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NEWS U CAN USE
March 19, 2021
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The Week that was…
15
th
Mar to 19
th
Mar
2
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Indian Economy
• The wholesale price index (WPI) based inflation rose 27-month high to 4.17% in Feb 2021
from 2.03% in the previous month and 2.26% in the same month of the previous year. The
WPI Food Index rose 3.31% in Feb 2021 from contraction of 0.26% in the previous month
and growth of 1.11% in Dec 2020. Under food articles, WPI inflation for vegetables
contracted 2.90% in Feb 2021 as compared to contraction of 20.82% in the previous
month. WPI inflation for potato contracted 29.78% as compared to contraction of 22.04%
in the previous month. WPI inflation for fuel and power rose 0.58% in Feb 2021 after
contracting for seven consecutive months.
• India’s trade deficit widened to $12.62 billion in Feb 2021 from $10.16 billion in the same
period of the previous year. Exports grew to $27.93 billion in Feb 2021 over the year from
$27.74 billion in Feb 2020. Imports rose to $40.54 billion in Feb 2021 over the year from
$37.90 billion in Feb 2020. For the period from Apr 2020 to Feb of 2021, trade deficit
narrowed sharply to $84.62 billion from $151.37 billion in the same period of the previous
year. Imports fell 23.11% on a yearly basis during the period from Apr 2020 to Feb 2021
while exports came down 12.23%. Oil imports in Feb 2021 was 16.63% lower in dollar
terms compared to the same period of the previous year while non-oil imports in dollar
terms rose 16.34% on a yearly basis in Feb 2021.
• According to the Union Minister of State for Finance & Corporate Affairs, fiscal deficit for
FY22 is estimated at 6.8%. The minister further added that under the restructured fiscal
consolidation path the government aims to reach fiscal deficit at 4.5% of GDP by FY26.
3
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4
Domestic Equity Market Indices
Indices 19-Mar-21 1 Week Return YTD Return
S&P BSE Sensex
49,858.24 -1.84% 4.41%
Nifty 50
14,744.00 -1.91% 5.45%
S&P BSE Mid-Cap
20,044.50 -2.59% 11.72%
S&P BSE Small-Cap
20,470.54 -3.48% 13.11%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
15-Mar-21 691 1316 0.53
16-Mar-21 913 1022 0.89
17-Mar-21 382 1582 0.24
18-Mar-21 425 1529 0.28
Source: NSE
• Indian equity markets settled for the
week with modest losses. Bourses were
dragged initially by weak
macroeconomic data. Besides, elevated
crude prices weighed on sentiment.
• Additionally, rising COVID-19 cases
increased the risk of a second wave.
Market participants were worried after
Gujarat decided to impose night curfew
in Surat, Rajkot, Ahmedabad, and
Vadodara for the next fortnight owing
to rising cases of COVID-19 infection.
• Further, elevated U.S. Treasury yield
triggered fears regarding outflow of
foreign money from domestic equities
to U.S. bond market.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
34.71 40.16 56.58 743.48
P/B
3.36 4.18 2.93 2.77
Dividend Yield
0.72 1.08 0.92 0.87
Source: BSE, NSE Va
lue as on Mar 19, 2021
Indian Equity Market
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5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
S&P BSE Auto
23,000.7 -1.92% -3.34%
S&P BSE Bankex
38,468.5 -3.82% -4.62%
S&P BSE CD
32,432.4 -2.57% 1.87%
S&P BSE CG
21,087.9 -5.20% -3.21%
S&P BSE FMCG
12,574.6 2.81% 2.37%
S&P BSE HC
20,545.1 -3.48% -3.69%
S&P BSE IT
25,995.5 -1.10% 2.17%
S&P BSE Metal
13,879.3 0.06% 8.38%
S&P BSE Oil & Gas
15,246.5 -4.06% -1.21%
Source: Refinitiv *Value as on Mar 19, 2021
• On the BSE sectoral front, majority of the
sectors closed in the red. S&P BSE Realty was
the major loser, down 5.93%, followed by S&P
BSE Capital Goods and S&P BSE Oil & Gas,
which dipped 5.20% and 4.06%, respectively.
• Meanwhile, S&P BSE FMCG, S&P BSE Power
and S&P BSE Metal were the only gainers, up
2.81%, 0.64% and 0.06%, respectively.
Indian Derivatives Market Review
• Nifty Mar 2021 Futures stood at 14,756.45, a premium of 12.45 points above the spot
closing of 14,744.00. The total turnover on NSE’s Futures and Options segment for the
week stood at Rs. 233.22 lakh crore as against Rs. 181.40 lakh crore for the week to Mar 12.
• The Put-Call ratio stood at 0.88 compared with the previous week’s close of 0.99.
• The Nifty Put-Call ratio stood at 1.20 compared with the previous week’s close of 1.02.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-Wk
Ago
1-Mth
Ago
6-Mth
Ago
Call Rate
3.25 3.22 3.21 3.41
91 Day T-Bill
3.33 3.30 3.23 3.35
05.22% 2025, (5 Yr GOI)
5.66 5.77 5.56 5.41
05.85% 2030, (10 Yr GOI)
6.19 6.23 6.13 6.01
Source: Refinitiv Value as on Mar 19, 2021
• Bond yields fell as market participants
expect open market operations (OMO)
purchases by the Reserve Bank of India
(RBI) to continue till the current fiscal
year end. Yields further fell on
expectations that RBI will cancel the last
scheduled weekly government securities
auction for the current financial year.
• Yield on the 10-year benchmark paper
(5.85% GS 2030) fell 4 bps to close at
6.19% from the previous week’s close of
6.23% after moving in a range of 6.17%
to 6.25%.
• RBI conducted the auction of four
government securities- 5.15% GS 2025,
5.85% GS 2030 and 6.76% GS 2061 for a
cumulative amount of Rs. 33,000 crore,
which was oversubscribed.
Domestic Debt Market
6.14
6.18
6.22
15-Mar 16-Mar 17-Mar 18-Mar 19-Mar
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 4.17 4.48 31
3 Year 5.10 5.71 61
5 Year 5.85 6.62 77
10 Year 6.29 7.49 120
Source: Refinitiv Value as on
Mar 19, 2021
• Yields on gilt securities fell by up to 12 bps
across maturities, barring 2-year paper that
rose 5 bps and 30-year paper was steady.
Yield fell the most on 6-year paper.
• Corporate bond yields rose in the range of 3
to 35 bps across the curve, leaving 10- & 15-
year papers that fell 4 & 22 bps, respectively.
• Spread between AAA corporate bond and gilt
expanded in the range of 14 to 46 bps across
the segments, except 15-year paper that
contracted 12 bps and 10-year paper was
steady.
Domestic Debt Market (Spread Analysis)
-14
-4
6
2.00
5.00
8.00
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 19-Mar-21 12-Mar-21
Yield in %
Change in bps
Source: Refinitiv
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8
• The Union Minister for Road Transport and Highways unveiled the vehicle scrapping policy,
stating that vehicle owners who scrap their old vehicles are likely to receive financial
incentives. The Union Government proposed to offer a road-tax rebate of up to 25% for
personal vehicles and up to 15% for commercial vehicles. Vehicle manufacturers are also
encouraged to offer a 5% discount on the purchase of a new vehicle in exchange for the
scrapping certificate. In addition, if a new vehicle is purchased with a scrapping certificate,
the registration fee may be waived.
• The Reserve Bank of India (RBI) has maintained its stance on cryptocurrencies, informing the
government of its decision to pursue a ban on such instruments after previously expressing
serious concerns. While stating that blockchain technology should be promoted, the central
bank has challenged the utility of cryptocurrencies being classified as a currency. The central
bank has also raised security concerns about cryptocurrencies, claiming that the anonymity
of the transactions could lead to money laundering and terror financing. The regulator
believes that allowing cryptocurrency into the economy will undo the current government's
efforts to restrict black money movement, as a large amount of illicit cash stashed abroad
might return through this path.
• According to media reports, The Reserve Bank of India will have to postpone the start of
monetary policy normalisation by three months due to an increase in COVID-19 cases, but
there is no major threat to the economy's recovery unless stringent lockdowns are
reinstated.
Regulatory Updates in India
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9
• Finance Minister introduced a Bill in Rajya Sabha to amend the Insurance Act, allowing for
74% foreign direct investment (FDI) in the sector. Amendments to the Insurance
Amendment Bill 2021 have been approved by the Union Cabinet. Currently, the maximum
amount of foreign direct investment (FDI) allowed in life and general insurance is 49%,
with Indian ownership and management control. Increased FDI would aid in the country's
life insurance penetration. The country's life insurance premiums are 3.6% of GDP, well
below the global average of 7.13%, and general insurance premiums are even worse, at
0.94% of GDP, well below the global average of 2.88%.
• The Securities and Exchange Board of India (Sebi) has proposed to streamline the initial
public offering (IPO) process with unified payment interface (UPI) in application supported
by blocked amount (ASBA) and redressal of investor grievances.
• Government has formed an expert advisory committee that will oversee the Startup India
Seed Fund Scheme's overall execution and monitoring. According to an office
memorandum from the Department for Promotion of Industry and Internal Trade (DPIIT),
the committee will evaluate and select incubators for allotment of funds under the
scheme, track progress, and take all appropriate steps for efficient utilisation of funds
against the scheme's objectives
Regulatory Updates in India (contd..)
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• The U.S. Federal Reserve (Fed) kept interest rates unchanged in its monetary policy review.
The U.S. Central Bank also decided to continue with its asset purchase program in which it
buys at least $120 billion of bonds a month. The U.S. Federal Reserve indicated no rate
hikes likely through 2023 despite an improving outlook and higher inflation. In addition,
the U.S. Central Bank now expects the U.S. economy to grow by 6.5% in 2021 as compared
to its earlier projection of 4.2% in Dec 2020.
• A global rating agency has affirmed the sovereign ratings of the U.S. at 'AA+' with 'stable'
outlook. The agency retained the ratings because of the country's strong institutions,
dynamic and resilient economy, monetary policy stability, and unique position as the
world's leading reserve currency issuer. However, the agency mentioned that the ratings
were hindered by high general government debt and fiscal deficits, all of which
deteriorated last year because of the pandemic's economic shock.
• According to data of Commerce Department, U.S. retail sales fell 3% in Feb 2021 after
rising by an upwardly revised 7.6% in Jan 2021.
• Bank of England policymakers unanimously agreed to keep the benchmark rate unchanged
at 0.10% and quantitative easing unchanged at GBP 895 billion. The committee stated that
it would not tighten monetary policy until clear proof of substantial progress in removing
spare capacity and achieving the 2% inflation goal on a long-term basis. It also stated that if
the outlook for inflation deteriorated the committee would be prepared to take whatever
additional steps were required to fulfil its mandate.
10
Global News/Economy
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11
Global Indices
Indices
19-Mar-21
1-Week
Return
YTD
Return
Russell 3000 1,941.82 -1.00% -0.55%
Nasdaq 100 12,866.99 -0.54% -0.17%
FTSE 100 6,708.71 -0.78% 3.84%
DAX Index 14,621.00 0.82% 6.58%
Nikkei Average 29,792.05 0.25% 8.56%
Straits Times 3,134.54 1.27% 10.22%
Source: Refinitiv Value as on Mar 19, 2021
U.S.
• U.S. markets largely remained under
pressure as recent spike in treasury
yields renewed concerns about the
outlook for high-growth companies.
• The downturn was restricted by U.S.
Fed’s forecast on stronger economic
growth and higher inflation this year
although it expects to keep interest
rates at near-zero levels through 2023.
Europe
• European markets largely went up during the week with investors cheering the Fed's
pledge to continue its accommodative policy and taking positive cues from the Bank of
England's monetary policy announcement.
Asia
• Majority of the Asian markets rose during the week after U.S. Fed reiterated its
accommodative monetary policy and projected the U.S. economy to grow 6.5% this year.
Nonetheless, rise in U.S. Treasury yield kept investors wary.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury rose 9
bps to close at 1.73%, from the previous
week’s close of 1.64%. Yield rose to its
highest level in 14 months.
• U.S. Treasury prices fell despite strong
demand for a 20-year bond auction. Prices
declined further after the U.S. Federal
Reserve projected a sharp rise in
economic growth with no interest rate
hikes through 2023.
• The fall in treasury prices accentuated by
the end of week as market participants
expect higher inflation as the economic
recovery in the U.S. gathers steam.
Global Debt (U.S.)
1.58
1.67
1.76
15-Mar 16-Mar 17-Mar 18-Mar 19-Mar
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)
63.23 69.30
Gold ($/Oz)
1744.74 1726.41
Gold (Rs/10 gm)
44788 44177
Silver ($/Oz)
26.25 25.91
Silver (Rs/Kg)
66744 65835
Source: Refinitiv *Value as on Mar 19, 2021
Gold
• Gold prices went up after U.S. Federal
Reserve kept interest rates unchanged and
indicated that there are no interest rate
hikes likely through 2023 despite an
improving outlook and higher inflation.
Brent Crude
• Brent crude prices plunged after data from
the EIA showed that U.S. crude inventories
rose by 2.4 million barrels for the week
ended Mar 12, 2021. Persisting concerns
over the COVID-19 pandemic after some
European countries halted the use of the
AstraZeneca vaccine also dampened
sentiments.
Baltic Dry Index
• The index rose during the week due to
improved capesize and panamax activities.
Commodities Market
9.00
9.50
10.00
10.50
11.00
19-Feb-21 5-Mar-21 19-Mar-21
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
Source: Refinitiv
1.28%
-8.76%
1.06%
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing* 1-Wk Ago
US Dollar
72.52 72.68
Pound Sterling
100.94 101.47
EURO
86.45 86.88
100 Yen
66.64 66.77
Source: Refinitiv Figures in INR , *
Value as on Mar 19, 2021
Rupee
• The Indian rupee rose against the U.S. dollar on
greenback inflows associated with initial public
offerings of corporates.
Euro
• Euro fell against the U.S. dollar on rise in U.S.
Treasury yields. However, losses were limited as
the U.S. Fed does not expect to increase
interest rates till the end of 2023.
Pound
• Pound fell against the U.S. dollar on possible
downside risks relating to the UK's Covid-19
vaccine rollout and tensions with the European
Union.
Yen
• Yen was little changed against the U.S. dollar as
fall due to rise in U.S. treasury yields neutralised
gains as the U.S. Fed does not expect to
increase interest rates till the end of 2023.
Currencies Markets
9.60
9.70
9.80
9.90
10.00
10.10
10.20
10.30
19-Feb-21 5-Mar-21 19-Mar-21
USD GBP Euro JPY
Source: Refinitiv
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
-0.49%
-0.52%
-0.23%
-0.19%
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15
The Week that was…
15
th
Mar to 19
th
Mar
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16
The Week that was (Mar 15 – Mar 19)
Date Events
Present
Value
Previous
Value
Monday,
March 15, 2021
• India Wholesale Price Inflation (Feb) 4.17% 2.03%
• India Trade Deficit (Feb) (USD) 12.62B 14.54B
• China Retail Sales (YoY)(Feb) 33.80% 4.60%
• China Industrial Production (YoY)(Feb) 35.10% 7.30%
Tuesday,
March 16, 2021
• U.S. Retail Sales (MoM)(Feb) -3% 7.60%
• Japan Industrial Production (YoY)(Jan) -5.20% -5.30%
• Japan Merchandise Trade Balance Total (Feb) (Yen) 217.4B -325.4B
• Germany ZEW Survey - Economic Sentiment (Mar) 76.6 71.2
• Eurozone ZEW Survey - Economic Sentiment (Mar) 74 69.6
Wednesday,
March 17, 2021
• Eurozone Consumer Price Index (MoM)(Feb) 0.20% 0.20%
• U.S. Housing Starts (MoM)(Feb) 1.421M 1.584M
Thursday,
March 18, 2021
• Japan National Consumer Price Index (YoY)(Feb) -0.40% -0.60%
• Eurozone Labor Cost(Q4) 3% 1.60%
• U.S. Initial Jobless Claims (Mar 12) 770K 725K
Friday,
March 19, 2021
• U.K. GfK Consumer Confidence (Mar) -16 -23
• Eurozone Producer Price Index (MoM) (Feb) 0.70% 1.40%
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17
The Week Ahead
22
nd
Mar to 26
th
Mar
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18
Day Event
Monday,
Mar 22, 2021
• People’s Bank of China Interest Rate Decision
• Japan Leading Economic Index (Jan)
Tuesday,
Mar 23, 2021
• U.K. ILO Unemployment Rate (3M) (Jan)
• U.S. New Home Sales (MoM)(Feb)
• Bank of Japan Monetary Policy Meeting Minutes
Wednesday,
Mar 24, 2021
• U.K. Consumer Price Index (YoY)(Feb)
• U.S. Durable Goods Orders (Feb)
• Germany Markit PMI Composite (Mar) PREL
• Eurozone Markit PMI Composite (Mar) PREL
• U.K. Markit Services PMI (Mar) PREL
Thursday,
Mar 25, 2021
• U.S. Gross Domestic Product Annualized (Q4)
• Germany Gfk Consumer Confidence Survey (Apr)
Friday,
Mar 26, 2021
• U.S. Michigan Consumer Sentiment Index (Mar)
• U.S. Core Personal Consumption Expenditure - Price Index (MoM) (Feb)
• U.K. Retail Sales (YoY) (Feb)
• Germany IFO – Business Climate (Mar)
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
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reasonableness of the assumptions upon which such data and information has been processed or arrive data; NAM India does not in any manner
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