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NEWS U CAN USE
Mar 27, 2020
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The Week that was…
23
rd
Mar to 27
th
Mar
2
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
Indian Economy
• The Monetary Policy Committee (MPC) lowered the key policy repo rate by 75 bps to
4.40% from the earlier 5.15% in order to combat the coronavirus outbreak across the
country and the nationwide lockdown. The reverse repo rate was reduced by 90 bps to
4.0% while the bank rate and the marginal standing facility rate stand reduced at 4.65%
from the previous 5.40%. The MPC decided to continue with the accommodative stance on
the monetary policy as long as it is necessary to revive the growth and mitigate the impact
of coronavirus outbreak on the economy. The Reserve Bank of India (RBI) Governor further
added that the MPC committee advanced their meeting to Mar 24 from Mar 27 as
compared from Apr 1 to Apr 3 which was scheduled earlier.
• The finance minister announced a Rs. 1.7 lakh crore fiscal stimulus package to help the
poor and needy manage in the 21-day lockdown across the country. The government
announced an insurance cover worth Rs. 50 lakh per person for sanitation workers, ASHA
workers, doctors, nurses and paramedics fighting the corona battle.
• The government has approved Rs. 670 crore recapitalisation plan for regional rural banks
(RRBs) for the next financial year, media reports showed. This will help them meet
regulatory capital requirements. The Cabinet Committee on Economic Affairs (CCEA),
chaired by the Prime Minister, has given its approval for continuation of the process of
recapitalisation of RRBs.
3
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4
Domestic Equity Market Indices
Indices
27-Mar-20
1 Week Return
YTD Return
S&P BSE Sensex
29815.59 -0.34% -27.73%
Nifty 50
8660.25 -0.97% -28.83%
S&P BSE Mid
-Cap
10537.86 -5.42% -29.60%
S&P BSE Small
-Cap
9497.238 -6.09% -30.67%
Source:
MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
23-Mar-20 107 1777 0.06
24-Mar-20 783 1053 0.74
25-Mar-20 1070 718 1.49
26-Mar-20 1070 718 1.49
27-Mar-20 1028 811 1.27
Source: NSE
• Indian equity markets were down a tad
in the week ended Mar 27, 2020. The
week was volatile as on the one hand
the pandemic started taking root in the
country with increasing number of
cases. On the other, the government
and the Reserve Bank of India took
concrete steps to help the poor and the
economy tide over the health crisis.
• The week started with equity markets
witnessing the biggest fall in history.
The Prime Minister announced a 21-day
lock down of the country to control the
spread of the virus, but investors
managed to stand ground on stimulus
hopes. The finance minister announced
a Rs. 1.7 lakh crore package to help the
poor and RBI cut the repo rate by 75
bps, besides other measures.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
18.18 19.52 20.03 148.59
P/B
2.32 2.47 1.73 1.40
Dividend Yield
1.47 1.76 1.64 1.75
Source: BSE, NSE
Value as on Mar 27, 2020
Indian Equity Market
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5
Sectoral Indices
Indices
Last Returns (in %)
Closing* 1-Wk 1-Mth
S&P BSE Auto
11,223.81 -7.76%
-30.63%
S&P BSE
Bankex
22,965.51 -1.29%
-33.78%
S&P BSE CD
19,475.46 -2.48%
-26.86%
S&P BSE CG
11,200.47 -4.61%
-29.43%
S&P BSE FMCG
9,632.65 -0.50%
-14.18%
S&P BSE HC
11,628.78 -3.03%
-16.56%
S&P BSE IT
12,791.08 3.63%
-19.44%
S&P BSE Metal
5,604.50 -8.59%
-36.76%
S&P BSE Oil & Gas
9,339.77 -8.48%
-28.23%
Source: Thomson Reuters Eikon
*Value as on Mar 27, 2020
• S&P BSE Metal was the major loser, down
8.59%, followed by S&P BSE Oil & Gas and S&P
BSE Auto, down 8.48% and 7.76%,
respectively.
• S&P BSE Realty and S&P BSE Capital Goods
lost 5.34% and 4.61%, respectively. S&P BSE IT
and S&P BSE Teck were the only two gainers,
up 3.63% and 2.55%, respectively.
Indian Derivatives Market Review
• Nifty Apr 2020 Futures stood at 8,651.40, a discount of 8.85 points below the spot closing
of 8,660.25. The total turnover on NSE’s Futures and Options segment for the week stood
at Rs. 35.25 lakh crore as against Rs. 49.38 lakh crore for the week to Mar 20.
• The Put-Call ratio stood at 0.7 compared with the previous session’s close of 0.82.
• The Nifty Put-Call ratio stood at 1.23 compared with the previous session’s close of 1.17.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-
Wk
Ago
1-
Mth
Ago
6-
Mth
Ago
Call Rate
4.68 5.00 4.93 5.24
91 Day T
-Bill
4.26 4.79 5.08 5.41
07.32% 2024, (5 Yr GOI)
5.58 5.98 5.87 6.42
06.45%
2029, (10 Yr GOI)
6.14 6.26 6.38 6.74
Source: Thomson Reuters Eikon
Value as on Mar 27, 2020
• Bond yields fell following security
purchases under open market
operation and announcement of a
fiscal package to safeguard the
economy from the ill-effects of
coronavirus. Yields fell further as the
Monetary Policy Committee trimmed
the key interest rate by 75 bps to
4.40% to lower the impact of
coronavirus on the economy.
• RBI conducted purchase auction of
6.84% GS 2022, 7.72% GS 2025, 8.33%
GS 2026 and 7.26% GS 2029 for
aggregate amount of Rs. 15,000 crore
under open market operation. The
entire amount was accepted by the
RBI. The cut-off yield was in the range
of 5.6385- 6.8217%, while the cut-off
price lied in between Rs. 102.99-
107.59.
Domestic Debt Market
6.00
6.25
6.50
23-Mar 24-Mar 26-Mar 27-Mar
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-
Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year
4.68 6.23 155
3 Year
5.48 6.82 135
5 Year
5.67 7.12 145
10 Year
6.24 7.56 132
Source: Thomson Reuters Eikon
Value as on
Mar 27
, 2020
• Yields on gilt securities plunged across the
maturities in the range of 10 to 42 bps,
barring 2-year paper that increased 1 bps.
Highest fall was seen on 5-year paper.
• Corporate bond yields fell across the curve
in the range of 18 to 39 bps. Highest
decline was seen on 2-year.
• Spread between AAA corporate bond and
gilt expanded on 3- to 5-year papers by 6,
18 & 23 bps, respectively while 6- & 7-year
papers were steady. Remaining securities
contracted by up to 16 bps.
Domestic Debt Market (Spread Analysis)
-60
-30
0
3.80
5.50
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 27-Mar-20 20-Mar-20
Yield
in %
Change
in bps
Source: Thomson Reuters Eikon
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8
• RBI took note of the ample liquidity in the banking system and also observed that the
distribution of the liquidity was not uniform across the financial system as well as within the
banking system. Hence to combat the disruption caused by the coronavirus pandemic, RBI
decided to reduce the cash reserve ratio (CRR) of all banks by 100 bps to 3% of net demand
and time liabilities. The new norms will come into effect from Mar 28, 2020 and will be
available for one year ending on Mar 26, 2021. The move is expected to release primary
liquidity to the tune of Rs. 1.37 lakh crore uniformly across the banking system. RBI also took
into account the hardships faced by the banks in terms of social distancing of staff and
decided to reduce the requirement of minimum daily CRR balance maintenance from 90%
to 80%. This will be effective from Mar 28, 2020 and will be available till Jun 26, 2020.
• RBI gave approval to all commercial banks. co-operative banks, all-India Financial Institutions,
and non-banking financial companies to allow a moratorium of three months on payment of
instalments for all term loans that are outstanding as on Mar 1, 2020. Similarly, RBI also gave
approval for deferment of interest on working capital facilities by three months. The
objective of the move is to help borrowers tide over the difficulties caused by the
coronavirus outbreak across the country. RBI also eased working capital financing by
allowing lending institutions to recalculate drawing power by reducing margins and/or by
reassessing the working capital cycle for the borrowers. In addition, RBI decided to
postpone the implementation of Net Stable Funding Ratio (NSFR) by six months from Apr 1,
2020 to Oct 1, 2020. The implementation of the last tranche of capital conservation buffer
(CCB) has also been deferred from Mar 31, 2020 to Sep 30, 2020.
Regulatory Updates in India
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9
• Banks under the marginal standing facility (MSF) can borrow overnight by pledging
government securities from the Statutory Liquidity Ratio (SLR) quota by up to 2%.
However, RBI after taking cognizance of the high volatility prevailing in the domestic
financial markets and to provide comfort to the banking system has decided to increase
the limit from 2% to 3% with immediate effect. This will be applicable till Jun 30, 2020.
The move will help the banking system to avail and additional liquidity of Rs. 1.37 lakh
crore under the LAF window in times of stress and at a reduced MSF rate. According to
RBI, the three measures relating to TLTRO, CRR and MSF will inject a total liquidity of Rs.
3.74 lakh crore into the banking system.
• RBI has decided to widen the monetary policy rate corridor from 50 bps to 65 bps. Thus
under the new corridor, the MSF rate would be 65 bps above the key policy reverse repo
rate while the key policy reverse repo rate will be 40 bps lower than the policy repo rate.
• The finance minister announced various statutory and regulatory compliance relief
measures. The last date for filing belated income tax return (ITR) for the FY19 has been
extended from Mar 31 to Jun 30, 2020. The deadline for filing returns of goods and
services tax (GST) for Mar, Apr and May 2020 has also been extended till Jun 30. The
government has extended the last date for linking PAN card with Aadhaar from Mar 31 to
Jun 30. Non-maintenance charges at banks will be waived off for three months. ATM
withdrawals from any bank ATMs will also be free for debit card holders for the next three
months.
Regulatory Updates in India (contd..)
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• The Federal Reserve has announced extensive new measures to support the economy
citing the tremendous hardship being caused by the coronavirus pandemic. The measures
include an unlimited expansion of the Fed's asset purchases, with the central bank saying it
will purchase Treasuries and mortgage-backed securities "in the amounts needed to
support smooth market functioning and effective transmission of monetary policy to
broader financial conditions and the economy."
• A Labor Department report showed a record spike in first-time claims for unemployment
benefits in the week ended Mar 21, 2020 to 3,283,000, an increase of 3,001,000 from the
previous week's 282,000.
• Bank of England unanimously decided to hold the interest rate at a record low and asset
purchase programme and signaled further easing if required.
• IHS Markit survey showed euro zone flash composite output index fell to 31.4 in Mar 2020
from 51.6 in Feb 2020. This was the largest monthly fall in activity since data first collected
in Jul 1998.
• The flash IHS Markit/Chartered Institute of Procurement & Supply composite output index
for the U.K. private sector fell to a record 37.1 in Mar 2020 from 53.0 in Feb 2020.
• IHS Markit survey data showed composite output index plunged to 37.2 in Mar 2020 from
50.7 in Feb 2020. This was the lowest score since Feb 2009.
10
Global News/Economy
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11
Global Indices
Indices
27-Mar-20
1-Week
Return
YTD
Return
Russell 3000
1,185.24 10.34% -16.89%
Nasdaq 100
7,588.37 8.49% -13.11%
FTSE 100
5,510.33 6.16% -26.94%
DAX Index
9,629.76 7.85% -27.32%
Nikkei Average
19,389.43 17.14% -18.04%
Straits Times
2,528.76 4.90% -21.54%
Source: Thomson Reuters
Eikon
Value as on
Mar 27, 2020
U.S.
• U.S. markets gained, as the government
and the U.S. Federal Reserve stepped
up efforts to shield the economy from
the impact of the coronavirus pandemic.
The infection has been spreading fast
and wide in the country.
• The Senate and government struck an
agreement on $2 trillion economic
stimulus package to deal with the virus-
induced slowdown.
Europe
• European markets rose on stimulus optimism. The European Central Bank started buying
bonds under its 750 billion-euro emergency plan to combat the pandemic. It also decided
to cancel most of the limits on bond purchases.
Asia
• Asian markets followed suit and gained as the U.S. Senate passed a $2 trillion relief
package for the economy. The U.S. Federal Reserve announcing unlimited Treasuries and
mortgage-backed securities purchase supported sentiment. The move will help reduce
currency and credit risks amid fears of a virus-induced global recession.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury fell
20 bps to close at 0.74% compared to
the previous week’s close of 0.94%.
• U.S. Treasury prices rose as investors
bought safe-haven assets like
government bonds despite the U.S
Federal Reserve (Fed) announced huge
stimulus measures to fight the blow
dealt to the U.S. economy by the
coronavirus pandemic.
• Treasury prices rose further after U.S.
initial weekly jobless claims surged to an
all-time high although the rise was
limited because market already priced in
expectations for an abysmal data
release. Yields also fell as investor’s
ignored the passage of a $2 trillion
stimulus bill by the U.S. Congress and
sought safety in high-quality assets.
Global Debt (U.S.)
0.70
0.81
0.92
23-Mar 24-Mar 25-Mar 26-Mar 27-Mar
US 10-Year Treasury Yield Movement
Source: Thomson Reuters Eikon
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13
Performance of various commodities
Commodities
Last Closing*
1-Week Ago
Brent Crude($/Barrel)
20.31 25.99
Gold ($/Oz)
1,617.50 1,497.64
Gold (Rs/10 gm)
40,989 40,989
Silver ($/Oz)
14.47 12.58
Silver (Rs/Kg)
36,871 36,871
Source: Thomson Reuters Eikon *
Value as on Mar 27
, 2020
Gold
• Gold prices saw a sharp surge after initial
jobless claims in the U.S. for the week
ended Mar 21, 2020 skyrocketed. Fresh
stimulus measures announced by the
U.S. Fed to help markets function more
efficiently amid the coronavirus
outbreak kept the greenback under
pressure, while adding to the bullion’s
safe-haven appeal.
Brent Crude
• Brent crude prices saw a steep plunge as
demand for oil due to coronavirus travel
bans and lockdowns dwindled, which
weighed on the market sentiment.
Baltic Dry Index
• The Baltic Dry Index fell due to lower
capesize and panamax activities.
Commodities Market
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
27-Feb-20 14-Mar-20
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global
Commodity Prices
Rebased to 10
Source: Thomson Reuters Eikon
15.02%
-21.85%
8.00%
27-Mar-20
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing*
1-Wk Ago
US Dollar
74.84 75.01
Pound Sterling
91.56 87.42
EURO
82.64 80.65
100 Yen
68.89 68.19
Source: RBI
Figures in INR , *Value as on Mar 27,
2020
Rupee
• The rupee gained against the greenback
following gains in the domestic equity
market after the Indian government
announced a welfare package.
Euro
• The euro rose against the greenback
after the U.S. Federal Reserve pledged
aggressive asset purchase programs to
help markets function more efficiently
amid the coronavirus crisis.
Pound
• The pound rose against the greenback
following rally in domestic equity market
and financial stimulus announced by
both government and Bank of England.
Yen
• The yen gained against the U.S. dollar as
the latter weakened after an
unprecedented rise in jobless claims.
Currencies Markets
9.00
9.50
10.00
10.50
11.00
11.50
27-Feb-20 14-Mar-20
USD GBP Euro JPY
Source: Thomson Reuters Eikon
Currency
Prices (
in terms of INR)
Rebased to 10
Currency Movement
4.74%
-0.22%
1.03%
2.47%
27-Mar-20
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15
The Week that was…
23
rd
Mar to 27
th
Mar
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16
The Week that was (Mar 23– Mar 27)
Date Events
Present
Value
Previous
Value
Monday,
March 23, 2020
• Eurozone Consumer Confidence (Mar) (P)
-11.60 -6.60
Tuesday,
March 24, 2020
• Germany Markit Manufacturing PMI (Mar) (P)
45.70 48.00
• Germany Markit Composite PMI (Mar) (P)
37.20 50.70
• Eurozone Markit Composite PMI (Mar) (P)
31.40 51.60
• U.K. Markit Services PMI (Mar) (P)
35.70 53.20
• U.S. Markit Manufacturing PMI (Mar) (P)
49.20 50.70
• U.S. Markit Composite PMI (Mar) (P)
40.50 49.60
Wednesday,
March 25, 2020
•
U.K. Consumer Price Index (YoY) (Feb) 1.70% 1.80%
• U.S. Nondefense Capital Goods Orders ex Aircraft (Feb)
-0.80% 1.00%
• Germany IFO
- Expectations (Mar) 79.70 82.00
• U.S. Durable Goods Orders (Feb)
1.20% 0.10%
Thursday,
March 26, 2020
• U.S. Initial Jobless Claims (Mar 20)
3283K 282K
• U.S. Gross Domestic Product Annualized (Q4)
2.10% 2.10%
• Japan Tokyo CPI ex Fresh Food (YoY) (Mar)
0.40% 0.50%
• U.K. BoE Interest Rate Decision
0.10% 0.10%
Friday,
March 27, 2020
• India Seventh Bi
-monthly Monetary Policy Statement (FY20) 4.40% 5.15%
• U.S. Core Personal Consumption Expenditure
- Price Index (YoY) (Feb) 1.80% 1.70%
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
17
The Week Ahead
30
th
Mar to 03
rd
Apr
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18
Day Event
Monday,
Mar 30, 2020
•
Germany Harmonized Index of Consumer Prices (YoY) (Mar) (P)
•
Japan Retail Trade (YoY) (Feb)
Tuesday,
Mar 31, 2020
•
U.K. Gross Domestic Product (QoQ) (Q4)
•
Germany Unemployment Rate (Mar)
•
Eurozone Consumer Price Index (YoY) (Mar) (P)
•
China Non-Manufacturing PMI (Mar)
Wednesday,
Apr 01, 2020
•
China Caixin Manufacturing PMI (Mar)
•
U.S. ADP Employment Change (Mar)
•
U.S. ISM Manufacturing PMI (Mar)
•
Germany Markit Manufacturing PMI (Mar)
Thursday,
Apr 02, 2020
•
India IHS Markit Manufacturing PMI
•
U.S. Initial Jobless Claims (Mar 27)
Friday,
Apr 03, 2020
•
IHS Markit India Services PMI
•
U.S. Nonfarm Payrolls (Mar)
•
U.S. Unemployment Rate (Mar)
•
U.S. ISM Non-Manufacturing PMI (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
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19
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