer Price Index (MoM)(Dec) 0.8% 0.2%
• Eurozone Consumer Price Index (MoM)(Dec) 0.3% -0.3%
Thursday,
January 21, 2021
• Japan National Consumer Price Index (YoY)(Dec) -1.2% -0.9%
• Eurozone Consumer Confidence(Jan) PREL -15.5 -13.8
• U.S. Building Permits (MoM)(Dec) 1.709M 1.635M
Friday,
January 22, 2021
• Germany Markit Manufacturing PMI(Jan) PREL 57 58.3
• U.K. GfK Consumer Confidence(Jan) -28 -26
• Eurozone Markit PMI Composite(Jan) PREL 47.5 49.1
• Germany Markit PMI Composite(Jan) PREL 50.8 52
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17
The Week Ahead
25
th
Jan to 29
th
Jan
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18
Day Event
Monday,
Jan 25, 2021
• Germany IFO – Business Climate (Jan)
• Bank of Japan Monetary Policy Meeting Minutes
Tuesday,
Jan 26, 2021
• U.K. ILO Unemployment Rate (3M) (Nov)
• U.S. Housing Price Index (MoM)(Nov)
• U.S. Consumer Confidence (Jan)
Wednesday,
Jan 27, 2021
• U.S. Federal Reserve Interest Rate Decision
• U.S. Durable Goods Orders (Dec)
• Germany Gfk Consumer Confidence Survey (Feb)
• Japan Retail Trade (YoY) (Dec)
Thursday,
Jan 28, 2021
• Eurozone Harmonized Index of Consumer Prices (YoY) (Jan) PREL
• U.S. Gross Domestic Product Annualized (Q4) PREL
• Eurozone Consumer Confidence (Jan)
• U.S. New Home Sales (MoM) (Dec)
• Japan Unemployment Rate (Dec)
Friday,
Jan 29, 2021
• Germany Gross Domestic Product (QoQ)(Q4) PREL
• U.S. Personal Spending (Dec)
• U.S. Michigan Consumer Sentiment Index (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 guideforthereaders.ItmaybenotedthatsinceNipponLifeIndiaAsset
Management Limited (NAM India) 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
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