Mutual Fund News of 11 June 2021 – Nippon India Mutual Fund

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NEWS U CAN USE

June 11, 2021

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The Week that was…

June to 11

June

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Indian Economy

• Index of Industrial Production (IIP) witnessed a growth of 134.4% in Apr 2021 as compared

to growth of 22.4% in the previous month and a contraction of 57.3% in the same period

of the previous year. The manufacturing sector witnessed a growth of 197.1% in Apr 2021

as compared to a contraction of 66.6% in the same period of the previous year. The mining

sector grew 37.1% in Apr 2021 as compared to a contraction of 26.9% in the same period

of the previous year while the electricity sector witnessed a growth of 38.5% in Apr 2021

as compared to a contraction of 22.9% in Apr 2020.

• The World Bank has lowered its forecast for India's gross domestic product (GDP) to 8.3%

for FY22, down from 10.1% previously forecasted. It also forecasts India's growth to be

7.5% in 2022, despite the country's recovery being delayed by an extraordinary second

wave of the COVID-19, the world's greatest epidemic since the fatal epidemic began.

• The World Bank's Board of Executive Directors has approved a USD 500 million

programme to help India's statewide push to revive the MSME sector, which has been hit

hard by the COVID-19 issue. The programme aims to improve the performance of 555,000

MSMEs and is estimated to raise $15.5 billion in funding.

• According to a new survey by the Reserve Bank of India (RBI), as the second wave of the

COVID-19 pandemic continues to wreak havoc on lives and businesses across the country,

consumer confidence has plummeted to new lows. The current perception compared with

one-year ago fell to a record 48.5 in May from 53.1 in Mar, shows the survey where 100 is

the level that divides pessimism from optimism.

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Domestic Equity Market Indices

Indices

11-Jun-21

1 Week Return

YTD Return

S&P BSE Sensex

52,474.76

0.72% 9.89%

Nifty 50

15,799.35

0.82% 13.00%

S&P BSE Mid

-Cap

22,927.83

1.85% 27.79%

S&P BSE Small

-Cap

25,116.30

3.52% 38.78%

Source: MFI Explorer

NSE Advance/Decline Ratio

Date Advances Declines

Advance/Decline Ratio

07-Jun-21 1418 637 2.23

08-Jun-21 1059 915 1.16

09-Jun-21 708 1282 0.55

10-Jun-21 1543 473 3.26

11-Jun-21 1043 959 1.09

Source: NSE

• Indian equity markets extended previous

week’s gain with indices setting new high

as daily COVID-19 instances in the country

fell to a two-month low, thus boosting

investor’s sentiments. The equity market

climbed further after the government

announced that all adults will receive free

COVID-19 vaccines.

• Market participants also cheered monthly

report by the Department of Economic

Affairs, which showed that the economic

impact of the COVID second wave will

most likely be limited to Q1 FY22 due to

faster vaccine coverage and off-loading of

fiscal measures.

• Further, the arrival of monsoon in the

country ahead of the schedule is expected

to boost agricultural production in the

country and to add to turnaround in the

economy.

Ratios

S&P BSE

Sensex

Nifty 50

S&P BSE

Mid Cap

S&P BSE

Small Cap

P/E

32.22 29.30 48.32 53.14

P/B

3.33 4.46 3.21 3.22

Dividend Yield

0.95 1.18 0.88 0.79

Source: BSE, NSE Va

lue as on Jun 11, 2021

Indian Equity Market

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Sectoral Indices

Indices

Last

Closing*

Returns (in %)

1-Wk 1-Mth

S&P BSE Auto

24,108.66

0.33% 7.49%

S&P BSE Bankex

39,731.36

-0.76% 6.13%

S&P BSE CD

35,381.68

1.29% 11.70%

S&P BSE CG

22,917.69

-1.55% 7.75%

S&P BSE FMCG

13,297.63

1.58% 4.11%

S&P BSE HC

25,466.31

2.88% 3.83%

S&P BSE IT

28,697.07

4.51% 8.08%

S&P BSE Metal

19,425.94

2.03% -3.50%

S&P BSE Oil & Gas

17,135.31

0.08% 6.78%

Source:

Refinitiv *Value as on Jun 11, 2021

• On the BSE sectoral front, barring S&P BSE

Bankex and S&P BSE Capital Goods, all the

major indices closed in the green. S&P BSE

Power was the top gainer, up 4.82%, followed

by S&P BSE IT and S&P BSE Teck, which rose

4.51% and 4.04%, respectively.

• Power stocks have been on a roll recently as

various states have relaxed the curbs in Jun

and economic activities and power

consumption are resuming.

Indian Derivatives Market Review

• Nifty Jun 2021 Futures stood at 15,817.30, a premium of 17.95 points above the spot

closing of 15,799.35. The total turnover on NSE’s Futures and Options segment for the

week stood at Rs. 226.25 lakh crore as against Rs. 220.93 lakh crore for the week to Jun 4.

• The Put-Call ratio remained unchanged compared with the previous week’s close of 0.85.

• The Nifty Put-Call ratio stood at 1.35 compared with the previous week’s close of 1.30.

Indian Equity Market (contd.)

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Debt Indicators

(%)

Current

Value

Ago

Mth

Ago

Mth

Ago

Call Rate

3.10 3.15 3.21 3.13

91 Day T

-Bill

3.41 3.43 3.38 3.11

05.22% 2025, (5

Yr GOI)

5.26 5.34 5.36 5.08

05.85% 2030, (10 Yr GOI)

6.01 6.03 6.01 5.89

Source:

Refinitiv Value as on Jun 11, 2021

• Bond yields fell marginally on decline in

U.S. Treasury yields after weaker-than-

expected U.S. nonfarm payroll report for

May 2021. Yields eased further on

expectations of the Reserve Bank of India’s

(RBI) bond purchases even after the

central bank devolved the 10-year

benchmark paper on primary dealers in

weekly gilt auction.

• Yield on the 10-year benchmark paper

(5.85% GS 2030) eased 2 bps to close at

6.01% as compared to the previous week’s

close of 6.03% after moving in a narrow

range of 6.00% to 6.05%.

• RBI conducted the auction of three

government securities- 4.26% GS 2023,

5.85% GS 2030 and 6.76% GS 2061 for a

cumulative amount of Rs. 26,000 crore,

which was oversubscribed along with

devolvement on primary dealers.

Domestic Debt Market

5.94

5.99

6.04

7-Jun 8-Jun 9-Jun 10-Jun 11-Jun

Yield in %

10 -Yr Benchmark Bond ( % )

Source: CCIL

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Maturity

G-

Sec Yield

(%)

Corporate Yield

(%)

Spread

bps

1 Year 3.93 4.62 69

3 Year 4.61 5.15 54

5 Year 5.59 6.21 62

10 Year 6.10 7.10 101

Source:

Refinitiv

Value as on

Jun 11 2021

• Yields on gilt securities increased on 1-year

paper by 6 bps and fell across the remaining

maturities in the range of 2 bps to 12 bps.

• Corporate bond yields fell across the

maturities in the range of 2 bps to 8 bps

barring 2, 3 and 15-year paper which increased

by up to 6 bps while the same on 1-year paper

closed steady.

• Difference in spread between AAA corporate

bond and gilt expanded across the maturities

by up to 15 bps barring 1-year paper and 10-

year paper which contracted 6 bps and 2 bps

respectively.

Domestic Debt Market (Spread Analysis)

-14

-3

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 11-Jun-21 04-Jun-21

Yield

in %

Change

in bps

Source: Refinitiv

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• The Cabinet Committee on Economic Affairs has approved the increase in the Minimum

Support Prices (MSPs) for all mandated Kharif crops for marketing season 2021-22. The

objective of the move is to ensure remunerative prices to the growers for their produce. The

highest absolute increase in MSP over the previous year has been recommended for

sesamum (Rs. 452 per quintal) followed by tur and urad (Rs. 300 per quintal each). In case of

groundnut and nigerseed, there has been an increase of Rs 275 per quintal and Rs 235 per

quintal respectively compared to last year. The aim of differential remuneration is to

encourage crop diversification.

• The Prime Minister of India announced that the Centre has now taken full responsibility and

decided to procure 75% of the supplies from manufacturers and distribute it for free to

vaccinate individuals over the age of 18 from Jun 21, 2021. Private hospitals can continue to

procure 25% from vaccine makers. He went on to say that service prices for private hospitals

have been set at Rs. 150 per dose.

• The Union Cabinet has approved the allotment of 5 MHz spectrum in 700 MHz band to

Indian Railways. The objective of the move is to enhance the safety and security of train

operations. The estimated investment of the total project is more than Rs. 25,000 crore and

the project is expected to be completed in next 5 years.

Regulatory Updates in India

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• The Reserve Bank of India has allowed banks to charge more for cash and non-cash ATM

transactions beyond free monthly permissible limit from next year. If bank customers

surpass their monthly limit of free transactions, they would have to pay Rs. 21 instead of

Rs. 20 each transaction starting Jan 1, 2022. Customers will, however, continue to be

entitled for five free transactions per month from their own bank ATMs. They would also

be able to make three free transactions from other bank ATMs in metro areas and five free

transactions in non-metro areas. In addition, beginning Aug 1, 2021, banks in all locations

will be able to boost interchange fees from Rs. 15 to Rs. 17 for financial transactions and

from Rs. 5 to Rs. 6 for non-financial transactions.

• The Reserve Bank of India (RBI) has declared that it will allow operational flexibility for

reporting over-the-counter (OTC) transactions in Government securities (G-Sec) by Foreign

Portfolio Investors (FPIs). The new regulations is effective from Jun 14, 2021.

• The Reserve Bank of India has instructed banks to save CCTV recordings of their branches

and cash chests from Nov 8, 2016 to Dec 30,2016, or until further directives, in order to

help law enforcement agencies prosecute people who engaged in criminal acts during the

demonetisation period.

Regulatory Updates in India (contd..)

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• According to the Labor Department, U.S. consumer prices rose more than expected by

0.6% in May 2021 following 0.8% rise in Apr 2021. Core consumer prices rose 0.7% in May

2021 following 0.9% rise in Apr 2021.

• The European Central Bank left main refi rate unchanged at record low 0% and the deposit

rate also unchanged at -0.50%. The lending rate was held steady at 0.25%. The

policymakers weigh the prospect of tapering stimulus as the euro area economy revs up

amid a rapid decline in the coronavirus infections and a faster vaccine roll-out. The bank

maintained its interest rate forward guidance, stating that key interest rates are expected

to remain at current or lower levels until the inflation outlook strongly converges to a level

"near to, but below, 2%."

• According to data from the Eurostat, eurozone Gross Domestic Product (GDP) fell 0.3%

sequentially in the quarter ended Mar 2021 following 0.6% fall in quarter ended Dec 2021.

On a yearly basis, GDP fell 1.3% in quarter ended Mar 2021 as against 4.7% fall in the

previous quarter.

• According to data from the Cabinet Office, Japan’s Gross Domestic Product (GDP) fell 3.9%

YoY in the quarter ended Mar 2021 following 11.7% rise in the previous quarter. On a

quarterly basis, GDP fell 1% in quarter ended Mar 2021 following 2.8% increase in the

previous quarter.

• Data from the National Bureau of Statistics showed that China's consumer price inflation

rose 1.3% on a yearly basis in May 2021 following a 0.9% rise in Apr 2021.

Global News/Economy

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Global Indices

Indices

11-Jun-21

1-Week

Return

YTD

Return

Russell 3000

2,112.35 1.94% 8.18%

Nasdaq 100

13,998.30 1.65% 8.61%

FTSE 100

7,134.06 0.92% 10.43%

DAX Index

15,693.27 0.00% 14.39%

Nikkei Average

28,948.73 0.02% 5.48%

Straits Times

3,157.97 0.22% 11.05%

Source: Refinitiv

Value as on Jun 11,

2021

U.S.

• Majority of the U.S. markets went up

following reports of higher-than-expected

increase in consumer prices in May.

• Investors are considering a significant

degree of this inflation as transitory with

nearly half of the above-average spike in

inflation coming from the base effects of

last year’s weakened economy.

Europe

• European markets largely closed in the green after revised euro zone growth data showed

that the region’s economy contracted by much less than expected in the first quarter of

2021. Buying interest found support from stock specific movements, with the latest

quarterly results and other corporate news providing some direction.

Asia

• Asian markets witnessed a mixed trend during the week as concerns raised from the

passage of a set of laws by the U.S. Senator to boost its ability to compete with Chinese

technology was neutralized by reports of China and U.S. holding talks on economic issues

for a third time in two weeks.

Global Equity Markets

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• Yields on the 10-year U.S. Treasury fell 10

bps to close at 1.46%, from the previous

week’s close of 1.56%.

• U.S. Treasury prices rose initially during

the week under review after a report

showed small business owners in U.S. less

confident. Market participants also

awaited more details about the outlook

for inflation and the results of upcoming

government bond auctions.

• U.S. Treasury prices rose further on

anticipation that the U.S. Federal Reserve

will maintain its accommodative stance on

monetary policy even though consumer

price index based inflation rose in May

2021.

• Market participants also deemed the

recent increase in inflation in U.S. to be

transitory.

Global Debt (U.S.)

1.40

1.50

1.60

7-Jun 8-Jun 9-Jun 10-Jun 11-Jun

US 10-Year Treasury Yield Movement

Source: Refinitiv

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Performance of various commodities

Commodities

Last Closing*

1-Week Ago

Brent Crude($/Barrel)

71.56 70.68

Gold ($/Oz)

1876.64 1889.97

Gold (Rs/10 gm)

48872 48403

Silver ($/Oz)

27.89 27.78

Silver (Rs/Kg)

72336 70337

Source: Refinitiv *

Value as on Jun 11, 2021

Gold

• Gold prices edged lower as the U.S. dollar

held steady with some investors betting on

rising U.S. consumer prices being temporary.

Meanwhile, investors focused on Fed’s June

15-16 policy meeting.

Brent Crude

• Brent crude prices rose on optimism for

strong economic demand after initial jobless

claims in U.S. for the week ended Jun 5,

2021 fell to their lowest since the country’s

first wave of COVID-19 last year. Oil prices

found additional support as prospect of oil

supplies returning from Iran faded.

Baltic Dry Index

• The index rose during the week due to

improved capesize and panamax activities.

Commodities Market

9.50

10.00

10.50

11-May-21 27-May-21

Global Commodity Movement

Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)

Global

Commodity Prices

Rebased to 10

Source: Refinitiv

0.40%

1.25%

-0.71%

11-Jun-21

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Movement of Rupee vs Other Currencies

Currency

Last Closing*

1-Wk Ago

US Dollar

72.98 73.03

Pound Sterling

103.51 102.96

EURO

88.98 88.45

100 Yen

66.70 66.25

Source: Refinitiv Figures in INR , *

Value as on Jun 11,

2021

Rupee

• The Indian rupee rose against the U.S. dollar on

greenback demand from corporate and

importers and a fall in U.S. Treasury yields.

Euro

• The euro fell against the U.S. dollar as market

participants expect interest rates would stay

lower for longer in Europe after the European

central bank policy review on Thursday.

Pound

• Pound declined against the U.S. dollar as

market participants expect interest rates would

stay lower for longer in U.K while post-Brexit

trade troubles over Northern Ireland also

soured the mood.

Yen

• Yen eased against the U.S. dollar with market

participants shifted their attention to European

central bank policy review that stuck to its

dovish stance.

Currencies Markets

9.70

9.90

10.10

11-May-21 27-May-21

USD GBP Euro JPY

Source: Refinitiv

Currency

Prices (

in terms of INR)

Rebased to 10

Currency Movement

-0.06%

0.61%

0.53%

0.68%

11-Jun-21

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The Week that was…

June to 11

June

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The Week that was (Jun 7 – Jun 11)

Date Events

Present

Value

Monday,

June 07, 2021

• Japan Gross Domestic Product (QoQ)(Q1)

-1.00% -1.30%

• Germany Factory Orders (MoM)(Apr)

-0.20% 3.90%

• China Trade Balance (USD) (May)

45.53B 42.85B

Tuesday,

June 08, 2021

• Eurozone Gross Domestic Product (QoQ)(Q1)

-0.30% -0.60%

• Germany Industrial Production (MoM)(Apr)

-1.00% 2.20%

• Eurozone ZEW Survey

– Economic Sentiment(Jun) 81.30 84.00

• U.S. Goods and Services Trade Balance (USD) (Apr)

-68.9B -75B

Wednesday,

June 09, 2021

• China Consumer Price Index (YoY)(May)

1.30% 0.90%

• Germany Trade Balance (Euro) (Apr)

15.9B 14B

Thursday

June 10, 2021

• U.S. Consumer Price Index (YoY) (May)

5.00% 4.20%

• U.S. Initial Jobless Claims(Jun 4)

376K 385K

Friday,

June 11, 2021

• U.K. Manufacturing Production (MoM)(Apr)

-0.30% 2.10%

• U.K. Industrial Production (MoM)(Apr)

-1.30% 1.80%

• U.K. Gross Domestic Product (MoM)(Apr)

2.30% 2.10%

• India Index of Industrial Production (Apr)

134.40% 22.40%

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.

The Week Ahead

Jun to 18

Jun

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Day Event

Monday,

Jun 14, 2021

•

Japan Industrial Production (YoY)(Apr)

•

Eurozone Industrial Production (MoM)(Apr)

•

India Retail price Inflation (May)

Tuesday,

Jun 15, 2021

•

U.K. ILO Unemployment Rate (3M)(Apr)

•

Germany Harmonized Index of Consumer Prices (YoY)(May)

•

U.S. Retail Sales (MoM)

•

Japan Merchandise Trade Balance Total(May)

Wednesday,

Jun 16, 2021

•

U.S. Federal Reserve Interest Rate Decison

•

China Retail Sales (YoY)(May)

•

U.K. Consumer Price Index (YoY)(May)

•

U.S. Housing Starts (MoM)(May)

Thursday,

Jun 17, 2021

•

Eurozone Consumer Price Index (MoM)(May)

•

Japan National Consumer Price Index (YoY) (May)

Friday,

Jun 18, 2021

•

Bank of Japan Interest Rate Decision

•

U.K. Retail Sales (YoY)(May)

•

Germany Producer Price Index (MoM)(May)

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

assures the accuracy or authenticity of such data and information. Some of the statements & assertions contained in these materials may reflect NAM

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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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