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NEWS U CAN USE
May 07, 2021
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The Week that was…
3
rd
May to 7
th
May
2
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Indian Economy
• IHS Markit survey showed India’s Manufacturing Purchasing Managers’ Index (PMI) rose marginally
to 55.5 in Apr 2021 from 55.4 in Mar 2021. The manufacturing sector remained largely unchanged,
with new order and production growth rates falling to eight-month lows as the COVID-19 crisis
worsened.
• Data from the private survey showed that the seasonally adjusted India Services Business Activity
Index fell to 54.0 in Apr 2021 from 54.6 in Mar 2021. The Composite PMI Output also decreased to
55.4 in Apr 2021 from 56.0 in Mar 2021.
• According to a major credit rating agency, India is likely to breach its fiscal deficit target in FY22.
The agency expects Indian central government deficit to come in at 8.3% of GDP in FY22 as against
government’s target of 6.8% of the GDP in FY22. The key driver of the deficit forecast revision is a
downward revision to the revenue outlook, provided that India's economic recovery will be
hampered by COVID-19 cases and containment measures in place, which will have a negative effect
on fiscal revenues.
• The Prime Ministers of India and the United Kingdom launched a bold 10-year plan to turn India-
UK relations into a comprehensive strategic partnership and expand cooperation in key areas such
as defence, security, trade, and healthcare. They also announced a strengthened trade
relationship, which the External Affairs Ministry described as "another big-ticket announcement."
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4
Domestic Equity Market Indices
Indices
07-May-21 1 Week Return YTD Return
S&P BSE Sensex
49,206.47 0.87% 3.05%
Nifty 50
14,823.15 1.31% 6.02%
S&P BSE Mid
-Cap 20,608.61 1.46% 14.87%
S&P BSE Small
-Cap 22,218.10 2.53% 22.76%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines Advance/Decline Ratio
03-May-21 1162 788 1.47
04-May-21 778 1134 0.69
05-May-21 1187 707 1.68
06-May-21 1056 850 1.24
07-May-21 1097 834 1.32
Source: NSE
• Indian equity markets witnessed muted
gains during the week with investors
initially contemplating on growing
probability of government imposing curbs
at the national level to rein in the COVID-
19 spread. Besides, confidence in the
markets took a hit following media reports
that banks have approached RBI to grant a
3-month moratorium period owing to
slowdown in economic activity.
• Bourses overcame the weakness in
response to the RBI’s announcement of
COVID-19 healthcare package of Rs 500
billion.
• Additionally, individual borrowers and
small businesses with loan outstanding of
up to Rs 25 crore, and who did not avail for
moratorium or restructuring relief last year,
can ask for restructuring of their loans for
up to 2 years.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE Mid
Cap
S&P BSE Small
Cap
P/E
31.41 30.23 56.87 73.24
P/B
3.18 4.24 3.03 2.99
Dividend Yield
0.84 0.99 0.91 0.83
Source: BSE, NSE Va
lue as on May 07, 2021
Indian Equity Market
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5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
S&P BSE Auto
22,053.00 1.78% -1.50%
S&P BSE Bankex
37,516.20 0.57% 0.57%
S&P BSE CD
31,605.77 -2.22% -2.02%
S&P BSE CG
20,611.88 1.78% -2.46%
S&P BSE FMCG
12,744.33 1.88% -1.09%
S&P BSE HC
24,048.61 2.20% 8.67%
S&P BSE IT
26,786.92 1.83% -3.14%
S&P BSE Metal
19,655.48 10.29% 25.65%
S&P BSE Oil & Gas
15,402.10 2.71% 3.03%
Source: Refinitiv *Value as on May 07, 2021
• On the BSE sectoral front, majority of the indices
closed in the green. S&P BSE Metal was the top
gainer, up 10.29%, followed by S&P BSE Power and
S&P BSE Oil & Gas, which rose 3.28% and 2.71%,
respectively.
• The domestic metal sector surged after China
adjusted its import and export levies on steel,
signaling that the world’s largest consumer of the
alloy is willing to import more to meet its growing
requirement. Meanwhile, S&P BSE Consumer
Durables and S&P BSE Realty slipped 2.22% and
0.96%, respectively.
Indian Derivatives Market Review
• Nifty May 2021 Futures stood at 14,869.55, a premium of 46.40 points above the spot closing of
14,823.15. The total turnover on NSE’s Futures and Options segment for the week stood at Rs.
212.61 lakh crore as against Rs. 219.20 lakh crore for the week to Apr 30.
• The Put-Call ratio stood at 0.83 compared with the previous week’s close of 0.87.
• The Nifty Put-Call ratio stood at 1.33 compared with the previous week’s close of 1.07.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-Wk Ago
1-Mth
Ago
6-Mth
Ago
Call Rate
3.22 3.21 3.14 3.20
91 Day T-Bill
3.36 3.33 3.25 3.16
05.22% 2025, (5 Yr GOI)
5.34 5.38 5.50 5.11
05.85% 2030, (10 Yr GOI)
6.02 6.03 6.08 5.87
Source: Refinitiv Value as on May 07, 2021
• Bond yields inched down after the Reserve
Bank of India announced a slew of measures
to provide support to the domestic economy
that has been reeling under the COVID-19
pandemic. However, persistent increase in
new COVID-19 infection cases across the
country that showed no signs of slow down
neutralised most of the gains.
• Bond yields inched down 1 bps to close at
6.02% as compared to the previous week’s
close of 6.03%.
• Data from RBI showed that money supply
increased at an annualized rate of 10.6% in
the fortnight ending Apr 23, 2021, compared
with an increase of 10.8% a year earlier. The
currency with the public increased 15.6%
during the same fortnight compared with an
increase of 15.9% a year earlier.
Domestic Debt Market
5.60
5.90
6.20
3-May 4-May 5-May 6-May 7-May
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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Maturity G-Sec Yield (%) Corporate Yield (%)
Spread bps
1 Year 3.89 4.59 70
3 Year 4.79 5.42 64
5 Year 5.61 6.25 64
10 Year 6.11 7.05 94
Source: Refinitiv
Value as on May 07, 2021
• Yields on gilt securities rose by up to 12 bps on 1-,
2-, 5-, 11-, 13-, 19- & 30-year papers while
remaining maturities fell in the range of 3 to 7
bps.
• Corporate bond yields rose in the range of 4 to 21
bps on 1- to 4- and 15-year papers while 6- to 10-
year papers fell in the range of 11 to 19 bps. Yield
on 5-year paper were unchanged.
• Spread between AAA corporate bond and gilt
expanded 1, 18, 26 or 27 bps on 1- to 4-year and
15-year papers while remaining maturities
contracted in the range of 6 to 14 bps.
Domestic Debt Market (Spread Analysis)
-4
5
14
2.40
5.00
7.60
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 07-May-21 30-Apr-21
Yield in %
Change in bps
Source: Refinitiv
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8
• The Reserve Bank of India (RBI) announced a slew of steps as the second wave of the coronavirus
pandemic causes serious strains on healthcare and medical services. The RBI Governor announced in
an unscheduled speech that the central bank would have an on-tap liquidity window of Rs. 500
billion to support emergency healthcare facilities and services. Banks will offer new lending support
to a wide variety of companies under this programme, including vaccine producers, importers and
suppliers of vaccines and priority medical supplies, hospitals and dispensaries, and other healthcare
operators. Credit is also available to logistics companies and patients. These loans will be classified
under the priority sector till repayment or maturity, whichever is earlier.
• According to RBI Governor, in Feb 2021, scheduled commercial banks were authorised to subtract
credit disbursed for new MSME borrowers from their Net Demand and Time Liabilities (NDTL) for the
purpose of calculating CRR. This exemption, which is currently valid for exposures up to Rs. 25 lakh
and credit disbursed up to fortnight ending Oct 1,2021, is being extended until Dec 31, 2021 to
further incentivize the entry of unbanked MSMEs into the banking system.
• The Securities Exchange Board of India (SEBI) announced that it is in the process of engaging
agencies to create a virtual museum of the Indian securities market in order to document its history.
SEBI has invited agencies to submit Expressions of Interest (EoI) for the creation of an online virtual
museum of the Indian securities market. The museum will preserve tangible and intangible records
and commemorate the history of the Indian securities industry, as well as create interest and raise
awareness of the market among stakeholders, the general public, scholars, and students.
Regulatory Updates in India
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9
• The Department of Telecommunications (DoT) has granted telcos permission to conduct trials for
5G technology use and applications. Telcos will need to perform trials in rural and semi-urban areas
as well as urban areas to ensure that the benefits of 5G technology are spread across the country
and not only in urban areas. The trials are currently scheduled to last for six months. This involves a
two-month cycle for purchasing and setting up the equipment.
• The Central Government has waived the IGST or integrated GST on goods received for free in
exchange for free distribution of COVID relief. The exemption is one-time only, and it applies to all
listed imports until Jun 30, 2021. The exemption would also apply to products that have already
been imported but are still pending clearance on the date of the exemption's issuance, which is set
to begin on May 3, 2021.
• The Reserve Bank of India announced the formation of an advisory committee to help the second
Regulatory Review Authority (RRA2.0), which was established earlier this month by the central
bank to streamline regulations and reduce the enforcement burden on controlled entities.
Regulatory Updates in India (contd..)
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• According to the Labor Department, U.S. non-farm payroll employment rose by 266,000 jobs in Apr
2021 after surging by a downwardly revised 770,000 jobs in Mar 2021. The report also showed the
unemployment rate rose 6.15 in Apr 2021 from 6% in Mar 2021.
• According to a report released by the Institute for Supply Management, U.S. manufacturing
Purchasing Managers' Index (PMI) fell to 60.7 in Apr 2021 after jumping to a more than 37-year
high of 64.7 in Mar 2021.
• The Bank of England kept its interest rate and quantitative easing unchanged at the latest meeting.
The bank retained the stock of corporate bond purchases at GBP 20 billion and the government
bond purchases at GBP 875 billion. The committee did not plan to tighten monetary policy until
clear evidence that substantial progress was being made in reducing spare capacity and achieving
the 2% inflation goal on a long-term basis.
• According to Destatis, Germany’s retail sales grew 7.7% MoM in Mar 2021 as against 2.7% increase
in Feb 2021. On a yearly basis, retail sales rebounded 11% in Mar as against 6.6% decline in the
previous month.
• According to the General Administration of Customs, China’s exports rose 32.3% YoY in Apr 2021 as
against 30.6% reported in Mar 2021. Similarly, imports rose 43.1% YoY as against expected growth
of 42.5%. The trade surplus totaled $42.85 billion in Apr.
• According to the latest survey from Caixin, China’s services Purchasing Managers’ Index (PMI) came
in at 56.3 in Apr 2021 as against 54.3 in Mar 2021.
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Global News/Economy
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11
Global Indices
Indices
07-May-21
1-Week
Return
YTD
Return
Russell 3000
2,075.38 -1.14% 6.29%
Nasdaq 100
13,719.63 -1.02% 6.45%
FTSE 100
7,129.71 2.29% 10.36%
DAX Index
15,399.65 1.74% 12.25%
Nikkei Average
29,357.82 1.89% 6.97%
Straits Times
3,200.26 -0.56% 12.53%
Source: Refinitiv Value as on May 7, 2021
U.S.
• U.S. markets largely closed higher with
investors reacting positively to the jobs
data. The closely watched Labor
Department report showed much weaker
than expected job growth in the month of
Apr.
• The disappointing jobs data reinforced the
view the Federal Reserve will leave ultra-
easy monetary policy in place for the
foreseeable future.
Europe
• European markets went up with investors reacting positively to some upbeat earnings reports and
encouraging economic data from Germany that indicate a fairly strong global economic rebound.
Asia
• Asian markets largely went down as investors remained cautious over the surge in coronavirus
cases in the region, particularly in Japan and India, as well as the possibility of lockdowns in several
markets. Meanwhile, positive Chinese export data for Apr boosted optimism about the global
economic outlook.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury fell 5 bps
to close at 1.58%, from the previous week’s
close of 1.63%.
• U.S. Treasury prices rose during the week
under review after data showed
manufacturing activity growth in U.S. slowed
in April 2021 amid supply chain challenges.
This reinforced expectations that interest
rates in U.S, would remain at ultra-low levels
for a prolonged period of time.
• However, the U.S. Treasury Secretary
advocated for a rise in interest rates in U.S.
which capped the gains.
Global Debt (U.S.)
1.50
1.58
1.66
3-May 4-May 5-May 6-May 7-May
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)
69.46 68.33
Gold ($/Oz)
1830.48 1768.59
Gold (Rs/10 gm)
47,569 47,569
Silver ($/Oz)
27.43 25.90
Silver (Rs/Kg)
69,875 69,875
Source: Refinitiv *Value as on May 07, 2021
Gold
• Gold prices rose following weakness in the
greenback and decline in yields on U.S.
Treasuries. Growing possibility that the U.S.
Federal Reserve will continue with their
accommodative stance on monetary policy also
contributed to the upside.
Brent Crude
• Brent Crude prices edged higher, with data
from the Energy Information Administration
showing that U.S. crude inventories fell by 8
million barrels in the week to April 30 to 485.1
million barrels. Oil prices found additional
support from growing prospects of a pickup in
fuel demand.
Baltic Dry Index
• The index rose during the week due to
improved capesize and panamax activities.
Commodities Market
9.60
10.80
12.00
7-Apr-21 22-Apr-21 7-May-21
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
Source: Refinitiv
5.91%
1.65%
3.50%
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing* 1-Wk Ago
US Dollar
73.74 74.02
Pound Sterling
102.51 103.16
EURO
88.90 89.69
100 Yen
67.55 68.02
Source: Refinitiv Figures in INR , *
Value as on May 07, 2021
Rupee
• The rupee rose against the greenback following
gains in the domestic equity market and selling of
the greenback by exporters.
Euro
• The euro rose against the greenback as the latter
remained under pressure following downbeat U.S.
jobs data for Apr 2021.
Pound
• The pound rose against the greenback after U.S.
jobs data for Apr 2021 came below market
expectations.
Yen
• The yen rose against the greenback as downbeat
U.S. economic data for Apr 2021 kept the U.S. dollar
under pressure. Meanwhile, the U.S. Treasury
Secretary advocated for a rise in interest rates in
U.S. which capped the gains.
Currencies Markets
9.90
10.15
10.40
7-Apr-21 22-Apr-21 7-May-21
USD GBP Euro JPY
Source: Refinitiv
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
-0.88%
-0.63%
-0.38%
-0.69%
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15
The Week that was…
3
rd
May to 7
th
May
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16
The Week that was (May 3 – May 7)
Date Events Present Value Previous Value
Monday,
May 03, 2021
• India Markit Manufacturing PMI (Apr) 55.5 55.4
• U.S. ISM Manufacturing PMI (Apr) 60.7 64.7
• Germany Retail Sales (YoY)(Mar) 11% -6.60%
• Germany Markit Manufacturing PMI(Apr) 66.2 66.4
Tuesday,
May 04, 2021
• U.S. Goods and Services Trade Balance (Mar) (USD) -74.4B -70.5B
• U.S. Factory Orders (MoM)(Mar) 1.10% -0.50%
Wednesday,
May 05, 2021
• India Markit Services PMI (Apr) 54 54.6
• U.S. ADP Employment Change (Apr) 742K 565K
• Germany Markit PMI Composite (Apr) 55.8 56
• U.S. ISM Services PMI (Apr) 62.7 63.7
Thursday
May 06, 2021
• Eurozone Retail Sales (YoY)(Mar) 12% -1.50%
• Germany Factory Orders (MoM)(Mar) 3% 1.40%
Friday,
May 07, 2021
• U.S. Nonfarm Payrolls (Apr) 266K 770K
• U.S. Unemployment Rate (Apr) 6.10% 6%
• Germany Industrial Production (MoM)(Mar) 2.50% -1.90%
• Germany Trade Balance (Mar) (Euro) 14.3B 18.9B
• China Trade Balance (USD) (Apr) 42.85B 13.8B
• China Caixin Services PMI (Apr) 56.3 54.3
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17
The Week Ahead
10
th
May to 14
th
May
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18
Day Event
Monday,
May 10, 2021
• U.K. Halifax House Prices (MoM)(Apr)
• Eurozone Sentix Investor Confidence (May)
Tuesday,
May 11, 2021
• China Consumer Price Index (YoY)(Apr)
• U.K. BRC Like-For-Like Retail Sales (YoY)(Apr)
• Eurozone ZEW Survey – Economic Sentiment (May)
• Germany ZEW Survey – Economic Sentiment (May)
Wednesday,
May 12, 2021
• U.K. Gross Domestic Product (QoQ)(Q1) PREL
• Germany Harmonized Index of Consumer Prices (YoY)(Apr)
• U.S. Consumer Price Index (YoY) (Apr)
• Eurozone Industrial Production (MoM)(Mar)
Thursday,
May 13, 2021
• Japan Current Account (Mar)
• U.S. Producer Price Index (MoM)(Apr)
Friday,
May 14, 2021
• U.S. Retail Sales (MoM) (Apr)
• U.S. Michigan Consumer Sentiment Index (May) PREL
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 Management Limited (NAM India) has not
independently verified the accuracy or authenticity of such information or data, or for that matter the reasonableness of the assumptions upon which such data
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