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NEWS U CAN USE
November 29, 2019
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The Week that was…
25
th
Nov to 29
th
Nov
2
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Indian Economy
Government data showed that the growth of the Indian economy plunged to its lowest
level in over six years in the quarter ended Sep 19 which can be attributed to weakness in
the domestic manufacturing sector and a fall in exports on account of global economic
slowdown. Gross domestic product (GDP) grew 4.5% in the second quarter of FY20, down
from 5.00% in the previous quarter and 7.00% in the same period of the previous year.
This was the slowest rate of growth of the Indian economy in as many as 26 quarters.
Government data showed that the growth of the index of eight core industries or the core
sector growth contracted 5.8% in Oct 2019 from a contraction of 5.1% in the previous
month and a growth of 4.8% in the same period of the previous year. The coal sector
witnessed the maximum contraction of 17.6% followed by the electricity sector and the
cement sector which contracted 12.4% and 7.7% respectively.
Government data showed that India’s fiscal deficit for the period from Apr to Oct of FY20
stood at Rs. 7.2 lakh crore or 102.4% of the budgeted estimate for the current fiscal. The
fiscal deficit was 10.3.9% in the corresponding period of the previous year. The capital
expenditure for the same period stood at Rs. 2.01 lakh crore or 59.5% of the budgeted
estimate of Rs. 3.38 lakh crore of FY20.
Minister of State for Finance has informed the Parliament that the Central GST collection
so far in FY20 stands at Rs. 3.26 lakh crore. This is around half the government’s target for
FY20 at Rs. 6,63,343 crore.
3
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4
Domestic Equity Market Indices
Indices
29
-Nov-
19
1 Week Return
YTD Return
S&P BSE Sensex
40,793.81 1.08% 13.10%
Nifty 50
12,056.05 1.19% 10.99%
S&P BSE Mid
-Cap 15,084.86 2.35% -2.29%
S&P BSE Small
-Cap 13,560.57 1.55% -7.79%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date
Advances
Declines
Advance/Decline Ratio
25-Nov-19 1,105 768 1.44
26-Nov-19 753 1,098 0.69
27-Nov-19 932 894 1.04
28-Nov-19 971 869 1.12
29-Nov-19 876 934 0.94
Source: NSE
Indian equity markets closed on a
positive note in the week ended Nov
29, 2019 after touching record highs in
one of the sessions. Investor sentiment
was buoyed by expectations that
growth could recover over the next few
quarters as the government tries to do
damage control. The finance minister
talking of "minimum alternate tax" and
"dividend distribution tax" in bad light
led to hopes that both could be
scrapped in the next Budget.
Also, expectation that the Reserve
Bank of India would cut rates for the
sixth consecutive time at its monetary
policy meeting on Dec 5, 2019 boosted
market sentiment.
However, reports that a new U.S. law
backing Hong Kong protests could
derail U.S’ and China’s efforts to end
their trade war restricted the gains.
Ratios
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
28.39 28.10 29.01 42.69
P/B
2.93 3.72 2.38 1.88
Dividend Yield
1.14 1.24 1.09 1.12
Source: NSE,BSE
Value as on Nov 29, 2019
Indian Equity Market
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5
Sectoral Indices
Indices
Last Returns (in %)
Closing* 1-Wk 1-Mth
S&P BSE Auto
18,099.52 0.60% -4.41%
S&P BSE Bankex
36,190.99 2.82% 7.15%
S&P BSE CD
24,872.70 0.38% -7.93%
S&P BSE CG
17,384.46
-1.92%
-6.75%
S&P BSE FMCG
11,723.58 0.62% -3.10%
S&P BSE HC
13,603.33 1.51% 3.83%
S&P BSE IT
14,875.14 0.04% -0.22%
S&P BSE Metal
9,778.97 4.28% 4.22%
S&P BSE Oil & Gas
15,155.61 0.30% -1.84%
Source: BSE * Value as on Nov 29, 2019
Further, investor apprehension of a less than 5%
GDP growth in the second quarter hit market
sentiment. Post market hours, gross domestic
product grew 4.5% in the second quarter of FY20,
down from 5.00% in the previous quarter and
7.00% in the same period of the previous year.
S&P BSE Metal was the major gainer that grew
4.28% followed by S&P BSE Bankex that grew
2.82%. Positive developments on the U.S.-China
trade front during the initial part of the week
supported the metal sector.
Indian Derivatives Market Review
Nifty Dec 2019 Futures stood at 12,099.85, a premium of 43.80 points above the spot
closing of 12,056.05. The total turnover on NSE’s Futures and Options segment for the
week stood at Rs. 69.36 lakh crore as against Rs. 61.50 lakh crore for the week to Nov 22.
The Put-Call ratio stood at 0.99 against the previous week’s close of 0.94.
The Nifty Put-Call ratio stood at 1.54 against the previous week’s close of 1.31.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-
Wk
Ago
1-
Mth
Ago
6-
Mth
Ago
Call Rate
5.06 5.04 5.09 5.87
91 Day T
-Bill
4.91 5.04 5.09 6.21
07.32% 2024, (5
Yr GOI)
6.19 6.19 6.27 6.90
06.45% 2029, (10 Yr GOI)
6.47 6.50 6.52 --
Source: Thomson Reuters Eikon
Value as on Nov 29, 2019
Bond yields fell as market participants
resorted to short covering. In addition,
hopes of policy rate cut in the
upcoming Monetary Policy meeting to
bolster economic activity also added
to the gains. However, surge in crude
oil prices limited gains.
Yield on the new 10-year benchmark
paper (6.45% GS 2029) fell 3 bps to
close at 6.47% compared with the
previous week’s close of 6.50% after
trading in a range of 6.44% to 6.51%.
RBI conducted auction of state
development loans of 13 state
governments for notified amount of
Rs. 15,265 crore, of which Rs
14,825.35 crore was accepted. The
cut-off yield was in the range of 6.50%
to 7.21%, while tenure lied in between
4 years to 12 years.
Domestic Debt Market
6.35
6.45
6.55
25-Nov 26-Nov 27-Nov 28-Nov 29-Nov
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-
Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 5.39 6.64 125
3 Year 6.09 7.12 103
5 Year 6.35 7.47 112
10 Year 6.56 7.87 131
Source: Thomson Reuters Eikon
Value as on Nov 29
, 2019
Yields on gilt securities fell across the
maturities by up to 11 bps barring 19-year
paper which grew 12 bps while the yield on
3, 4 and 30-year paper closed steady.
Corporate bond yields fell across 1 to 7-year
maturities and 15-year paper in the range of
2 bps to 10 bps and expanded across 8 to 10-
year paper by up to 5 bps.
Domestic Debt Market (Spread Analysis)
-16
-1
14
4.00
6.00
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 29-Nov-19
Yield
in %
Change
in bps
Source: Thomson Reuters Eikon
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8
The government plans to invest Rs. 100 lakh crore in the infrastructure sector over the next
five years, Union Minister said. He said all infrastructure-related sectors such as aviation,
shipping, electricity, and oil & gas are going to see a huge thrust in the next five years.
According to media reports, the Securities and Exchange Board of India (SEBI) will make it
easier for unlisted companies looking to raise funds by selling debt securities on the stock
exchange platform. The main attention is on companies that want to list only their debt
instruments.
Union minister of road transport and highways said the ministry is likely to award road
projects with an aggregate length of around 4,500 km worth Rs. 50,000 crore in the next
three months.
Labour minister said the government has introduced the Labour Code on Industrial
Relations, 2019 bill in the Lok Sabha. The bill aims to streamline industrial relations and help
India improve on the ease of doing business index.
The authorized capital of Food Corporation of India (FCI) has been increased from the
existing Rs. 3,500 crore to Rs. 10,000 crore. The proposal was approved by the Cabinet
Committee on Economic Affairs chaired by the Prime Minister. With this, additional equity
capital can be infused in FCI through the Union budget, to fund the foodgrains stock, which
will reduce the borrowings of FCI, save interest cost and reduce food subsidy in the end.
Regulatory Updates in India
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9
The Insurance Regulatory and Development Authority of India (IRDAI) recent proposal on
modifying insurance policies of motor vehicles to age-based depreciation for calculating
sum insured is in favour of vehicle owners. Media reports that the step has been taken by
the regulator to simplify the process and increase transparency. Customers will not be
required to purchase add-ons such as invoice under the new regime.
As per media reports, the Insurance Regulatory and Development Authority of India
(IRDAI) has introduced a revised set of rules for group insurance schemes. Typically,
insurers undercut premium to attract customers and win a larger market share. As such,
the insurance regulator said that group insurance scheme should present collection of
premium, besides issuing certificate of insurance and reimbursement of expenses.
As per media reports, the Insurance Regulatory and Development Authority of India
(IRDAI) has proposed in the insurance policies of motor vehicles. The insurance regulator
has suggested age-based depreciation while valuing vehicles for calculating sum assured.
This purpose is to eliminate subjectivity in settling claims.
Regulatory Updates in India (contd..)
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Revised data released by the Commerce Department showed the U.S. economy grew by
more than initially estimated in the third quarter. Real gross domestic product jumped
2.1% in the third quarter compared to the previously estimated 1.9% increase.
Data from IFO institute showed German business confidence rose to a four-month high in
Nov 2019. The business confidence index rose to 95.0 in Nov from 94.7 in Oct 2019. The
reading was in line with expectations.
Data from the National Bureau of Statistics showed China's industrial profits declined at a
faster pace in Oct 2019 at 9.9% YoY, following a 5.3% decrease in Sep 2019. This was the
third consecutive decrease.
A Commerce Department report showed durable goods orders climbed 0.6% in Oct 2019
after plunging 1.4% in Sep 2019.
Data from the Federal Employment Agency showed German unemployment declined
notably in Nov 2019 by a seasonally adjusted 16,000 after rising 5,000 a month ago.
Data from the Cabinet Office showed Japan's consumer confidence rose to a seasonally
adjusted 38.7 in Nov 2019 from 36.2 in Oct 2019.
A Conference Board report showed U.S. consumer confidence unexpectedly declined for a
fourth consecutive month in Nov 2019. The consumer confidence index fell to 125.5 in Nov
from 126.1 in Oct 2019.
10
Global News/Economy
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11
Global Indices
Indices
29-Nov-19
1-Week
Return
YTD
Return
Russell 3000
1,386.10 1.61% 30.43%
Nasdaq 100
8,403.69 1.59% 32.76%
FTSE 100
7,346.53 0.27% 9.19%
DAX Index
13,286.97 0.94% 25.84%
Nikkei Average
23,293.91 0.78% 16.38%
Straits Times
3,193.92 -0.98% 4.08%
Source: Thomson Reuters Eikon
Value as on Nov 29, 2019
U.S.
U.S. markets gained in the week ended
Nov 29, 2019 and reached record closing
highs on stronger than expected
economic data.
However, the upside was limited on
caution over the trade scenario between
U.S. and China after the U.S. President
signed a bill supporting Hong Kong
protestors.
Europe
European markets gained as U.S. and China seemed to get closer to signing a phase one
trade deal. However, the U.S. President signing a legislation supporting Hong Kong
protestors was seen as potentially jeopardising trade negotiations between the two
countries.
Asia
Asian equity markets were mostly higher on positive U.S.-China trade developments.
However, sentiment was hit to some extent when the U.S. President signed two U.S. bills
supporting Hong Kong's pro-democracy protesters. Weak Japanese economic data added
to cautious mood at the end.
Global Equity Markets
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12
Yields on the 10-year U.S. Treasury bond
grew 1 bps to close at 1.78% compared
to the previous week’s close of 1.77%.
U.S. Treasury prices fell on reports that
U.S. durable goods orders unexpected
grew in Oct due to surge in orders for
aircraft and parts. Also, U.S President
stated that U.S. and China are close to
agreement on the first phase of a trade
deal, weighed on the safe haven appeal
of U.S. treasury prices.
However, most of the losses were
neutralized on reports that China stated
that it would retaliate after U.S. passed
legislation backing anti-government
protesters in Hong Kong that
complicates the possibility of a bilateral
trade deal.
Global Debt (U.S.)
1.73
1.76
1.79
25-Nov 27-Nov 29-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($/Barrel)
66.34 66.07
Gold ($/Oz)
1,466.18 1,462.04
Gold (Rs/10 gm)
37,876 38,157
Silver ($/Oz)
16.98 17.00
Silver (Rs/Kg)
44,303 44,942
Source: Thomson Reuters Eikon *
Value as on
Nov 29, 2019
Gold
Gold prices grew after the U.S. President
signed a legislation on Hong Kong’s
autonomy to validate favorable U.S. trading
terms. This also cast a cloud on the “phase
one” trade deal between U.S. and China.
Brent Crude
Brent crude prices surged on reports of
U.S.-China trade optimism and that OPEC
and Russia are likely to extend existing
production cuts.
However, unexpected increase in weekly
crude inventory in the week ended Nov 22
and renewed U.S.-China trade worries that
could hinder the “phase one” trade deal
limited the upside.
Baltic Dry Index
The Baltic Dry Index grew due to improved
capesize and panamax activities.
Commodities Market
9.00
10.00
11.00
29-Oct-19 14-Nov-19
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global
Commodity Prices
Rebased to 10
Source: Thomson Reuters Eikon
-0.14%
0.41%
-0.28%
29-Nov-19
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14
Movement of Rupee vs Other Currencies
Currency
Last Closing*
1-Wk Ago
US Dollar
71.73 71.85
Pound Sterling
92.66 92.83
EURO
78.98 79.52
100 Yen
65.51 66.14
Source: RBI Figures in INR , *
Value as on Nov 29,
2019
Rupee
The rupee rose against the greenback
following gains in the domestic equity
market.
Euro
The euro fell against the greenback after
the U.S. economic growth picked up
slightly in the third quarter of 2019 from
the previous quarter.
Pound
The pound rose against the greenback on
hopes that political uncertainty regarding
Brexit would come to an end following the
outcome of the election results scheduled
to be held on Dec 12.
Yen
The yen weakened against the greenback
after the U.S. economic growth picked up
slightly in the third quarter of 2019 from
the previous quarter.
Currencies Markets
9.90
10.00
10.10
10.20
10.30
29-Oct-19 14-Nov-19
USD GBP Euro JPY
Source: Thomson Reuters Eikon
Currency
Prices (
in terms of INR)
Rebased to 10
Currency Movement
-0.69%
-0.18%
-0.18%
-0.95%
29-Nov-19
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15
The Week that was…
25
th
Nov to 29
th
Nov
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16
The Week that was (Nov 25 Nov 29)
Date Events
Present
Value
Previou
s Value
Monday,
November 25, 2019
• Japan Leading Economic Index (Sep)
91.90 91.90
• Germany IFO
- Expectations (Nov) 92.10 91.60
Tuesday,
November 26, 2019
• Germany Gfk Consumer Confidence Survey (Dec)
9.70 9.60
• U.S. Housing Price Index (MoM) (Sep)
0.60%
0.20%
• U.S. New Home Sales (MoM) (Oct)
0.733M
0.738M
Wednesday,
November 27, 2019
• U.S. Nondefense Capital Goods Orders ex Aircraft (Oct)
1.20%
-0.50%
• U.S. Gross Domestic Product Annualized (Q3) (P)
2.10%
1.90%
• U.S. Personal Income (MoM) (Oct)
0.00%
0.30%
• U.S. Initial Jobless Claims (Nov 22)
213K 228K
Thursday,
November 28, 2019
• Germany Harmonized Index of Consumer Prices (YoY) (Nov) (P)
1.20%
0.90%
• Japan Tokyo CPI ex Fresh Food (YoY) (Nov)
0.60%
0.50%
• Japan Industrial Production (YoY) (Oct) (P)
-7.40%
1.30%
• Japan Unemployment Rate (Oct)
2.40%
2.40%
Friday,
November 29, 2019
• India Gross Domestic Product (Q2)
4.50%
5.00%
• U.K. GfK Consumer Confidence (Nov)
-14.00
-14.00
• Germany Unemployment Rate (Nov)
5.00%
5.00%
• Germany Retail Sales (MoM) (Oct)
-1.90%
0.00%
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17
The Week Ahead
02
nd
Dec to 06
th
Dec
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18
Day Event
Monday,
December 02, 2019
India Nikkei Manufacturing PMI (Nov)
China Caixin Manufacturing PMI (Nov)
U.S. ISM Manufacturing PMI (Nov)
Germany Markit Manufacturing PMI (Nov)
Tuesday,
December 03, 2019
U.K. Markit Construction PMI (Nov)
Wednesday,
December 04, 2019
India Nikkei Services PMI (Nov)
U.S. ISM Non-Manufacturing PMI (Nov)
China Caixin Services PMI (Nov)
Germany Markit Composite PMI (Nov)
U.K. Markit Services PMI (Nov)
Thursday,
December 05, 2019
Eurozone Gross Domestic Product (YoY) (Q3)
Germany Factory Orders (YoY) (Oct)
Eurozone Retail Sales (YoY) (Oct)
U.S. Trade Balance (Oct)
U.S. Initial Jobless Claims (Nov 29)
Friday,
December 06, 2019
U.S. Nonfarm Payrolls (Nov)
U.S. Michigan Consumer Sentiment Index (Dec) (P)
The Week Ahead
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