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NEWS U CAN USE
Mar 20, 2020
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The Week that was…
16
th
Mar to 20
th
Mar
2
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Indian Economy
• India’s Wholesale Price Index (WPI) - based inflation slowed down to 2.26% in Feb 2020
from 3.1% in Jan 2020 and 2.93% in Feb 2019. Food articles inflation slowed to 7.79% in
Feb from 11.51% in Jan as inflation in vegetables and onion came in at 29.97% from
52.72% and 162.30% from 293.37%, respectively. WPI Food Index decreased to 7.31% in
Feb from 10.12% in Jan.
• Media reports showed total liabilities of the government increased to Rs. 93.89 lakh crore
at the end of Dec 2019, up 3.2% compared with the previous quarter. The liabilities,
including those under the public account, had stood at Rs. 91,01,484 crore at the end of
Sep 2019.
• Government data showed India's finished steel exports plunged 8% in Feb 2020 from a
year earlier, their first decline in eight months as demand from traditional buyers in
Europe and South East Asia contracted due to coronavirus outbreak. India, the world's
second-biggest steel producer, shipped 570,000 tonnes of finished steel in Feb, as against
619,000 tonnes a year ago.
• The government said India's near-term macroeconomic outlook is vulnerable to disruption
of trade with China due to the coronavirus outbreak. It also said latest data do not suggest
any adverse impact on the economy and sliding crude oil prices may be a silver lining,
media reports showed.
3
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4
Domestic Equity Market Indices
Indices 20-Mar-20 1 Week Return YTD Return
S&P BSE Sensex
29,915.96 -12.28% -27.48%
Nifty 50
8,745.45 -12.15% -28.13%
S&P BSE Mid-Cap
11,141.38 -11.85% -25.56%
S&P BSE Small-Cap
10,113.36 -14.01% -26.18%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
16-Mar-20 309 1,640 0.19
17-Mar-20 583 1,314 0.44
18-Mar-20 248 1,674 0.15
19-Mar-20 401 1,515 0.26
20-Mar-20 1,156 725 1.59
Source: NSE
• Indian equity markets witnessed their
worst week in a decade with more than
12% loss as the coronavirus pandemic
wreaked havoc all over the globe
physically and financially. Global
equities remained in the middle of a
rout even as central banks announced
humongous stimulus packages.
• Increasing fears of a coronavirus-led
economic slowdown and rising foreign
fund outflows as the rupee weakened
against the greenback weighed on
markets. Global brokerages and
financial agencies have been cutting
their growth forecast for the Indian
economy for the fiscal and the quarter
in the face of the pandemic. Although
wholesale inflation eased in Feb 2020
as food prices decreased, but
coronavirus spread fears kept
sentiment dampened.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
18.18 19.72 21.08 156.84
P/B
2.32 2.49 1.82 1.48
Dividend Yield
1.48 1.74 1.57 1.67
Source: BSE, NSE Va
lue as on Mar 20, 2020
Indian Equity Market
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5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
S&P BSE Auto
12,168.4 -12.84% -29.93%
S&P BSE Bankex
23,265.7 -19.47% -34.50%
S&P BSE CD
19,970.7 -14.67% -27.43%
S&P BSE CG
11,741.8 -14.90% -29.50%
S&P BSE FMCG
9,681.2 -1.03% -15.79%
S&P BSE HC
11,992.0 -5.39% -17.50%
S&P BSE IT
12,342.6 -7.16% -24.49%
S&P BSE Metal
6,131.2 -12.39% -36.36%
S&P BSE Oil & Gas
10,205.1 -5.85% -26.52%
Source:
Refinitiv *Value as on Mar 20, 2020
• All the sectors lost. S&P BSE Bankex was the
major loser, down 19.47%, followed by S&P
BSE Realty and S&P BSE Capital Goods, down
15.88% and 14.90%, respectively.
• S&P BSE Consumer Durables and S&P BSE
Auto lost 14.67% and 12.84% respectively.
Business is getting severely affected as the
pandemic suffocates supply chains and halts
production. A survey found out more than
50% of Indian companies see impact on their
operations and nearly 80% have witnessed
decline in cash flows.
Indian Derivatives Market Review
• Nifty Mar 2020 Futures stood at 8,723.10, a discount of 22.35 points below the spot closing
of 8,745.45. The total turnover on NSE’s Futures and Options segment for the week stood
at Rs. 49.38 lakh crore as against Rs. 60.36 lakh crore for the week to Mar 13.
• The Put-Call ratio stood at 0.49 compared with the previous session’s close of 0.72.
• The Nifty Put-Call ratio stood at 1.19 compared with the previous session’s close of 0.98.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-Wk
Ago
1-Mth
Ago
6-Mth
Ago
Call Rate
5.00 4.96 5.04 5.37
91 Day T-Bill
4.79 4.88 5.07 5.32
07.32% 2024, (5 Yr GOI)
5.98 5.96 5.95 6.46
06.45% 2029, (10 Yr GOI)
6.26 6.32 6.42 6.79
Source: Refinitiv Value as on Mar 20, 2020
• Bond yields fell as speculations of a
rate cut by the Monetary Policy
Committee in its upcoming policy
meet strengthened. The rumours of
the policy rate cut strengthened
following the Federal Reserve’s rate
cut to nearly zero amid the
coronavirus scare. Bets of liquidity
easing also supported market
sentiments.
• However, gains were capped following
fall in domestic currency against the
greenback and increase in U.S.
Treasury yields.
• Yield on the 10-year benchmark paper
(6.45% GS 2029) fell 6 bps to close at
6.26% compared with the previous
week’s close of 6.32% after trading in
a range of 6.12% to 6.45%.
Domestic Debt Market
6.15
6.25
6.35
6.45
16-Mar 17-Mar 18-Mar 19-Mar 20-Mar
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year
5.15 6.52 137
3 Year
5.86 7.08 122
5 Year
6.09 7.19 110
10 Year
6.36 7.81 145
Source: Refinitiv Value as on
Mar 20, 2020
• Yields on gilt securities increased across
the maturities by up to 9 bps, barring on 1-
, 10- & 13-year papers that fell 1 or 6 bps.
• Corporate bond yields rose across the
curve in the range of 6 to 20 bps, leaving
5- to 7-year & 15-papers that fell in the
range of 4 to 66 bps. Yield on 8-year paper
was flat.
• Spread between AAA corporate bond and
gilt contracted 9, 11 or 75 bps on 5 to 7- &
15-year papers while remaining securities
expanded in the range of 5 to 20 bps.
Domestic Debt Market (Spread Analysis)
-10
-5
0
5
4.50
5.40
6.30
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 20-Mar-20 13-Mar-20
Yield in %
Change in bps
Source: Refinitiv
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8
• Capital market regulator Securities and Exchange Board of India (SEBI) tightened rules in
order to put a check on the “abnormally high” volatility in the domestic equity market amid
concerns over the coronavirus pandemic. SEBI halved position limits for certain stock
futures, restricted short-selling of index derivatives and raised margin rates for some shares.
The measure will come into effect from Mar 23 and continue for one month.
• The Reserve Bank of India (RBI) governor has announced steps including a U.S. dollar-rupee
sell-buy swap and long-term repo operations (LTRO) amid concerns related to coronavirus.
RBI, however, did not announce a rate cut, which was being expected widely, media reports
showed.
• RBI has asked banks to take measures and put in place business continuity plans to prevent
any disruption of services due to coronavirus outbreak, media reports showed. There is need
for a co-ordinated strategy for handling the emerging situations for protecting the
resilience of the Indian financial system, RBI said in a statement.
• The Supreme Court has made it clear that there could not be another attempt at calculating
the adjusted gross revenue (AGR) dues of telecom firms. It reprimanded the department of
telecommunications (DoT) for allowing companies to undertake self-assessment and called
the purpose of doing the numbers again a fraud on the court. It asked the DoT to withdraw
the move. The companies’ self-assessment of dues to the government are Rs. 82,300 crore
short of what the telecom department calculated after the Supreme Court's ruling on AGR.
Regulatory Updates in India
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9
• The ministry of corporate affairs is set to make major changes to the framework of
statutory audits to ensure that managements cannot arm-twist or tempt auditors into
overlooking governance lapses.
• The government said it has proposed certain amendments to the Competition law for
greater regulation of e-commerce platforms and ensure that presence of etailers has no
severe impact on local jobs.
• As per media reports, the Insurance Regulatory and Development Authority said that
insurance companies cannot include the pharmacy cost, expenses incurred on medical
devices and diagnostics. In cases where the policyholder chooses a room with rent higher
than the permissible limit, expenses are reimbursed by the insurer after proportionate
deduction of related medical bills. This means that the policyholder receives partial
reimbursement. The insurance regulator wants to undertake steps to support
policyholders get better coverage by paying less.
Regulatory Updates in India (contd..)
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• The U.S. Federal Reserve, Bank of Canada, Bank of England, Bank of Japan, the European
Central Bank and the Swiss National Bank announced a coordinated action to enhance the
provision of global U.S. dollar liquidity. These central banks agreed to lower the pricing on
the standing U.S. dollar liquidity swap arrangements by 25 basis points, so that the new
rate will be the U.S. dollar overnight index swap (OIS) rate plus 25 basis points.
• The U.S. Federal Reserve reduced the interest rate to near zero as the coronavirus
outbreak harmed economic activity. The U.S. Federal Reserve said it will increase its
holdings of Treasury securities by at least $500 billion and its holdings of agency mortgage-
backed securities by at least $200 billion.
• The Bank of England cut the bank rate again, to a record low, and expanded its bond
buying scheme and the targeted funding measure for small and medium businesses.
• China left its benchmark lending rates unchanged, defying expectations for a reduction as
economic activity faces severe downturn after the outbreak of coronavirus, or covid-19.
The one-year loan prime rate was retained at 4.05% and the five-year loan prime rate at
4.75%.
• Germany's economic confidence logged its sharpest decline on record in Mar 2020 as
financial market experts fear recession due to the coronavirus. Germany’s ZEW Indicator of
Economic Sentiment plunged 58.2 points to -49.5 in Mar 2020, survey results from the ZEW
- Leibniz Centre for European Economic Research revealed.
10
Global News/Economy
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11
Global Indices
Indices
20-Mar-20
1-Week
Return
YTD
Return
Russell 3000 1,074.22 -14.37% -24.67%
Nasdaq 100 6,994.29 -12.52% -19.91%
FTSE 100 5,190.78 -3.27% -31.18%
DAX Index 8,928.95 -3.28% -32.61%
Nikkei Average 16,552.83 -5.04% -30.03%
Straits Times 2,410.74 -8.48% -25.20%
Source: Refinitiv Value as on Mar 20, 2020
U.S.
• U.S. markets ended deep in the red in
the week ended Mar 20, 2020, touching
a new pandemic crisis lows as investors
worried about the economic damage
from the outbreak. This came despite
the U.S. Federal Reserve undertaking a
massive monetary stimulus campaign of
more than $1 trillion, which includes
direct payments to citizens.
Europe
• European markets lost too in the week but the fall wasn’t as bad as U.S. and Asia. Much of
the region has been shut down due to the spread of the coronavirus. Spain has imposed a
15-day nationwide lockdown as it confirmed the highest number of cases in Europe, after
Italy. The downside was limited by policy announcements by the European Central Bank
and the Bank of England to deal with the pandemic.
Asia
• Asian markets were witness to steep falls, especially the Japanese market, as investors
feared the impact of the pandemic will most certainly push the global economy into a
deep recession.
Global Equity Markets
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12
• Amid high volatility, yields on the 10-
year U.S. Treasury eased 1 bps to close
at 0.94% compared to the previous
week’s close of 0.95% after moving in a
wide range of 0.73% to 1.26%.
• U.S. Treasury prices rose after the U.S.
Federal Reserve lowered interest rates
to near zero.
• However, Treasury prices soon fell after
the U.S. Federal Reserve announced
plan to rescue the stressed commercial
paper market.
• Losses reversed at the end of the week
after as an order for New York state
residents to stay at home reinforced
concerns about the economic impact of
the coronavirus pandemic, and the U.S.
Federal Reserve stepped in with
measures aimed at boosting liquidity.
Global Debt (U.S.)
0.70
0.90
1.10
1.30
16-Mar 17-Mar 18-Mar 19-Mar 20-Mar
Yield in %
US 10-Year Treasury Yield
Movement
Source: Refinitiv
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13
Performance of various commodities
Commodities
Last Closing* 1-Week Ago
Brent Crude($/Barrel) 25.99 32.69
Gold ($/Oz) 1497.64 1529.31
Gold (Rs/10 gm) 40,989 41,859
Silver ($/Oz) 12.58 14.68
Silver (Rs/Kg) 36,871 42,984
Source: Refinitiv *Value as on Mar 20, 2020
Gold
• Gold prices fell as concerns that the
coronavirus outbreak across the globe
may lead to a global economic recession
prompted investors to sell assets and
hoard cash.
Brent Crude
• Brent crude prices plunged in excess of
20% as it came below $30 per barrel
amid concerns that the coronavirus
outbreak across the globe might bring
travel and business to a standstill which
may result in global economic recession
that dented global demand for crude.
Baltic Dry Index
• The Baltic Dry Index fell due to sluggish
capesize and panamax activities.
Commodities Market
3.50
5.90
8.30
10.70
20-Feb-20 29-Feb-20 9-Mar-20 18-Mar-20
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
Source: Refinitiv
-14.31%
-20.50%
-2.07%
20-Mar-20
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14
Movement of Rupee vs Other Currencies
Currency Last Closing* 1-Wk Ago
US Dollar
75.01 74.07
Pound Sterling
87.42 93.00
EURO
80.65 82.96
100 Yen
68.19 70.21
Source: Refinitiv Figures in INR , *Value as on Mar 20, 2020
Rupee
• The rupee weakened against the
greenback as persisting concerns over
the coronavirus outbreak across the
globe led to fears of financial volatility.
Euro
• The euro weakened against the
greenback on concerns over economic
shutdowns from the global spread of the
coronavirus.
Pound
• The pound weakened against the
greenback on concerns over the
economic impact from the coronavirus
pandemic.
Yen
• The yen weakened against the U.S. dollar
as market participants rushed to the
perceived safety of the greenback.
Currencies Markets
9.00
9.50
10.00
10.50
11.00
11.50
20-Feb-20 29-Feb-20 9-Mar-20 18-Mar-20
USD GBP Euro JPY
Source: Refinitiv
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
-6.00%
1.26%
-2.88%
-2.79%
20-Mar-20
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15
The Week that was…
16
th
Mar to 20
th
Mar
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16
The Week that was (Mar 16 – Mar 20)
Date Events Present Value Previous Value
Monday,
March 16, 2020
• India WPI Inflation (Feb 2020) 2.26% 3.10%
• Bank of Japan Interest Rate Decision -0.10% -0.10%
Tuesday,
March 17, 2020
• U.K. ILO Unemployment Rate (3M) (Jan) 3.90% 3.80%
• Germany ZEW Survey - Economic Sentiment (Mar) -49.50 8.70
• U.S. Retail Sales Control Group (Feb) 0.00% 0.40%
• Japan Merchandise Trade Balance Total (Feb) ¥1109.8 B ¥-1313.2 B
• U.S. Industrial Production (MoM) (Feb) 0.60% -0.50%
• Japan Industrial Production (YoY) (Jan) -2.30% -2.50%
Wednesday,
March 18, 2020
• Eurozone Consumer Price Index (YoY) (Feb) 1.20% 1.20%
• U.S. Housing Starts (MoM) (Feb) 1.599M 1.624M
• Japan National Consumer Price Index (YoY) (Feb) 0.40% 0.70%
Thursday,
March 19, 2020
• U.K. BoE Interest Rate Decision 0.10% 0.25%
• Germany IFO - Expectations (Mar) PREL 82.00 93.20
• U.S. Initial Jobless Claims (Mar 13) 281K 211K
Friday,
March 20, 2020
• China PBoC Interest Rate Decision 4.05% 4.05%
• Germany Producer Price Index (MoM) (Feb) -0.40% 0.80%
• Japan All Industry Activity Index (MoM) (Jan) 0.80% 0.00%
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17
The Week Ahead
23
rd
Mar to 27
th
Mar
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18
Day Event
Monday,
Mar 23, 2020
• China Industrial Production (YoY) (Feb)
Tuesday,
Mar 24, 2020
• Germany Markit Manufacturing PMI (Mar) (P)
• Germany Markit Composite PMI (Mar) (P)
• Eurozone Markit Composite PMI (Mar) (P)
• U.K. Markit Services PMI (Mar) (P)
• U.S. New Home Sales (MoM) (Feb)
Wednesday,
Mar 25, 2020
• U.K. Consumer Price Index (YoY) (Feb)
• U.S. Nondefense Capital Goods Orders ex Aircraft (Feb)
• Germany IFO - Expectations (Mar)
• U.K. Retail Price Index (MoM) (Feb)
• U.S. Durable Goods Orders (Feb)
Thursday,
Mar 26, 2020
• U.K. Bank of England Minutes
• U.S. Initial Jobless Claims (Mar 20)
• U.S. Gross Domestic Product Annualized (Q4)
Friday,
Mar 27, 2020
• Germany Harmonized Index of Consumer Prices (YoY) (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
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