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NEWS U CAN USE
May 21, 2021
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The Week that was…
17
th
May to 21
st
May
2
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Indian Economy
The Wholesale Price Index (WPI) based inflation surged to 10.49% on a yearly basis in Apr
2021 from 7.39% in the previous month and 4.83% in Feb 2021. WPI inflation in the same
period of the previous year stood at -1.57%. The WPI Food Index also surged to 7.58% in
Apr 2021 from 5.28% in the previous month and 3.58% in Feb 2021. WPI based rate of
inflation for crude petroleum and natural gas over the year stood at 79.56% compared to
the same period of the previous year when the same stood at -46.17%. WPI inflation for
manufactured products stood at 9.01% in Apr 2021 compared to the same period of the
previous year when the same stood at 0.17%.
According to the RBI Bulletin for May 2021, the consolidated balance sheet of non-banking
financial companies (NBFCs) grew at a slower pace in Q2 and Q3 of FY21. Profitability of
the sector improved marginally in Q2 and Q3 of FY21 as the expenditure of NBFCs
registered a steeper fall than income. The asset quality of NBFCs improved in Q2 and Q3
of FY21 compared to Q4 of FY20 on account of regulatory forbearance to mitigate the
impact of COVID-19 pandemic.
According to the labour ministry, retail inflation for farm workers and rural labourers in
Apr 2021 eased marginally to 2.66% and 2.94%, respectively, as against 2.78% and 2.96%,
respectively, in Mar 2021. The decline came mainly due to lower prices of certain food
items. Food inflation based on farm workers and rural labourers stood at 1.24% and 1.54%
in Apr 2021, respectively.
3
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4
Domestic Equity Market Indices
Indices 21-May-21 1 Week Return YTD Return
S&P BSE Sensex
50,540.48 3.71% 5.84%
Nifty 50
15,175.30 3.39% 8.54%
S&P BSE Mid-Cap
21,485.75 4.77% 19.76%
S&P BSE Small-Cap
23,130.40 4.19% 27.81%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
17-May-21 1340 650 2.06
18-May-21 1201 756 1.59
19-May-21 1107 857 1.29
20-May-21 942 1010 0.93
21-May-21 1202 751 1.60
Source: NSE
Indian equity markets ended the week
on a positive note with investors
initially taking positive cues from the
report suggesting that domestic
coronavirus cases falling below
3,00,000 mark for the first time since
April 21. Buying interest found
additional support after the country's
largest public sector lender by assets
reported record profit in quarter ended
Mar 2021.
Further, reports of new coronavirus
infections remaining below the
3,00,000 mark for a fifth consecutive
days of the week, added to bullish
sentiment.
However, gains were undermined by
report of record COVID fatalities in the
country along with uncertainty over
global inflation.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
31.57 29.48 51.73 58.76
P/B
3.23 4.34 3.09 3.08
Dividend Yield
0.85 0.97 0.91 0.83
Source: BSE, NSE Va
lue as on May 21, 2021
Indian Equity Market
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5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
S&P BSE Auto
23,166.60 5.15% 6.69%
S&P BSE Bankex
39,285.58 7.34% 11.29%
S&P BSE CD
32,682.68 3.51% 2.10%
S&P BSE CG
22,076.50 3.48% 10.53%
S&P BSE FMCG
12,942.26 -0.37% 1.94%
S&P BSE HC
24,474.37 1.59% 4.65%
S&P BSE IT
26,724.17 2.27% 0.82%
S&P BSE Metal
18,641.76 -0.72% 17.04%
S&P BSE Oil & Gas
15,802.60 1.41% 9.72%
Source: Refinitiv *Value as on May 21, 2021
On the BSE sectoral front, majority of the
sectors closed in the green. S&P BSE Bankex
was the major gainer, followed by S&P BSE
Power and S&P BSE Realty, which went up
6.89% and 6.77%, respectively.
S&P BSE Auto and S&P BSE Consumer Durable
rose 5.15% and 3.51%, respectively.
Indian Derivatives Market Review
Nifty May 2021 Futures stood at 15,206.20, a premium of 30.90 points above the spot
closing of 15,175.30. The total turnover on NSE’s Futures and Options segment for the
week stood at Rs. 222.49 lakh crore as against Rs. 173.96 lakh crore for the week to May 14.
The Put-Call ratio stood at 0.70 compared with the previous week’s close of 0.86.
The Nifty Put-Call ratio stood at 1.38 compared with the previous week’s close of 1.11.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-Wk
Ago
1-Mth
Ago
6-Mth
Ago
Call Rate
3.14 3.27 3.23 3.16
91 Day T-Bill
3.39 3.39 3.34 2.99
05.22% 2025, (5 Yr GOI)
5.32 5.38 5.51 5.06
05.85% 2030, (10 Yr GOI)
5.98 5.99 6.07 --
Source: Refinitiv Value as on May 21, 2021
Bond yields fell for the fifth consecutive
week due to the Reserve Bank of India’s
(RBI) debt purchase. However, gains
were limited after the RBI raised higher-
than-scheduled amount in the weekly
government securities auction.
Yield on the 10-year benchmark paper
(5.85% GS 2030) fell 1 bps to close at
5.98% as compared to the previous
week’s close of 5.99%.
RBI conducted the second auction of
open market purchase of seven
government securities under G-sec
Acquisition Programme (G-SAP 1.0) for an
aggregate amount of Rs. 35,000 crore,
which was completely accepted. Highest
and lowest amount was accepted in
5.85% GS 2030 and 6.18% GS 2024,
respectively.
Domestic Debt Market
5.70
5.90
6.10
17-May 18-May 19-May 20-May 21-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 4.63 77
3 Year 4.73 5.03 30
5 Year 5.62 6.23 61
10 Year 6.07 7.01 94
Source: Refinitiv Value as on
May 21, 2021
Yields on gilt securities fell by up to 18 bps
across the maturities, barring 1-, 11-, 15-, 19-
& 30-year papers that rose by up to 10 bps.
Yield on 7-year paper was unchanged.
Corporate bond yields fell in the range of 2 to
13 bps across the curve, except 1-year paper
that rose 4 bps.
Spread between AAA corporate bond and gilt
contracted by up to 6 bps across segments,
leaving 1- & 2-year papers that expanded 1 &
4 bps, respectively.
Domestic Debt Market (Spread Analysis)
-16
-4
8
2.70
5.10
7.50
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 21-May-21 14-May-21
Yield in %
Change in bps
Source: Refinitiv
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8
Capital market regulator Securities and Exchange Board of India (SEBI) after consultation
with the Reserve Bank of India (RBI) decided to double the amount of money that
Alternative Investment Funds (AIFs)/Venture Capital Funds (VCFs) can invest in overseas
companies to $1.5 billion per year for the entire industry. Earlier SEBI registered AIFs and
VCFs were permitted to invest overseas, subject to an overall limit of $750 million. The move
is expected to enable AIFs to invest overseas and generate goods returns for their investors
which will help accelerate the growth of the Indian AIF industry overall.
The Central Board of Directors of RBI at its 589th meeting approved the transfer of Rs.
99,122 crore as surplus to the Central Government for the accounting period of nine
months ended Mar 31, 2021 (Jul 2020-Mar 2021), while deciding to maintain the
Contingency Risk Buffer at 5.50%.
SEBI proposed a framework for setting up the Gold Exchange in India. Gold will be traded in
the form of electronic gold receipts (EGRs) and this will help in having a transparent
domestic spot price discovery mechanism.
The Union Finance Ministry, on the recommendation of the Panchayati Raj Ministry, issued
Rs. 8,923.8 crore to 25 states for grants to rural local bodies. The ministry further said that
Covid-19 pandemic has recently reached epidemic proportions in various parts of the world.
Rural communities' vulnerabilities must be discussed in particular.
Regulatory Updates in India
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9
SEBI proposed merger of listing rules pertaining to debt securities and non- convertible
redeemable preference shares into a single regulation. The objective of the move is to
ease compliance burden on listed entities.
According to RBI, all licensed prepaid payment instruments (PPIs)— or mobile wallets—
must be interoperable by FY23. Thus, starting Apr 2022, a fully vetted mobile wallet
user—one who has met all know-your-customer (KYC) requirements—will be allowed to
send and receive money from several mobile wallets. This will be accomplished for card-
based PPIs through card network interoperability, and for e-wallets through the Unified
Payments Interface (UPI), according to the central bank.
According to media reports, the top crypto exchanges have conveyed to the government
in their recent interactions that capital market regulator SEBI is better suited to regulate
the sector than RBI. They are of the view that crypto assets are closer to commodities than
to currency.
According to media reports, the government will sell nearly 2% stake in Axis Bank Ltd held
through Specified Undertaking of the Unit Trust of India (SUUTI). The move is expected to
fetch around Rs. 3,969 crore to the exchequer in divestment receipts.
Regulatory Updates in India (contd..)
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Minutes of the U.S. Federal Reserve’s monetary policy review held in Apr 2021 showed that
a number of officials suggested that it may consider changes to monetary policy based on
continued rapid progress in the recovery of the U.S. economy. They are of the view that a
reduction in asset purchases could happen ahead, though there was no timetable.
However, officials largely remained unconcerned about inflationary pressures, which they
see as transitory.
Flash data from Eurostat showed that Gross Domestic Product (GDP) of the euro zone
economy contracted 0.6% in the first quarter of 2021 as compared to a contraction of
0.7% in the fourth quarter of 2020. On a yearly basis, GDP fell 1.8% in the first quarter of
2021 as compared to a contraction of 4.9% in the fourth quarter of 2020.
U.K. consumer price inflation rose 1.5% on a yearly basis in Apr 2021 following an increase
of 0.7% in Mar 2021. On a monthly basis, consumer price inflation increased to 0.6% in Apr
2021 from 0.3% in Mar 2021.
Japan's gross domestic product contracted an annualized 5.1% in the first quarter of 2021
following the downwardly revised 11.6% increase in the previous quarter (originally
11.7%). On a quarterly basis, GDP contracted 1.3% following the 2.8% increase in the
previous quarter.
Industrial production in China grew 9.8% on a yearly basis in Apr 2021 which is slower than
the 14.1% increase in Mar 2021. Retail sales rose 17.7% on a yearly basis in Apr 2021, much
slower than the 34.2% increase seen in Mar 2021.
10
Global News/Economy
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11
Global Indices
Indices
21-May-21
1-Week
Return
YTD
Return
Russell 3000 2,032.31 0.11% 4.08%
Nasdaq 100 13,411.74 0.14% 4.06%
FTSE 100 7,018.05 -0.36% 8.63%
DAX Index 15,437.51 0.14% 12.53%
Nikkei Average 28,317.83 0.83% 3.18%
Straits Times 3,117.89 2.06% 9.64%
Source: Refinitiv Value as on May 21, 2021
U.S.
U.S. markets closed on a mixed note.
Disappointing data on housing starts,
and a sell-off in the technology sector
weighed on the investor sentiments.
The downturn was neutralized by data
released by the Labor Department
showing unemployment claims in U.S.
fell to 4,44,000 in the week to May 14,
compared with a revised 4,78,000
claims in the preceding week.
Europe
European markets also closed on a mixed note. Rising concerns about inflation renewed
worries that global central banks might consider tightening their easy monetary policies
sometime soon. However, upbeat corporate earnings reports and optimism about global
economic recovery, neutralized the fall.
Asia
Asian markets went up as investors hunted for bargains following a recent sell-off on
worries about inflation and a surge in coronavirus cases in a number of Asian countries.
Global Equity Markets
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12
Yields on the 10-year U.S. Treasury fell 1
bps to close at 1.63%, from the previous
week’s close of 1.64%.
U.S. Treasury prices fell after minutes
from the U.S. Federal Reserve's latest
policy meeting revealed there was more
discussions of tapering its bond purchases
than market had expected.
However, losses reversed after factory
activity in the U.S. mid-Atlantic region
slowed in May 2021 from a record pace,
raising concerns on the pace of the
economic growth.
Global Debt (U.S.)
1.60
1.65
1.70
17-May 18-May 19-May 20-May 21-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)
67.74 69.85
Gold ($/Oz)
1880.30 1842.19
Gold (Rs/10 gm)
47569 47569
Silver ($/Oz)
27.52 27.42
Silver (Rs/Kg)
69875 69875
Source: Refinitiv *Value as on May 21, 2021
Gold
Gold prices traded higher as market
participants were of the view that the U.S.
Fed would continue to keep interest rates
at lower level despite talks about tapering.
Brent Crude
Brent Crude prices went down as investors
braced for the return of Iranian crude oil
supplies after officials said Iran and world
powers made progress on a nuclear deal.
The fall was restricted by hopes of demand
recovery as vaccination programs in Europe
and U.S. would allow more people to
travel, although rising cases across parts of
Asia are raising concerns.
Baltic Dry Index
The index fell WoW due to sluggish
capesize and panamax activities.
Commodities Market
9.50
10.00
10.50
11.00
11.50
21-Apr-21 6-May-21 21-May-21
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
Source: Refinitiv
0.38%
-3.02%
2.07%
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing* 1-Wk Ago
US Dollar
73.02 73.37
Pound Sterling
103.61 103.05
EURO
89.31 88.76
100 Yen
67.14 67.01
Source: Refinitiv Figures in INR , *
Value as on May 21,
2021
Rupee
The Indian rupee rose on weak U.S. dollar index
and strong gains in domestic equity market.
Euro
Euro rose against the U.S. dollar on reducing
fears that surge in U.S. inflation could prompt
the U.S. Federal Reserve (Fed) to raise interest
rates sooner than anticipated.
Pound
Sterling rose against the U.S dollar as U.K. lifted
number of social restrictions imposed to
combat COVID-19. However, gains were limited
on doubling of U.K. consumer price inflation in
Apr 2021.
Yen
Yen rose against the U.S. dollar on reducing
fears that surge in U.S. inflation could prompt
the U.S. Fed to raise interest rates sooner than
anticipated.
Currencies Markets
9.70
9.80
9.90
10.00
10.10
21-Apr-21 6-May-21 21-May-21
USD GBP Euro JPY
Source: Refinitiv
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
0.62%
0.55%
-0.48%
0.19%
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15
The Week that was…
17
th
May to 21
st
May
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16
The Week that was (May 17 May 21)
Date Events
Present
Value
Previous
Value
Monday,
May 17, 2021
• China Retail Sales (YoY) (Apr) 17.70% 34.20%
• Japan Gross Domestic Product (QoQ)(Q1) PREL -1.30% 2.80%
• China Industrial Production (YoY)(Apr) 9.80% 14.10%
Tuesday,
May 18, 2021
• U.K. ILO Unemployment Rate (3M)(Mar) 4.80% 4.90%
• Eurozone Gross Domestic Product (YoY)(Q1) PREL -1.80% -1.80%
Wednesday,
May 19, 2021
• U.K. Consumer Price Index (YoY)(Apr) 1.50% 0.70%
• Japan Industrial Production (YoY)(Mar) 3.40% 4.0%
• Eurozone Consumer Price Index (MoM)(Apr) 0.60% 0.90%
• Japan Merchandise Trade Balance Total (Apr) (Yen) 255.3B 662.2B
Thursday
May 20, 2021
• Japan National Consumer Price Index (YoY)(Apr) -0.4% -0.20%
• U.K. GfK Consumer Confidence (May) -9 -15
Friday,
May 21, 2021
• Germany Markit PMI Composite(May) PREL 56.2 55.8
• Eurozone Markit PMI Composite(May) PREL 56.9 53.8
• U.K. Markit Services PMI(May) PREL 55.1 50.5
• U.S. Markit PMI Composite (May) PREL 68.1 63.5
• Eurozone Consumer Confidence(May) PREL -5.1 -8.1
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17
The Week Ahead
24
th
May to 28
th
May
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18
Day Event
Monday,
May 24, 2021
Bank of Japan Governor Speech
U.S. Chicago Fed National Activity Index (Apr)
Tuesday,
May 25, 2021
Germany Gross Domestic Product (YoY) (Q1)
Germany IFO – Business Climate (May)
U.S. Housing Price Index (MoM) (Mar)
U.S. Consumer Confidence (May)
Wednesday,
May 26, 2021
Japan Leading Economic Index (Mar)
Japan Coincident Index (Mar)
Thursday,
May 27, 2021
U.S. Coincident Index (Mar)
U.S. Gross Domestic Product Annualized (Q1) PREL
U.S. Pending Home Sales (MoM) (Apr)
Japan Unemployment Rate (Apr)
Friday,
May 28, 2021
U.S. Michigan Consumer Sentiment Index (May)
U.S. Personal Spending (Apr)
U.S. Core Personal Consumption Expenditure - Price Index (MoM) (Apr)
Eurozone Consumer Confidence (May)
The Week Ahead
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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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