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NEWS U CAN USE
June 18, 2021
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The Week that was…
14
th
June to 18
th
June
2
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Indian Economy
• Government data showed that the Consumer Price Index based inflation (CPI) rose to
6.30% in May 2021 from 4.23% in Apr 2021. Inflation, based on CPI, has breached the
Reserve Bank of India's (RBI) target range for the first time after five months. The
Consumer Food Price Index also rose to 5.01% in May 2021 from 1.96% in the previous
month.
• Government data showed that the Wholesale Price Index (WPI) based inflation surged to
12.94% on a yearly basis in May 2021 from 10.49% in the previous month and 7.89% in Mar
2021. WPI inflation in the same period of the previous year stood at -3.37%. The WPI Food
Index also surged to 8.11% in May 2021 from 7.58% in the previous month and 5.63% in
Mar 2021. WPI based rate of inflation for crude petroleum and natural gas over the year
stood at 56.06% compared to the same period of the previous year when the same stood
at -37.45%. WPI inflation for manufactured products stood at 10.83% in May 2021
compared to the same period of the previous year when the same stood at -0.34%.
• Government data showed that India’s trade deficit widened to $6.28 billion in May 2021
from $3.15 billion in May 2020 which corresponds to an increase of 99.61%. Exports grew
69.35% on a yearly basis $32.27 billion in May 2021 from $19.05 billion in the same period
of the previous year. Imports rose 73.64% over the year to $38.55 billion in May 2021 from
$22.20 billion in the same period of the previous year. Oil imports in May 2021 stood at
$9.45 billion which was higher by 171.10% in dollar terms compared to May 2020. Non-oil
imports were estimated at $29.10 billion in May 2021 which was 55.48% higher in dollar
terms compared to the same period of the previous year.
3
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4
Domestic Equity Market Indices
Indices 18-Jun-21 1 Week Return YTD Return
S&P BSE Sensex
52,344.45 -0.25% 9.62%
Nifty 50
15,683.35 -0.73% 12.17%
S&P BSE Mid-Cap
22,238.21 -3.01% 23.95%
S&P BSE Small-Cap
24,648.83 -1.86% 36.20%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
14-Jun-21 899 1,138 0.79
15-Jun-21 1,188 810 1.47
16-Jun-21 726 1,291 0.56
17-Jun-21 687 1,324 0.52
18-Jun-21 565 1,436 0.39
Source: NSE
• Indian equity markets ended the week
with modest losses, largely dragged by
weak cues from the highly anticipated
U.S. Federal Reserve monetary policy
review. Nonetheless, optimism over
economic rebound following easing of
lockdown restrictions continued to
provide underlying support, thereby
restricting the fall.
• Initially a drop in COVID-19 infection
cases and subsequent easing of
lockdown restrictions in many parts of
the country lifted hopes of faster
economic recovery.
• However, gains were erased after the
U.S. Federal Reserve indicated that it
may start raising interest rates in 2023,
a year earlier than expected.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
32.75 29.08 44.22 47.87
P/B
3.32 4.32 3.08 3.15
Dividend Yield
0.96 1.24 0.92 0.81
Source: BSE, NSE Va
lue as on Jun 18, 2021
Indian Equity Market
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5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
S&P BSE Auto
23,386.00 -3.00% 0.95%
S&P BSE Bankex
39,177.92 -1.39% 1.68%
S&P BSE CD
35,285.33 -0.27% 8.59%
S&P BSE CG
22,182.89 -3.21% 0.98%
S&P BSE FMCG
13,503.49 1.55% 4.14%
S&P BSE HC
24,765.04 -2.75% 2.59%
S&P BSE IT
29,146.47 1.57% 9.69%
S&P BSE Metal
18,058.59 -7.04% -7.09%
S&P BSE Oil & Gas
16,866.45 -1.57% 6.00%
Source: Refinitiv *Value as on Jun 18, 2021
• On the BSE sectoral front, majority of the
indices closed in the red. S&P BSE Power was
the major loser, down 8.69%, followed by S&P
BSE Metal and S&P BSE Realty, which fell
7.04% and 3.72%, respectively. Power sectors
were hit amid concerns over increasing trend
of state governments trying to cancel or
renegotiate the contracts including the Power
Purchase Agreements (PPAs) that were
finalised after a proper bidding process. Such
trend has the potential to derail India’s long-
term journey towards the green economy as it
could erode the confidence of investors.
Indian Derivatives Market Review
• Nifty Jun 2021 Futures stood at 15,696.70, a premium of 13.35 points above the spot
closing of 15,683.35. The total turnover on NSE’s Futures and Options segment for the
week stood at Rs. 242.76 lakh crore as against Rs. 226.25 lakh crore for the week to Jun 11.
• The Put-Call ratio stood at 0.92 compared with the previous week’s close of 0.85.
• The Nifty Put-Call ratio stood at 1.18 compared with the previous week’s close of 1.35.
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 3.10 3.11 3.22
91 Day T-Bill
3.48 3.41 3.38 3.11
05.22% 2025, (5 Yr GOI)
5.41 5.26 5.37 5.05
05.85% 2030, (10 Yr GOI)
6.01 6.01 5.98 5.91
Source: Refinitiv Value as on Jun 18, 2021
• Bond yields rose initially following a
sharp spike in retail inflation for May
2021. Increase in global crude oil prices
also contributed to the downside.
However, losses were neutralized, and
bond yields closed steady as purchase of
government securities by the RBI
boosted market sentiments to some
extent.
• Yield on the 10-year benchmark paper
(5.85% GS 2030) closed unchanged at
6.01%, same as that of the previous
week.
• Data from RBI showed that India's
foreign exchange reserves rose for a
tenth consecutive week and hit a record
high of $608.08 billion as on Jun 11 from
$605.01 billion in the previous week.
Domestic Debt Market
5.90
5.95
6.00
6.05
14-Jun 15-Jun 16-Jun 17-Jun 18-Jun
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 4.01 4.69 68
3 Year 4.73 5.34 61
5 Year 5.70 6.39 69
10 Year 6.10 7.17 107
Source: Refinitiv Value as on
Jun 18, 2021
• Yields on gilt securities increased across the
maturities by up to 15 bps barring 10-year
paper which closed steady.
• Corporate bond yields increased across the
maturities in the range of 4 bps to 17 bps
barring 15-year paper which fell 3 bps.
• Difference in spread between AAA corporate
bond and gilt expanded across the maturities
in the range of 2 bps to 10 bps barring 2, 7
and 15-year paper which contracted in the
range of 3 bps to 11 bps.
Domestic Debt Market (Spread Analysis)
0
6
12
2.80
5.00
7.20
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 19 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 18-Jun-21 11-Jun-21
Yield in %
Change in bps
Source: Refinitiv
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8
• The Goods and Services Tax (GST) Council has decided to retain the GST on COVID-19
vaccines at 5%. However, it temporarily lowered the tax rates on most supplies and also
exempted medications for treating the black fungus. COVID-19 essentials for which tax
rates have been cut includes medicines, oxygen, concentrators, related medical devices,
testing kits, related machines and other relief items.
• Minutes of the Monetary Policy Committee (MPC) Meeting held from Jun 2 to Jun 4 showed
that the six-member MPC advocated to continue with a loose monetary policy in order to
support growth, as the second wave of the COVID-19 pandemic turned out to be more
severe than expected. The committee was also of the view that the inflation wasn’t demand
driven and hence compromising on growth might not be the best policy choice.
• Securities and Exchange Board of India (SEBI) has removed the minimum vesting period
requirement for employee stock option plan (ESOP) in the event of death of an employee.
The measure, according to the regulator, is intended to provide relief to the relatives of
deceased employees of publicly traded companies in the wake of the COVID-19 outbreak.
All such employees who died on or after Apr 1, 2020, would be eligible for this relief.
• SEBI has said that the independent directors will have to give reasoned recommendation
and the promoters need to disclose their intention to delist the firm through an initial public
announcement in order to enhance transparency and efficiency of the delisting process.
Regulatory Updates in India
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9
• SEBI has given BSE Administration and Supervision Ltd (BASL) permission to carry out
investment adviser administration and supervision. SEBI has awarded recognition for three
years, beginning June1,2021, with the renewal conditional on BASL's performance, which
is a subsidiary of the stock market BSE. SEBI further said that all existing SEBI-registered
investment advisors (IA) would be required to join BASL, and new applicants will be
required to join before filing for registration as an IA with the regulator.
• According to a research by the RBI, India's record foreign exchange reserves of more than
USD 600 billion may not be enough, since it falls short on several parameters such as
import cover and liabilities outflows.
• Insurance Regulatory and Development Authority (IRDAI) is looking for a company to run
its multi-media grievance redressal centre, which will handle complaints from insured
people against insurance companies. The IRDAI has established a Consumer Affairs
Department (CAD) to monitor insurers' and intermediaries' compliance with the
Policyholders' Interest Protection Act.
• According to the Chemicals and Fertilizers Minister, the Union Cabinet has approved the
proposal of the Department of Fertilizers for fixation of 'Nutrient Based Subsidy Rates' for
Phosphatic and Potassic (P&K) Fertilizers for FY22.
Regulatory Updates in India (contd..)
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• The U.S. Federal Reserve in its monetary policy announcement kept its interest rates
unchanged at 0 to 0.25%. Also the statement was largely unchanged from the previous
meeting, the central bank's latest projections show an increase in interest rates to 0.6% in
2023. Seven officials expect a rate hike as soon as 2022. Estimates for GDP growth in 2023
was raised to 2.4% from the 2.2% forecast in Mar 2021. Core consumer price inflation is
still expected to increase by 2.1% in 2023.
• The Bank of Japan maintained its massive monetary stimulus and announced the launch of
a new funding program to help with climate change measures, as well as extending the
deadline for the Covid support program. The board kept the interest rate on current
accounts maintained by financial institutions at the central bank at -0.1%. The bank will
continue to buy enough Japanese government bonds without imposing an upper limit,
ensuring that 10-year JGB yields stay around 0%. The bank intends to introduce the new
measures in 2021. The measure's preliminary outline will be revealed during the July
monetary policy meeting.
• According to the Labor Department, U.S. initial jobless claims rose 37,000 to 412,000 in the
week ended Jun 12, 2021 from the previous week's revised level of 375,000.
• According to the Office for National Statistics, U.K. retail sales fell 1.4% MoM in May 2021
as against 9.2% rise in Apr 2021. On a yearly basis, the retail sales rose 24.6% in May as
against 42.4% rise in Apr.
10
Global News/Economy
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11
Global Indices
Indices
18-Jun-21
1-Week
Return
YTD
Return
Russell 3000 2,117.43 0.24% 8.44%
Nasdaq 100 14,049.59 0.37% 9.01%
FTSE 100 7,017.47 -1.63% 8.62%
DAX Index 15,448.04 -1.56% 12.61%
Nikkei Average 28,964.08 0.05% 5.54%
Straits Times 3,144.16 -0.44% 10.56%
Source: Refinitiv Value as on Jun 18, 2021
U.S.
• Majority of the U.S. markets reeled
under selling pressure after the U.S.
Federal Reserve in its monetary policy
review, gave latest economic
projections, which point to a rise in
interest rates to 0.6% in 2023. The fall
was cushioned by gains in technology
and software stocks.
Europe
• European markets largely remained weak as market participants were reluctant to make
significant moves after the U.S. Federal Reserve said it expects interest rates will be hiked
in 2023, a year earlier than expected.
Asia
• Majority of the Asian markets went down with investors reacting negatively after U.S.
Federal Reserve indicated that interest rates will rise sooner than expected. Meanwhile
indications of more policy support from Beijing restricted the fall.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury inched
down 1 bps to close at 1.44%, from the
previous week’s close of 1.45%.
• U.S. Treasury prices fell initially during the
week under review after the U.S. Federal
Reserve policymakers moved up their
projections for commencing interest rates
hikes to 2023 from 2024 as the economy
recovers from the coronavirus pandemic.
• However, the trend reversed, and losses
were made good as a section of market
participants were of the view that the U.S.
Federal Reserve is in no hurry to pare its
asset purchase program even though it
indicated that it may raise interest rates in
2023.
Global Debt (U.S.)
1.40
1.45
1.50
1.55
1.60
14-Jun 15-Jun 16-Jun 17-Jun 18-Jun
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)
73.30 71.56
Gold ($/Oz)
1,763.34 1,876.64
Gold (Rs/10 gm)
47,122 48,872
Silver ($/Oz)
25.79 27.89
Silver (Rs/Kg)
68,675 72,336
Source: Refinitiv *Value as on Jun 18, 2021
Gold
• Gold prices fell sharply as the U.S. dollar
strengthened after the U.S. Federal
Reserve in its monetary policy raised its
expectations for inflation this year and
brought forward the time frame on when it
will next raise interest rate.
Brent Crude
• Brent crude prices rose after data from U.S.
Energy Information Administration
showing that crude inventories in U.S. fell
by 7.4 million barrels in the week ended
Jun 11, 2021. Signs of improving demand
worldwide also contributed to the upside.
However, the upside was restricted by
recent strength in U.S. dollar.
Baltic Dry Index
• The index rose WoW rose due to improved
capesize and panamax activities.
Commodities Market
9.00
9.25
9.50
9.75
10.00
10.25
10.50
10.75
18-May-21 2-Jun-21 17-Jun-21
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
Source: Refinitiv
-7.53%
2.43%
-6.04%
18-Jun-21
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing* 1-Wk Ago
US Dollar
74.14 72.98
Pound Sterling
103.01 103.51
EURO
88.26 88.98
100 Yen
67.35 66.70
Source: Refinitiv Figures in INR , *
Value as on Jun 18, 2021
Rupee
• The rupee weakened against the greenback on
indications that the U.S. Federal Reserve could
raise interest rates earlier than previously
expected.
Euro
• The euro fell against the U.S. dollar after the
U.S. Federal Reserve projected at least two
quarter-point rate hikes for 2023.
Pound
• The pound weakened against the U.S. dollar
amid reports that Britain was to delay its
reopening from COVID-19 lockdown
restrictions by a month and indications that the
U.S. Federal Reserve may raise interest rates
sooner than expected.
Yen
• The yen weakened against the U.S. dollar after
the U.S. Federal Reserve indicated raising
interest rates in 2023.
Currencies Markets
Source: Refinitiv
1.59%
- 0.48%
- 0.81%
0.97%
9.80
9.90
10.00
10.10
10.20
18-May-21 2-Jun-21 17-Jun-21
USD GBP Euro JPY
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
18-Jun-21
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15
The Week that was…
14
th
June to 18
th
June
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16
The Week that was (June 14 – June 18)
Date Events Present Value Previous Value
Monday,
June 14, 2021
• India WPI Inflation (YoY) (May) 12.94% 10.49%
• India CPI Inflation (YoY) (May) 6.30% 4.23%
• Japan Industrial Production (YoY)(Apr) 15.80% 15.40%
• Eurozone Industrial Production (MoM)(Apr) 0.80% 0.40%
Tuesday,
June 15, 2021
• India Balance of Trade Final (May) (USD) -6.28B -15.09B
• U.K. ILO Unemployment Rate (3M)(Apr) 4.70% 4.80%
• Germany Harmonized Index of Consumer Prices (YoY)(May)
2.40% 2.40%
• U.S. Retail Sales (MoM)(May) -1.30% 0.90%
• U.K. Claimant Count Change(May) -92.6K -55.8K
Wednesday,
June 16, 2021
• U.K. Consumer Price Index (YoY)(May) 2.10% 1.50%
• U.S. Housing Starts (MoM)(May) 1.572M 1.517M
• Japan Merchandise Trade Balance Total(May) (Yen) -187.1B 253.1B
• China Retail Sales (YoY)(May) 12.40% 17.70%
Thursday
June 17, 2021
• Eurozone Consumer Price Index (MoM) (May) 0.30% 0.60%
• China House Price Index (May) 4.90% 4.80%
Friday,
June 18, 2021
• Japan National Consumer Price Index (YoY)(May) -0.10% -0.40%
• U.K. Retail Sales (YoY)(May) 24.60% 42.40%
• Germany Producer Price Index (MoM)(May) 1.50% 0.80%
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17
The Week Ahead
21
st
Jun to 25
th
June
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18
Day Event
Monday,
June 21, 2021
• People’s Bank of China Interest Rate Decision
• U.K. Rightmove House Price Index (YoY)(Jun)
Tuesday,
June 22, 2021
• Eurozone Consumer Confidence (Jun) PREL
• U.S. Existing Home Sales (MoM)(May)
Wednesday,
June 23, 2021
• Bank of Japan Monetary Policy Meeting Minutes
• Germany Markit Composite PMI (Jun) PREL
• Eurozone Markit PMI Composite (Jun) PREL
• U.K. Markit Services PMI (Jun) PREL
• U.S. Markit PMI Composite (Jun) PREL
Thursday,
June 24, 2021
• Bank of England Interest Rate Decision
• U.S. Durable Goods Orders (May)
• U.S. Gross Domestic Product Annualized (Q1)
• Germany IFO – Business Climate (Jun)
Friday,
June 25, 2021
• U.K. GfK Consumer Confidence (Jun)
• Germany Gfk Consumer Confidence Survey (Jul)
• U.S. Personal Income (MoM)(May)
• U.S. Personal Spending (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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