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NEWS U CAN USE
March 26, 2021
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The Week that was…
22
nd
Mar to 26
th
Mar
2
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Indian Economy
• The Parliament passed a bill to set up the National Bank for Financing Infrastructure and
Development to fund infrastructure projects in India. The bill proposes to establish the
National Bank for Financing Infrastructure and Development to support the development
of long-term non-recourse infrastructure financing in India, including the development of
the bonds and derivatives markets needed for infrastructure financing, as well as to carry
on the business of financing infrastructure and related matters.
• According to the Reserve Bank of India Bulletin for Mar 2021, foreign portfolio investors
so far (up to March 10) in FY21, have invested a total of USD 36 billion in equities, the most
since FY13. Net foreign direct investment inflows, on the other hand, increased to USD 44
billion by the end of Jan 2021, up from USD 36.3 billion a year earlier.
• RBI said that on the basis of a review of the cash balance, the government has decided to
suspend its Rs. 20,000 crore borrowing scheduled for Mar 26, 2021. This means the
government will borrow Rs. 20,000 crore less than the Rs 12.8 lakh crore target it set for
FY21 in the Budget.
• The Parliament has approved a bill to increase foreign direct investment (FDI) in the
insurance sector from 49% to 74%, with the Lok Sabha voting in favour of the bill by voice
vote. The Finance Minister, who is piloting the Bill, claimed that raising the FDI cap in the
insurance sector would assist insurers in raising additional funds and overcoming financial
difficulties. The Insurance (Amendment) Bill, 2021 was earlier passed by the Rajya Sabha
last week.
3
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4
Domestic Equity Market Indices
Indices 26-Mar-21 1 Week Return YTD Return
S&P BSE Sensex
49,008.50 -1.70% 2.63%
Nifty 50
14,507.30 -1.61% 3.76%
S&P BSE Mid-Cap
19,970.37 -0.37% 11.31%
S&P BSE Small-Cap
20,278.97 -0.94% 12.05%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
22-Mar-21 1,062 930 1.14
23-Mar-21 1,157 778 1.49
24-Mar-21 441 1,492 0.30
25-Mar-21 359 1,615 0.22
26-Mar-21 1,157 769 1.50
Source: NSE
• Indian equity markets ended the week
in the negative territory. Worries over a
second coronavirus wave in India kept
market participants wary. The
government had detected a new
"double mutant variant" of the novel
coronavirus. The rising cases have
raised concerns of renewed lockdowns
in the parts of the country. Bourses also
witnessed some volatility amid
settlement of March F&O series.
• Nonetheless, the fall was cushioned as
Supreme Court refused to extend the
six-month loan moratorium period
offered by the RBI last year, as it is a
“policy decision” on the part of the
government and RBI. The apex court
has also lifted the temporary freeze on
letting banks classify accounts as non-
performing assets (NPAs) after the
moratorium has ended.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
34.26 39.51 56.70 76.19
P/B
3.32 4.11 2.98 2.75
Dividend Yield
0.73 1.09 0.92 0.87
Source: BSE, NSE Va
lue as on Mar 26, 2021
Indian Equity Market
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5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
S&P BSE Auto
22,050.9 -4.13% -3.87%
S&P BSE Bankex
37,527.8 -2.45% -3.73%
S&P BSE CD
31,914.3 -1.60% 0.49%
S&P BSE CG
20,964.8 -0.58% -2.58%
S&P BSE FMCG
12,462.2 -0.89% 4.14%
S&P BSE HC
20,760.2 1.05% -0.46%
S&P BSE IT
25,831.0 -0.63% 5.76%
S&P BSE Metal
13,937.3 0.42% 1.59%
S&P BSE Oil & Gas
14,671.0 -3.77% -5.61%
Source: Refinitiv *Value as on Mar 26, 2021
• On the BSE sectoral front, majority of the
indices closed in the red. S&P BSE Auto was
the major loser, down 4.13%, followed by S&P
BSE Oil & Gas and S&P BSE Bankex which
slipped 3.77% and 2.45%, respectively.
• S&P BSE Healthcare, S&P BSE Metal and S&P
BSE Realty were the only gainers, up 1.05%,
0.42% and 0.01% respectively.
Indian Derivatives Market Review
• Nifty Apr 2021 Futures stood at 14,608.50, a premium of 101.20 points above the spot
closing of 14,507.30. The total turnover on NSE’s Futures and Options segment for the
week stood at Rs. 227.07 lakh crore as against Rs. 233.22 lakh crore for the week to Mar 19.
• The Put-Call ratio stood at 0.90 compared with the previous week’s close of 0.88.
• The Nifty Put-Call ratio stood at 1.14 compared with the previous week’s close of 1.20.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-Wk
Ago
1-Mth
Ago
6-Mth
Ago
Call Rate
3.23 3.25 3.24 3.41
91 Day T-Bill
3.31 3.33 3.17 3.39
05.22% 2025, (5 Yr GOI)
5.56 5.66 5.66 5.38
05.85% 2030, (10 Yr GOI)
6.12 6.18 6.23 --
Source: Refinitiv Value as on Mar 26, 2021
• Bond yields fell broadly as the RBI
cancelled the last weekly government
securities auction scheduled on Mar 26,
2021 due to improved revenues. Yields
fell further tracking decline in U.S.
treasury yields and after the RBI
conducted special open market
operations (OMO) to purchase debt
including the 10-year benchmark paper,
ahead of the fiscal year-end.
• Yield on the 10-year benchmark paper
(5.85% GS 2030) fell 6 bps to close at
6.12% from the previous week’s close of
6.18%.
• Data from RBI showed that reserve
money increased at an annualized rate of
12.0% in the week to Mar 19, 2021,
compared with an increase of 14.1% a
year earlier.
Domestic Debt Market
6.10
6.15
6.20
22-Mar 23-Mar 24-Mar 25-Mar 26-Mar
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 4.05 4.51 46
3 Year 4.97 5.65 68
5 Year 5.70 6.57 87
10 Year 6.22 7.33 111
Source: Refinitiv Value as on
Mar 26, 2021
• Yields on gilt securities fell in the range of 5
to 14 bps across maturities. Yield fell the
most on 5-year paper.
• Corporate bond yields declined in the range
of 8 to 11 bps across the curve, leaving 1-year
papers that rose 13 bps. Yield fell the most
on 9- & 10-year papers.
• Spread between AAA corporate bond and gilt
expanded by up to 21 bps across the
segments, except 10- & 15-year papers that
contracted 4 & 1 bps, respectively and 7-year
paper was unchanged.
Domestic Debt Market (Spread Analysis)
-18
-9
0
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 26-Mar-21 19-Mar-21
Yield in %
Change in bps
Source: Refinitiv
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8
• Capital market regulator Securities and Exchange Board of India (SEBI) has accepted several
key proposals to make the innovator growth platform's listing process easier for start-ups.
The capital markets regulator has approved shortening the time during which qualifying
investors in a start-up must retain 25% of the pre-issue capital to one year from two years
previously. The regulator has also permitted start-ups to assign up to 60% of the issue size
to qualified investors on a discretionary basis prior to the issue launch, with a 30-day lock-in
period on such shares. In the event of an acquisition of a company listed on the Innovator
Growth Platform, the open bid trigger has been increased from 25% to 49%.
• SEBI changed the way perpetual bonds are valued. The deemed residual maturity of Basel III
supplementary tier-1 (AT-1) bonds will be 10 years until Mar 31, 2022, according to a circular
issued by SEBI. Further, if the issuer does not exercise call option for any ISIN then the
valuation and calculation of Macaulay Duration shall be done considering maturity of 100
years from the date of issuance for AT-1 Bonds and Contractual Maturity for Tier 2 bonds,
for all ISINs of the issuer.
• SEBI has urged stock exchanges, depositories and all market intermediaries, which use bulk
SMS (short message service) for providing services to investors to ensure strict compliance
with Telecom Regulatory Authority of India’s (TRAI) rules. SEBI further said that non-
compliance with the provisions of Telecom Commercial Communications Customer
Preference Regulations, 2018 (TCCCP Regulations) may result in disruption of delivery of
their messages to the investors.
Regulatory Updates in India
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9
• In the event of delivery default, SEBI has introduced a new penal structure for commodity
derivatives. Furthermore, according to SEBI, clearing corporations with commodity
derivatives segments should have an appropriate deterrent mechanism in place to prevent
intentional or wilful delivery defaults, as well as adequate compensation for non-
defaulting counterparties.
• According to the Finance Minister, SEBI will establish the Corporate Debt Market
Development Fund (CDMDF) to provide liquidity to mutual funds and other corporate
bond market participants.
• RBI has announced the establishment of a standing external advisory committee (SEAC) to
review universal bank and small finance bank applications. A former deputy governor will
lead the five-member committee. After the regulator has vetted the plan, the SEAC, which
will have a three-year term, will screen applications for universal and small finance banks.
• According to media reports, Insurance Regulatory and Development Authority of India
(IRDAI) in a circular to life, general and standalone health insurance companies as well as
Third Party Administrators specified that insurer shall ensure that the denial of the claim is
not based on presumptions and conjectures. The insurance regulator said that when a
claim is denied or repudiated, the insurer shall communicate the same, specifically
mentioning reasons and also referring to the corresponding policy conditions.
Regulatory Updates in India (contd..)
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• According to revised data released by the Commerce Department, U.S. real gross domestic
product (GDP) rose 4.3% in the fourth quarter of 2020 compared to the previously
reported 4.1% rise. The stronger-than-expected growth was largely due to an upward
revision to private inventory investment, which was partially offset by a downward revision
to non-residential fixed investment.
• According to data from the Commerce Department, U.S. durable goods orders
unexpectedly fell 1.1% in Feb 2021 after spiking by an upwardly revised 3.5% in Jan 2021.
• According to flash data from IHS Markit, Germany’s composite output index rose 56.8 in
Mar 2021 from 51.1 in Feb 2021. The services Purchasing Managers' Index rose to 50.8 in
Mar from 45.7 in Feb. The manufacturing PMI rose to 66.6 in Mar from 60.7 in the previous
month.
• According to flash data from IHS Markit, eurozone’s composite output index rose to 52.5 in
Mar 2021 from 48.8 in Feb 2021. As global demand recovered from the pandemic, the euro
area private sector resumed growth in March, bolstered by a record expansion in
manufacturing.
• People’s Bank of China left its benchmark lending rates unchanged. The one-year loan
prime rate was retained at 3.85% and the five-year loan prime rate was maintained at
4.65%. The possibility of raising rates this year is dwindling. The central bank tends to
prefer quantitative lending controls. In either case, credit conditions are expected to
worsen in 2021.
10
Global News/Economy
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11
Global Indices
Indices
26-Mar-21
1-Week
Return
YTD
Return
Russell 3000 1,958.70 0.87% 0.31%
Nasdaq 100 12,979.12 0.87% 0.70%
FTSE 100 6,740.59 0.48% 4.34%
DAX Index 14,748.94 0.88% 7.51%
Nikkei Average 29,176.70 -2.07% 6.31%
Straits Times 3,157.95 0.75% 11.05%
Source: Refinitiv Value as on Mar 26, 2021
U.S.
• U.S. markets rose after the U.S.
President announced a new goal of
administering 200 million COVID-19
vaccinations within his first 100 days in
office. Market sentiments were further
boosted after the U.S. Federal Reserve
mandated that banks could resume
buybacks and raise dividends starting at
the end of Jun 2021. However, concerns
about extended coronavirus lockdowns
in Europe amid worries a new wave of
infections capped the gains.
Europe
• European markets rose following an improvement in global risk sentiment as market
participants focused on the outlook for growth and inflation amid advances in COVID-19
vaccine rollout. However, surge in COVID-19 cases in several parts of Europe and
extension of lockdown measures capped the gains.
Asia
• Asian markets witnessed a mixed trend with cautious mood prevailing amid worries over
potential U.S. tax hikes and extended lockdowns in Europe.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury fell 7
bps to close at 1.66%, from the previous
week’s close of 1.73%.
• U.S. Treasury prices rose following upbeat
demand for a $60 billion sale of 2-year
notes and average demand for an auction
of 5-year notes. Quarterly rebalancing of
portfolios further boosted the demand
for bonds.
• Gains were limited as the safe haven
appeal of the U.S. Treasuries dwindled
with market participants growing hopeful
of a faster U.S. economic recovery and
higher inflation pressures.
Global Debt (U.S.)
1.60
1.65
1.70
22-Mar 23-Mar 24-Mar 25-Mar 26-Mar
Yields in %
US 10-Year Treasury Yield
Movement
Source: Refinitiv
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13
Performance of various commodities
Commodities
Last Closing* 1-Week Ago
Brent Crude($/Barrel)
64.24 63.23
Gold ($/Oz)
1,731.97 1,744.74
Gold (Rs/10 gm)
44,569 44,788
Silver ($/Oz)
25.05 26.25
Silver (Rs/Kg)
64,693 66,744
Source: Refinitiv *Value as on Mar 26, 2021
Gold
• Gold prices fell as U.S. dollar hit a four-
month high, reducing the non-yielding
yellow metal's appeal. Nonetheless, prices
got support from safe haven appeal on
concerns over renewed lockdowns in euro
zone.
Brent Crude
• Brent crude prices rose on concerns over a
disruption in oil supply after a giant
container ship lost control and ran aground
in the Suez Canal thereby bringing marine
traffic to a halt. However, gains were
restricted by new round of coronavirus
restrictions in Europe, which renewed
worries over global growth.
Baltic Dry Index
• The index fell WoW due to sluggish
capesize and panamax activities.
Commodities Market
9.20
9.60
10.00
10.40
10.80
26-Feb-21 12-Mar-21 26-Mar-21
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
Source: Refinitiv
- 0.73%
1.60%
- 4.57%
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing* 1-Wk Ago
US Dollar
72.40 72.52
Pound Sterling
99.62 100.94
EURO
85.31 86.45
100 Yen
66.26 66.64
Source: Refinitiv Figures in INR , *
Value as on Mar 26, 2021
Rupee
• The Indian rupee rose against the U.S. dollar, as
greenback sales by exporter’s outweighed
broader strength in the dollar index.
Euro
• Euro fell against the U.S. dollar after the U.S.
Treasury Secretary and the U.S. Federal Reserve
chairman indicated to Congress that they had
confidence in the U.S. economy.
Pound
• Pound declined against the U.S. dollar as the
European Union considered banning COVID-19
vaccine exports to Britain.
Yen
• Yen weakened against the U.S. dollar as the
safe haven appeal of the former dwindled after
the U.S. Treasury Secretary and the U.S. Federal
Reserve chairman indicated to Congress that
they had confidence in the U.S. economy.
Currencies Markets
9.50
9.60
9.70
9.80
9.90
10.00
10.10
26-Feb-21 12-Mar-21 26-Mar-21
USD GBP Euro JPY
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
Source: Refinitiv
- 0.15%
-1.32%
-0.57%
-1.31%
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15
The Week that was…
22
nd
Mar to 26
th
Mar
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16
The Week that was (Mar 22 – Mar 26)
Date Events Present Value Previous Value
Monday,
March 22, 2021
• Japan Leading Economic Index (Jan) 98.5 97.7
• U.S. Existing Home Sales (MoM)(Feb) 6.22M 6.66M
Tuesday,
March 23, 2021
• U.K. ILO Unemployment Rate (3M)(Jan) 5% 5.10%
• U.S. New Home Sales (MoM) (Feb) 0.775M 0.948M
Wednesday,
March 24, 2021
• U.K. Consumer Price Index (YoY) (Feb) 0.40% 0.70%
• Germany Markit PMI Composite (Mar) PREL 56.8 51.1
• Eurozone Markit PMI Composite (Mar) PREL 52.5 48.8
• U.K. Markit Services PMI (Mar) PREL 56.8 49.5
• U.S. Durable Goods Orders (Feb) -1.10% 3.50%
Thursday,
March 25, 2021
• U.S. Gross Domestic Product Annualized (Q4) 4.30% 4.10%
• U.S. Gross Domestic Product Price Index (Q4) 1.90% 2%
• U.S. Personal Consumption Expenditures (QoQ)(Q4) 1.50% 1.6%
• Germany Consumer Confidence Survey (Apr) -6.2 -12.7
Friday,
March 26, 2021
• U.K. Retail Sales (YoY)(Feb) -3.70% -5.90%
• Germany IFO – Business Climate (Mar) 96.6 92.7
• U.S. Personal Income (MoM) (Feb) -7.10% 10.10%
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17
The Week Ahead
29
th
Mar to 2
nd
Apr
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18
Day Event
Monday,
Mar 29, 2021
• Japan Unemployment Rate (Feb)
• Japan Retail Trade (YoY) (Feb)
Tuesday,
Mar 30, 2021
• Germany Harmonized Index of Consumer Prices (YoY) (Mar) PREL
• Eurozone Consumer Confidence (Mar)
• U.S. Housing Price Index (MoM) (Jan)
• Japan Industrial Production (YoY) (Feb) PREL
Wednesday,
Mar 31, 2021
• U.K. Gross Domestic Product (QoQ) (Q4)
• China Non-Manufacturing PMI (Mar)
• Eurozone Consumer Price Index (YoY) (Mar) PREL
• U.S. ADP Employment Change (Mar)
• Germany Unemployment Rate (Feb)
Thursday,
Apr 1, 2021
• Germany Retail Sales (YoY) (Feb)
• U.S. ISM Manufacturing PMI (Mar)
Friday,
Apr 2, 2021
• U.S. Nonfarm Payrolls (Mar)
• U.S. Unemployment Rate (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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