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NEWS U CAN USE
Jan 3, 2020
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
The Week that was…
30
th
Dec 2019 to 3
rd
Jan 2020
2
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Indian Economy
• Nikkei India Manufacturing Purchasing Managers' Index (PMI) rose to 52.7 in Dec 2019
from 51.2 in Nov 2019. This marked 10-months high. New orders grew at the fastest pace
since Jul 2019. On sub-sector level, growth was driven by consumer and intermediate
goods.
• Media reports showed the goods and services tax (GST) collections crossed the Rs. 1
trillion mark for the second straight month in Dec 2019. This has brought some relief to
policymakers making efforts to boost consumption and liquidity in a slowing economy.
Central and state governments together collected Rs. 1.03 trillion in Dec, which is 9%
more than what was collected in the year-ago period.
• According to a report by a global agency, the government might breach the fiscal deficit
target in FY20. This will happen amidst drop in revenue mobilization and expected
additional expenditure by the government. The report said the need for fiscal stimulus has
increased even as the government finances remain "strained".
• The finance minister has introduced Rs. 102 lakh crore of infrastructure projects that will
be implemented in the next five years, media reports showed. This is part of the
government's spending thrust in the infrastructure sector.
3
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4
Domestic Equity Market Indices
Indices 03-Jan-20 1 Week Return YTD Return
S&P BSE Sensex 41,464.61 -0.27% 0.51%
Nifty 50 12,226.65 -0.16% 0.48%
S&P BSE Mid-Cap 15,114.55 1.24% 0.98%
S&P BSE Small-Cap 13,988.89 3.26% 2.11%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date
Advances
Declines
Advance/Decline Ratio
30-Dec-19 1,089 778 1.40
31-Dec-19 962 854 1.13
01-Jan-20 1,021 759 1.35
02-Jan-20 1,356 482 2.81
03-Jan-20 879 973 0.90
Source: NSE
• Indian equity markets closed on a weak
note in the first week of 2020.
Weakness in rupee against the
greenback and higher crude oil prices
kept market sentiment subdued.
• Further, weak global cues amid
heightened geo-political tensions
between the U.S. and Iran added to the
losses. However, reports that U.S.
President has stated that Phase 1 of
the trade deal with China would be
signed on Jan 15, 2020 restricted the
losses.
• Market sentiment also received some
support on reports that the
government has announced
investments worth about Rs. 100 lakh
crore in roads, railways, airports and
agricultural projects over the next five
years to boost slowing economic
growth.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
25.92 28.44 28.77 45.78
P/B
3.20 3.77 2.38 1.98
Dividend Yield
1.03 1.23 1.09 1.09
Source: NSE,BSE
Value as on Jan 03, 2020
Indian Equity Market
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5
Sectoral Indices
Indices
Last Returns (in %)
Closing* 1-Wk 1-Mth
S&P BSE Auto
18,310.9 -0.44% 2.65%
S&P BSE Bankex
36,522.4 -1.19% 1.68%
S&P BSE CD
24,603.0 -1.63% -0.60%
S&P BSE CG
17,332.1 2.29% 0.97%
S&P BSE FMCG
11,430.6 0.08% -1.62%
S&P BSE HC
13,581.7 1.23% 1.01%
S&P BSE IT
15,778.2 1.01% 6.35%
S&P BSE Metal
10,598.9 3.01% 11.01%
S&P BSE Oil & Gas
14,815.1 0.11% -1.16%
Source: BSE * Value as on Jan 03, 2020
• S&P BSE Consumer Durables was the major
loser that fell 1.63% followed by S&P BSE
Bankex and S&P BSE Auto that fell 1.19% and
0.44%, respectively.
• Weak auto sales numbers for Dec 2019
weighed on the auto sector. However, S&P
BSE Metal was the major gainer and grew
3.01% followed by S&P BSE Capital Goods that
grew 2.29%.
Indian Derivatives Market Review
• Nifty Jan 2020 Futures stood at 12,256.45, a premium of 29.80 points above the spot
closing of 12,226.65. The total turnover on NSE’s Futures and Options segment for the
week stood at Rs. 71.64 lakh crore as against Rs. 54.36 lakh crore for the week to Dec 27.
• The Put-Call ratio stood at 1.10 against the previous week’s close of 0.82.
• The Nifty Put-Call ratio stood at 1.37 against the previous week’s close of 1.16.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-Wk
Ago
1-Mth
Ago
6-Mth
Ago
Call Rate
4.94 5.11 5.05 5.71
91 Day T-Bill
4.99 5.02 4.92 5.96
07.32% 2024, (5 Yr GOI)
6.36 6.44 6.19 6.74
06.45% 2029, (10 Yr GOI)
6.51 6.50 6.47 6.83
Source: Thomson Reuters Eikon Value as on Jan 03, 2020
• Bond yields inched up on worries over
government additional borrowings
and fiscal slippage. However, most of
the losses were neutralized after
remarks from a government official
increased the possibility of increase in
foreign investment limit for Indian
debt.
• Yield on the 10-year benchmark paper
(6.45% GS 2029) rose marginally 1 bps
to close at 6.51% compared with the
previous week’s close of 6.50%.
• RBI on Jan 1, 2020 conducted auction
of 91-day, 182-day and 364-day T-Bill
for notified amount of Rs. 4,000 crore,
Rs. 6,000 crore and Rs. 3,000 crore,
respectively. The cut-off price was Rs.
98.78 (YTM: 4.94%), Rs. 97.46 (YTM:
5.22%) and Rs. 94.98 (YTM: 5.30%),
respectively.
Domestic Debt Market
6.40
6.50
6.60
30-Dec 31-Dec 1-Jan 2-Jan 3-Jan
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 5.61 6.68 107
3 Year 6.37 7.33 96
5 Year 6.44 7.54 110
10 Year 6.62 7.86 124
Source: Thomson Reuters Eikon
Value as on Jan 03, 2020
• Yields on gilt securities plunged across the
maturities by up to 16 bps, barring 2 & 10-
year papers that increased 1 bps each.
Yield on 14-year paper was flat. Yield drop
the most on 1-year paper.
• Corporate bond yields dropped across the
curve in the range of 3 to 26 bps. Yield
drop the most on 7-year paper and the
least on 10-year paper.
Domestic Debt Market (Spread Analysis)
-21
-9
3
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 03-Jan-20 27-Dec-19
Yield in %
Change in bps
Source: Thomson Reuters Eikon
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8
• The Reserve Bank of India (RBI) has limited urban cooperative banks (UCBs) from offering
large corporate loans through several changes to lending norms. This comes after
depositors lost large sums of money following a crisis at a cooperative bank. The regulator
slashed single and connected borrower exposure for UCBs, hiked the priority sector lending
(PSL) target and specified a portfolio mix for at least half of their loan books. The guidelines
will be applicable from Mar 31, 2023.
• The Reserve Bank of India (RBI) has extended existing relaxations for securitization of assets
by non-banking financial companies (NBFCs) by another six months. The move could give
NBFCs some relief to repair their broken balance-sheets by selling assets and improving
liquidity. In Nov 2018, RBI had first relaxed the minimum holding period requirement for
originating NBFCs, for loans of maturity above five years, to six months from 12 months
earlier. The relaxation was originally given for six months till May 2019. Now, this stands
extended till Dec 31, 2019.
• The Insurance Regulatory and Development Authority of India (IRDA) has issued guidelines
on standard individual health insurance, media reports showed. It has asked the general and
health insurers to offer product that can take care of basic health needs of customers with
maximum sum insured of Rs. 5 lakh and a minimum of Rs. 1 lakh. The product will be named
as Arogya Sanjeevani Policy.
Regulatory Updates in India
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9
• The Securities and Exchange Board of India (SEBI) is planning to revise fund categorisation
into largecap, midcap and smallcap stocks, media reports showed. SEBI will do this in in
consultation with the mutual fund industry. A representative of the fund managers has
been asked to create a new list as SEBI wants more stocks to be incorporated under
largecaps, midcaps and smallcaps, the reports showed. An announcement in this regard
could be made by the next week. SEBI had introduced categorisation and rationalisation of
mutual fund schemes in Oct 2017 in order to help investors make accurate comparisons of
schemes.
• The Central Board of Direct Taxation (CBDT) has extended the last date for taxpayers to
avail a "one-time" facility to apply for compounding of income tax offences till Jan 31,
2020, media reports showed. The previous deadline was Dec 31, 2019. In I-T parlance,
compounding means authorities do not file a prosecution case against the offender or tax
evader in court in lieu of payment of due taxes and surcharges.
• According to media reports, the government could finalize stricter quality standards for
371 items by Mar 2020. This is mainly aimed at curbing imports of non-essential items such
as toys, plastic goods, sports items and furniture, especially from China. The proposed
rules, to be framed by ministries in coordination with the Bureau of Indian Standards (BIS),
will also ensure stricter inspection of imports.
Regulatory Updates in India (contd..)
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• A Conference Board report showed U.S. consumer confidence dipped in Dec 2019. The
Conference Board said its consumer confidence index edged down to 126.5 in Dec from
126.8 in Nov 2019.
• A Labor Department report showed first-time claims for U.S. unemployment benefits
slipped to 222,000, a decrease of 2,000 from the previous week's revised level of 224,000.
• U.K. manufacturing sector downturn deepened as IHS Markit/Chartered Institute of
Procurement & Supply factory Purchasing Managers' Index fell to 47.5 in Dec 2019, the
second-weakest level for almost seven-and-a-half years.
• Data from the Federal Employment Agency showed German unemployment increased far
more than expected in Dec 2019. The number of people out of work rose by a seasonally
adjusted 8,000 persons.
• According to the National Bureau of Statistics Official survey, China's manufacturing sector
expanded for the second straight month in Dec 2019. The manufacturing Purchasing
Managers' Index held steady at 50.2 in Dec.
• The People's Bank of China reduced the amount of cash that banks should set aside as
reserves to spur liquidity ahead of the Spring Festival. The People's Bank of China lowered
the reserve requirement ratio, or RRR, by 50 basis points, with effect from Jan 6. The RRR
cut will release CNY 800 billion liquidity into the financial system. The bank had reduced
RRR three times last year.
10
Global News/Economy
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11
*Global Indices
Indices
03-Jan-20
1-Week
Return
YTD
Return
Russell 3000
1,434.15 0.13% 0.57%
Nasdaq 100
8,793.90 0.26% 0.70%
FTSE 100
7,622.40 -0.29% 1.06%
DAX Index
13,200.06 -1.03% -0.37%
Nikkei Average*
23,656.62 -0.76% NA
Straits Times
3,238.82 0.38% 0.50%
Source: Thomson Reuters Eikon * As on Dec 30, 2019 Value as on Jan 03, 2020
U.S.
• U.S. markets closed on a mixed note
during the week under review. Though
markets touched record highs on the
first trading day of the new year,
continuing from where they left in 2019
after U.S. President announced that
Phase 1 of the trade deal with China
would be signed on Jan 15, 2020,
geopolitical tensions in the Middle East
capped the gains.
Europe
• European markets were mostly down as trading remained thin because of the holiday
season. At the end of the week, heightened geopolitical tensions hit sentiment after U.S.
airstrikes in Iraq killed a top Iranian military general.
Asia
• Asian equity markets were broadly up in the holiday-truncated week. Sentiment was
supported by the U.S. President announcing that the phase one trade deal with China
would be signed on Jan 15, 2020. Also, news of China easing monetary policy helped
underpin investor sentiment.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury
Treasuries fell 8 bps to close at 1.79%
compared to the previous week’s close
of 1.87%.
• U.S. Treasury prices fell initially as
market participants remained optimistic
after U.S. and China agreed to the first
phase of a trade deal in Dec 2019. The
U.S. President announced that Phase 1
of the trade deal with China would be
signed on Jan 15, 2020. Trading volume
also remained low due to New Year’s
holiday.
• However, the trend reversed soon at
the end of the week as the safe haven
appeal of U.S. Treasuries improved after
U.S. air strikes in Iraq killed a senior
Iranian military official. This in turn
increased tensions between the two
countries.
Global Debt (U.S.)
1.75
1.85
1.95
30-Dec 31-Dec 1-Jan 2-Jan 3-Jan
Yield in %
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($/Barrel) 70.27 70.65
Gold ($/Oz) 1,551.40 1,510.42
Gold (Rs/10 gm) 39,948 38,791
Silver ($/Oz) 18.03 17.75
Silver (Rs/Kg) 47,307 46,192
Source: Thomson Reuters Eikon *Value as on Jan 03, 2020
Gold
• Gold prices moved up as geopolitical
tension rose in the Middle East owing to
the U.S. airstrike, lowering investor
appetite for riskier assets. Weakness in
the greenback also lent some support to
the bullion.
Brent Crude
• Oil prices fell after U.S. crude oil
production in Oct 2019 rose to a record
of 12.66 million barrels per day (bpd)
from a revised 12.48 million bpd in Sep
2019. However, rising Middle East
tension with escalating apprehension on
supply disruption following the U.S.
airstrike restricted further losses.
Baltic Dry Index
• The Baltic Dry Index fell due to lower
capesize and panamax activities.
Commodities Market
9.60
10.00
10.40
10.80
11.20
3-Dec-19 13-Dec-19 23-Dec-19 2-Jan-20
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Source: Thomson Reuters Eikon
Currency Prices ( in terms of INR)
Rebased to 10
Global Commodity Movement
- 0.54%
2.71%
1.58%
03-Jan-20
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14
Movement of Rupee vs Other Currencies
Currency Last Closing* 1-Wk Ago
US Dollar
71.69 71.22
Pound Sterling
93.99 92.55
EURO
80.05 79.19
100 Yen
66.32 65.04
Source: RBI Figures in INR , *Value as on Jan 03, 2020
Rupee
• The rupee weakened against the
greenback due to rising geopolitical
tensions between U.S. and Iran.
Euro
• The euro weakened against the greenback
after British factory output fell in Dec
2019 and Germany’s Purchasing Managers'
Index contracted in the same month.
Pound
• The pound was almost unchanged against
the greenback as concerns of a no-deal
Brexit at the end of 2020 kept the
currency under pressure .
Yen
• The yen strengthened against the
greenback as its safe haven appeal
improved after U.S. air strikes in Iraq killed
a senior Iranian military official.
Currencies Markets
9.80
9.90
10.00
10.10
10.20
10.30
3-Dec-19 13-Dec-19 23-Dec-19 2-Jan-20
USD GBP Euro JPY
Source: Thomson Reuters Eikon
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
1.55%
0.66%
1.97%
1.09%
03-Jan-20
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15
The Week that was…
30
th
Dec, 2019 to 3
rd
Jan, 2020
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16
The Week that was (Dec 30, 2019 – Jan 3, 2020)
Date
Events
Present
Value
Previous
Value
• U.S. Pending Home Sales (YoY) (Nov)
7.4% 4.4%
• U.S. Chicago Purchasing Managers' Index (Dec)
48.9 46.3
• U.S. Wholesale Inventories (Nov) (P)
0% 0%
• U.S. BBA Mortgage Approvals (Nov) 43.715 K
41.312 K
• China Non-Manufacturing PMI (Dec) 53.5 54.4
• China Non-Manufacturing PMI (Dec) 50.2 50.2
• U.S. Housing Price Index (MoM) (Oct)
0.2% 0.6%
• Germany Markit/BME Manufacturing PMI Dec 43.7 43.4
• Euro Zone Markit Manufacturing Final PMI Dec
46.3 45.9
• U.K. Markit/CIPS Manufacturing PMI Dec 2019
47.5 47.4
• U.S. Markit Manufacturing PMI Final Dec 2019
52.4 52.5
• U.K. Markit Manufacturing PMI (Dec) 47.5 47.4
• U.S. Initial Jobless Claims (Dec 27) 222K 224K
• Germany Unemployment Rate SA Dec 2019 5% 5%
• Germany CPI YY Dec 2019 (P) 1.5% 1.1%
• U.S. ISM Manufacturing PMI Dec 2019
47.2 48.1
• U.K. Markit Construction PMI (Dec) 44.4 45.3
Tuesday ,
December 31, 2019
Monday,
December 30, 2019
Thursday,
January 2, 2020
Friday,
January 3, 2020
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17
The Week Ahead
6
th
Jan to 10
th
Jan
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18
Day Event
Monday,
Jan 6, 2020
• China Caixin Services PMI (Dec)
• Euro Zone Markit Services PMI (Dec)
• U.S. Markit Services PMI (Dec)
• Germany Markit Services PMI (Dec)
• Germany Retail Sales (MoM) (Nov)
Tuesday,
Jan 7, 2020
• Euro Zone Retail Sales (YoY) (Nov)
• Euro Zone Consumer Price Index (YoY) (Dec) (P)
• U.S. ISM Non-Manufacturing PMI (Dec)
• U.S. Factory Orders (MoM) (Nov)
Wednesday,
Jan 8, 2020
• U.S. ADP Employment Change (Dec)
• Euro Zone Consumer Confidence (Dec)
• Germany Factory Orders s.a. (MoM) (Nov)
Thursday,
Jan 9, 2020
• U.S. Initial Jobless Claims (Jan 3)
• Euro Zone Unemployment Rate (Nov)
• Germany Industrial Production s.a. (MoM) (Nov)
• China Consumer Price Index (MoM) (Dec)
• China Producer Price Index (YoY) (Dec)
Friday,
Jan 10, 2020
• U.S. Nonfarm Payrolls (Dec)
• U.S. Unemployment Rate (Dec)
• U.S. Wholesale Inventories (Nov)
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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