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NEWS U CAN USE
June 12, 2020
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The Week that was…
08
th
June to 12
th
June
2
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Indian Economy
• India's Index of industrial production (IIP) plunged 55.5% YoY in Apr 2020, record low since
ever. Manufacturing sector, which accounts for 78% cent of the IIP, fell 64.26% and mining
and electricity sector fell 27.37% and 22.59%, respectively, in Apr 2020. However, as
stated by Ministry of Statistics & Programme Implementation, in the view of nation-wide
lockdown by the government to contain spread of coronavirus pandemic during the
month majority of the industrial sector establishments were not operating from the end
of Mar 2020 onwards. Thus, it is not appropriate to compare the IIP of Apr 2020 with
earlier months.
• Government d
ata showed that the consumer food price index (CFPI) for the month of May
2020 for Rural, Urban and Combined sector are 9.69%, 8.36% and 9.28%, respectively. This
is the second consecutive month that the government did not release the overall retail
inflation data owing to the nationwide lockdown to reduce the spread of the novel
coronavirus.
• The R
eserve Bank of India (RBI) will conduct a “switch auction” on 15th Jun 2020, where
the central bank will attempt to replace sovereign bonds worth Rs. 27,000 crore maturing
in next two financial years with that of longer dated ones. This will help government to
manage market borrowing programme extending near term repayments amid an
economic crisis.
3
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4
Domestic Equity Market Indices
Indices
12-Jun-20 1 Week Return YTD Return
S&P BSE Sensex
33,780.89 -1.48% -18.11%
Nifty 50
9,972.90 -1.67% -18.04%
S&P BSE Mid-Cap
12,600.15 0.37% -15.82%
S&P BSE Small-Cap
11,845.27 -0.08% -13.53%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines Advance/Decline Ratio
08-Jun-20 1301 607 2.14
09-Jun-20 773 1135 0.68
10-Jun-20 1155 740 1.56
11-Jun-20 662 1199 0.55
12-Jun-20 952 910 1.05
Source: NSE
• Indian equity markets settled in losses
for the week under review. Initial
cheers following government’s move to
open places of worship, malls and
restaurants waned as concerns over
rising coronavirus cases rekindled.
• Sentiments also dampened as World
Bank projected India’s economy to
contract 3.2% in FY 2021 due to
stringent measures to restrict spread of
covid-19, which brought all business
activities to a grinding halt.
• The benchmark indices slumped as the
dismal economic outlook from the U.S.
Federal Reserve’s latest policy meeting
triggered sell-off. The U.S. central bank
projected a 6.5% decline in U.S. Gross
Domestic Product (GDP) in 2020 and a
9.3% unemployment rate at the year's
end.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
21.24 24.08 24.24 122.66
P/B
2.53 2.84 1.98 1.74
Dividend Yield
1.11 1.53 1.40 1.36
Source: BSE, NSE Va
lue as on Jun 12, 2020
Indian Equity Market
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5
Sectoral Indices
Indices
Last Returns (in %)
Closing* 1-Wk 1-Mth
S&P BSE Auto
14,849.68 -1.07% 14.83%
S&P BSE Bankex
23,498.60 -2.41% 8.93%
S&P BSE CD
20,445.54 -2.03% 11.13%
S&P BSE CG
12,585.21 -2.47% 13.10%
S&P BSE FMCG
10,886.81 -1.34% 8.03%
S&P BSE HC
16,130.05 -0.18% 6.50%
S&P BSE IT
14,371.83 -1.38% 4.02%
S&P BSE Metal
7,118.32 -4.27% 14.03%
S&P BSE Oil & Gas
12,529.62 -0.05% 10.89%
Source:
Refinitiv *Value as on Jun 12, 2020
• On the BSE sectoral front, barring S&P BSE
Realty, all the indices closed in the red. S&P
BSE Metal was the major loser, down 4.27%,
followed by S&P BSE Capital Goods and S&P
BSE Bankex, which slumped 2.47% and 2.41%,
respectively.
• Metal sector remained weak amid concerns
over probable demand slowdown, logistic
constraints and labour shortage resulting
from the ongoing pandemic. Such constraints
are likely to take a toll on the margins of the
steel manufacturers.
Indian Derivatives Market Review
• Nifty Jun 2020 Futures stood at 9,955.35, a discount of 17.55 points below the spot closing
of 9,972.90. The total turnover on NSE’s Futures and Options segment for the week stood
at Rs. 85.89 lakh crore as against Rs. 71.10 lakh crore for the week to Jun 5.
• The Put-Call ratio stood at 0.87 compared with the previous session’s close of 0.81.
• The Nifty Put-Call ratio stood at 1.47 compared with the previous session’s close of 1.50.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-Wk
Ago
1-Mth
Ago
6-Mth
Ago
Call Rate
3.54 3.64 3.79 4.95
91 Day T-Bill
3.35 3.49 3.50 5.12
07.32% 2024, (5 Yr GOI)
4.97 5.01 5.11 6.55
05.79% 2030, (10 Yr GOI)
5.80 5.82 5.82 --
Source: Refinitiv Value as on Jun 12, 2020
• Bond yields fell during the week under
review on expectations that the
Reserve Bank of India (RBI) would
announce open market purchase of
government securities to absorb the
excess supply of sovereign debt in the
market.
• However, absence of any
announcement from RBI to manage
the excess supply of sovereign debt
and profit booking to some extent
capped the gains.
• Yield on the new 10-year benchmark
paper (5.79% GS 2030) fell 2 bps to
close at 5.80% from the previous
week’s close of 5.82% after moving in a
range of 5.76% to 5.86%.
Domestic Debt Market
5.50
5.70
5.90
8-Jun 9-Jun 10-Jun 11-Jun 12-Jun
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year
3.82 5.72 190
3 Year
4.61 6.35 174
5 Year
5.49 6.80 130
10 Year
5.88 7.19 131
Source:
Refinitiv
Value as on
Jun 12, 2020
• Yields on gilt securities fell across
maturities by up to 6 bps barring 2-, 11- to
13- and 15-year papers that rose by up to
3 bps and 1-year paper that stood steady.
• Corporate bond yields fell across
maturities in the range of 5 bps to 32 bps.
• Difference in spread between AAA
corporate bond and gilt contracted across
maturities by up to 35 bps barring 6-year
paper that stood steady.
Domestic Debt Market (Spread Analysis)
-16
-8
0
2.20
4.70
7.20
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 12-Jun-20 05-Jun-20
Yield in %
Change in bps
Source: Refinitiv
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8
• The GST Council agreed to reduce the late fee on the filing of GSTR-3B returns during Jul
2017 to Jan 2020. The council also stated that entities with no tax obligation need not
submit the late fee for the period. For entities with tax liability but which have not filed
returns or have filed returns late, the late fee has been capped at Rs. 500 without interest.
Interest will, however, be payable on the tax component at the applicable rate for delays.
However, in a relief to the small taxpayers with turnover up to Rs. 5 crore, the council halved
the interest on delayed filing of GST returns for Feb, Mar and Apr to 9%, only if the returns
are filed by Sep 2020. The deadline for filing returns for May, Jun and Jul has been extended
till Sep, without any interest or late fee.
• The Reserve Bank of India (RBI) intends to reform Indian banking system's corporate
governance structure by restricting the terms of directors and chief executive officers and
put greater responsibility on the board of directors for the culture and compensation of a
bank. The board of directors would be responsible for the remuneration and the result or
performance and would be accountable for the risk that a bank takes.
• Securities Exchange Board of India (SEBI) eased norms related to fast track further public
offers (FPO). The required average market capitalisation of public shareholding of the
company concerned has now been reduced to Rs. 500 crore from Rs. 1,000 crore. This is
applicable for FPO that open on or before Mar 31, 2021. SEBI had previously relaxed
eligibility conditions related to Fast Track Rights Issue.
Regulatory Updates in India
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9
• The Reserve Bank of India (RBI) has issued new draft frameworks for the sale of loan
exposures and the securitisation of standard assets by banks and NBFIs. RBI has amended
the securitisation definition in the draft guidelines to include single asset securities against
the multiple asset securities permitted in existing standards.
• The Insurance Regulatory and Development Authority of India (IRDAI) has decided to come
out with a mandate that all general and health insurers need to offer a standard individual
COVID-19 health insurance product that will be a COVID-19 specific product which will also
address basic health insurance needs of the public.
• In a move to bring in greater transparency, IRDAI has directed insurers to make public their
underwriting philosophy and approach with regard to insurance coverage for persons with
disabilities, HIV/AIDS and mental illness. The insurers are required to publish the
information on their respective website by Oct 1, 2020.
• IRDAI has issued guidelines on public disclosures, wherein it has directed general and
standalone health insurers to publish quantitative and qualitative data on processing and
settlement of health insurance claims in their websites. As per the guideline, the insurers
transacting health insurance business should disclose the turnaround time for cashless
claims for individual/group policies (pre-authorisation and discharge from hospital) and
settlement or rejection of claims for individual/group/government policies. This is among
the several other data that should be disclosed by the insurers.
Regulatory Updates in India (contd..)
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• According to the Organisation for Economic Cooperation and Development (OECD), global
economic growth is forecasted to contract 6% in 2020 if a second wave of COVID- 19
infections is avoided. In case of a second outbreak of virus triggering a return to
lockdowns, global GDP will fall 7.6%. Global economy is undergoing the deepest recession
since the Great Depression in the 1930s due to COVID-19 pandemic.
• The U.S. F
ederal Reserve (U.S. Fed) kept its widely expected decision to maintain the target
range for the federal funds rate at zero to 0.25%. U.S. Fed indicated that interest rates are
likely to remain at current near-zero levels through 2022. The central bank expects the U.S.
economy to rebound in 2021 following a sharp contraction this year due to the COVID-19
pandemic.
• According to t
he revised estimate by Eurostat, euro area Gross Domestic Product (GDP)
contracted 3.6% QoQ in the Mar quarter of 2020, but slower than the initial estimate of
3.8% fall. Household spending dropped 4.7% QoQ and gross fixed capital formation went
down 4.3%.
• Final re
ading showed Gross Domestic Product (GDP) of Japan was revised downwards to
2.2% YoY in the Mar quarter of 2020 compared with preliminary reading that showed a fall
of 3.4%. In the Q4 2019, upwardly revised 7.2 YoY (originally reported -7.3%).
• Data p
ublished by the National Bureau of Statistics showed, China’s consumer price
inflation slowed to a 14-month low of 2.4% YoY in May 2020 from 3.3% in Apr 2020. Food
prices rose 10.6%, slower than 14.8% rise during the similar comparable period.
10
Global News/Economy
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11
Global Indices
Indices
12-Jun-20
1-Week
Return
YTD
Return
Russell 3000 1,482.50 -3.26% 3.96%
Nasdaq 100 9,663.78 -1.63% 10.66%
FTSE 100 6,105.18 -5.85% -19.06%
DAX Index 11,949.28 -6.99% -9.81%
Nikkei Average 22,305.48 -2.44% -5.71%
Straits Times 2,684.63 -2.43% -16.70%
Source: Refinitiv
Value as on
Jun 12, 2020
U.S.
• U.S. markets traded lower as initial
optimism over speedy recovery
following re-opening of the economy
was overshadowed by concerns about a
second wave of coronavirus cases.
Recent data from the COVID tracking
project has led to worries about
economic reopening following a spike in
infections.
Europe
• European markets witnessed selling pressure after reports showed an increase in new
COVID-19 cases and worries about a deep recession following the U.S. Federal Reserve's
recent comments on the outlook for the U.S. economy.
Asia
• Asian markets were no exception to the global trend, with investors taking weak cues
from the U.S. Federal Reserve’s bleak economic outlook in its latest monetary policy
meeting. The U.S. Fed projected a sharp contraction in the U.S. economy this year due to
the coronavirus pandemic and warned of a long road to recovery.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury
plummeted 21 bps during the week under
review to close at 0.70% from the previous
week’s close of 0.91%. This was the
biggest weekly fall in yields since the week
ended May 22, 2020.
• U.S. Treasury prices rose initially as market
participants resorted to bargain hunting
following a spike in yields in the previous
week after the U.S. nonfarm payroll data
for May 2020 came above market
expectations.
• U.S. Treasury prices rose further after the
U.S. Federal Reserve in its monetary policy
review pledged to continue its asset
purchase in order to provide support to
the U.S. economy. The U.S. Federal
Reserve made no policy changes as
expected and indicated that it would keep
interest rates near zero through 2022.
Global Debt (U.S.)
0.60
0.71
0.82
0.93
8-Jun 9-Jun 10-Jun 11-Jun 12-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($/Barrel) 38.89 40.93
Gold ($/Oz) 1729.77 1685.23
Gold (Rs/10 gm) 47337 46525
Silver ($/Oz) 17.44 17.37
Silver (Rs/Kg) 47705 47781
Source: Refinitiv *Value as on Jun 12, 2020
Gold
• Gold prices edged higher after the U.S.
Federal Reserve in its monetary policy
review indicated that it would keep
interest rates near zero through 2022.
Further the economic outlook of the
central bank prompted investors to go
for the safe haven asset.
Brent Crude
• Brent crude prices fell on concerns over
global growth amid fears over a second
wave of coronavirus infections. Losses
were extended after the U.S. Federal
Reserve projected the U.S. economy to
contract 6.5% in 2020.
Baltic Dry Index
• Baltic Dry Index rose due to improved
capesize and panamax activities.
Commodities Market
9.00
13.00
17.00
12-May-20 28-May-20
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
Source: Refinitiv
0.40%
-4.98%
2.64%
12-Jun-20
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14
Movement of Rupee vs Other Currencies
Currency Last Closing* 1-Wk Ago
US Dollar
75.97 75.47
Pound Sterling
95.56 95.47
EURO
85.87 85.84
100 Yen
70.89 69.03
Source: RBI Figures in INR , *Value as on Jun 12, 2020
Rupee
• The Indian rupee weakened against the
U.S. dollar weighed down by weak growth
outlook by the U.S. Fed.
Euro
• Euro fell against the U.S. dollar as
expectations diminished that the global
economy would recover speedily from the
COVID-19 pandemic.
Pound
• Pound plunged against the U.S. dollar as
weak U.K. economic data and Brexit
related concerns weighed on the currency.
Yen
• Yen rose notably against the U.S. dollar as
safe haven appeal of the currency
improved with diminishing expectations
that the global economy would recover
speedily from the COVID-19 pandemic.
Currencies Markets
9.70
10.10
10.50
12-May-20 28-May-20
USD GBP Euro JPY
Source: Refinitiv
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
12-Jun-20
0.03%
0.10%
2.69%
0.67%
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15
The Week that was…
08
th
June to 12
th
June
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16
The Week that was (Jun 08– Jun 12)
Date Events Present Value
Previous
Value
Monday, Jun
08, 2020
•
Germany Industrial Production (MoM)(Apr) -17.9% -8.9%
• Japan Eco Watchers Survey: Outlook (May) 36.5 16.6
• Eurozone Sentix Investor Confidence (Jun) -24.8 -41.8
Tuesday, Jun
09, 2020
• Eurozone Gross Domestic Product (YoY)(Q1) -3.1% -3.2%
• Germany Trade Balance (Apr) €3.2 B €12.8 B
• Eurozone Employment Change (YoY)(Q1) 0.4% 0.3%
• Japan Machinery Orders (YoY)(Apr) -17.7% -0.7%
• Japan Producer Price Index (YoY)(May) -2.7% -2.4%
Wednesday,
Jun 10, 2020
•
U.S. Federal Reserve Rate Decision 0.3% 0.3%
• China Consumer Price Index (YoY)(May) 2.4% 3.3%
• U.S. Consumer Price Index (YoY)(May) 0.1% 0.3%
• U.K. RICS Housing Price Balance (May) -0.3 -0.2
Thursday, Jun
11, 2020
•
U.S. Producer Price Index (YoY)(May) -0.8% -1.2%
• U.S. Initial Jobless Claims (Jun 5) 1542 K 1897 K
Friday, Jun
12, 2020
•
U.K. Gross Domestic Product (MoM)(Apr) -20.4% -5.8%
• India Index of Industrial Production (Apr 2020) -55.5% -16.7%
• U.S. Michigan Consumer Sentiment Index (Jun) P 78.9 72.3
• Eurozone Industrial Production (YoY)(Apr) -28.0% -13.5%
• Japan Industrial Production (YoY)(Apr) -15.0% -14.4%
• U.K. Industrial Production (MoM)(Apr) -20.3% -4.2%
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17
The Week Ahead
15
th
June to 19
th
June
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18
Day Event
Monday, June
15, 2020
• India Wholesale Price Inflation (Apr & May 2020)
• China Industrial Production (YoY) (May)
• China Retail Sales (YoY) (May)
Tuesday, June
16, 2020
• Japan BoJ Interest Rate Decision
• U.K. ILO Unemployment Rate (3M) (Apr)
• Germany Harmonized Index of Consumer Prices (YoY) (May)
• Eurozone ZEW Survey - Economic Sentiment (Jun)
• U.S. Retail Sales (MoM) (May)
• U.S. NAHB Housing Market Index (Jun)
• Japan Merchandise Trade Balance Total (May)
Wednesday,
June 17, 2020
• U
.K. Consumer Price Index (YoY) (May)
• U.K. Retail Price Index (MoM) (May)
• Eurozone Consumer Price Index (YoY) (May)
Thursday,
June 18, 2020
• U.
K. BoE Interest Rate Decision
• U.S. Initial Jobless Claims (Jun 12)
Fri
day,
June 19, 2020
• U
.K. Retail Sales (YoY) (May)
• Germany Wholesale Price Index (YoY) (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
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19
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