Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
NEWS U CAN USE
June 19, 2020
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
The Week that was…
15
th
Jun to 19
th
Jun
2
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
Indian Economy
• According to the data released by the Commerce and Industry Ministry, India’s trade
deficit contracted for the fourth consecutive month in May 2020 as imports plunged faster
than exports. Trade deficit fell to $3.15 billion in May 2020 from $15.36 billion in the same
month previous year. Export fell 36.47% YoY to $19.05 billion while imports plunged
51.05% to $22.20 billion in May 2020.
• Wholesale price index fell 3.2% YoY in May 2020 compared with 2.79% rise in May 2019.
Contraction could be attributed to fall in demand amid an economic hit in the wake of the
COVID-19 pandemic. Among sub-categories, food items rose 1.13% while fuel and power
prices fell 19.83% in May 2020.
• A global rating agency revised its outlook on India's sovereign ratings from ‘Stable’ to
‘Negative’. The reason behind the downgrade is a weakened growth outlook and
challenges from a high public debt burden due to the COVID-19 pandemic. The global
rating agency retained its rating at ‘BBB-‘, the lowest investment grade.
• According to the RBI’s weekly supplement India’s foreign reserves rose by $5.9 billion to a
record high of $507.6 billion in the week ending June 12. One of the major reasons behind
the rise in foreign reserves is the high foreign investments that the country is receiving.
Foreign reserves crossed the $500 billion mark in the week ending June 5.
3
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
4
Domestic Equity Market Indices
Indices 19-Jun-20 1 Week Return YTD Return
S&P BSE Sensex
34,731.73 2.81% -15.81%
Nifty 50
10,244.40 2.72% -15.81%
S&P BSE Mid-Cap
12,803.84 1.62% -14.46%
S&P BSE Small-Cap
12,277.11 3.65% -10.38%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
15-Jun-20 923 973 0.95
16-Jun-20 847 1,036 0.82
17-Jun-20 1,027 838 1.23
18-Jun-20 1,407 455 3.09
19-Jun-20 1,295 584 2.22
Source: NSE
• Indian equity markets ended the week
on a positive note, despite lingering
concerns over second wave of COVID-
19 infections, which sent jitters across
global stock markets. Additionally,
renewed signs of geo-political tension
between India and China at the Ladakh
border kept investors on the sidelines.
• Meanwhile, positive vibes, which
ultimately helped the markets to close
in the green include U.S. Federal
Reserve's expanded bond-buying
programme, which led to expectation
of higher foreign fund inflow in the
domestic market. Buying interest found
additional support after the
government told the Supreme Court it
was withdrawing 96% of the demands
for outstanding telecom dues that it
had raised against some state-run
firms.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
22.11 25.49 25.80 130.86
P/B
2.61 2.92 2.03 1.80
Dividend Yield
1.06 1.49 1.31 1.28
Source: BSE, NSE Va
lue as on Jun 19, 2020
Indian Equity Market
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
S&P BSE Auto
15,004.5 1.04% 20.50%
S&P BSE Bankex
24,243.4 3.17% 20.57%
S&P BSE CD
20,392.2 -0.26% 14.88%
S&P BSE CG
12,564.1 -0.17% 14.66%
S&P BSE FMCG
10,753.9 -1.22% 7.07%
S&P BSE HC
16,208.3 0.49% 8.90%
S&P BSE IT
14,539.6 1.17% 6.94%
S&P BSE Metal
7,228.2 1.54% 17.90%
S&P BSE Oil & Gas
12,888.8 2.87% 19.57%
Source:
Refinitiv *Value as on Jun 19, 2020
• On the BSE sectoral front, S&P BSE Realty was
the top gainer, up 3.70%, followed by S&P BSE
Bankex and S&P BSE Oil & Gas, which rose
3.17% and 2.87%, respectively.
• Realty sector rose on hopes of attracting huge
capital from investors post COVID-19 as the
sector embraces PropTech to improve the way
properties are bought, sold or rented.
Meanwhile, S&P BSE FMCG, S&P BSE
Consumer Durables and S&P BSE Capital
Goods were the only loser, down 1.22%,
0.26% and 0.17%, respectively.
Indian Derivatives Market Review
• Nifty Jun 2020 Futures stood at 10,235.55, a discount of 8.85 points below the spot closing
of 10,244.40. The total turnover on NSE’s Futures and Options segment for the week stood
at Rs. 90.53 lakh crore as against Rs. 85.89 lakh crore for the week to Jun 12.
• The Put-Call ratio stood at 0.72 compared with the previous session’s close of 0.87.
• The Nifty Put-Call ratio stood at 1.56 compared with the previous session’s close of 1.47.
Indian Equity Market (contd.)
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
6
Debt Indicators
(%)
Current
Value
1-Wk
Ago
1-Mth
Ago
6-Mth
Ago
Call Rate
3.63 3.54 3.92 4.99
91 Day T-Bill
3.28 3.35 3.37 5.02
07.32% 2024, (5 Yr GOI)
4.90 4.97 5.05 6.51
05.79% 2030, (10 YrGOI)
5.85 5.80 5.75 --
Source: Refinitiv Value as on Jun 19, 2020
• Bond yields rose following geo-
political tension between India and
China and on concerns over excess
supply of sovereign debt. Investors
also awaited measures from Reserve
Bank of India to help absorb the heavy
supply of sovereign debt, as well as
policy easing.
• However, value buying by investors
and ease in geo-political tension
between India and China to some
extent towards the end of the week
restricted the losses to some extent.
• Yield on the new 10-year benchmark
paper (5.79% GS 2030) rose 5 bps to
close at 5.85% from the previous
week’s close of 5.80% after moving in
a range of 5.78% to 5.86%.
Domestic Debt Market
5.75
5.80
5.85
15-Jun 16-Jun 17-Jun 18-Jun 19-Jun
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
7
Maturity
G-Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 3.78 5.62 184
3 Year 4.57 6.18 161
5 Year 5.47 6.68 121
10 Year 5.94 7.16 122
Source: Refinitiv Value as on
Jun 19, 2020
• Yields on gilt securities rose by up to 5 bps
on 2-, 10-, 13-, 14- & 30-year papers while
12- & 19-year papers were flat. Remaining
securities fell by up to 7 bps.
• Corporate bond yields dropped in the
range of 2 to 37 bps up across the curve,
barring 8- & 9-year papers that rose 1 bps
each.
• Spread between AAA corporate bond and
gilt contracted in the range of 5 to 35 bps
across the segments barring 2- & 7-year
papers that expanded 1 bps each. Spread
fell the most on 15-year paper.
• .
Domestic Debt Market (Spread Analysis)
-8
-3
2
7
3.00
4.40
5.80
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 19-Jun-20 12-Jun-20
Yield in %
Change in bps
Source: Refinitiv
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
8
• According to a circular by the ministry of corporate affairs, the government has allowed a
seven month relaxation for filings relating to creation or modification of charges on debt
instruments created on March 1, 2020 under the Companies Act, 2013. This is a major relief
to companies that raised funds via the debt route.
• The Central Board of Indirect Taxes and Customs (CBIC) launched 'e-Office' in over 500 GST
and customs offices. This application is expected to help improve governance by automating
the internal processes of handling files, which is currently handled manually.
• The Authority for Advance Ruling said, a domestic company purchasing goods outside India
and selling to another country will be levied goods and services ta (GST) on such transactions
even if the said products are not entering the Indian territory.
• The Authority for Advance Ruling said, the value of exempted income, like interest on PPF,
savings bank account and loans given to family/friends, will be included along with taxable
supplies while calculating the threshold limit for obtaining GST registration.
• Finance Minister announced the plans to launch ‘Garib Kalyan Rojgar Abhiyaan’ to provide
employment opportunities to over 60 lakh migrant workers in six states through
government schemes in the next four months. The government has decided to frontload
expenditure of Rs. 50,000 crore in next 125 days towards 25 areas of work in 116 districts
spread across six states.
Regulatory Updates in India
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
9
• According to media reports, Supreme Court has sought the response of the central
government and the Insurance Regulatory and Development Authority of India (IRDAI) on
a plea seeking directions to insurance companies to provide medical insurance coverage
for treatment of mental illness.
• According to media reports, IRDAI, in a fresh set of guidelines, stated that health insurance
companies will not be allowed to contest claims in case the premium has been paid for a
consecutive period of 8 years. The objective of this guideline is to standardise the general
terms and clauses incorporated in indemnity-based health insurance (excluding personal
accident and domestic/overseas travel) products. Accordingly, the policy contracts of the
existing health insurance products that are not in compliance with these guidelines shall
be modified as and when they are due for renewal from Apr 1, 2021 onwards.
• Based on the recommendations of the 15th Finance Commission, the finance ministry
released Rs. 15,187 crore to 28 states as grants to rural local bodies. The amount would
enable the rural local bodies to fight the coronavirus pandemic and restart economic
activities, ministry added.
Regulatory Updates in India (contd..)
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
• The U.S. Federal Reserve announced that it will start buying corporate bonds on the top of
exchange traded funds which it already is buying. The objective of the move is to provide
support to the functioning of markets and ease credit conditions.
• The U.S. Federal Reserve chief acknowledged signs of improvement in the U.S. economy
during congressional testimony which is attributed to easing of restrictions on coronavirus
lockdowns. However, the central bank chief warned that there is significant uncertainty
over the economic outlook as the spread of the coronavirus infection is yet to be fully
contained.
• The Bank of England kept interest rates on hold in its monetary policy review. However, it
announced additional quantitative easing to provide support to the economy that has
been hit by the COVID-19 pandemic. The Monetary Policy Committee decided to increase
the size of the asset purchase program by £100 billion to £745 billion.
• The Bank of Japan kept interest rates on hold in its monetary policy review and expanded
the size of the coronavirus lending program to ¥110 trillion from ¥75 trillion to lend
support to the economy which has been reeling under the COVID-19 pandemic.
• Data from the U.S. Labour Department showed that initial jobless claims for the week
ended Jun 13 fell by 58,000 to 1.508 million from the previous week's upwardly revised
level of 1.566 million (1.542 million originally reported for the previous week).
10
Global News/Economy
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
11
Global Indices
Indices
19-Jun-20
1-Week
Return
YTD
Return
Russell 3000 1,528.79 3.12% 7.20%
Nasdaq 100 10,008.64 3.57% 14.61%
FTSE 100 6,292.60 3.07% -16.57%
DAX Index 12,330.76 3.19% -6.93%
Nikkei Average 22,478.79 0.78% -4.98%
Straits Times 2,634.83 -1.86% -18.24%
Source: Refinitiv Value as on Jun 19, 2020
U.S.
• U.S. markets traded higher led by U.S.
Federal Reserve announcement on
plans to buy up to $750 million worth of
broad and diversified portfolio of
corporate bonds. Investors also took
positive cues from upbeat U.S. retail
sales in May 2020, as stores began to
reopen following the coronavirus
lockdown.
Europe
• European markets too witnessed buying spree after the U.S. Federal Reserve expanded its
bond-buying program. Further, the Bank of England expanded its quantitative easing
program in a bid to shore up the U.K. economy.
Asia
• Asian markets largely joined the global rally with investor sentiments buoyed by U.S.
Federal Reserve’s expanded bond-buying programme. Buying interest found additional
support as nations round the world ramped up efforts to contain a coronavirus outbreak
that has led to widespread fears of greater contagion.
Global Equity Markets
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
12
• Yields on the 10-year U.S. Treasury
closed unchanged at 0.70% compared
to the previous week’s close.
• U.S. Treasury prices fell initially during
the week after the U.S. Federal Reserve
said it would expand its purchases of
corporate bonds, thus boosting risk
appetite. Record rise in U.S. retail sales
in May 2020 also led to fall in Treasury
prices.
• However, the trend reversed in the mid-
week as the safe-haven appeal of U.S.
Treasuries improved on concerns about
new outbreaks of the coronavirus
infection cases in several U.S. states.
• All the gains were neutralized in the
penultimate day of the week as U.S.
Treasury prices fell following reports
that China will speed up purchases of
U.S. farm goods.
Global Debt (U.S.)
0.68
0.70
0.72
0.73
0.75
15-Jun 16-Jun 17-Jun 18-Jun 19-Jun
Yield in %
US 10-Year Treasury Yield
Movement
Source: Refinitiv
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
13
Performance of various commodities
Commodities
Last Closing* 1-Week Ago
Brent Crude($/Barrel)
43.48 38.89
Gold ($/Oz)
1,742.84 1,729.77
Gold (Rs/10 gm)
#
47,519 47,337
Silver ($/Oz)
17.60 17.44
Silver (Rs/Kg)
#
48,069 47,705
Source: Refinitiv *Value as on Jun 19, 2020
Gold
• Gold prices rose as its safe haven appeal
improved on concerns over a second
wave of coronavirus infections.
Brent Crude
• Brent crude prices rose after the
International Energy Agency (IEA)
increased its oil demand forecast for
2020 to 91.7 million barrels per day,
500,000 bpd higher than its estimate in
May’s report. However, concerns over a
second wave of lockdowns from rising
coronavirus infection rates capped the
gains.
Baltic Dry Index
• The Baltic Dry Index rose due to
improved capesize and panamax
activities.
Commodities Market
9.30
10.80
12.30
13.80
19-May-20 29-May-20 8-Jun-20 18-Jun-20
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
Source: Refinitiv
0.92%
11.80%
0.76%
19-Jun-20
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
14
Movement of Rupee vs Other Currencies
Currency Last Closing* 1-Wk Ago
US Dollar
76.21 75.97
Pound Sterling
94.79 95.56
EURO
85.42 85.87
100 Yen
71.27 70.89
Source: Refinitiv Figures in INR , *Value as on Jun 19, 2020
Rupee
• The rupee weakened against the
greenback amid escalating geopolitical
tensions between U.S. and China.
Euro
• The euro weakened as concerns over a
second wave of coronavirus infection
cases in U.S. and China boosted demand
of the safe haven greenback.
Pound
• The pound weakened against the
greenback after Bank of England
decided to increase the size of the asset
purchase program.
Yen
• The yen rose against the greenback as its
safe haven appeal improved on concerns
over a second wave of coronavirus
infection cases in U.S. and China.
Currencies Markets
9.70
9.90
10.10
10.30
10.50
19-May-20 29-May-20 8-Jun-20 18-Jun-20
USD GBP Euro JPY
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
-0.81%
0.32%
0.54%
-0.53%
Source: Refinitiv
19-Jun-20
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
15
The Week that was…
15
th
Jun to 19
th
Jun
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
16
The Week that was (Jun 15 – Jun 19)
Date Events Present Value Previous Value
Monday,
June 15, 2020
• China Fixed Asset Investment (YTD) (YoY) (May) -6.3% -10.3%
• China Industrial Production (YoY) (May) 4.4% 3.9%
• China Retail Sales (YoY) (May) -2.8% -7.5%
• New York Empire State Manufacturing Index (Jun) -0.2 -48.5
Tuesday,
June 16, 2020
• U.K. ILO Unemployment Rate (3M) (Apr) 3.9% 3.9%
• Bank of Japan Interest Rate Decision -0.1% -0.1%
• Euro Zone ZEW Survey -
Economic Sentiment (Jun)
58.6 46.0
• U.S. Retail Sales (MoM) (May) 17.7% -14.7%
• U.S. Industrial Production (MoM) (May) 1.4% -12.5%
• U.S. Capacity Utilization (May) 64.8% 64.0%
Wednesday,
June 17, 2020
• U.K. Consumer Price Index (MoM) (May) 0.0% -0.2%
• Euro Zone Consumer Price Index (MoM) (May) -0.1% 0.3%
• U.S. Building Permits Change (May) 14.4% -21.4%
• U.S. Housing Starts Change (May) 4.3% -26.4%
Wednesday,
June 18, 2020
• Bank of England Asset Purchase Facility (Jun) £745 B £645 B
• U.S. Initial Jobless Claims (Jun 12) 1508 K 1566 K
Friday,
June 19, 2020
• U.K. Retail Sales (MoM) (May) 12.0% -18.0%
• U.K. Retail Sales (YoY) (May) -13.1% -22.7%
• Germany Producer Price Index (MoM) (May) -0.4% -0.7%
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
17
The Week Ahead
22
nd
Jun to 26
th
Jun
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
18
Day Event
Monday,
Jun 22, 2020
• People's Bank of China Interest Rate Decision
• U.S. Existing Home Sales Change (MoM) (May)
• U.S. Chicago Fed National Activity Index (May)
Tuesday,
Jun 23, 2020
• Japan Jibun Bank Manufacturing PMI (Jun) (P)
• Euro Zone Markit Manufacturing PMI (Jun) (P)
• U.K. Markit Manufacturing PMI(Jun) (P)
• U.S. Markit Manufacturing PMI(Jun) (P)
Wednesday,
Jun 24, 2020
• Japan Leading Economic Index (Apr)
• Germany IFO - Business Climate (Jun)
• U.S. Housing Price Index (MoM) (Apr)
Thursday,
Jun 25, 2020
• U.S. Initial Jobless Claims (Jun 19)
• U.S. Durable Goods Orders (May)
• U.S. Gross Domestic Product Annualized (Q1)
• Germany Gfk Consumer Confidence Survey (Jul)
Friday,
Jun 26, 2020
• U.S. Personal Income (MoM) (May)
• U.S. Personal Spending (May)
• U.S. Michigan Consumer Sentiment Index (Jun)
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) (formerly Reliance Nippon Life Asset Management Limited) 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, affiliates 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 not intended to be an offer or solicitation for the purchase or sale
of any financial product or instrument. Recipients of this information should rely on information/data arising out of their own investigations. Before
making any investments, the readers are advised to seek independent professional advice, verify the contents in order to arrive at an informed
investment decision. None of the Sponsor(s), the Investment Manager, the Trustee, their respective directors, employees, affiliates or
representatives shall be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including on
account of lost profits arising from the information contained in this material.
All information contained in this document has been obtained by ICRA Analytics Limited from sources believed by it to be accurate and reliable.
Although reasonable care has been taken to ensure that the information herein is true, such information is provided ‘as is’ without any warranty of
any kind, and ICRA Analytics Limited or its affiliates or group companies and its respective directors, officers, or employees in particular, makes no
representation or warranty, express or implied, as to the accuracy, suitability, reliability, timelines or completeness of any such information. All
information contained herein must be construed solely as statements of opinion, and ICRA Analytics Limited, or its affiliates or group companies and
its respective directors, officers, or employees shall not be liable for any losses or injury, liability or damage of any kind incurred from and arising out
of any use of this document or its contents in any manner, whatsoever. Opinions expressed in this document are not the opinions of our holding
company, ICRA Limited (ICRA), and should not be construed as any indication of credit rating or grading of ICRA for any instruments that have been
issued or are to be issued by any entity.
19
Disclaimer
Thank you for
your time.
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
Thank you for
your time.
