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NEWS U CAN USE
July 16, 2021
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The Week that was…
12
th
July to 16
th
July
2
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Indian Economy
• Government data showed that the Consumer Price Index based inflation (CPI) slowed to
6.26% in Jun 2021 from 6.30% in May 2021. Inflation, based on CPI, has breached the
Reserve Bank of India's (RBI) target range for the second consecutive month in Jun. The
Consumer Food Price Index also rose to 5.15% in Jun 2021 from 5.01% in the previous
month.
• Government data showed that the Index of Industrial Production (IIP) witnessed a growth
of 29.3% in May 2021 as compared to growth of 134.6% in the previous month and a
contraction of 33.4% in the same period of the previous year. The manufacturing sector
witnessed a growth of 34.5% in May 2021 as compared to a contraction of 37.8% in the
same period of the previous year.
• Government data showed that the Wholesale Price Index (WPI) based inflation eased to
12.07% on a yearly basis in Jun 2021 from 12.94% in the previous month. WPI inflation in
the same period of the previous year stood at -1.81%.
• Government data showed that India’s trade deficit widened to $9.37 billion in Jun 2021
from a surplus of $0.79 billion in Jun 2020. Exports grew 48.34% on a yearly basis to $32.5
billion in Jun 2021 from $21.91 billion in the same period of the previous year. Imports
rose 98.31% over the year to $41.87 billion in Jun 2021 from $21.11 billion in the same
period of the previous year.
3
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4
Domestic Equity Market Indices
Indices 16-Jul-21 1 Week Return YTD Return
S&P BSE Sensex
53,140.06 1.44% 11.29%
Nifty 50
15,923.40 1.49% 13.89%
S&P BSE Mid-Cap
23,130.41 1.39% 28.92%
S&P BSE Small-Cap
26,462.31 2.27% 46.22%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
12-Jul-21 1,181 842 1.40
13-Jul-21 1,063 921 1.15
14-Jul-21 1,029 957 1.08
15-Jul-21 927 1,067 0.87
16-Jul-21 1,007 975 1.03
Source: NSE
• Indian equity markets settled for the
week with modest gains following a
mixed set of global and domestic cues.
While bourses were initially driven by
firm global cues following strong
China’s trade data for Jun 2021,
investors also took some respite
following marginal fall in the retail
inflation data for Jun 2021. Favorable
wholesale price inflation data for Jun
2021 too provided support to the
buying interest.
• Meanwhile, intermittent weakness
seen on the backdrop of rise in U.S.
inflation numbers for Jun 2021, was
settled for good following reassurance
by the U.S. Federal Reserve Chief to
keep interest rates near zero.
Anticipation of robust Q1 earnings
further boosted domestic equity
market.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
32.01 28.53 42.60 53.26
P/B
3.42 4.29 3.22 3.38
Dividend Yield
1.02 1.09 0.89 0.72
Source: BSE, NSE Va
lue as on Jul 16, 2021
Indian Equity Market
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5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
S&P BSE Auto
23,309.79 0.25% -2.47%
S&P BSE Bankex
40,499.65 2.09% 2.08%
S&P BSE CD
36,032.39 0.81% 2.11%
S&P BSE CG
23,868.71 3.95% 5.73%
S&P BSE FMCG
13,593.02 0.09% 0.93%
S&P BSE HC
26,307.27 1.67% 4.53%
S&P BSE IT
30,114.48 1.66% 3.89%
S&P BSE Metal
19,499.18 2.74% 3.52%
S&P BSE Oil & Gas
15,706.04 -0.96% -8.83%
Source: Refinitiv *Value as on Jul 16, 2021
• On the BSE sectoral front, barring S&P BSE Oil
& Gas, all the major sectors closed in the
green. S&P BSE Realty was the top gainer, up
8.55%, followed by S&P BSE Capital Goods and
S&P BSE Metal, which went up 3.95% and
2.74%, respectively.
• Real estate stocks had a bonanza sessions,
thanks to strong buying from retail investors
who see a bigger story emerging in the sector.
Indian Derivatives Market Review
• Nifty Jul 2021 Futures stood at 15,936.00, a premium of 12.60 points above the spot
closing of 15,923.40. The total turnover on NSE’s Futures and Options segment for the
week stood at Rs. 245.61 lakh crore as against Rs. 258.92 lakh crore for the week to Jul 9.
• The Put-Call ratio stood at 0.92 compared with the previous week’s close of 0.91.
• The Nifty Put-Call ratio stood at 1.24 compared with the previous week’s close of 0.94.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-Wk
Ago
1-Mth
Ago
6-Mth
Ago
Call Rate
3.17 3.17 3.20 3.22
91 Day T-Bill
3.44 3.46 3.44 3.29
05.22% 2025, (5 Yr GOI)
5.50 5.59 5.45 5.24
06.10% 2031, (10 Yr GOI)
6.13 6.10 -- --
Source: Refinitiv Value as on Jul 16, 2021
• Bond yields inched up as the weekly debt
auction led to fresh supply of debt.
Market sentiments were further
dampened after the Reserve Bank of
India (RBI) did not include liquid notes in
its next debt purchase on Jul 22 2021.
Meanwhile the Indian government kept
its borrowing plan for the first half of the
fiscal year unchanged, despite
transferring an advance to states as
compensation for goods and services tax
which provided support to the debt
market sentiment to some extent.
• Yield on the 10-year benchmark paper
(6.10% GS 2031) inched up 3 bps to close
at 6.13% from the previous week’s close
of 6.10% after moving in a range of
6.10% to 6.15%.
Domestic Debt Market
6.09
6.12
6.14
12-Jul 13-Jul 14-Jul 15-Jul 16-Jul
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 3.99 4.72 73
3 Year 4.74 5.28 54
5 Year 5.76 6.34 58
10 Year 6.13 7.16 103
Source: Refinitiv Value as on
Jul 16, 2021
• Yields on gilt securities fell across 1 to 10-year
maturities in the range of 2 bps to 10 bps while
it increased across the remaining maturities in
the range of 3 bps to 9 bps barring 11-year
paper which closed steady.
• Corporate bond yields fell across 1 to 15-year
maturities in the range of 3 bps to 8 bps.
• Difference in spread between AAA corporate
bond and gilt contracted on 6 and 15-year paper
by 1 bps and 16 bps respectively while it
expanded across the remaining maturities in the
range of 2 bps to 7 bps barring 2, 7 and 10-year
paper which closed steady.
Domestic Debt Market (Spread Analysis)
-14
-4
6
2.80
5.30
7.80
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 16-Jul-21 09-Jul-21
Yield in %
Change in bps
Source: Refinitiv
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8
• According to the RBI, the coronavirus epidemic generated supply shocks and sector-specific
demand-supply imbalances, which caused inflation to rise. These variables could reduce
during the year as supply side actions take effect, according to the RBI's monthly report for
Jul 2021. It also stated that the second coronavirus wave's tapering, along with a vigorous
vaccination campaign, has improved the Indian economy's near-term prospects. Despite the
fact that numerous high frequency indicators of activity are improving, the central bank
warned that a meaningful increase in aggregate demand is yet to materialise.
• The RBI Governor said financial inclusion will continue to be a policy priority for the central
to make the post-pandemic recovery more equitable and sustainable. RBI will very soon be
coming out with the first financial inclusion index, which will assess progress in terms of
access, usage and quality. The RBI Governor added that all stakeholders must ensure that
the financial ecosystem (including the digital medium) is inclusive and capable of effectively
addressing risks such as mis-selling, cybersecurity, data privacy, and promoting trust in the
financial system through appropriate financial education and awareness.
• The Union Minister announced increase in dearness allowance (DA) for Central Government
and pensioners employees from 17% to 28%. This will be applicable from Jul 1, 2021. This
will provide a cash boost to over 5 million Central Government employees and nearly 6.5
million retirees, allowing them to spend more during the next festival season.
Regulatory Updates in India
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9
• The Union Cabinet approved continuation of the National Ayush Mission as a Centrally
Sponsored Scheme for another five years till 2026. The scheme would run from Apr 1,
2021, to Mar 31, 2026, with a total cost of Rs. 4,607.30 crore expected to be spent
throughout that time.
• The Civil Aviation Ministry released the updated Drone Rules, 2021 for public consultation
The UAS Rules 2021 will be replaced by the Drone Rules 2021, which were announced on
Mar 12, 2021. The deadline for public comments is Aug 5, 2021. New drone lanes for cargo
delivery will be constructed, according to the report, and a drone promotion council will
be established to assist a business-friendly regulatory environment.
• According to media reports, the government may extend the 2017-20 investment
promotion plan in order to attract investors and boost the country's economic growth.
According to reports, the finance ministry's expenditure finance committee has approved
the proposal to prolong the scheme, and the commerce and industry ministry is expected
to seek Cabinet approval soon.
• As per media reports, India and Bangladesh have reaffirmed their commitment to
deepening their collaboration and extending diverse cooperation, as well as the
importance of resuming work on different collaborative mechanisms as soon as the Covid
situation in both countries improves.
Regulatory Updates in India (contd..)
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• According to a report by the Labor Department, U.S. consumer price index rose 0.9% MoM
in Jun 2021 as against 0.6% rise in May 2021. Consumer prices in the U.S. saw the biggest
monthly increase in thirteen years in the month of Jun 2021. Core consumer prices rose
4.5% YoY in Jun as against 3.8% rise in May.
• The U.S. Federal Reserve Chair in a testimony before the House Financial Services
Committee continued to downplay the dangers of inflation, implying that the central bank
is unlikely to begin tightening monetary policy anytime soon. In prepared remarks, U.S. Fed
Chair warned the committee that "significant further progress" toward the Fed's goals of
maximum employment and price stability is "still a ways off." Following its monetary policy
meeting last month, the Fed announced that it will keep buying bonds at a rate of at least
$120 billion per month until it has achieved "substantial further progress" toward its goals.
The Chairman also reiterated that any adjustments to the Fed's asset purchase programme
will be announced with "advance notice."
• According to the National Bureau of Statistics, China’s gross domestic product climbed
7.9% YoY in the second quarter. Due to the high base of comparison, China's economic
growth slowed significantly in the second quarter. Despite this, the rate of growth
remained strong, fueled by consumer spending. The economy grew 12.7% in the first half
of 2021 compared to the same period last year.
10
Global News/Economy
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11
Global Indices
Indices
16-Jul-21
1-Week
Return
YTD
Return
Russell 3000 2,207.50 -1.43% 13.05%
Nasdaq 100 14,681.38 -0.98% 13.91%
FTSE 100 7,008.09 -1.60% 8.48%
DAX Index 15,540.31 -0.94% 13.28%
Nikkei Average 28,003.08 0.22% 2.04%
Straits Times 3,152.30 0.67% 10.85%
Source: Refinitiv Value as on Jul 16, 2021
U.S.
• U.S. markets remained under selling
pressure amid worries over global
economic outlook after China reported
slowdown in its GDP growth by more
than expected in the second quarter of
2021. Meanwhile, concerns over high
U.S. inflation were outweighed by
positive reaction to U.S. Federal Reserve
Chair’s prepared remarks before the
House Financial Services Committee.
Europe
• European markets went down as worries about inflation and rising delta variant of the
coronavirus cases weighed on investor sentiments.
Asia
• Asian market closed in green as upbeat China’s trade data for Jun 2021 fueled prospects
of a speedy economic recovery from the pandemic in major Asian economies. The
outcome of Bank of Japan’s latest policy meeting generated mixed reaction among the
investors. While, the central bank held steady on monetary policy, it downgraded Japan’s
real GDP growth forecast to 3.8% for 2021, compared with the 4% growth forecast made
in Apr.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury fell 6
bps to close at 1.30%, from the previous
week’s close of 1.36%.
• U.S. Treasury prices fell initially after
consumer price index-based inflation in
U.S. saw the biggest monthly increase in
thirteen years in Jun 2021 which renewed
concerns of monetary policy tightening by
the U.S. Federal Reserve.
• The trend reversed after the U.S. Federal
Reserve Chief testified before Congress
that rising inflation is likely to be
transitory and that the U.S. central bank
would continue to support the economy.
• However, gains were capped after retail
sales in U.S. increased in Jun 2021 which
led to expectations that the U.S.
economic growth might have accelerated
in the second quarter of 2021.
Global Debt (U.S.)
1.26
1.35
1.44
12-Jul 13-Jul 14-Jul 15-Jul 16-Jul
Yield in %
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)
75.48 78.30
Gold ($/Oz)
1,810.89 1,807.98
Gold (Rs/10 gm)
48,182 47,723
Silver ($/Oz)
25.66 26.08
Silver (Rs/Kg)
68,924 68,756
Source: Refinitiv *Value as on Jul 16, 2021
Gold
• Gold prices edged higher after U.S. Federal
Reserve Chair reassured investors that the
central bank shall continue its
accommodative monetary policy despite a
recent spike in inflation readings. Concerns
over the ongoing COVID-19 pandemic
further contributed to the upside.
Brent Crude
• Brent Crude prices fell amid speculation
that a negotiation deal between leading
OPEC producers will inject a sharp increase
of oil supply into an extremely tight
market. Oil prices were further hit as the
COVID-19 curve is on rise after months of
decline trend.
Baltic Dry Index
• The index rose on WoW basis due to
improved capesize and panamax activities.
Commodities Market
9.40
9.60
9.80
10.00
10.20
10.40
10.60
10.80
16-Jun-21 1-Jul-21 16-Jul-21
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
Source: Refinitiv
-1.61%
-3.60%
0.16%
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing* 1-Wk Ago
US Dollar
74.62 74.64
Pound Sterling
103.14 102.75
EURO
88.11 88.29
100 Yen
67.84 67.79
Source: Refinitiv Figures in INR , *
Value as on Jul 16, 2021
Rupee
• The rupee rose against the greenback following
gains in the domestic equity market. Gains were
extended after the U.S. Federal Reserve Chief
indicated that more progress was needed on
employment before withdrawing stimulus.
Euro
• The euro fell against the greenback as rising
COVID-19 infections across the globe boosted
the safe haven appeal of the U.S. dollar.
Pound
• The pound weakened against the greenback on
concerns over spread of the COVID-19 Delta
variant in Britain and worries that fiscal support
measures in the country will end in Sep 2021.
Yen
• The yen inched up against the greenback after
the U.S. Federal Reserve chief indicated that
the U.S. central bank is not likely to begin
tightening monetary policy anytime soon.
Currencies Markets
9.85
10.00
10.15
10.30
16-Jun-21 1-Jul-21 16-Jul-21
USD GBP Euro JPY
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
- 0.03%
0.38%
- 0.20%
0.07%
Source: Refinitiv
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15
The Week that was…
12
th
July to 16
th
July
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16
The Week that was (July 12 – July 16)
Date Events Present Value Previous Value
Monday,
July 12, 2021
• India Consumer Price Inflation (YoY) (Jun) 6.26% 6.30%
• India Industrial Production (YoY) (May) 29.30% 134.60%
• U.K. BRC Like-For-Like Retail Sales (YoY)(Jun) 6.70% 18.50%
Tuesday,
July 13, 2021
• U.S. Consumer Price Index (YoY)(Jun) 5.40% 5%
• Germany Harmonized Index of Consumer Prices (YoY)(Jun) 2.10% 2.10%
• China Trade Balance (USD) (Jun) 51.5B 45.53B
Wednesday,
July 14, 2021
• India Wholesale Price Inflation (YoY) (Jun) 12.07% 12.94%
• U.K. Consumer Price Index (YoY)(Jun) 2.50% 2.10%
• U.K. Retail Price Index (MoM)(Jun) 0.70% 0.30%
• Eurozone Industrial Production (MoM)(May) -1.00% 0.60%
• Japan Industrial Production (YoY)(May) 21.10% 22%
Thursday
July 15, 2021
• China Gross Domestic Product (YoY)(Q2) 7.90% 18.30%
• China Retail Sales (YoY)(Jun) 12.10% 12.40%
• U.K. ILO Unemployment Rate (3M)(May) 4.80% 4.80%
Friday,
July 16, 2021
• U.S. Retail Sales (MoM)(Jun) 0.60% -1.70%
• U.S. Michigan Consumer Sentiment Index(Jul) Prel 80.8 85.5
• Eurozone Consumer Price Index (YoY)(Jun) 1.90% 1.90%
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17
The Week Ahead
19
th
July to 23
rd
July
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18
Day Event
Monday,
July 19, 2021
• Japan National Consumer Price Index (YoY)(Jun)
• U.S. NAHB Housing Market Index (Jul)
• Eurozone Construction Output (YoY)(May)
Tuesday,
July 20, 2021
• People’s Bank of China Interest Rate Decision
• Bank of Japan Monetary Policy Meeting Minutes
• Germany Producer Price Index (MoM)(Jun)
• U.S. Housing Starts (MoM)(Jun)
• Japan Merchandise Trade Balance Total (Jun)
Wednesday,
July 21, 2021
• U.K. Public Sector Net Borrowing (Jun)
• U.S. MBA Mortgage Applications (Jul 16)
Thursday,
July 22, 2021
• European Interest Rate Decision
• Eurozone Consumer Confidence (Jul) PREL
• U.K. GfK Consumer Confidence (Jul)
Friday,
July 23, 2021
• Germany Markit PMI Composite (Jul) PREL
• Eurozone Markit PMI Composite (Jul) PREL
• U.K. Markit Services PMI (Jul) PREL
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
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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