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NEWS U CAN USE
May 15, 2020
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The Week that was…
11
th
May to 15
th
May
2
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Indian Economy
• India's Index of industrial production (IIP) plunged 16.7% YoY in Mar 2020 compared with
2.7% rise seen in Mar 2019. Fall was mainly due to 20.6% YoY sharp fall in manufacturing
output in Mar 2020 while electricity output fell 6.8%. Factories closed down towards the
Mar end due to the nationwide lockdown. Industrial output growth during FY19-20 slowed
substantially to 0.5% from 4% rise in FY18-19.
• According to the data released by the commerce and industry ministry, India’s exports and
imports plunged 60.28% YoY and 58.65% YoY to $10.36 billion and $17.12 billion,
respectively in Apr 2020. As a result, trade deficit contracted significantly to $6.76 billion in
Apr 2020 from $15.33 billion in Apr 2019. Exports witnessed its steepest monthly fall in at
least 25 years, as manufacturing units were closed amid country lockdown to contain the
spread of coronavirus .
• India’s Wholesale Food Price Index based inflation slowed down to 3.60% YoY in Apr 2020
from 5.49% in Mar 2020. The government suspended the release of the headline
wholesale inflation number due to the nationwide lockdown-led disruptions in data
collection.
• Finance minister announced 15 relief measures as part of economic stimulus package in a
bid to revive economy impacted by lockdown amid covid-19 pandemic and make India self-
reliant (Atmanirbhar Bharat). India will provide Rs. 3 lakh crore worth collateral-free loans
to small businesses for four years.
3
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4
Domestic Equity Market Indices
Indices
15
-May-
20
1 Week Return
YTD Return
S&P BSE Sensex
31,097.73 -1.72% -24.62%
Nifty 50
9,136.85 -1.24% -24.91%
S&P BSE Mid
-Cap 11,500.32 0.67% -23.17%
S&P BSE Small
-Cap 10,688.86 0.47% -21.98%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
11-May-20 859 968 0.89
12-May-20 684 1103 0.62
13-May-20 1331 472 2.82
14-May-20 703 1086 0.65
15-May-20 837 945 0.89
Source: NSE
• Indian equity markets fell for the
second consecutive week with
investors cautiously following the
developments on the coronavirus front.
• Weak global cues played spoilsport
amid worries about a second wave of
coronavirus infections after the
Chinese city where the pandemic
originated reported its first new cases
since its lockdown was lifted.
• The downturn was restricted as
investors welcomed the Rs. 20 trillion -
stimulus package announced by the
government to revive the economy in
the wake of the COVID-19 pandemic.
• However, a slew of announcements by
the finance minister later targeting
various sectors did little to lift buying
interest.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
19.20 20.98 22.08 122.72
P/B
2.33 2.60 1.86 1.58
Dividend Yield
1.22 1.67 1.59 1.56
Source: BSE, NSE Va
lue as on May 15, 2020
Indian Equity Market
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5
Sectoral Indices
Indices
Last Returns (in %)
Closing* 1-Wk 1-Mth
S&P BSE Auto
13,024.51 5.51% 7.23%
S&P BSE Bankex
21,576.07 -2.86% -1.28%
S&P BSE CD
18,317.57 1.16% -7.71%
S&P BSE CG
11,670.48 4.62% -0.90%
S&P BSE FMCG
10,077.72 0.16% -9.77%
S&P BSE HC
15,029.45 -1.58% 1.84%
S&P BSE IT
13,314.15 -1.63% 4.74%
S&P BSE Metal
6,322.08 4.14% -0.24%
S&P BSE Oil & Gas
11,199.75 -2.82% 3.08%
Source: Thomson Reuters Eikon
*Value as on May 15, 2020
• On the BSE sectoral front, S&P BSE Bankex
was the major loser down 2.86%, followed by
S&P BSE Oil & Gas and S&P BSE IT, which
slipped 2.82% and 1.63%, respectively.
• Meanwhile, S&P BSE Auto was the major
gainer, up 5.51%, followed by S&P BSE Capital
Goods and S&P BSE Metal, which rose 4.62%
and 4.14%, respectively. S&P BSE Power and
S&P BSE Realty edged up 2.78% and 2.38%,
respectively.
Indian Derivatives Market Review
• Nifty May 2020 Futures stood at 9,137.10, a premium of 0.25 points above the spot closing
of 9,136.85. The total turnover on NSE’s Futures and Options segment for the week stood
at Rs. 60.28 lakh crore as against Rs. 60.49 lakh crore for the week to May 8.
• The Put-Call ratio stood at 0.80 compared with the previous session’s close of 0.92.
• The Nifty Put-Call ratio stood at 1.11 compared with the previous session’s close of 1.32.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-
Wk
Ago
1-
Mth
Ago
6-
Mth
Ago
Call Rate
3.97 3.98 4.27 5.09
91 Day T
-Bill
3.41 3.54 4.08 5.06
07.32% 2024, (5 Yr GOI)
5.08 4.92 5.62 6.22
06.45% 2029, (10
Yr GOI)
6.08 5.97 6.43 6.52
Source: Thomson Reuters Eikon
Value as on May 15, 2020
• Bond yields rose as lack of any
announcement from the Reserve Bank
of India on the upsized government
borrowing plan hurt investor’s
sentiment.
• However, losses were restricted as
state-run banks stepped up purchases
after the announcement of an
economic stimulus package by the
Prime Minister in the speech on May
12, 2020. Prime Minister said that Rs.
20 lakh crore package, almost
amounting to 10% of India's gross
domestic product, will be aimed at
migrant labour, the middle class and
industry.
• Yield on the 10-year benchmark paper
(6.45% GS 2029) rose 11 bps to close
at 6.08% compared with the previous
week’s close of 5.97%.
Domestic Debt Market
5.00
5.70
6.40
11-May 12-May 13-May 14-May 15-May
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-
Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 3.86 5.90 204
3 Year 4.82 6.58 176
5 Year 5.67 7.00 133
10 Year 6.17 7.47 129
Source: Thomson Reuters
Eikon Value as on
May 15
, 2020
• Yields on gilt securities rose across the
maturities by up to 22 bps, barring 1- & 19-
year papers that fell 4 bps each. Highest
rise was seen on 6-year paper and lowest
increase was on 2- & 15-year papers.
• Corporate bond yields went up across the
curve in the range of 9 to 18 bps, leaving
1-, 2- & 15-year papers by up to 8 bps.
• Spread between AAA corporate bond and
gilt contracted across the segments by up
to 10 bps, leaving 1-, 5- & -7-year papers
that expanded 2, 8 & 5 bps, respectively.
Domestic Debt Market (Spread Analysis)
-15
0
15
3.00
5.10
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 15-May-20 08-May-20
Yield
in %
Change
in bps
Source: Thomson Reuters Eikon
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8
• Tax deducted at source (TDS) and Tax collected at source (TCS) reduced by 25% till Mar 31,
2021. This will release Rs. 50,000 crore in the hands of people. Vivaad se Vishvas scheme
extended till Dec 31, 2020. Due date for all Income tax returns for FY19-20 extended to Nov
30, 2020.
• Six-member expert committee has constituted by the ministry of petroleum and natural gas
to review the existing production sharing contracts amid decline in crude oil prices and the
Covid-19 lockdown. There is a need to find ways of attracting investment in exploration and
production of oil and gas.
• Power Minister hopes that the revised tariff policy can be implemented within a month. It
has been cleared by a group of ministers and proposes to take it to the next Cabinet
meeting. One of the steps policy include penalty for unscheduled power cuts by distribution
companies. The government intends to provide '24X7 Power to All' at affordable rates.
• Central government will not hike the lease rent for 2020-21 for units in the government-
owned special economic zones (SEZs) due to the coronavirus pandemic, which will provide
relief to these facilities. The first quarter is deferred lease rent for the Jun quarter of 2020
up to Jul 31 for all SEZ units and the deferment would not invite any interest.
Regulatory Updates in India
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9
• Finance minister announced steps on governance and administrative reforms including
amending Essential Commodities Act, 1955. Onions, potatoes, pulses, edible oils, cereals
to be completely deregulated. Stock limits will be invoked only under exceptional
situations. Central law to be brought to provide farmers the choice to sell at best price.
• Barriers in inter-state trade to be lifted and provisions will be brought to enable e-trading.
Legal framework to be brought in to ensure a fixed fair price for farmers even before they
start sowing. Farmers at present do not have a standard mechanism to charge a
predictable price. Well this move will improve income and standard of living of farmers.
Farmers will be able to deal with aggregators and other intermediaries in a risk-free
transparent manner.
Regulatory Updates in India (contd..)
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• According to the U.S. Labor Department, U.S. consumer price index fell 0.8% in Apr 2020
after falling 0.4% in Mar 2020. Excluding food and energy prices, core consumer prices fell
0.4% in Apr 2020 after declining 0.1% in Mar 2020.
• Data from Office for National Statistics showed that U.K.’s gross domestic product (GDP)
fell 2% sequentially in the first quarter of 2020. This was the largest decline since the
global financial crisis as measures adopted to reduce the transmission of the coronavirus
took a toll on overall activity.
• Germany’s gross domestic product fell 2.2% sequentially in the first quarter of 2020, the
biggest fall since the first quarter of 2009, as against 0.1% fall in the last quarter of 2019.
The contraction came as the nationwide lockdown amid coronavirus spread weighed on
consumption and overseas demand. Two consecutive quarters of contraction indicates
that the largest euro area economy entered a technical recession.
• According to flash estimate from Eurostat, eurozone’s gross domestic product fell 3.8%
sequentially in the first quarter of 2020 as against 0.1% rise in the fourth quarter of 2019.
The economy contracted due to measures taken to control the outspread of coronavirus.
On a yearly basis, the economy fell 3.2% after rising 1% in the fourth quarter.
• According to data from the National Bureau of Statistics, China’s Consumer Price inflation
fell to 3.3% in Apr 2020 from 4.3% in Mar 2020. The inflation eased to a seven-month low
in Apr and producer prices declined further indicating poor domestic demand despite
subsiding coronavirus pandemic.
10
Global News/Economy
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11
Global Indices
Indices
15-May-20
1-Week
Return
YTD
Return
Russell 3000
1,405.13 -1.07% -1.47%
Nasdaq 100
9,152.64 -0.73% 4.80%
FTSE 100
5,799.77 -2.29% -23.10%
DAX Index
10,465.17 -4.03% -21.01%
Nikkei Average
20,037.47 -0.70% -15.30%
Straits Times
2,523.55 -2.64% -21.70%
Source: Thomson Reuters Eikon Value as on May 15, 2020
U.S.
• U.S. markets slipped in the red following
renewed concerns of the new
coronavirus infection. Members of the
White House coronavirus task force
cautioned that the U.S. could risk
additional outbreaks if states start to
reopen too early.
• Later, the release of disappointing U.S.
economic data dragged the markets.
Europe
• European markets fell as investors became increasingly concerned about a potential
second wave of coronavirus cases. Investors also worried about the economic impact of
the coronavirus pandemic following the statement by the U.S. Fed Chief.
Asia
• Asian markets too mirrored the weakness of its global peers. Markets slipped to the red
after the U.S. Federal Reserve Chief warned that the near-term economic outlook is both
highly uncertain and subject to significant downside risks. Additionally, U.S.-China tensions
also dented investor sentiment.
Global Equity Markets
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12
• After rising in the last two consecutive
weeks, Yields on the 10-year U.S.
Treasury fell 4 bps to close at 0.64%
compared to the previous week’s close
of 0.68%.
• Initially, U.S. Treasury prices fell as
market participants anticipated new
government securities being issued to
pay for massive stimulus efforts to
boost the economy amid the Covid-19
pandemic.
• However, losses reversed as market
participants bought safe haven bonds as
the economy gets negatively impacted
by covid-19 pandemic. Strong demand
for 10-year notes was also seen in the
auction. Weak U.S. retail sales report,
further boosted treasury prices.
Global Debt (U.S.)
0.56
0.66
0.76
11-May 12-May 13-May 14-May 15-May
U.S. 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)
29.79 21.96
Gold ($/Oz)
1,741.00 1700.65
Gold (Rs/10 gm)
40,989 40989
Silver ($/Oz)
16.62 15.45
Silver (Rs/Kg)
36,871 36871
Source: Thomson Reuters Eikon *
Value as on May 15, 2020
Gold
• Gold prices rose as its safe haven appeal
improved on concerns over prolonged
economic weakness due to the
coronavirus outbreak. Worries over a
second wave of coronavirus infections
also contributed to the strength in the
bullion.
Brent Crude
• Brent crude prices rose, taking support
from the data by U.S. Energy
Information Administration showing
crude inventories in U.S. fell by 745,000
barrels in the week to May 8. However,
persisting concerns over the global
economic outlook capped the gains.
Baltic Dry Index
• Baltic Dry Index fell due to weak
capesize and panamax activities.
Commodities Market
0.00
5.00
10.00
15.00
20.00
15-Apr-20 30-Apr-20 15-May-20
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global
Commodity Prices
Rebased to 10
Source: Thomson Reuters Eikon
7.57%
35.66%
2.37%
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing*
1-Wk Ago
US Dollar
75.56 75.44
Pound Sterling
92.26 93.50
EURO
81.65 81.80
100 Yen
70.48 70.93
Source: RBI Figures in INR , *
Value as on May 15
, 2020
Rupee
• The rupee weakened against the
greenback following losses in the
domestic equity market.
Euro
• The euro weakened against the
greenback as hopes for a quick global
recovery from the covid-19 pandemic
faded while the threat of a second wave
of coronavirus infections rattled market
participants.
Pound
• The pound weakened against the
greenback as coronavirus-induced
economic woes weighed on the market.
Yen
• The yen weakened against the
greenback as countries across the globe
started to ease lockdown restrictions.
Currencies Markets
9.50
9.60
9.70
9.80
9.90
10.00
10.10
15-Apr-20 30-Apr-20 15-May-20
USD GBP Euro JPY
Source: Thomson Reuters Eikon
Currency
Prices (
in terms of INR)
Rebased to 10
Currency Movement
-0.18%
-1.32%
0.16%
-0.63%
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15
The Week that was…
11
th
May to 15
th
May
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16
The Week that was (May 11– May 15)
Date Events
Present
Value
Previous
Value
Monday,
May 11, 2020
• China M2 Money Supply (YoY) (Apr)
11.10% 10.10%
• China New Loans (Apr)
1700B 2850B
• Japan Foreign Reserves (Apr) (USD)
1368.6B 1366.2B
Tuesday,
May 12, 2020
• India Index of Industrial Production (Mar)
-16.70% 4.60%
• China Consumer Price Index (YoY) (Apr)
3.30% 4.30%
• Japan Preliminary Leading Economic Index (Mar)
83.8 91.9
• U.S. Consumer Price Index (YoY) (Apr)
0.30% 1.50%
• Japan Current Account (Mar) (Yen)
1971B 3168.8B
Wednesday,
May 13, 2020
• Japan Eco Watchers Survey Outlook (Apr)
16.6 18.8
• U.K. Industrial Production (YoY) (Mar)
-8.20% -3.40%
• U.K. Preliminary GDP (YoY) (Q1)
-1.60% 1.10%
• Eurozone Industrial Production (YoY) (Mar)
-12.90% -2.20%
• U.S. Producer Prices (YoY) (Apr)
-1.20% 0.70%
Wednesday,
May 14, 2020
• Germany Consumer Price Index (YoY) (Apr)
0.90% 0.80%
• Japan Producer Prices (YoY) (Apr)
-2.30% -0.40%
• U.S. Initial Jobless Claims (May 8)
2981K 3176K
Friday,
May 15, 2020
• China Industrial Production (YoY) (Apr)
3.90% -1.10%
• China Retail Sales (YoY) (Apr)
-7.50% -15.80%
• Eurozone Preliminary GDP (QoQ) (Q1)
-3.80% -3.80%
• Germany Preliminary GDP (QoQ) (Q1)
-2.20% -0.10%
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
17
The Week Ahead
18
th
May to 22
nd
May
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18
Day Event
Monday,
May 18, 2020
•
China House Price Index (Apr)
•
Japan Tertiary Industry Index (MoM) (Mar)
•
U.S. NAHB Housing Market Index (May)
Tuesday,
May 19, 2020
•
Japan Industrial Production (YoY) (Mar)
•
U.K. ILO Unemployment Rate (3M) (Mar)
•
Eurozone ZEW Survey - Economic Sentiment (May)
•
Eurozone Construction Output (YoY) (Mar)
•
U.S. Housing Starts (MoM) (Apr)
•
Japan Machinery Orders (YoY) (Mar)
Wednesday,
May 20, 2020
•
U.K. Consumer Price Index (MoM) (Apr)
•
Eurozone Gfk Consumer Confidence Survey (Jun)
•
Japan Merchandise Trade Balance Total (Apr)
Thursday,
May 21, 2020
•
Japan National Consumer Price Index (YoY) (Apr)
•
U.S. Existing Home Sales (MoM) (Apr)
Friday,
May 22, 2020
•
U.K. Retail Sales (YoY) (Apr)
•
U.K. Public Sector Net Borrowing (Apr)
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 Company 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 and information has been processed or arrive data; NAM India does not in any
manner assures the accuracy or authenticity of such data and information. Some of the statements & assertions contained in these materials may
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