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NEWS U CAN USE
November 27, 2020
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The Week that was…
23
rd
Nov to 27
th
Nov
2
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Indian Economy
• Gross domestic product (GDP) of the Indian economy at constant (2011-12) prices
witnessed a contraction of 7.5% in the second quarter of FY21 as compared to a
contraction of 23.9% in the preceding quarter and a growth of 4.4% in the same period of
the previous year. All the sectors witnessed contraction in economic activity barring the
manufacturing sector and the agriculture sector. The manufacturing sector witnessed a
growth of 0.6% in Q2FY21 as compared to a contraction of 39.3% in the preceding quarter
and a contraction of 0.6% in the same period of the previous year. The agriculture sector
witnessed a growth of 3.4% in Q2FY21 same as that of the preceding quarter and a
growth of 3.5% in the same quarter of the previous year.
• India’s fiscal deficit for the period from Apr to Oct of 2020 came in at Rs. 9.53 lakh crore or
119.7% of the budget estimate for FY21 as compared to 102.4% in the corresponding
period of the previous year. Revenue deficit came in at Rs. 7.72 lakh crore or 126.7% of the
budget estimate as compared to 112.5% of the budget estimate in the corresponding
period of the previous year. Total expenditure stood at Rs. 16.6 lakh crore or 54.6% of the
budget estimate as compared to 59.4% of the budget estimate in the corresponding
period of the previous year.
• India's infrastructure output contracted 2.5% in Oct 2020 as compared to a contraction of
0.1% in Sep 2020 and a contraction of 5.5% in the same period of the previous year. The
refinery products sector witnessed the maximum contraction of 17.0% followed by natural
gas sector and crude oil sector which contracted 8.6% and 6.2% respectively.
3
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4
Domestic Equity Market Indices
Indices
27
-Nov-
20
1 Week Return
YTD Return
S&P BSE Sensex
44,149.72 0.61% 7.02%
Nifty 50
12,968.95 0.85% 6.58%
S&P BSE Mid
-Cap
16,914.65 2.91% 13.01%
S&P BSE Small
-Cap
16,875.15 4.28% 23.18%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
23-Nov-20 1125 793 1.42
24-Nov-20 1097 806 1.36
25-Nov-20 651 1253 0.52
26-Nov-20 1255 622 2.02
27-Nov-20 1212 686 1.77
Source: NSE
• Indian equity markets ended the week
with modest gains. During the period,
investors sentiments were buoyed by
hopes for imminent availability of
coronavirus vaccines with Nifty
surpassing the 13,000-mark. Positive
global cues provided additional support
to the gains after the U.S. President
elect was given the go-ahead to begin
his White House transition.
• Stock specific updates also supported
buying interest following reports that
one of the market behemoths won
regulatory approval for a $3.4-billion
deal.
• Nonetheless, gains were restricted by
rising cases of COVID-19. Probability of
partial lockdowns in some parts of the
country also kept investors wary.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
31.49 35.66 60.73 -4797.75
P/B
2.93 3.67 2.54 2.29
Dividend Yield
0.92 1.22 1.08 0.98
Source: BSE, NSE Va
lue as on Nov 27, 2020
Indian Equity Market
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5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
S&P BSE Auto
20,128.83 2.47% 12.31%
S&P BSE Bankex
33,884.04 0.83% 19.39%
S&P BSE CD
27,045.66 1.33% 9.61%
S&P BSE CG
17,022.49 0.20% 18.20%
S&P BSE FMCG
11,725.56 1.21% 4.72%
S&P BSE HC
20,318.54 3.02% 3.32%
S&P BSE IT
21,635.41 0.79% 1.75%
S&P BSE Metal
10,218.88 5.94% 22.88%
S&P BSE Oil & Gas
13,251.24 2.60% 10.03%
Source:
Refinitiv *Value as on Nov 27, 2020
• On the BSE sectoral front, major sectors
closed in the green. S&P BSE Metal was the
top gainer, up 5.94%, followed by S&P BSE
Realty and S&P BSE Healthcare, which rose
3.99% and 3.02%, respectively.
• Metal sector rose on the back of hopes of
better earnings growth. Realty sector went up
with sales and investment in the industry
making a strong comeback.
Indian Derivatives Market Review
• Nifty Dec 2020 Futures stood at 13,017.40, a premium of 48.45 points above the spot
closing of 12,968.95. The total turnover on NSE’s Futures and Options segment for the
week stood at Rs. 169.40 lakh crore as against Rs. 131.62 lakh crore for the week to Nov 20.
• The Put-Call ratio stood at 0.93 compared with the previous week’s close of 0.90.
• The Nifty Put-Call ratio stood at 1.28 compared with the previous week’s close of 1.57.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-
Wk
Ago
1-
Mth
Ago
6-
Mth
Ago
Call Rate
3.13 3.16 3.15 3.61
91 Day T
-Bill
2.93 2.99 3.20 3.10
05.22% 2025, (5 Yr GOI)
5.05 5.06 5.13 -
05.77%
2030, (10 Yr GOI)
5.91 5.88 5.85 -
Source:
Refinitiv Value as on Nov 27, 2020
• Bond yields rose as the Reserve Bank of
India returned to special open market
operations over outright debt purchases.
Also market participants remained
cautious ahead of the gross domestic
product (GDP) for the Sep quarter of
2020.
• Yield on the 10-year benchmark paper
(5.77% GS 2030) rose 3 bps to close at
5.91% from the previous week’s close of
5.88% after moving in a range of 5.87%
to 5.92%.
• RBI conducted the auction of special
OMO of simultaneous purchase and sale
of government of India securities for a
notified amount of Rs. 10,000 crore each,
which were completely accepted. RBI
bought 3, 6 & 9 year maturities and sold
securities maturing within one year.
Domestic Debt Market
5.84
5.87
5.90
23-Nov 24-Nov 25-Nov 26-Nov 27-Nov
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-
Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 3.37 4.73 136
3 Year 4.48 5.33 84
5 Year 5.14 6.41 126
10 Year 6.00 7.05 105
Source:
Refinitiv Value as on
Nov 27, 2020
• Yields on gilt securities fell by up to 17 bps
across maturities, barring 2-, 4-, 5- & 10-year
papers that rose by up to 5 bps while 3-year
was flat.
• Corporate bond yields fell by up to 11 bps on
1- & 6- to 9-year papers while rose by up to 10
bps on remaining securities.
• Spread between AAA corporate bond and gilt
contracted by up to 6 bps on 1-, 5-, 7- & 10-
year papers while remaining expanded by up
to 13 bps. Spread on 4-year paper was flat.
Domestic Debt Market (Spread Analysis)
-13
-4
5
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 27-Nov-20 20-Nov-20
Yield
in %
Change
in bps
Source: Thomson Reuters Eikon
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8
• The Securities and Exchange Board of India (SEBI) has suggested that the minimum
threshold appropriate to reclassify promoters as public shareholders should be changed. In
a company, promoters seeking re-classification should not hold 15% or more of the total
voting rights. The minimum threshold requirement is currently 10%.
• The Reserve Bank of India has demanded that banks not allow any proposal by foreign law
firms to open, under the Foreign Exchange Management Act (FEMA), a branch office,
project office or liaison office in the country for the purpose of practising the legal
profession.
• Under section 69A of the Information Technology Act, the Government of India has
restricted the access of 43 Chinese mobile applications by users in India. This action was
taken on the basis of feedback from these applications to participate in practises that are
detrimental to India's sovereignty and integrity, defence of India, state security and public
order.
• The Union Cabinet has approved equity infusion of Rs. 6,000 crore in NIIF Debt Platform
funded by National Investment and Infrastructure Fund. This was informed by Information
and Broadcasting Minister after the Cabinet meeting. The plan to invest Rs. 6,000 crore in
NIIF as equity is part of the package announced earlier this month for Aatmanirbhar Bharat
3.0.
Regulatory Updates in India
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9
• The Chief of SEBI launched the Securities Market Trainers (SMARTs) program, a new
initiative to enhance investor knowledge and awareness. The Chairman of SEBI also raised
concerns about the complicated distribution of active investors across the country and
said that the SMART programme would seek to resolve this issue by increasing the
outreach of investors in far-flung areas.
• SEBI has decided to relax some regulatory restrictions introduced in Mar 2020 in order to
minimise the spike in market volatility following the sell-off caused by the spread of Covid-
19. The regulator has announced that the steps taken with regard to stock futures and
options and the rise in the margin for cash market non-F&O stocks will be removed as from
Nov 26, 2020. The restrictions on index derivatives and the flexing of dynamic price bands
for F&O stocks will remain in place until further notice.
• According to media reports, IRDAI has make known new norms for insurers on minimum
information to be provided for inspection and investigation by the insurance regulator.
According to the Insurance Regulatory and Development Authority of India (Minimum
Information Required for Investigation & Inspection) Regulations 2020, the insurers is
required to maintain record of all proposals received for insurance with proposal number,
date when the proposal is signed by the proposer, date of the receipt of the proposal,
name and code of the insurance agent, staff or intermediary and data and amount of the
insurance proposal deposit, among others.
Regulatory Updates in India (contd..)
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• Data from the U.S. Commerce Department showed that durable goods orders in U.S.
increased 1.3% in Oct 2020 after increasing 2.1% in Sep 2020. Orders for non-defense
capital goods excluding aircraft also rose 0.7% in Oct 2020 following a 1.9% rise in Sep
2020.
• Data from the University of Michigan showed that consumer sentiment in the U.S. fell
more than expected in Nov 2020. The consume sentiment was downwardly revised to 76.9
from a preliminary reading of 77.0 compared to 81.8 in Oct 2020.
• Data from the U.S. Commerce Department showed that personal income in U.S. fell by
0.7% in Oct 2020 after increasing by a downwardly revised 0.7% in Sep 2020 (0.9% increase
originally reported for the previous month). Personal spending rose 0.5% in Oct 2020 after
jumping by a revised 1.2% in Sep 2020 (1.4% increase originally reported for the previous
month).
• Data from the U.S. Commerce Department showed that the increase in gross domestic
product (GDP) of the U.S. economy in the third quarter of 2020 which came in at 33.1%
remained unrevised from the initial estimate. The GDP of the U.S. economy fell 31.4% in
the second quarter of 2020.
• Data from the market research group GfK showed that German consumer sentiment fell in
Dec 2020 due to partial lockdown. The forward-looking consumer sentiment index fell to -
6.7 in Dec 2020 from -3.2 in Oct 2020.
10
Global News/Economy
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11
Global Indices
Indices
27-Nov-20
1-Week
Return
YTD
Return
Russell 3000
1,861.49 2.42% 30.53%
Nasdaq 100
12,258.21 2.95% 40.37%
FTSE 100
6,367.58 0.25% -15.58%
DAX Index
13,335.68 1.51% 0.65%
Nikkei Average
26,644.71 4.38% 12.63%
Straits Times
2,855.82 1.52% -11.39%
Source:
Refinitiv Value as on Nov 27,
2020
U.S.
• U.S. markets rose as market participants
reacted positively to additional upbeat
news regarding a potential coronavirus
vaccine.
• Investors also cheered news about the
President-elect's transition to the White
House.
Europe
• European markets traded higher amid optimism about coronavirus vaccine. Relaxation in
quarantine restrictions in U.K., higher crude oil prices, upbeat German GDP data, and a
drop in new coronavirus cases in France, further boosted sentiment.
Asia
• Asian markets settled for the week in the green, led by optimism over a third potential
vaccine and reports by WHO showing that the signs that the COVID-19 infection rate has
slowed down in Europe. Nonetheless, unexpected uptick in U.S. jobless claims restricted
the gains.
Global Equity Markets
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12
• Yields on the 10-year U.S. Treasury rose 1
bps to close at 0.84% compared with the
previous week’s close of 0.83%.
• Initially, U.S. Treasury price fell as safe
haven appeal diminished and turned to
riskier assets after positive COVID-19
vaccine news.
• However, losses were almost reversed,
weighed down by persistent worries
about the continued surge in coronavirus
cases and probably weaker economic data
next week amid renewed lockdowns in
several U.S. states and around the world.
Global Debt (U.S.)
0.82
0.83
0.84
0.85
0.86
0.87
0.88
0.89
23-Nov 24-Nov 25-Nov 26-Nov 27-Nov
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)
46.06 42.81
Gold ($/Oz)
1,788.13 1,870.49
Gold (Rs/10 gm)
48,751 50,199
Silver ($/Oz)
22.70 24.14
Silver (Rs/Kg)
59,664 62,028
Source:
Refinitiv *Value as on Nov 27,
2020
Gold
• Gold prices fell as optimism over progress
in COVID-19 vaccine development and
hopes for a quick transition in the U.S.
Administration dampened the safe haven
appeal of the bullion.
Brent Crude
• Brent crude prices rose on hopes that the
COVID-19 vaccine will improve the demand
outlook of the commodity. However, gains
were capped after data from the American
Petroleum Institute showed that U.S. crude
stocks rose by 3.8 million barrels in the
week to Nov 20.
Baltic Dry Index
• The index rose WoW due to improved
capesize and panamax activities.
Commodities Market
9.00
10.00
11.00
12.00
27-Oct-20 12-Nov-20
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global
Commodity Prices
Rebased to 10
Source: Thomson Reuters Eikon
-6.00%
7.59%
--4.40%
27-Nov-20
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing*
1-Wk Ago
US Dollar
73.80 74.16
Pound Sterling
98.71 98.50
EURO
88.02 88.15
100 Yen
70.97 71.47
Source: Refinitiv
Figures in INR , *Value as on Nov 27,
2020
Rupee
• The Indian rupee gained against the U.S. dollar
supported by an upbeat risk appetite in the
region and rise in domestic equities market.
Euro
• Euro rose against the greenback on improving
risk sentiment amid encouraging COVID-19
vaccine news.
Pound
• Pound rose against the greenback, as positive
news about a potential COVID-19 vaccine
propelled supported riskier currencies and on
expectations that U.K and the European Union
would finalise a Brexit trade deal.
Yen
• Yen fell against the greenback, safe haven
appeal dimiished on positive news about a
potential COVID-19 vaccine propelled
supported riskier currencies.
Currencies Markets
9.80
9.90
10.00
10.10
10.20
10.30
10.40
27-Oct-20 12-Nov-20
USD GBP Euro JPY
Source: Thomson Reuters Eikon
Currency
Prices (
in terms of INR)
Rebased to 10
Currency Movement
27-Nov-20
-0.15%
0.21%
-0.49%
-0.70%
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15
The Week that was…
23
rd
Nov to 27
th
Nov
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16
The Week that was (Nov 23 – Nov 27)
Date Events Present Value
Previous Value
Monday,
Nov 23, 2020
•
Euro Zone Markit PMI Composite (Nov) PREL 45.1 50.0
•
Germany Markit PMI Composite(Nov) PREL 52.0 55.0
•
U.K. Markit Manufacturing PMI(Nov) PREL 55.2 53.7
•
U.S. Chicago Fed National Activity Index (Oct) 0.83 0.32
•
U.S. Markit PMI Composite(Nov) PREL 57.9 56.3
•
U..S Markit Manufacturing PMI(Nov) PREL 56.7 53.4
Tuesday,
Nov 24, 2020
•
Germany Gross Domestic Product (YoY)(Q3) -4.0% -4.3%
•
Germany Business Climate(Nov) 90.70 92.50
•
U.S. Richmond Fed Manufacturing Index(Nov) 15.00 29.00
Tuesday,
Nov 25, 2020
•
U.S. Wholesale Inventories(Oct) PREL 0.9% 0.7%
•
U.S. Durable Goods Orders(Oct) 1.3% 2.1%
•
U.S. Initial Jobless Claims(Nov 20) 778 K 748 K
• U.S
. Personal Income (MoM)(Oct) -0.7% 0.7%
Thursday,
Nov 26, 2020
•
Japan Coincident Index (Sep) 81.10 79.40
•
Japan Leading Economic Index(Sep) 92.50 88.50
Friday,
Nov 27, 2020
•
Euro Zone Industrial Confidence(Nov) -10.1 -9.2
•
Euro Zone Economic Sentiment Indicator(Nov) 87.60 91.10
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17
The Week Ahead
30
th
Nov to 4
th
Dec
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18
Day Event
Monday,
Nov 30, 2020
•
China NBS Manufacturing PMI (Nov)
•
U.S. Chicago Purchasing Managers' Index (Nov)
Tuesday,
Dec 01, 2020
•
China Caixin Manufacturing PMI (Nov)
•
Japan Jibun Bank Manufacturing PMI (Nov)
•
U.S. ISM Manufacturing Employment Index (Nov)
•
Euro Markit Manufacturing PMI (Nov)
•
U.K. Markit Manufacturing PMI (Nov)
Wednesday,
Dec 02, 2020
•
U.S. ADP Employment Change (Nov)
•
Euro Zone Unemployment Rate (Oct)
Thursday,
Dec 03, 2020
•
Euro Zone Markit Services PMI (Nov)
•
Germany Markit Services PMI (Nov)
•
U.K. Markit Services PMI (Nov)
•
U.S. ISM Services PMI (Nov)
Friday,
Dec 04, 2020
•
U.S. Nonfarm Payrolls (Nov)
•
U.S. Average Hourly Earnings (YoY) (Nov)
•
U.K. Markit Construction PMI (Nov)
•
U.S. Unemployment Rate (Nov)
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 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 reflect NAM
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due care has been taken to ensure that the facts are accurate and opinions given are fair and reasonable, to the extent possible. This information is
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19
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