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NEWS U CAN USE
October 16, 2020
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The Week that was…
12
th
Oct to 16
th
Oct
2
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Indian Economy
According to the data released by the National Statistical Office, consumer price index
based inflation accelerated to 8-month high at 7.34% YoY in Sep 2020 from 6.69% in Aug
2020 and 3.99% in Sep 2019 mainly on account of higher food prices. Consumer Food
Price Index (CFPI) rose to 10.68% YoY during the reported period from 9.05% in the prior
month due to spurt in vegetable prices.
Index of Industrial production (IIP) contracted 8% YoY in Aug 2020, worse than 1.4% in
Aug 2019 mainly due to plunge in manufacturing. Manufacturing, Mining and power
generation sectors fell 27.9%, 18.2% and 10.4%, respectively during the reported period.
Industrial production during Apr-Aug 2020 stood contracted 25% compared to a growth
of 2.4% in the same period of the previous year.
India’s trade deficit plunged to $2.72 billion in in Sep 2020 from $11.67 billion in the year-
ago period due to fall in imports and also rise in exports. Exports increased 5.99% YoY to
$27.58 billion while imports fell 19.60% to $30.31 billion in Sep 2020. Oil and non-oil
imports plummeted 35.88% YoY and 14.43% to $5.83 billion and $24.48 billion,
respectively.
Wholesale price index-based inflation rate accelerated for the second consecutive month
and stood at 1.32% YoY in Sep 2020 from 0.16% in the prior month due to surge in food
inflation. WPI inflation for Food Articles surged to 8.17% YoY in during the reported
month from 3.84% in the prior month due to spike in vegetable and pulse prices.
3
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4
Domestic Equity Market Indices
Indices 16-Oct-20 1 Week Return YTD Return
S&P BSE Sensex
39,982.98 -1.30% -3.08%
Nifty 50
11,762.45 -1.27% -3.34%
S&P BSE Mid-Cap
14,621.31 -0.98% -2.32%
S&P BSE Small-Cap
14,786.56 -1.20% 7.94%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
12-Oct-20 652 1,249 0.52
13-Oct-20 807 1,077 0.75
14-Oct-20 809 1,062 0.76
15-Oct-20 483 1,433 0.34
16-Oct-20 1,139 730 1.56
Source: NSE
Indian equity markets settled for the
week with modest losses. Initial
positive vibes were generated after
government announced a host of
stimulus measures to boost consumer
demand.
Nonetheless, gains were largely erased
as official data showed consumer
inflation increased to 7.34% in Sep, the
highest level recorded since Jan, as
food prices surged ahead of the festival
season.
Weak global cues also forced domestic
bourses to give up gains after a record
number of new coronavirus infections
in parts of Europe led investors to shift
away from risky assets to traditional
safe havens such as gold and the
Japanese yen.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
29.17 34.13 496.83 -529.48
P/B
2.98 3.33 2.29 2.09
Dividend Yield
1.01 1.35 1.19 1.11
Source: BSE, NSE Va
lue as on Oct 16, 2020
Indian Equity Market
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5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
S&P BSE Auto
18,006.7 -2.34% -2.30%
S&P BSE Bankex
26,680.9 -1.05% 4.12%
S&P BSE CD
24,312.8 -0.98% 0.07%
S&P BSE CG
13,621.8 -1.32% -3.77%
S&P BSE FMCG
10,985.4 -0.88% -3.85%
S&P BSE HC
19,916.5 -1.90% 1.49%
S&P BSE IT
21,839.4 -0.76% 10.05%
S&P BSE Metal
8,205.4 -0.24% -6.68%
S&P BSE Oil & Gas
11,905.2 -2.20% -10.10%
Source:
Refinitiv *Value as on Oct 16, 2020
On the BSE sectoral front, all the major
sectors closed in the red. S&P BSE Auto was
the major loser, down 2.34%, followed by S&P
BSE Oil & Gas and S&P BSE Healthcare, which
slipped 2.20% and 1.90%, respectively.
Indian Derivatives Market Review
Nifty Oct 2020 Futures stood at 11,765.15, a premium of 2.70 points above the spot closing
of 11,762.45. The total turnover on NSE’s Futures and Options segment for the week stood
at Rs. 126.91 lakh crore as against Rs. 117.04 lakh crore for the week to Oct 9.
The Put-Call ratio stood at 0.87 compared with the previous session’s close of 0.82.
The Nifty Put-Call ratio stood at 1.31 compared with the previous session’s close of 1.60.
Indian Equity Market (contd.)
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6
Debt Indicators
(%)
Current
Value
1-Wk
Ago
1-Mth
Ago
6-Mth
Ago
Call Rate
3.36 3.39 3.43 4.24
91 Day T-Bill
3.24 3.29 3.35 4.06
05.22% 2025, (5 Yr GOI)
5.27 5.20 5.36 --
05.77% 2030, (10 Yr GOI)
5.94 5.94 5.99 --
Source: Refinitiv Value as on Oct 16, 2020
Initially, bond yields fall after slew of
measures announced by the Reserve
Bank of India (RBI) last week on Oct 9
continued to support buying for
duration papers. However, at the end,
gains reversed as market sentiment
remained cautious after the
government increased its borrowing
by Rs. 1.10 lakh crore for current fiscal
year.
Yield on the 10-year benchmark paper
(5.77% GS 2030) remained unchanged
at 5.94% compared to the previous
week’s close after moving in a range of
5.89% to 5.95%.
Data from RBI showed that reserve
money increased at an annualized rate
of 13.9% in the week to Oct 09, 2020,
compared with an increase of 13.5% a
year earlier.
Domestic Debt Market
5.80
5.87
5.94
12-Oct 13-Oct 14-Oct 15-Oct 16-Oct
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
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7
Maturity
G-Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 3.56 5.34 178
3 Year 4.85 5.58 73
5 Year 5.34 6.63 129
10 Year 6.02 7.02 100
Source: Refinitiv Value as on
Oct 16, 2020
Yields on gilt securities increased on 3 to 5-
year maturities and 19, 30-year paper in the
range of 2 bps to 6 bps while it fell across the
remaining maturities by up to 7 bps barring
10 and 14-year paper which closed steady.
Corporate bond yields fell across the
maturities in the range of 3 bps to 15 bps
barring 15-year paper which increased 2 bps.
Difference in spread between AAA corporate
bond and gilt contracted across the
maturities in the range of 5 bps to 14 bps
barring 6-year paper which closed steady and
15-year paper which expanded 7 bps.
Domestic Debt Market (Spread Analysis)
-8
0
8
3.00
5.00
7.00
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
India Yield Curve Shift (%) (W-o-W)
Change in bps 16-Oct-20 09-Oct-20
Yield in %
Change in bps
Source: Refinitiv
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8
The finance minister announced a one-time Rs. 10,000 interest-free advance to all its
officers and employees. The advance amount will come as a pre-paid rupay card, which can
be availed and spent by Mar 31, 2021. It is one of the measures of the government’s plan to
increase consumer spending to spur demand in the economy. The repayment will be in 10
installments.
Finance Minister also announced Rs. 12,000 crore interest-free 50-year loan to states for
spending on capital projects with an aim to boost economy. From this amount, north-
eastern states will be given Rs. 1,600 crore, Rs. 900 crore for Uttrakhand and Himachal
Pradesh, Rs 7,500 crore for the remaining states and Rs. 2,000 crore will be given to states
that fulfill pre-stated reforms. The loan will have to be spent entirely on new or ongoing
capital projects.
Union Labour and Employment Secretary said government intends to implement new labour
laws In India from Apr 1, 2021. He added, that government has begun the process of giving
shape to the rules that are to be framed under the codes. In the new law, industries will
have to file single return to the authorities under the new labour law regime.
Centre government allowed 20 states to borrow an additional Rs. 68,825 crore through the
market to make up for the compensation shortfall due to inadequate cess collection.
Meanwhile, states like Kerala, West Bengal, Punjab and Chhattisgarh are exploring legal
options, including moving the Supreme Court, to counter the Centre’s move.
Regulatory Updates in India
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9
RBI said through frequently asked questions (FAQs) section for one-time restructuring
that, outstanding debt on the date of invocation will be eligible for restructuring under
regulatory scheme for borrowers facing financial stress due to Covid-19 pandemic. Banks
have to invoke restructuring plans not later than Dec 31, 2020.
The government asked the agro-chemicals industry to come out with new molecules of
global standards for the farmers' benefit. On the other hand, industry body CropLife India
suggested for stable policy and regulatory regime to boost the growth of the sector.
Finance Ministry said the central government will borrow Rs. 1.1 lakh crore as a back-to-
back loan in lieu of Goods and Services tax (GST) compensation cess releases to states.
Ministry clarified that the States + centre borrowings will not increase by this move.
According to media reports, the Supreme Court said, the government decision's to waive
off compound interest payment for small borrowers during the six-month moratorium
period should be implemented by Nov 2, 2020. The Reserve Bank of India had decided to
defer repayment through a six-month moratorium imposed in Mar 2020.
According to media reports, SEBI has warned investors against unsolicited stock tips and
investment advice that are circulated through bulk SMS, websites and social media
platforms. The market regulator further advised investors to exercise appropriate due
diligence before dealing in the securities market.
Regulatory Updates in India (contd..)
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According to a report by the Labour Department, U.S. consumer prices increased 0.2% in
Sep 2020 as against 0.4% rise in Aug 2020. Excluding food and energy prices, core
consumer prices rose 0.2% in Sep following 0.4% growth in Aug.
According to the Commerce Department, U.S. retail sales rose 1.9% in Sep 2020 after rising
0.6% in Aug 2020. The much stronger rise in retail sales than anticipated was partially due
to a substantial increase in motor vehicle and parts dealer sales, which grew 3.6% in Sep
after 0.7% increase in Aug.
According to a report released by the Labor Department, U.S. initial jobless claims
increased 53,000 to 898,000 for week ended Oct 10, 2020 from the previous week's
revised level of 845,000.
According to the Office for National Statistics, U.K. jobless rate rose 0.4% points from the
preceding quarter to 4.5% in the three months to Aug 2020. Unemployment increased by
138,000 from the prior quarter to 1.52 million. At the same time, the employment rate fell
by 0.3% points to 75.6% in three months to Aug. Employment totaled 32.59 million, which
was 153,000 fewer than the previous quarter.
According to data from the National Bureau of Statistics, China’s consumer prices rose
1.7% YoY in Sep 2020 as against 2.4% rise in Aug 2020. At the same time, core inflation,
which excludes food and energy prices, held steady at 0.5% in Sep.
10
Global News/Economy
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11
Global Indices
Indices
16-Oct-20
1-Week
Return
YTD
Return
Russell 3000 1,812.07 0.49% 27.07%
Nasdaq 100 11,852.17 1.08% 35.72%
FTSE 100 5,919.58 -1.61% -21.52%
DAX Index 12,908.99 -1.09% -2.57%
Nikkei Average 23,410.63 -0.89% -1.04%
Straits Times 2,533.02 0.00% -21.40%
Source: Refinitiv Value as on Oct 16, 2020
U.S.
U.S. markets witnessed uptrend, led by
strong buying in technology stocks.
Markets were also benefitted from
optimism about a new stimulus bill,
although such hopes soon faded after
U.S. House Speaker rejected the $1.8
trillion coronavirus relief proposal from
the White House, calling it inadequate
to support the pandemic-ravaged
economy.
Europe
European markets settled for the week in the red amid fading hopes of a U.S. stimulus
before the U.S. Presidential election, and fresh lockdown restrictions across Europe due to
spikes in coronavirus infections.
Asia
Asian markets closed on a mixed note during the week under review. Upbeat trade data
from China boosted market sentiments. However, fading hopes of a U.S. stimulus before
the U.S. Presidential elections weighed on the same.
Global Equity Markets
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12
Yields on the 10-year U.S. Treasury fell 4
bps to close at 0.74% compared with
the previous week’s close of 0.78%.
U.S. Treasury prices rose as investors
were uncertain about the next move of
government on coronavirus aid.
Treasury prices rose further after the
Treasury Secretary announced that
before the U.S. Presidential election on
Nov 3, 2020, an agreement to tackle the
economic fallout from the coronavirus
pandemic seemed impossible. An
unexpected increase in U.S. jobless
claims for the week ended Oct 10 also
contributed to the upside.
However, gains were capped following
more than expected increase in U.S.
retail sales for Sep 2020.
Global Debt (U.S.)
0.71
0.72
0.73
0.74
0.75
13-Oct 14-Oct 15-Oct 16-Oct
Yield in %
US 10-Year Treasury Yield Movement
Source: Refinitiv
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13
Performance of various commodities
Commodities
Last Closing* 1-Week Ago
Brent Crude($/Barrel)
40.84 41.92
Gold ($/Oz)
1,898.97 1,929.43
Gold (Rs/10 gm)
50,796 50,695
Silver ($/Oz)
24.17 25.12
Silver (Rs/Kg)
61,330 60,813
Source: Refinitiv *Value as on Oct 16, 2020
Gold
Gold prices fell tracking moves in the
strengthening U.S. dollar. A stronger
dollar is typically been a headwind for
gold, which is priced in the U.S. currency,
making bullion more expensive for
overseas buyers when the dollar firms.
Brent Crude
Brent crude prices fell after some
European countries put in place new
restrictions to combat the COVID-19
pandemic which increased uncertainty
over the outlook for economic growth
and a recovery in fuel demand. However,
a fall in U.S. oil inventories for the week
ended Oct 9 restricted further losses.
Baltic Dry Index
The index fell due to sluggish capesize
and panamax activities.
Commodities Market
8.00
9.40
10.80
16-Sep-20 1-Oct-20 16-Oct-20
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
Source: Refinitiv
-3.78%
-2.58%
-1.58%
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14
Movement of Rupee vs Other Currencies
Currency Last Closing* 1-Wk Ago
US Dollar
73.38 73.21
Pound Sterling
94.56 94.80
EURO
85.84 86.21
100 Yen
69.70 69.11
Source: Refinitiv Figures in INR , *Value as on Oct 16, 2020
Rupee
The rupee weakened against the
greenback following losses in the
domestic equity market.
Euro
The euro weakened against the
greenback amid persisting concerns over
COVID-19 pandemic.
Pound
The pound weakened against the
greenback on renewed concerns of a
hard Brexit.
Yen
The safe haven appeal of the yen
strengthened against the greenback due
to uncertainty surrounding the COVID-19
vaccine and fading prospects of a U.S.
stimulus package before the U.S.
Presidential elections on Nov 3.
Currencies Markets
9.70
9.90
10.10
16-Sep-20 1-Oct-20 16-Oct-20
USD GBP Euro JPY
Source: Refinitiv
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
-0.25%
0.24%
0.85%
-0.42%
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15
The Week that was…
12
th
Oct to 16
th
Oct
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16
The Week that was (Oct 12 Oct 16)
Date Events Present Value Previous Value
Monday,
October 12, 2020
• India Index of Industrial Production (YoY) (Aug) -8.00% -10.40%
• India Consumer Price Inflation (YoY) (Sep) 7.34% 6.69%
• Japan Machine Tool Orders (YoY)(Sep) PREL -15% -23.20%
• Germany Wholesale Price Index (YoY)(Sep) -1.80% -2.20%
• U.K. BRC Like-For-Like Retail Sales (YoY) (Sep) 6.10% 4.70%
• Japan Money Supply M2+CD (YoY)(Sep) 9% 8.60%
Tuesday,
October 13, 2020
• U.K. ILO Unemployment Rate (3M)(Aug) 4.50% 4.30%
• Germany Harmonized Index of Consumer Prices
(YoY)(Sep)
-0.40% -0.40%
• China Trade Balance (USD) (Sep) 37B 58.9B
• Germany ZEW Survey Economic Sentiment (Oct) 56.1 77.4
• U.S. Consumer Price Index (YoY) (Sep) 1.40% 1.30%
Wednesday,
October 14, 2020
• India Wholesale Price Inflation (YoY) (Sep) 1.32% 0.16%
• Japan Industrial Production (YoY) (Aug) -13.80% -13.30%
• China M2 Money Supply (YoY) (Sep) 10.90% 10.40%
• Eurozone Industrial Production (MoM)(Aug) 0.70% 5%
Thursday,
October 15, 2020
• China Consumer Price Index (YoY)(Sep) 1.70% 2.40%
• Japan Tertiary Industry Index (MoM) (Aug) 0.80% -0.50%
Friday,
October 16, 2020
• Eurozone Consumer Price Index (MoM) (Sep) 0.10% -0.40%
• U.S. Retail Sales (MoM)(Sep) 1.90% 0.60%
• U.S. Michigan Consumer Sentiment Index (Oct)
PREL
81.2 80.4
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17
The Week Ahead
19
th
Oct to 23
rd
Oct
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18
Day Event
Monday,
October 19, 2020
China Gross Domestic Product (YoY) (Q3)
China Retail Sales (YoY) (Sep)
Tuesday,
October 20, 2020
People’s Bank of China Interest Rate Decision
Germany Producer Price Index (MoM) (Sep)
U.S. Housing Starts (MoM) (Sep)
Wednesday,
October 21, 2020
U.K. Consumer Price Index (YoY) (Sep)
U.K. Retail Price Index (YoY) (Sep)
Thursday,
October 22, 2020
Japan All Industry Activity Index (MoM) (Aug)
Germany Consumer Confidence Survey (Nov)
U.S. Existing Home Sales (MoM) (Sep)
Eurozone Consumer Confidence (Oct) PREL
U.K. GfK Consumer Confidence (Oct)
Japan National Consumer Price Index (YoY) (Sep)
Friday,
October 23, 2020
U.S. Presidential Debate
Germany Markit Composite PMI (Oct) PREL
Eurozone Markit PMI Composite (Oct) PREL
U.K. Markit Services PMI (Oct) PREL
U.S. Markit PMI Composite (Oct) 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
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