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NEWS U CAN USE
Mar 06, 2020
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The Week that was…
02
nd
Mar to 06
th
Mar
2
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Indian Economy
• The Nikkei India Manufacturing Purchasing Managers' Index (PMI) slowed to 54.5 in Feb
2020 from 55.3 in Jan 2020. Since the Jan figure was at an almost eight-year high, the Feb
PMI is being seen as healthy. The month saw rates of growth for factory orders, exports
and output holding close to Jan's highs. Companies were willing to step up input buying,
and hiring activity increased fractionally.
• The Nikkei India Services Business Activity Index increased to 57.5 in Feb 2020 from 55.5 in
Jan 2020. This is the fifth successive month of growth and the quickest expansion in
services output since Jan 2013. The month saw renewed increase in new export orders
and strengthening business confidence.
• A global credit rating agency has cut its forecast for India’s economic growth to 4.9% in
FY20, as manufacturing could come under pressure from weak domestic demand and
supply chain disruptions due to the coronavirus outbreak, media reports showed. The GDP
growth is forecast to recover slightly to 5.4% in FY21.
• Goods and Services Tax (GST) collections at Rs 1.05 lakh crore for Feb 2020 are significantly
below the government’s revised target, media reports showed. The figure is Rs. 10,000
crore shorter than the revised target. To compensate for low collections in previous
months of FY20, the government set an ambitious monthly GST target of Rs 1.1 lakh crore
for Dec-Mar.
3
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4
Domestic Equity Market Indices
Indices
06-Mar-20
1 Week Return
YTD Return
S&P BSE Sensex
37,576.62 -1.88% -8.91%
Nifty 50
10,989.45 -1.90% -9.69%
S&P BSE Mid
-Cap
14,227.49 -2.55% -4.95%
S&P BSE Small
-Cap
13,329.78 -2.77% -2.70%
Source:
MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
02-Mar-20 671 1178 0.57
03-Mar-20 1007 829 1.21
04-Mar-20 511 1384 0.37
05-Mar-20 968 872 1.11
06-Mar-20 378 1535 0.25
Source: NSE
• Indian equity markets fell on
coronavirus spread fears. The number
of people infected in the country
increased, leading to worries of a
bigger and wider outbreak. Global cues
kept markets under pressure for most
of the week as the virus spread to the
U.S. and more countries.
• Markets declined after the Union
health minister said the number of
confirmed cases in India have risen to
28. This even overshadowed the
optimism emanating from U.S. Federal
Reserve’s surprise rate cut to combat
the slowdown for the virus scare.
• On top of this came the crisis related to
a big private sector bank. The Reserve
Bank of India took control of the
troubled lender and put a Rs. 50,000
withdrawal cap, spooking investors.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
22.83 25.01 26.84 394.70
P/B
2.91 3.09 2.32 1.88
Dividend Yield
1.18 1.39 1.20 1.25
Source: BSE, NSE
Value as on Mar 06, 2020
Indian Equity Market
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5
Sectoral Indices
Indices
Last Returns (in %)
Closing* 1-Wk 1-Mth
S&P BSE Auto
15,530.98 -0.24%
-15.00%
S&P BSE
Bankex
31,988.36 -4.27%
-10.70%
S&P BSE CD
25,900.69 -0.96% -3.12%
S&P BSE CG
15,189.04 -1.35%
-11.86%
S&P BSE FMCG
10,806.23 -1.44% -6.64%
S&P BSE HC
13,968.00 3.62% -0.64%
S&P BSE IT
15,384.16 2.65% -3.97%
S&P BSE Metal
8,029.73 -2.56%
-19.23%
S&P BSE Oil & Gas
12,242.32 -2.99%
-14.87%
Source: Thomson Reuters Eikon
*Value as on Mar 06, 2020
• S&P BSE Consumer Durables was the major
loser, down 4.27%, followed by S&P BSE
Realty and S&P BSE Oil & Gas, down 3.72% and
2.99%, respectively.
• S&P BSE Healthcare was the major gainer, up
3.62% followed by S&P BSE IT and S&P BSE
Teck, up 2.65% and 1.65%, respectively.
Indian Derivatives Market Review
• Nifty Mar 2020 Futures stood at 10,939.90, a discount of 49.55 points below the spot
closing of 10,989.45. The total turnover on NSE’s Futures and Options segment for the
week stood at Rs. 91.13 lakh crore as against Rs. 90.35 lakh crore for the week to Feb 28.
• The Put-Call ratio stood at 0.69 compared with the previous session’s close of 0.88.
• The Nifty Put-Call ratio stood at 1.25 compared with the previous session’s close of 1.22.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-
Wk
Ago
1-
Mth
Ago
6-
Mth
Ago
Call Rate
4.98 5.01 5.00 5.37
91 Day T
-Bill
4.96 5.08 5.15 5.32
07.32% 2024, (5 Yr GOI)
5.62 5.85 6.06 6.23
06.45%
2029, (10 Yr GOI)
6.18 6.37 6.45 6.60
Source: Thomson Reuters Eikon
Value as on Mar 06, 2020
• Bond yields fell plunged during the
week under review after the U.S.
Federal Reserve cut interest rates by
50 bps in an emergency move to
counter the impact of coronavirus
outbreak across the globe.
• The Reserve Bank of India too assured
that it is monitoring global and
domestic developments closely and
continuously and stands ready to take
appropriate actions to ensure orderly
functioning of financial markets,
maintain market confidence and
preserve financial stability. This fuelled
expectations that the Monetary Policy
Committee may ease interest rates in
its upcoming monetary policy review
which also boosted market
sentiments.
Domestic Debt Market
6.00
6.20
6.40
2-Mar 3-Mar 4-Mar 5-Mar 6-Mar
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-
Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year
5.02 6.30 128
3 Year
5.49 6.62 113
5 Year
5.70 6.76 106
10 Year
6.28 7.66 138
Source: Thomson Reuters Eikon
Value as on
Mar 06
, 2020
• Yields on gilt securities fell across the
maturities in the range of 9 to 28 bps. The
maximum fall was seen on 1-year paper.
• Corporate bond yields fell across curve in
the range of 2 to 21 bps. The maximum
fall was seen on 2, 8 and 9-year paper.
• Difference in spread between AAA
corporate bond and gilt expanded across
the maturities in the range of 4 to 19 bps
barring 7-year, which contracted 4 bps and
10-year paper closed steady.
Domestic Debt Market (Spread Analysis)
-40
-20
0
4.70
5.85
7.00
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 06-Mar-20 28-Feb-20
Yield
in %
Change
in bps
Source: Thomson Reuters Eikon
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8
• The cabinet has approved a proposal for direct listing of Indian companies abroad. With this,
India’s start-ups, unicorns and small firms will now have greater access to overseas capital.
The cabinet also cleared 72 amendments to the Companies Act, covering 65 sections to
decriminalise various offences and facilitate ease of doing business. Firms that have a
spending obligation of less than Rs. 50 lakh under CSR would no longer have to constitute
CSR committees.
• The Central Board of Direct Taxes (CBDT) will link annual appraisals and postings of field
officers with their performance in terms of collection under the ‘Vivad se Vishwas’ scheme,
media reports said. It added that collection outcomes would play a bigger role in the future
postings of the field officers. This come as there have been concerns over alleged ‘tax
terrorism’ and undue harassment of genuine taxpayers by tax officials.
• The government has restricted exports of 26 pharma products — active pharma ingredients
(APIs) and formulations, including paracetamol, tinidazole and metronidazole, media reports
showed. This is being done as the government is alarmed by the increasing Covid-19 cases in
and outside China and wants to keep domestic supplies steady. The curbs are going to be in
place until raw material imports from coronavirus-hit China resume unhindered, the report
said.
Regulatory Updates in India
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9
• The Direct Tax Vivaad Se Vishwas Bill, 2020, which will provide an opportunity to taxpayers
to settle their tax disputes by paying just due taxes with complete waiver of interest and
penalty by Mar 31, 2020, was approved by Lok Sabha, media reports showed. The bill was
introduced by the finance minister in the House on Mar 2, 2020.
• The ministry of corporate affairs has launched a one-time amnesty scheme for Limited
Liability Partnership (LLP) companies that have failed to file the requisite statutory
documents such as annual statements, change in directors, etc. This will enable ease of
doing business and cleanse the system. It provides these companies a one-time relaxation
in payment of additional fees and immunity from prosecution.
• Media reports showed the Reserve Bank of India (RBI) said it is ready to safeguard the
country’s banking system from financial and market risks emanating from the spread of
coronavirus. The bank cited expectations of “coordinated policy action” by central banks
around the world amid threats to global demand and currency movements. The RBI
governor said the impact of the virus on India is via China and global trade.
Regulatory Updates in India (contd..)
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• The U.S. Federal Reserve (Fed) announced that it will lower the target range for the federal
funds rate by 50 basis points to 1 to 1-1/4%. In the accompanying statement, Fed said the
fundamentals of the U.S. economy remain strong, but the coronavirus poses evolving risks
to economic activity.
• Survey data from IHS Markit showed China's manufacturing sector contracted at a record
pace in Feb 2020 as outbreak of the coronavirus weighed heavily on performance of
factories. The Caixin manufacturing Purchasing Managers' Index fell to 40.3 in Feb from
51.1 in Jan 2020. This was the lowest reading since the survey began in Apr 2004.
• The Organisation for Economic Co-operation and Development downgraded its global
growth outlook by 0.5 percentage points, saying the impact of the Covid-19 outbreak on
economic prospects is set to be severe.
• Labor Department report showed employment in the U.S. surged up by 273,000 jobs in
Feb 2020, matching the upwardly revised spike in Jan 2020.
• Survey data from IHS Markit showed U.K. manufacturing sector expanded at the fastest
pace in 10 months in Feb 2020 as domestic demand continued to recover on the back of
reduced political uncertainty.
• Eurostat data showed euro zone inflation slowed to 1.2% in Feb 2020 from 1.4% in Jan
2020. The rate came in line with expectations.
10
Global News/Economy
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11
Global Indices
Indices
06-Mar-20
1-Week
Return
YTD
Return
Russell 3000
1,363.41 0.78% -4.39%
Nasdaq 100
8,575.62 1.34% -1.80%
FTSE 100
6,462.55 -1.79% -14.32%
DAX Index
11,516.09 -3.15% -13.08%
Nikkei Average
20,749.75 -1.86% -12.29%
Straits Times
2,960.98 -1.66% -8.12%
Source: Thomson Reuters
Eikon
Value as on
Mar 06, 2020
U.S.
• U.S. markets gained even though
concerns from the virus spread
remained.
• The U.S. Fed cutting interest rates by 50
bps in a surprise move to mitigate the
economic fallout of the coronavirus
outbreak lifted the markets. Also, a
former Vice President scored key
primary victories, which led to a massive
rally in the health-care sector.
Europe
• European markets declined as coronavirus outbreak continued to impact businesses
worldwide. The fall in U.S. Treasury yield has led to recession fears as the virus spread is
threatening global economic growth.
Asia
• Asian equity markets fell, as the coronavirus speeded up in Europe, North America and
Britain, leading to worries about a hit to global economic growth. The Asian Development
Bank said the outbreak will cut global growth by 0.1%- 0.4% and will have a significant
impact on developing Asian economies.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury fell
for the third consecutive week and
plunged 42 bps to close at an all-time
record low of 0.71% compared to the
previous week’s close of 1.13%. This was
the biggest weekly fall since Dec 19,
2008 which is more than a decade when
the yield on 10-year U.S. Treasury
plunged 44 bps.
• U.S. Treasury prices rose sharply amid
persisting concerns that the coronavirus
outbreak across the globe will adversely
affect global growth prospects which
improved the safe haven appeal of U.S.
Treasuries.
• The U.S. Federal Reserve (Fed) cut
interest rates by 50 bps in an
emergency move to counter the impact
of coronavirus outbreak across the
globe which also added to the gains.
Global Debt (U.S.)
0.70
0.80
0.90
1.00
1.10
1.20
2-Mar 3-Mar 4-Mar 5-Mar 6-Mar
US 10-Year Treasury Yield Movement
Source: Thomson Reuters Eikon
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13
Performance of various commodities
Commodities
Last Closing*
1-Week Ago
Brent Crude($/Barrel)
46.14 52.30
Gold ($/Oz)
1,673.85 1,584.74
Gold (Rs/10 gm)
44,315 42,352
Silver ($/Oz)
17.31 16.66
Silver (Rs/Kg)
47,071 45,509
Source: Thomson Reuters Eikon *
Value as on Mar 06
, 2020
Gold
• Gold prices rose after the U.S. Fed
announced an emergency cut and
lowered interest rates to combat the
economic impact of the coronavirus
outbreak. Gains extended after the U.S.
President advocated for more monetary
easing in order to stay competitive with
other global central banks.
Brent Crude
• Brent crude prices fell amid rapid spread
of coronavirus outside China, which
fuelled concerns over global economic
growth and a subsequent fall in global
energy demand.
Baltic Dry Index
• The Baltic Dry Index grew due to
improved capesize and panamax
activities.
Commodities Market
9.00
9.50
10.00
10.50
11.00
6-Feb-20 22-Feb-20
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global
Commodity Prices
Rebased to 10
Source: Thomson Reuters Eikon
3.91%
-11.78%
5.62%
06-Mar-20
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing*
1-Wk Ago
US Dollar
73.66 72.19
Pound Sterling
95.44 93.01
EURO
82.69 79.44
100 Yen
69.56 66.30
Source: RBI
Figures in INR , *Value as on
Mar 06, 2020
Rupee
• The Indian rupee witnessed its worst
week against the dollar in nearly seven
years amid concerns over rising cases of
the coronavirus infections in India.
Euro
• The euro surged against the greenback
on expectations that the U.S. Fed would
ease interest rates further after it cut
interest rates by 50 bps.
Pound
• The pound strengthened against the
greenback on hopes of a trade deal
between U.S. and European Union.
Yen
• The yen surged against the greenback as
its haven appeal improved on persisting
concerns over the coronavirus outbreak
across the globe.
Currencies Markets
9.50
10.00
10.50
11.00
6-Feb-20 22-Feb-20
USD GBP Euro JPY
Source: Thomson Reuters Eikon
Currency
Prices (
in terms of INR)
Rebased to 10
Currency Movement
2.61%
2.04%
4.92%
4.09%
06-Mar-20
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15
The Week that was…
02
nd
Mar to 06
th
Mar
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16
The Week that was (Mar 02– Mar 06)
Date Events
Present
Value
Previous
Value
Monday,
March 02, 2020
• India Manufacturing PMI (Feb)
54.5 55.3
• China Caixin Manufacturing PMI (Feb)
40.3 51.1
• U.S ISM Manufacturing PMI (Feb)
50.1 50.9
• Germany Markit Manufacturing PMI (Feb)
48.0 47.8
• U.K. Markit Manufacturing PMI (Feb)
51.7 51.9
Tuesday,
March 03, 2020
• Eurozone Consumer Price Index (YoY) (Feb) (P)
1.2% 1.4%
• U.S. FOMC Rate Decision
1.3% 1.8%
• Eurozone Unemployment Rate (Jan)
7.4% 7.4%
Wednesday,
March 04, 2020
• India Services PMI (Feb)
57.5 55.5
• U.S. ISM Non
-Manufacturing PMI (Feb) 57.3 55.5
• China Caixin Services PMI (Feb)
26.5 51.8
• Eurozone Retail Sales (YoY) (Jan)
1.7% 1.7%
• Germany Retail Sales (MoM) (Jan)
0.9% -2.0%
Thursday,
March 05, 2020
• U.S. Initial Jobless Claims (Feb 28)
216k 219k
• U.S. Factory Orders (MoM) (Jan)
-0.5% 1.9%
Friday,
March 06, 2020
• U.S. Nonfarm Payrolls (Feb)
273K 225k
• U.S. Unemployment Rate (Feb)
3.5% 3.6%
• Germany Factory Orders (MoM) (Jan)
1.4% -8.9%
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
17
The Week Ahead
09
th
Mar to 13
th
Mar
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18
Day Event
Monday,
Mar 09, 2020
•
Japan Eco Watchers Survey Current (Feb)
•
Japan Gross Domestic Product Annualized s.a. (QoQ) (4Q F)
Tuesday,
Mar 10, 2020
•
China New Yuan Loans China (Feb)
•
China Consumer Price Index (YoY) (Feb)
•
Eurozone Gross Domestic Product s.a. (YoY) (4Q F)
Wednesday,
Mar 11, 2020
•
U.K. Industrial Production (YoY) (Jan)
•
U.S. Consumer Price Index (YoY) (Feb)
•
U.K. Trade Balance (Jan)
•
U.K. Monthly GDP (MoM) (Jan)
Thursday,
Mar 12, 2020
•
India Consumer price index based Inflation (Feb 2020)
•
India Index of Industrial Production (Dec 2019)
•
Eurozone Industrial Production w.d.a. (YoY) (Jan)
•
European Central Bank Rate Decision
Friday,
Mar 13, 2020
•
India Balance Payments (USD) (Q4 2019)
•
Japan Tertiary Industry Index (MoM) (Jan)
•
German Consumer Price Index (YoY) (Feb F)
•
U.S. U. of Mich. Sentiment (Mar P)
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 Company Limited (NAM India) has not independently verified the accuracy or authenticity of such information or data, or for that
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