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NEWS U CAN USE
Mar 13, 2020
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The Week that was…
9
th
Mar to 13
th
Mar
2
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Indian Economy
• India’s Index of Industrial Production (IIP) growth rose 2% YoY in Jan 2020 as against an
acceleration of 0.10% in Dec 2019 (revised) and an increase of 1.6% in Jan 2019. The
mining, manufacturing and electricity sector rose 4.4%, 1.5% and 3.1% in Jan 2020. The
mining sector had risen 5.4% in Dec 2019, while manufacturing and electricity had fallen
1.2% and 0.1%, respectively.
• India’s consumer inflation slowed to 6.58% in Feb 2020 from 7.59% YoY in Jan 2020 and
2.57% in Feb 2019. Food inflation grew 10.81% in Feb compared with a growth of 13.63%
in Jan and a degrowth of 0.73% in the same month of the previous year. Food and
beverages inflation eased to 9.45% YoY in Feb from 11.79% in Jan. Vegetable prices eased
to 31.61% YoY in Feb compared with 50.19% in Jan.
• Data from RBI showed that India’s current account deficit (CAD) narrowed sharply to US$
1.4 billion (0.2% of GDP) in Q3FY20 from US$ 17.7 billion (2.7% of GDP) in Q3FY19 and US$
6.5 billion (0.9% of GDP) in the previous quarter or Q2FY20. CAD narrowed on account of
a lower trade deficit which stood at US$ 34.6 billion and a rise in net services receipts at
US$ 21.9 billion as compared with the corresponding period of last year.
• Government data showed that India’s trade deficit narrowed to $9.85 billion in Feb 2020
as exports came in at $27.65 billion compared with $26.87 billion in Feb 2019 and imports
were $37.50 billion compared with $36.59 billion in Feb 2019.
3
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4
Domestic Equity Market Indices
Indices 13-Mar-20 1 Week Return YTD Return
S&P BSE Sensex
34,103.48 -9.24% -17.33%
Nifty 50
9,955.20 -9.41% -18.19%
S&P BSE Mid-Cap
12,638.74 -11.17% -15.56%
S&P BSE Small-Cap
11,761.22 -11.77% -14.15%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
09-Mar-20 260 1690 0.15
11-Mar-20 785 1097 0.72
12-Mar-20 141 1835 0.08
13-Mar-20 952 932 1.02
Source: NSE
• Indian equity markets suffered heavy
losses in the holiday-truncated week
ended Mar 13, 2020. The week was
witness to record-setting falls (in
absolute terms) in two sessions as
coronavirus spread fears and its impact
on the economy got graver. The World
Health Organisation officially declared
the coronavirus outbreak a global
pandemic.
• The week started with biggest single-
day fall in absolute terms on the back
of coronavirus concerns and crash in
crude oil prices and the subsequent
developments leading to price war
fears.
• The last day of the week even saw
circuit breakers coming into play as the
markets lost 10% after opening,
although the day ended with gains.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
20.82 22.66 23.99 253.71
P/B
2.65 2.80 2.07 1.69
Dividend Yield
1.28 1.53 1.36 1.45
Source: BSE, NSE Va
lue as on Mar 13, 2020
Indian Equity Market
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5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
S&P BSE Auto
13960.2 -10.11% -21.57%
S&P BSE Bankex
28890.3 -9.69% -19.20%
S&P BSE CD
23404.7 -9.64% -13.20%
S&P BSE CG
13798 -9.16% -17.98%
S&P BSE FMCG
9781.62 -9.48% -16.24%
S&P BSE HC
12675.3 -9.25% -12.26%
S&P BSE IT
13295.1 -13.58% -18.79%
S&P BSE Metal
6998.5 -12.84% -28.47%
S&P BSE Oil & Gas
10838.8 -11.46% -23.50%
Source: Thomson Reuters Eikon
*Value as on Mar 13, 2020
• All the sectors lost in the week. S&P BSE IT was
the major loser, down 13.58%, followed by
S&P BSE Metal and S&P BSE Realty, down
12.84% and 12.32%, respectively. S&P BSE
Teck and S&P BSE Oil & Gas lost 11.78% and
11.46% respectively.
• Sectors lost as the global pandemic has
disrupted supply chains and is adversely
affecting businesses around the globe.
Indian Derivatives Market Review
• Nifty Mar 2020 Futures stood at 9,897.70, a discount of 57.50 points below the spot closing
of 9,955.20. The total turnover on NSE’s Futures and Options segment for the week stood
at Rs. 60.36 lakh crore as against Rs. 91.13 lakh crore for the week to Mar 06.
• The Put-Call ratio stood at 0.48 compared with the previous session’s close of 0.75.
• The Nifty Put-Call ratio stood at 1.11 compared with the previous session’s close of 0.9.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-Wk
Ago
1-Mth
Ago
6-Mth
Ago
Call Rate
4.96 4.98 4.96 5.29
91 Day T-Bill
4.88 4.96 5.11 5.33
07.32% 2024, (5 Yr GOI)
5.96 5.62 5.93 6.28
06.45% 2029, (10 Yr GOI)
6.32 6.18 6.43 6.64
Source: Thomson Reuters Eikon Value as on Mar 13, 2020
• Bond yields rose as investors resorted
to profit booking after U.S. Treasury
yields and crude oil retreated from
recent lows. Yields continued to rise
owing to weak global cues and fears
over the coronavirus outbreak across
the globe. This raised concerns over
foreign fund outflows in the domestic
debt market.
• However, losses were restricted due
to rising speculations of policy rate cut
by the Monetary Policy Committee in
the upcoming policy meet and fall in
crude oil prices and the U.S. Treasury
yield.
• Yield on the 10-year benchmark paper
(6.45% GS 2029) rose 14 bps to close
at 6.32% compared with the previous
week’s close of 6.18% after trading in
a range of 6.00% to 6.36%.
Domestic Debt Market
5.80
6.10
6.40
9-Mar 11-Mar 12-Mar 13-Mar
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year
5.11 6.36 124
3 Year
5.82 6.88 106
5 Year
6.04 7.24 119
10 Year
6.42 7.68 126
Source: Thomson Reuters Eikon Value as on
Mar
13, 2020
• Yields on gilt securities increased across
the maturities in the range of 5 bps to 36
bps.
• Corporate bond yields fell across the
maturities in the range of 2 bps to 48 bps
barring 15-year paper which fell 2 bps.
• Difference in spread between AAA
corporate bond and gilt expanded across
the maturities in the range of 5 bps to 14
bps barring 3, 10 and 15-year paper which
contracted in the range of 6 bps to 15 bps.
The same on 1-year paper closed steady.
Domestic Debt Market (Spread Analysis)
-16
14
44
4.60
5.80
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 13-Mar-20 06-Mar-20
Yield in %
Change in bps
Source: Thomson Reuters Eikon
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8
• The Securities & Exchange Board of India (SEBI) has come out with a new set of measures to
secure the interest of debenture holders and check any wrongdoings. In a new consultation
paper, SEBI has proposed a detailed review of the regulatory framework for Corporate
Bonds and Debenture Trustees (DTs). As per the consultation paper, non-banking financial
companies (NBFCs) will now be required to create an identified charge on the assets.
Creation of an identified charge by NBFCs will enable liquidation of asset and return of debt
quickly to the investors in the event of any default, SEBI said.
• SEBI has further proposed creation of a recovery fund by the issuer at the time of issuance
of security. This is aimed at mitigating the problem of delay in receipt of funds to the
debenture trustees and ensure an accelerated enforcement of security.
• The Reserve Bank of India said it will undertake U.S. dollar sell/buy swaps to provide liquidity
in the foreign exchange market and is ready to take all measures required to mitigate the
risks from the coronavirus spread. It will undertake six-month U.S. dollar sell/buy swaps, the
bank said in a statement. The swaps will be conducted through the auction route in multiple
tranches.
Regulatory Updates in India
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9
• The rural development ministry plans to seek time extension of two years for the flagship
programme Pradhan Mantri Awas Yoajana (PMAY-Gramin). This comes as the ministry is
unable to meet its targets for providing own home to every rural household. The ministry
had set the target of constructing 1 crore houses in the first phase of PMAY-Gramin by
2018-2019 financial year. However, till Feb 27, 2020, (a year after the initial deadline),
96.84 lakh houses had been completed.
• The government has increased the dearness allowance (DA) by 4%, which means DA
allowance has been increased from 17% of basic pay/pension to 21% of basic pay/pension
for central government employees and pensioners. The decision was approved in a cabinet
meet chaired by the Prime Minister.
Regulatory Updates in India (contd..)
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• A Labor Department report showed a modest increase in U.S. consumer prices in Feb 2020.
Consumer price index inched up 0.1%, matching the uptick seen in Jan 2020.
• A Labor Department report showed first-time claims for U.S. unemployment benefits
dipped to 211,000, a decrease of 4,000 from the previous week's level of 215,000.
• The Bank of England unexpectedly cut its key interest rate by 50 basis points to a record
low 0.25% and launched a new funding scheme for small businesses as it expects the U.K.
economy to take a major hit due to the coronavirus outbreak.
• European Central Bank President surprised markets by leaving rates unchanged but
announced fresh stimulus measures including additional EUR 120 billion bond purchases.
• Eurozone’s GDP inched up 0.1% sequentially in Q4 2019 as against an expansion of 0.3% in
Q3 2019. The downside reflects weaker consumption and exports.
• The Cabinet Office said Japan’s Gross Domestic Product for the fourth quarter of 2019 saw
a downward revision to -7.1% YoY. Last month's preliminary reading had suggested a
decline of 6.3%.
• National Bureau of Statistics data showed China's consumer prices advanced 5.2% on a
yearly basis in Feb 2020, slower than the 5.4% increase seen in Jan 2020.
• People's Bank of China lowered the reserve requirement ratio for qualified banks by 50-
100 basis points to support the economy hit by the outbreak of coronavirus epidemic. This
was the second cut this year.
10
Global News/Economy
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11
Global Indices
Indices
13-Mar-20
1-Week
Return
YTD
Return
Russell 3000 1,254.44 -7.99% -12.03%
Nasdaq 100 7,995.26 -6.27% -8.45%
FTSE 100 5,366.11 -16.97% -28.85%
DAX Index 9,232.08 -20.01% -30.32%
Nikkei Average 17,431.05 -15.99% -26.32%
Straits Times 2,634.00 -11.04% -18.27%
Source: Thomson Reuters Eikon
Value as on
Mar 13, 2020
U.S.
• U.S. markets witnessed heavy selling in
the week ended Mar 13, 2020,
reminiscent of the 2008 financial crisis
and 1987 market crash days. Markets
reacted to the World Health
Organisation (WHO) declaring the
coronavirus outbreak a global pandemic
and the U.S. President putting a travel
ban on Europe, except U.K. to contain
the spread in the country.
Europe
• European markets plunged in the week as the virus spread rapidly in the region, making it
the epicentre of the pandemic. Markets saw their worst one-day drop in history as the U.S.
President imposed a travel ban on Europe and the European Central Bank decided not to
cut interest rates.
Asia
• Asian equity saw heavy losses on the back of the global rout. Investors became concerned
that governments’ efforts to contain the coronavirus spread has come too late and feared
that stimulus packages will not be enough to save the global economy from a recession.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury
surged 24 bps to close at 0.95%
compared to the previous week’s close
of 0.71%.
• U.S. Treasury prices surged initially after
global crude oil prices plummeted
below $40 per barrel level amid growing
tensions between Russia and Saudi
Arabia and worries of an all-out price
war which boosted its safe haven
appeal.
• However, the trend reversed sharply as
U.S. Treasury prices plunged amid
growing possibility of fiscal stimulus in
the U.S., Europe and Japan. The investor
risk sentiment improved further after
the U.S. President declared the
coronavirus outbreak a national
emergency.
Global Debt (U.S.)
0.45
0.56
0.67
0.78
0.89
1.00
9-Mar 10-Mar 11-Mar 12-Mar 13-Mar
US 10-Year Treasury Yield Movement
Source: Thomson Reuters Eikon
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13
Performance of various commodities
Commodities
Last Closing* 1-Week Ago
Brent Crude($/Barrel) 32.69 46.14
Gold ($/Oz) 1529.31 1673.85
Gold (Rs/10 gm) 41859 44315
Silver ($/Oz) 14.68 17.31
Silver (Rs/Kg) 42984 47071
Source: Thomson Reuters Eikon *Value as on Mar 13, 2020
Gold
• Gold prices fell as market participants
preferred to book profits at higher
levels. Further, hopes for global stimulus
measures to cushion the economic
impact of the coronavirus outbreak
across the globe helped improve the
investor risk sentiment to some extent.
Brent Crude
• Brent crude prices fell below $40 per
barrel level amid growing tensions
between Russia and Saudi Arabia and
worries of an all-out price war. Losses
were extended after WHO’s decision to
declare the coronavirus outbreak a
pandemic.
Baltic Dry Index
• The Baltic Dry Index grew due to
improved capesize and panamax
activities.
Commodities Market
5.00
8.50
12.00
13-Feb-20 28-Feb-20
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
Source: Thomson Reuters Eikon
-15.21%
-29.15%
-8.64%
13-Mar-20
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14
Movement of Rupee vs Other Currencies
Currency Last Closing* 1-Wk Ago
US Dollar
74.07 73.66
Pound Sterling
93.00 95.44
EURO
82.96 82.69
100 Yen
70.21 69.56
Source: RBI Figures in INR , *Value as on Mar 13, 2020
Rupee
• The Indian rupee was almost steady
against the U.S. dollar amid high volatility
during the week. Rupee fell tracking
sharp fall in the domestic equity markets
but recovered most of the losses on
suspected intervention by the RBI.
Euro
• Euro plunged against the greenback
following European Central Bank's (ECB)
stimulus measures.
Pound
• Pound plunged against the greenback on
worsening market turmoil.
Yen
• Yen fell against the U.S. dollar amid high
volatility as safe haven appeal dampened
after equity markets recovered globally.
Currencies Markets
9.60
10.40
11.20
13-Feb-20 28-Feb-20
USD GBP Euro JPY
Source: Thomson Reuters Eikon
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
13-Mar-20
0.32%
0.55%
-2.55%
0.93%
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15
The Week that was…
9
th
Mar to 13
th
Mar
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16
The Week that was (Mar 9 – Mar 13)
Date Events
Present
Value
Previous
Value
Consensus
Monday,
March 09, 2020
• Germany Trade Balance (Jan) €18.5 B €19 B €15.4 B
• Germany Industrial Production (MoM) (Jan) 3.00% -2.20% 1.50%
Tuesday,
March 10, 2020
• China Consumer Price Index (YoY) (Feb) 5.20% 5.40% 5.20%
• Eurozone Gross Domestic Product s.a. (YoY) (Q4) 1.00% 0.90% 0.90%
• China Producer Price Index (YoY) (Feb) -0.40% 0.10% -1.34%
• U.K. BRC Like-For-Like Retail Sales (YoY) (Feb) -0.40% 0.00% -0.20%
Wednesday,
March 11, 2020
• Bank of England Interest Rate Decision 0.25% 0.75%
• U.K. Manufacturing Production (YoY) (Jan) -3.60% -2.50% -3.50%
• U.K. Industrial Production (MoM) (Jan) -0.10% 0.10% 0.30%
• U.S. Consumer Price Index ex Food & Energy (YoY)
(Feb)
2.40% 2.30% 2.30%
Thursday,
March 12, 2020
• India CPI Inflation (Feb 2020) 6.58% 7.59% 6.80%
• Index of Industrial Production (Jan 2020) 2.00% 0.10% 0.70%
• Eurozone ECB Interest Rate Decision 0.00% 0.00% 0.00%
• Eurozone Industrial Production (MoM) (Jan) 2.30% -1.80% 1.40%
• U.S. Producer Price Index ex Food & Energy (YoY) (Feb) 1.40% 1.70% 1.70%
Friday,
March 13, 2020
• Germany Harmonized Index of Consumer Prices (YoY)
(Feb)
1.70% 1.70% 1.70%
• U.S. Michigan Consumer Sentiment Index (Mar) (P) 95.9 101 95
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17
The Week Ahead
16
th
Mar to 20
th
Mar
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18
Day Event
Monday,
Mar 16, 2020
• China Industrial Production (YoY) (Feb)
• China Retail Sales (YoY) (Feb)
Tuesday,
Mar 17, 2020
• U.K. ILO Unemployment Rate (3M) (Jan)
• Germany ZEW Survey - Economic Sentiment (Mar)
• U.S. Retail Sales Control Group (Feb)
• Japan Industrial Production (YoY) (Jan)
• U.S. Industrial Production (MoM) (Feb)
Wednesday,
Mar 18, 2020
• Germany Consumer Price Index (YoY) (Feb)
• U.S. Housing Starts (MoM) (Feb)
• Japan National Consumer Price Index (YoY) (Feb)
Thursday,
Mar 19, 2020
• Bank of Japan Interest Rate Decision
• U.S. Initial Jobless Claims (Mar 13)
Friday,
Mar 20, 2020
• China People's Bank of China's Interest Rate Decision
• Germany Producer Price Index (MoM) (Feb)
• U.K. Public Sector Net Borrowing (Feb)
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 Reliance Nippon Life Asset
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