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June 04, 2021

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The Week that was…
31
st
May to 04
th
June
2
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Indian Economy
• The Monetary Policy Committee (MPC) in its monetary policy review kept key policy repo
rate unchanged at 4.0%. The reverse repo rate thus remained unchanged at 3.35% and the
marginal standing facility rate and the bank rate also stood unchanged at 4.25%. The MPC
also decided to continue with its accommodative stance as long as necessary to sustain
growth on a durable basis and continue to mitigate the impact of COVID-19 on the
economy, while ensuring that inflation remains within the target going forward. All the
members of the MPC unanimously voted for keeping the policy repo rate unchanged and
continuing with the accommodative stance on the monetary policy.
• Government data showed that the Gross Domestic Product (GDP) of the Indian economy
at constant (2011-12) prices in Q4FY21 witnessed a growth of 1.6% as against a growth of
0.5% in the previous quarter and a growth of 3.0% in the same period of the previous year.
The growth in GDP during FY21 was estimated at -7.3% as compared to 4.0% in the
previous fiscal. On the sectoral front, the construction sector witnessed a growth of 14.5%
in Q4FY21 as compared to a growth of 6.5% in the previous quarter and a growth of 0.7%
in the same period of the previous year. The manufacturing sector also witnessed a
growth of 6.9% in Q4FY21 as against a growth of 1.7% in the previous quarter and a
contraction of 4.2% in the same period of the previous year. The growth of the agriculture
sector however slowed to 3.1% in Q4FY21 from 4.5% in the previous quarter and 6.8% in
the same period of the previous year.
3
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4
Domestic Equity Market Indices
Indices
04-Jun-21
1 Week Return
YTD Return
S&P BSE Sensex
52,100.05
1.32% 9.11%
Nifty 50
15,670.25
1.52% 12.08%
S&P BSE Mid
-Cap
22,511.49
3.92% 25.47%
S&P BSE Small
-Cap
24,261.90
3.34% 34.06%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
31-May-21 1,102 914 1.21
01-Jun-21 730 1,247 0.59
02-Jun-21 1,375 587 2.34
03-Jun-21 1,360 625 2.18
04-Jun-21 1,116 859 1.30
Source: NSE
• Indian equity markets ended the week
with modest gains. Buying interest found
support after India witnessed the lowest
daily rise in COVID-19 cases in 50 days
with 1.52 lakh fresh infections as on May
31. Market participants also took cues
from the domestic GDP data, which grew
1.6% in Q4FY21 as against a growth of
0.5% in the previous quarter and a growth
of 3.0% in the same period of the
previous year.
• Meanwhile, investors also remained
optimistic ahead of the MPC policy meet,
scheduled on Jun 4. While the central
bank committee decided to keep rates
unchanged and maintained the policy
stance as accommodative as expected, it
revised the growth projection downward
to 9.5% from 10.5% for FY22 and revised
the inflation projection upward to 5.1%.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
31.47 29.06 49.49 53.24
P/B
3.31 4.42 3.17 3.13
Dividend Yield
0.96 1.07 0.90 0.82
Source: BSE, NSE Va
lue as on Jun 04, 2021
Indian Equity Market
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5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
24,029.95
1.94% 11.80%
40,035.31
0.43% 8.91%
34,929.76
5.34% 11.49%
23,279.53
3.57% 14.20%
13,090.32
0.73% 3.79%
24,752.23
1.37% 6.12%
27,459.70
-0.61% 5.07%
19,040.30
3.14% 5.98%
17,120.94
5.35% 14.22%
Source:
Refinitiv *Value as on Jun 04, 2021
• On the BSE sectoral front, barring S&P BSE IT
and S&P BSE Teck, all the major sectors closed
in the green. S&P BSE Realty was the top
gainer up 6.55%, followed by S&P BSE Oil &
Gas and S&P BSE Consumer Durables, which
rose 5.35% and 5.34%, respectively.
• Investors are expecting continued strong
performance in the Indian retail sector as
organised retail penetration increases and
population density remains high.
Indian Derivatives Market Review
• Nifty Jun 2021 Futures stood at 15,700.85, a premium of 30.60 points above the spot
closing of 15,670.25. The total turnover on NSE’s Futures and Options segment for the
week stood at Rs. 220.93 lakh crore as against Rs. 226.66 lakh crore for the week to May 28.
• The Put-Call ratio remained unchanged compared with the previous week’s close of 0.85.
• The Nifty Put-Call ratio stood at 1.30 compared with the previous week’s close of 1.32.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-
Wk
Ago
1-
Mth
Ago
6-
Mth
Ago
Call Rate
3.15 3.14 3.19 3.06
91 Day T
-Bill
3.43 3.41 3.33 3.01
05.22% 2025, (5
Yr GOI)
5.34 5.32 5.38 5.03
05.85% 2030, (10 Yr GOI)
6.03 6.00 6.01 --
Source:
Refinitiv Value as on Jun 04, 2021
• Bond yields rose as central government’s
additional borrowing on behalf of states
weighed on sentiment.
• Yields went up further as lower-than-
expected bond purchase plan for the next
quarter disappointed market participants.
• The Reserve Bank of India (RBI) will buy
government bonds worth Rs. 1.20 lakh
crore under G-SAP in the Sept quarter of
2021.
• Meanwhile, the Monetary Policy
Committee (MPC) kept key policy repo rate
unchanged at 4.0% and to continue with
its accommodative stance.
• Yield on the 10-year benchmark paper
(5.85% GS 2030) rose 3 bps to close at
6.03% as compared to the previous week’s
close of 6.00% after moving in a narrow
range of 5.98% to 6.04%.
Domestic Debt Market
5.97
6.01
6.05
31-May 1-Jun 2-Jun 3-Jun 4-Jun
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-
Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 3.86 4.67 80
3 Year 4.73 5.17 43
5 Year 5.63 6.31 67
10 Year 6.09 7.15 107
Source:
Refinitiv
Value as on
Jun 04, 2021
• Yields on gilt securities rose by up to 14 bps
across the maturities, barring 3-year paper
that eased 1 bps and 11-year paper was flat.
• Corporate bond yields fell in the range of 2 to
9 bps on 1- & 5- to 7-year papers while
remaining securities rose by up to 22 bps.
• Spread between AAA corporate bond and gilt
contracted in the range of 5 to 23 bps on 1- &
4- to 7-year papers while remaining securities
expanded in the range of 5 to 19 bps.
Domestic Debt Market (Spread Analysis)
-3
6
15
2.80
5.10
7.40
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 04-Jun-21 28-May-21
Yield
in %
Change
in bps
Source: Refinitiv
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8
• The RBI decided to create a separate liquidity window of Rs. 15,000 crore with a tenor of 3
years at the repo rate till Mar 31, 2022 to provide liquidity support to the contact-intensive
sectors hit by Covid-19.
• According to MPC, the inflation trajectory is likely to be shaped by uncertainties impinging
on the upside and the downside. The rising trajectory of international commodity prices,
especially of crude, together with logistics costs, pose upside risks to the inflation outlook.
MPC projected retail inflation at 5.1% during FY22.
• According to MPC, rural demand remains strong and the expected normal monsoon bodes
well for sustaining its buoyancy, going forward. The increased spread of COVID-19 infections
in rural areas, however, poses downside risks. Real GDP growth is now projected at 9.5% in
FY22.
• The Securities and Exchange Board of India (Sebi) has asked listed companies to submit a
half-yearly statement in their corporate governance compliance report concerning loans and
guarantees issued to promoters or other entities controlled by them. The move is aimed at
bringing transparency and strengthening disclosures about such loans and guarantees. In
this context, the regulator has issued a revised disclosure format that will take effect in
FY22.
Regulatory Updates in India
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9
• The Union Cabinet approved the Model Tenancy Act under which separate rent
authorities, courts, and tribunals would be established in districts to protect the interests
of both the landlord and the tenant. Tenants in residential properties will be required to
post a security deposit of no more than two months' rent, while commercial tenants will
be required to deposit six months' rent. States and union territories can either introduce
new legislation or alter their existing rental rules to comply with the Model Tenancy Act.
All new tenancies must have a written agreement, which must be presented to the
involved district's 'Rent Authority.'
• The Securities and Exchange Board of India (Sebi) has extended the deadline for
implementing guidelines for SMS notifications under the Unified Payment Interface (UPI)
system for shares applied for and allotted during an initial public offering (IPO). The
deadline for setting up an automated web site for Initial Public Offerings (IPOs) using the
UPI system has been extended as well.
Regulatory Updates in India (contd..)
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• According to the Labor Department, U.S. non-farm payroll employment rose 559,000 jobs
in May 2021 after climbing by an upwardly revised 278,000 jobs in Apr 2021. As per the the
Labor Department, the unemployment rate fell to 5.8% in May from 6.1% in Apr.
• According to the payroll processor ADP, U.S. private sector employment increased by
978,000 jobs in May 2021 after surging by a downwardly revised 654,000 jobs in Apr 2021.
• According to report by the Institute for Supply Management, U.S. manufacturing
purchasing managers' index inched up to 61.2 in May 2021 from 60.7 in Apr 2021.
• According to preliminary figures from Eurostat, eurozone flash consumer price inflation
rose 2% in May 2021 from 1.6% in Apr 2021. Core inflation, which excludes prices of
energy, fresh food, alcohol and tobacco, rose 0.9% in May from 0.7% in Apr.
• According to Eurostat, eurozone retail sales fell 3.1% MoM in Apr 2021 as against upwardly
revised 3.3% rise in Mar 2021. The decline came as the Covid-19 lockdown restrictions were
tightened in some countries.
• According to the latest survey from the National Bureau of Statistics, China’s
manufacturing Purchasing Mangers’ Index (PMI) edged down to 51 in May 2021 from 51.1
in Apr 2021. The non-manufacturing PMI rose to 55.2 in May from 54.9 in Apr.
• According to Jibun Bank, Japan’s service Purchasing Managers' Index fell to 46.5 in May
2021 from 4.5 in Apr 2021.
10
Global News/Economy
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11
Global Indices
Indices
04-Jun-21
1-Week
Return
YTD
Return
Russell 3000
2,072.18 0.28% 6.12%
Nasdaq 100
13,770.78 0.62% 6.85%
FTSE 100
7,069.04 0.66% 9.42%
DAX Index
15,692.90 1.11% 14.39%
Nikkei Average
28,942.00 -0.71% 5.46%
Straits Times
3,151.04 -0.86% 10.80%
Source: Refinitiv Value as on Jun 04, 2021
U.S.
• U.S. markets rose marginally, reflecting
continued optimism about the outlook for
the global economy following upbeat
manufacturing data. Buying interest
boosted following the release of the
Labor Department's closely watched
report on employment in May. The report
showed job growth in the U.S.
reaccelerated in May, although the
increase in employment still fell short of
market estimates.
Europe
• European markets went up as continued optimism about global economic recovery
helped underpin sentiment. Data showing rise in U.S. non-farm payroll employment in May
and a drop in unemployment aided sentiment. However, the lower-than-expected
increase in addition of jobs limited markets' upside.
Asia
• Asian markets largely closed in the red as recent flare-ups of coronavirus infection in
certain parts of China and likely measures by Chinese central bank to halt speculative
trading in yuan offset the positive sentiment surrounding five-month high factory growth
of the nation.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury fell 3
bps to close at 1.56%, from the previous
week’s close of 1.59%.
• U.S. Treasury price fell ahead of the U.S.
nonfarm payroll data for May 2021.
• However, losses reversed at the end and
prices gained after U.S. nonfarm payroll
data for May 2021 came lower than
market expectations.
• This calmed fears that the U.S. economy
could lead to a quicker tightening of
monetary policy.
Global Debt (U.S.)
1.55
1.60
1.65
1-Jun 2-Jun 3-Jun 4-Jun
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($/Barrel)
70.68 70.23
Gold ($/Oz)
1889.97 1902.64
Gold (Rs/10 gm)
48403 48541
Silver ($/Oz)
27.78 27.88
Silver (Rs/Kg)
70337 70611
Source: Refinitiv *
Value as on Jun 04, 2021
Gold
• Gold prices fell as better-than-expected U.S.
employment and service sector data for May
2021 strengthened the greenback and
increased the possibility of a rate hike by the
U.S. Federal Reserve.
Brent Crude
• Brent crude prices rose as OPEC and its
allies agreed on a gradual easing of supply
curbs through Jul amid expectation of
recovery of demand. Slow pace of nuclear
talks between Iran and the U.S. provided
additional support to oil prices.
Baltic Dry Index
• The index fell WoW due to sluggish capesize
and panamax activities.
Commodities Market
8.80
9.20
9.60
10.00
10.40
10.80
11.20
4-May-21 20-May-21
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global
Commodity Prices
Rebased to 10
Source: Refinitiv
-0.36%
0.64%
-0.67%
04-Jun-21
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing*
1-Wk Ago
US Dollar
73.03 72.48
Pound Sterling
102.96 102.77
EURO
88.45 88.23
100 Yen
66.25 65.96
Source: Refinitiv Figures in INR , *
Value as on
Jun 04, 2021
Rupee
• Rupee fell against the U.S. dollar on greenback
buying by importers’, on likely domestic equity
outflows due to rebalancing in the MSCI index
and sharp rebound in the U.S. dollar index.
Euro
• Euro fell against the U.S. dollar on upbeat U.S.
private employment data for May 2021 but
losses trimmed on lower than expected U.S.
nonfarm payroll data.
Pound
• Sterling dropped against the U.S. dollar on
better than expected U.S. private employment
data for May 2021 but downside was limited on
downbeat U.S. nonfarm payroll data.
Yen
• Yen gained against the U.S. dollar after lower
than expected U.S. nonfarm payroll data for
May 2021 but upside got trimmed on upbeat
U.S. private employment data.
Currencies Markets
9.50
9.75
10.00
10.25
4-May-21 20-May-21
USD GBP Euro JPY
Source: Refinitiv
Currency
Prices (
in terms of
INR)
Rebased to 10
Currency Movement
0.76%
0.24%
0.19%
0.44%
04-Jun-21
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15
The Week that was…
31
st
May to 04
th
June
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16
The Week that was (May 31 – Jun 04)
Date Events
Present
Value
Previous
Value
Monday,
May 31, 2021
• India GDP Growth Rate (YoY) (Q1)
1.60% 0.50%
• China NBS Manufacturing PMI (May)
51 51.1
• Germany Harmonized Index of Consumer Prices (YoY) (May) PREL
2.40% 2.10%
Tuesday,
June 01, 2021
• India Markit Manufacturing PMI (May)
50.8 55.5
• Eurozone Consumer Price Index (YoY)(May) PREL
2% 1.60%
• U.S. ISM Manufacturing PMI (May)
61.2 60.7
• Germany Unemployment Rate (May)
6% 6%
• Eurozone Unemployment Rate (Apr)
8% 8.10%
Wednesday,
June 02, 2021
• Germany Retail Sales (YoY)(Apr)
4.40% 11%
• Eurozone Producer Price Index (YoY)(Apr)
7.60% 4.30%
Thursday
June 03, 2021
• India Markit Services PMI (May)
46.4 54
• U.S. ADP Employment Change(May)
978K 654K
• U.S. ISM Services PMI(May)
64 62.7
• China Caixin Services PMI(May)
55.1 56.3
• Germany Markit PMI Composite(May)
56.2 56.2
• Eurozone Markit PMI Composite(May)
57.1 56.9
Friday,
June 04, 2021
• Eurozone Retail Sales (YoY)(Apr)
23.90% 13.10%
• U.S. Nonfarm Payrolls(May)
559K 278K
• U.S. Unemployment Rate(May)
5.80% 6.10%
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
17
The Week Ahead
07
th
Jun to 11
th
Jun
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18
Day Event
Monday,
Jun 07, 2021
•
China Trade Balance (USD) (May)
•
Japan Leading Economic Index (Apr) PREL
•
Germany Factory Orders (MoM) (Apr)
Tuesday,
Jun 08, 2021
•
Japan Gross Domestic Product (QoQ) (Q1)
•
Eurozone Gross Domestic Product (YoY) (Q1)
•
U.K. BRC Like-For-Like Retail Sales (YoY) (May)
•
Germany ZEW Survey – Economic Sentiment (Jun)
•
Eurozone ZEW Survey – Economic Sentiment(Jun)
•
Germany Industrial Production s(MoM)(Apr)
Wednesday,
Jun 09, 2021
•
China Consumer Price Index (YoY) (May)
•
Germany Trade Balance (Apr)
Thursday,
Jun 10, 2021
•
Eurozone Interest Rate Decision
•
U.S. Consumer Price Index (YoY)(May)
Friday,
Jun 11, 2021
•
U.S. Michigan Consumer Sentiment Index (Jun) PREL
•
U.K. Gross Domestic Product (MoM) (Apr)
•
U.K. Industrial Production (MoM) (Apr)
The Week Ahead
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
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
assures the accuracy or authenticity of such data and information. Some of the statements & assertions contained in these materials may reflect NAM
India’s views or opinions, which in turn may have been formed on the basis of such data or information. The Sponsor(s), the Investment Manager, the
Trustee or any of their respective directors, employees, associates or representatives do not assume any responsibility for, or warrant the accuracy,
completeness, adequacy and reliability of such data or information. Whilst no action has been solicited based upon the information provided herein,
due care has been taken to ensure that the facts are accurate and opinions given are fair and reasonable, to the extent possible. This information is
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19
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