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NEWS U CAN USE
January 29, 2021
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The Week that was…
25
th
Jan to 29
th
Jan
2
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Indian Economy
According to the National Statistical Office, real gross domestic product (GDP) for the
years 2019-20 and 2018-19 stands at Rs. 145.69 lakh crore and Rs. 140.03 lakh crore,
respectively, showing growth of 4% (4.2% estimated earlier) during 2019-20 and 6.5%
during 2018-19.
Government data showed that India’s fiscal deficit for the period from Apr to Dec of 2020
came in at Rs. 11.58 lakh crore or 145.5% of the budget estimate for FY21 as compared to
132.4% in the corresponding period of the previous year. Revenue deficit came in at Rs.
8.83 lakh crore or 144.9% of the budget estimate as compared to 145.7% of the budget
estimate in the corresponding period of the previous year.
Government data showed that India's infrastructure output contracted 1.3% in Dec 2020
as compared to revised contraction of 1.4% in Nov 2020 and an expansion of 3.1% in the
same period of the previous year. India's infrastructure output thus contracted for the
tenth consecutive month. The cement sector witnessed the maximum contraction of 9.7%
followed by natural gas sector and crude oil sector which contracted 7.2% and 3.6%
respectively. The sectors which witnessed expansion over the month are coal and
electricity sector which grew 2.2%, and 4.2% respectively.
The International Monetary Fund (IMF) projected a 11.5% growth for the Indian economy
in 2021 and 6.8% in 2022. For 2020, IMF projected the growth of the Indian economy to
come down by 8%. According to IMF, India is the only country in the global economy which
is expected to witness a double digit growth in 2021.
3
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4
Domestic Equity Market Indices
Indices
29-Jan-21
1 Week Return
YTD Return
S&P BSE Sensex
46,285.77 -5.30% -3.07%
Nifty 50
13,634.60 -5.13% -2.48%
S&P BSE Mid
-Cap
18,082.23 -3.62% 0.78%
S&P BSE Small
-Cap
17,988.20 -2.36% -0.61%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
25-Jan-21 501 1,457 0.34
27-Jan-21 614 1,313 0.47
28-Jan-21 938 975 0.96
29-Jan-21 868 1,044 0.83
Source: NSE
Indian equity markets settled for the
week in the negative territory as
traders and investors were seen
lightening their positions ahead of the
of the Union Budget.
Investors are awaiting Finance
Minister's third Union Budget
presentation due on Feb 1.
Reports of a face-off between India and
China and worries over peak valuations
of the market also provided initial
jitters.
Buying interest was hardly impacted by
the IMF’s projection of an 11.5%
growth for India in 2021.
Bourses also witnessed volatility amid
expiry of the Jan series of the Futures
and Options (F&O) contracts.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
31.75 36.57 61.21 177.47
P/B
3.15 3.86 2.69 2.45
Dividend Yield
0.86 1.16 1.01 0.95
Source: BSE, NSE Va
lue as on Jan 29, 2021
Indian Equity Market
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5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
S&P BSE Auto
22,127.69 -6.65% 8.08%
S&P BSE Bankex
34,662.51 -2.03% -3.58%
S&P BSE CD
30,099.01 -2.84% 0.72%
S&P BSE CG
19,481.53 -3.07% 4.55%
S&P BSE FMCG
12,218.24 -3.55% -3.25%
S&P BSE HC
20,628.71 -3.31% -4.42%
S&P BSE IT
24,820.69 -6.03% 2.13%
S&P BSE Metal
11,031.12 -4.46% -3.21%
S&P BSE Oil & Gas
13,811.98 -4.83% -2.09%
S&P BSE Teck
11,380.96 -5.96% 2.16%
Refinitiv *Value as on Jan 29, 2021
On the BSE sectoral front, all the major sectors
closed in the red.
S&P BSE Auto was the major loser, down
6.65%, followed by S&P BSE IT and S&P BSE
Teck, which slipped 6.03% and 5.96%,
respectively.
All the sectors are eyeing for any policy
announcements by the Finance Minister in its
upcoming budget.
Indian Derivatives Market Review
Nifty Feb 2021 Futures stood at 13,709.10, a premium of 74.50 points above the spot
closing of 13,634.60. The total turnover on NSE’s Futures and Options segment for the
week stood at Rs. 175.93 lakh crore as against Rs. 188.27 lakh crore for the week to Jan 22.
The Put-Call ratio stood at 0.90 compared with the previous week’s close of 1.03.
The Nifty Put-Call ratio stood at 0.98 compared with the previous week’s close of 1.14.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-
Wk
Ago
1-
Mth
Ago
6-
Mth
Ago
Call Rate
3.26 3.20 3.15 3.47
91 Day T
-Bill
3.37 3.32 3.11 3.32
05.22% 2025, (5 Yr GOI)
5.22 5.22 5.07 5.01
05.77% 2030, (10
Yr GOI)
5.95 5.94 5.93 5.83
Source:
Refinitiv Value as on Jan 29, 2021
Bond yields remained almost unchanged
as market participants refrained from
taking fresh positions ahead of the Union
budget on Monday, i.e., on Feb 1, 2021.
Yield on the 10-year benchmark paper
(5.77% GS 2030) rose 1 bps to close at
5.95% from the previous week’s close of
5.94%.
According to the data on sectoral
deployment of bank credit released by
RBI showed, non-food bank credit
growth slowed to 5.9% in Dec 2020 from
7.0% in Dec 2019. Credit growth to
agriculture and allied activities
accelerated to 9.4% from 5.3% during
the similar period. Credit growth to the
services sector rose to 8.8% better than
6.2% mainly on the back of acceleration
in credit growth to ‘transport operators’
and ‘trade’.
Domestic Debt Market
5.90
5.94
5.98
25-Jan 27-Jan 28-Jan 29-Jan
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-
Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 3.94 4.64 70
3 Year 4.76 5.51 75
5 Year 5.37 6.53 116
10 Year 6.04 7.10 106
Source:
Refinitiv
Value as on
Jan 29, 2021
Yields on gilt securities increased by up to 2
bps on 6-, 7-, 14-, 15-, & 19-year papers,
barring 4-, 11- & 13-year papers that were
steady. Yield on remaining securities were
flat.
Corporate bond yields changed 1 bps or
remained unchanged across the curve,
leaving 1-year paper that increased 5 bps.
Spread between AAA corporate bond and gilt
changed 1 bps or remained unchanged across
the segments, except 1-, 2- & 5-year papers
that expanded in the range of 2 to 11 bps.
Domestic Debt Market (Spread Analysis)
-9
-1
7
2.50
4.90
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 29-Jan-21 22-Jan-21
Yield
in %
Change
in bps
Source: Thomson Reuters Eikon
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8
Capital market regulator Securities and Exchange Board of India (SEBI) has amended the
norms regarding holding of enquiry against intermediaries. The objective of the move is to
rationalise the process and avoid duplication of proceedings before designated authorities
and designated members.
The Union Minister for Road Transport and Highways approved a proposal to levy a “Green
Tax” on old vehicles. The objective of the move is to protect and clean up the environment
by phasing out polluting and unfit vehicles. A higher green tax will be imposed on those
vehicles that are in highly polluted cities.
According to media reports, IRDAI has directed all life insurance companies to offer a
standard individual immediate annuity product named 'Saral Pension' by Apr 1, 2021. It will
be a single premium, non-linked, non-participating immediate annuity plan. The framework
for the plan has been fixed by the regulator and will be standard across insurers.
Securities Exchange Board of India (Sebi) sought to empower minority investors on the
appointment of key executives, proposing that board candidatures rejected by ordinary
shareholders be reversed only after detailed justification by the company’s statutory panel
that oversees director-level rewards. Sebi stated that in order to ensure shareholder
supremacy in matters relating to the selection of directors, such a person may be appointed
only after his candidacy has been recommended by the Nomination and Remuneration
Committee (NRC) with thorough explanation as to why such appointment, despite rejection
by shareholders, is recommended.
Regulatory Updates in India
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9
According to the World Gold Council, gold consumption in India, the world’s second-
biggest buyer, is expected to rebound in 2021 after plunging to the lowest in more than
two decades. As the country's economy exhibits signs of recovery, demand is projected to
leap closer to the 690 tons purchased in 2019. In 2020, goldsmiths had one of the worst
years, when demand dropped by more than a third to 446.4 tons, the lowest since 1994, as
coronavirus-related lockdowns, movement curbs, record high prices and lower incomes
reduced jewelry spending.
The Ministry of Statistics is stepping up the use of artificial intelligence to gather, evaluate
and report data in order to better track the economy. The initiatives include a $60 million
initiative with assistance from the World Bank to use an information portal that gathers
data in real time.
According to media reports, an IRDAI working group has suggested standardisation of
cyber liability insurance as it might impede innovation and hinder adaptation to evolving
industry needs. The panel, as per its report published by the regulator, examined various
aspects relating to cyber insurance in India, including coverage issues, sector wise
exposures, underwriting/ pricing methodology, and claims response and management to
come to an informed conclusion on standardisation.
Regulatory Updates in India (contd..)
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IMF projected the global economy to contract 3.5% in 2020. IMF then expects the global
economy to witness a growth of 5.5% in 2021 and 4.2% in 2022. The upgrade in global
growth forecasts come as IMF note of coronavirus vaccinations which are being
administered across the globe. However, IMF warned that the new COVID variants may
adversely impact the post-pandemic recovery.
The U.S. Federal Reserve (U.S. Fed) left interest rates unchanged as widely expected and
revealed it plans to maintain its asset purchase program at the current pace. The U.S. Fed
agreed to retain the federal funds rate goal range at zero to 0.25% and again plans to
leave rates at near-zero levels until labor market conditions hit levels consistent with full
jobs and inflation is on track to moderately exceed 2%. The latest statement also referred
to the rollout of coronavirus vaccines, stating that the path of the economy, and the
success of vaccinations, would rely significantly on the trajectory of the coronavirus.
According to data from the European Commission, eurozone’s economic sentiment index
fell less than expected to 91.5 in Jan 2021 from 92.4 in the previous month. Eurozone’s
economic sentiment weakened in Jan due to sliding confidence in retail trade and services
as Covid-19 containment measures remain in place.
According to data released by the National Bureau of Statistics, China’s industrial profits
rose 20.1% YoY in Dec 2020 as against 15.5% increase in Nov 2020. In the whole year of
2020, profits of industrial firms increased 4.1% as against 3.3% fell in 2019.
10
Global News/Economy
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11
Global Indices
Indices
29-Jan-21
1-Week
Return
YTD
Return
Russell 3000
1,944.46 -3.48% -0.42%
Nasdaq 100
12,925.38 -3.30% 0.29%
FTSE 100
6,407.46 -4.30% -0.82%
DAX Index
13,432.87 -3.18% -2.08%
Nikkei Average
27,663.39 -3.38% 0.80%
Straits Times
2,920.30 -2.38% 2.69%
Source: Refinitiv
Value as on Jan 29, 2021
U.S.
U.S. markets fell with investors assessing
the impact of new and more contagious
coronavirus strains along with
uncertainty about the prospects for a
new relief package.
The downturn was restricted by value
buying and after report from the Labor
Department showed bigger than
expected decline in first-time claims for
U.S. unemployment benefits in the week
to Jan 23.
Europe
European markets went down as disappointing economic data, rising coronavirus cases,
tighter lockdown measures and worries about delay in vaccine supplies triggered heavy
selling across various sectors.
Asia
Asian markets settled in the negative territory as rising COVID-19 cases and vaccine
distribution delays flagged concerns over a probable slowdown in the pace of the
economic recovery.
Global Equity Markets
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12
Yields on the 10-year U.S. Treasury
remained unchanged at 1.09%, similar to
the previous week’s close.
U.S. Treasury prices rose amid persistent
worries about rising Covid-19 cases and
after the U.S. Federal Reserve left interest
rates unchanged and kept its bond-buying
program intact, as widely expected.
However, gains retreated after U.S. GDP
data for Dec quarter of 2020 was not as
weak as initially market forecasted.
Gains reversed at the end after U.S.
employment costs rose suggesting the
U.S. is repairing from the devastating
effects of the pandemic.
Global Debt (U.S.)
0.96
1.00
1.04
1.08
1.12
25-Jan 26-Jan 27-Jan 28-Jan 29-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)
55.40 55.25
Gold ($/Oz)
1,846.09 1,852.55
Gold (Rs/10 gm)
49,205 48,920
Silver ($/Oz)
27.00 25.40
Silver (Rs/Kg)
69,944 65,477
Source: Refinitiv *
Value as on Jan 29, 2021
Gold
Gold prices fell as the safe haven appeal of
the greenback improved after the U.S.
Federal Reserve expressed worries over
the slow pace of economic recovery.
Brent Crude
Brent crude prices rose after data from the
American Petroleum Institute showed that
crude oil inventories in the U.S. fell by 5.3
million barrels in the week to Jan 22, 2021.
However, gains were capped after the data
showed that gasoline stocks rose by 3.1
million barrels during the same period.
Baltic Dry Index
The index fell on WoW basis due to
sluggish capesize and panamax activities.
Commodities Market
8.00
9.00
10.00
11.00
12.00
29-Dec-20 14-Jan-21
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global
Commodity Prices
Rebased to 10
Source: Thomson Reuters Eikon
6.31%
0.27%
-0.35%
29-Jan-21
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing*
1-Wk Ago
US Dollar
72.95 73.04
Pound Sterling
100.02 100.06
EURO
88.30 88.86
100 Yen
69.82 70.49
Source: Refinitiv Figures in INR , *
Value as on
Jan 29, 2021
Rupee
The Indian rupee gained against the U.S. dollar
amid greenback sales by foreign banks likely for
their custodian clients. However, gains were
capped as sharp selloff in global equity market
pushed market participants to the safety of the
greenback
Euro
Euro fell against the U.S. dollar as investors
were cautious on worries about the economic
impact of the Covid-19, and after the U.S.
Federal Reserve expressed concerns about the
pace of the economic recovery.
Pound
Pound rose against the U.S. dollar based on the
quick UK Covid-19 vaccine rollout.
Yen
Yen fell against the strong U.S. dollar as market
participants were cautious on worries about the
economic impact of the Covid-19.
Currencies Markets
9.80
10.00
10.20
29-Dec-20 14-Jan-21
USD GBP Euro JPY
Source: Thomson Reuters Eikon
Currency
Prices (
in terms of INR)
Rebased to 10
Currency Movement
-0.63%
-0.04%
-0.95%
-0.12%
29-Jan-21
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15
The Week that was…
25
th
Jan to 29
th
Jan
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16
The Week that was (Jan 25 Jan 29)
Date Events
Present
Value
Previous
Value
Monday,
January 25, 2021
• Germany IFO
Business Climate (Jan) 90.1 92.2
• Germany IFO
Current Assessment (Jan) 89.2 91.3
Tuesday,
January 26, 2021
• U.K. ILO Unemployment Rate (3M)(Nov)
5% 4.90%
• U.K. Claimant Count Change (Dec)
7K 38.1K
• U.S. Housing Price Index (MoM)(Nov)
1% 1.50%
Wednesday,
January 27, 2021
• U.S. Durable Goods Orders (Dec)
0.20% 1.20%
• Germany Gfk Consumer Confidence Survey (Feb)
-15.6 -7.5
• Japan Retail Trade (YoY)(Dec)
-0.30% 0.60%
• Japan Leading Economic Index (Nov)
96.4 94.3
Thursday,
January 28, 2021
• Germany Harmonized Index of Consumer Prices (YoY)(Jan) PREL
1.60% -0.70%
• U.S. Gross Domestic Product Annualized (Q4) PREL
4% 33.40%
• Eurozone Consumer Confidence (Jan)
-15.5 -15.5
• Japan Unemployment Rate (Dec)
2.90% 2.90%
• Japan Industrial Production (YoY)(Dec) PREL
-3.20% -3.90%
• U.S. New Home Sales (MoM)(Dec)
0.842M 0.829M
Friday,
January 29, 2021
• Germany Gross Domestic Product (QoQ)(Q4) PREL
0.10% 8.50%
• Germany Unemployment Rate (Dec)
6% 6%
• U.S. Core Personal Consumption Expenditure
-
Price Index (MoM)(Dec)
0.30% 0%
• U.S. Personal Income (MoM)(Dec)
0.60% -1.70%
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17
The Week Ahead
1
st
Feb to 05
th
Feb
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18
Day Event
Monday,
Feb 01, 2021
India Markit Manufacturing PMI (Jan)
Germany Retail Sales (YoY)(Dec)
U.S. ISM Manufacturing PMI (Jan)
China Caixin Manufacturing PMI (Jan)
U.K. Markit Manufacturing PMI (Jan)
Tuesday,
Feb 02, 2021
Eurozone Gross Domestic Product (Q4) PREL
U.K. Nationwide Housing Prices (YoY)(Jan)
Wednesday,
Feb 03, 2021
India Markit Services PMI (Jan)
U.S. ADP Employment Change (Jan)
U.S. ISM Services PMI(Jan)
Eurozone Markit PMI Composite (Jan)
Germany Markit PMI Composite (Jan)
Thursday,
Feb 04, 2021
Bank of England Interest Rate Decision
Eurozone Retail Sales (YoY)(Dec)
U.S. Nonfarm Productivity (Q4) PREL
Friday,
Feb 05, 2021
U.S. Nonfarm Payrolls (Jan)
U.S. Unemployment Rate (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
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19
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