Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
NEWS U CAN USE
October 30, 2020
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
The Week that was…
26
th
Oct to 30
th
Oct
2
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
Indian Economy
• Government data showed that India's infrastructure output contracted 0.8% in Sep 2020
as compared to a contraction of 7.3% in Aug 2020 and a contraction of 5.1% in the same
period of the previous year. The natural gas sector witnessed the maximum contraction of
10.6% followed by refinery products sector and crude oil sector which contracted 9.5%
and 6.0% respectively.
• Government data showed that India’s fiscal deficit during the period from Apr to Sep of
2020 stood at Rs. 9.14 lakh crore. India’s fiscal deficit target thus exceeded the full year
target of Rs. 7.96 lakh crore by almost 15%. India’s fiscal deficit widened as government’s
revenue remained subdued on account of COVID-19 pandemic. Total receipts for the
government stood at Rs. 5.65 lakh crore or 25.2% of the budget estimate as compared to
40.2% of the budget estimate in the corresponding period of the previous year.
• According to World Bank, remittances to India may come down by 9% to $76 billion which
it attributed to the ongoing COVID-19 pandemic and global economic recession. World
Bank further added that some of the factors which may lead to a decline in remittances
are weak economic growth, increasing unemployment, lower global crude oil prices and
weakening of the currencies of remittance-source countries against the greenback.
• Data from the Reserve Bank of India (RBI) showed that the states ‘consolidated gross fiscal
deficit (GFD) is placed at 2.8% of GDP for FY21. However, RBI warned that the COVID-19
pandemic may alter budget estimates substantially.
3
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
4
Domestic Equity Market Indices
Indices
30-Oct-20 1 Week Return YTD Return
S&P BSE Sensex
39,614.07 -2.63% -3.97%
Nifty 50
11,642.40 -2.41% -4.32%
S&P BSE Mid-Cap
14,904.62 -0.48% -0.42%
S&P BSE Small-Cap
14,888.08 -1.63% 8.68%
Source: MFI Explorer
NSE Advance/Decline Ratio
Date Advances Declines
Advance/Decline Ratio
26-Oct-20 621 1298 0.48
27-Oct-20 865 982 0.88
28-Oct-20 599 1251 0.48
29-Oct-20 642 1247 0.51
30-Oct-20 938 908 1.03
Source: NSE
• Indian equity markets settled for the
week in the red as the surge in the
COVID-19 cases at an alarming pace in
U.S. and Europe raised concerns that
economies may resort to lockdowns
and travel restrictions. Uncertainty
around the U.S. Presidential election
due on Nov 3, 2020 kept investors on
tenterhooks. Back home, investors
adopted cautious stance as the first
phase of polling for the Bihar Assembly
Election began this week.
• Meanwhile, the downturn was
restricted by hopes of higher foreign
fund inflow after MSCI said it will
implement the new regime on foreign
ownership limits in the MSCI Global
Indices containing Indian securities in
the Nov 2020 Semi Annual Index
Review.
Ratios
S&P BSE
Sensex
Nifty 50
S&P BSE
Mid Cap
S&P BSE
Small Cap
P/E
27.55 31.90 459.76 -1004.51
P/B
2.85 3.30 2.29 2.06
Dividend Yield
1.03 1.36 1.21 1.11
Source: BSE, NSE Va
lue as on Oct 30, 2020
Indian Equity Market
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
5
Sectoral Indices
Indices
Last
Closing*
Returns (in %)
1-Wk 1-Mth
S&P BSE Auto
17,517.1 -4.10% -2.01%
S&P BSE Bankex
27,388.6 -1.43% 12.46%
S&P BSE CD
24,076.3 -3.01% -0.83%
S&P BSE CG
14,167.3 0.15% 2.41%
S&P BSE FMCG
10,922.6 -1.10% -1.16%
S&P BSE HC
19,257.8 -1.93% -2.73%
S&P BSE IT
21,058.8 -3.12% 5.40%
S&P BSE Metal
8,207.5 -5.07% -1.16%
S&P BSE Oil & Gas
12,126.1 -0.84% -0.95%
Source:
Refinitiv *Value as on Oct 30, 2020
• On the BSE sectoral front, barring S&P BSE
Power and S&P BSE Capital Goods, all the
major indices closed in the red.
• S&P BSE Metal was the major loser, down
5.07%, followed by S&P BSE Auto and S&P BSE
IT, which slipped 4.10% and 3.12%,
respectively.
Indian Derivatives Market Review
• Nifty Nov 2020 Futures stood at 11,638.40, a discount of 4.00 points below the spot closing
of 11,642.40. The total turnover on NSE’s Futures and Options segment for the week stood
at Rs. 135.82 lakh crore as against Rs. 130.62 lakh crore for the week to Oct 23.
• The Put-Call ratio stood at 0.99 compared with the previous session’s close of 0.88.
• The Nifty Put-Call ratio stood at 1.46 compared with the previous session’s close of 1.47.
Indian Equity Market (contd.)
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
6
Debt Indicators
(%)
Current
Value
1-Wk
Ago
1-Mth
Ago
6-Mth
Ago
Call Rate
3.25 3.22 3.40 4.08
91 Day T-Bill
3.23 3.21 3.31 3.64
05.22% 2025, (5 Yr GOI)
5.17 5.21 5.39 --
05.77% 2030, (10 YrGOI)
5.88 5.84 6.02 --
Source: Refinitiv Value as on Oct 29, 2020
• Bond yields increased on profit
booking and as market participants
remained cautious ahead of the
Reserve Bank of India’s (RBI) open
market purchase, along with weekly
debt auction, which were conducted
on Friday.
• Yields rose further as sentiment
continues to be supported on dovish
comments from the Reserve Bank of
India (RBI).
• Yield on the 10-year benchmark paper
(5.77% GS 2030) increased 4 bps to
close at 5.88% from the previous
week’s close of 5.84% after trading in
a range of 5.79% to 5.89%.
Domestic Debt Market
5.80
5.85
5.90
26-Oct 27-Oct 28-Oct 29-Oct
Yield in %
10 -Yr Benchmark Bond ( % )
Source: CCIL
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
7
Maturity
G-Sec Yield
(%)
Corporate Yield
(%)
Spread
bps
1 Year 3.50 4.99 149
3 Year 4.68 5.43 75
5 Year 5.23 6.47 123
10 Year 5.97 7.07 110
Source: Refinitiv Value as on
Oct 29, 2020
• Yields on gilt securities fell on 12, 15 and
30-year maturities by up to 9 bps while it
increased across the remaining maturities
by up to 4 bps barring 3 and 11-year
maturities which closed steady.
• Corporate bond yields increased on 2-year
paper and 7 to 10-year maturities in the
range of 3 bps to 8 bps while it fell across
the remaining maturities by up to 5 bps
barring 3-year paper which closed steady.
Domestic Debt Market (Spread Analysis)
-10
-5
0
5
2.00
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-Oct-20 23-Oct-20
Yield in %
Change in bps
Source: Refinitiv
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
8
• The Union Cabinet approved nationwide project for rehabilitation and improvement of
dams worth Rs. 10,211 crore. The objective of the move is to ensure safety of dams,
enhance water security of the country and support sustainable development while creating
employment opportunities.
• The government banned export of onion seeds with immediate effect. The move comes
amid rising prices of onions in the market on account of damage done by heavy rainfall to
standing Kharif crop across several parts of the country.
• The Union Cabinet has approved the signing of the Memorandum of Understanding
between India and Cambodia on cooperation in the field of Health and Medicine. The
objective of the move is to encourage cooperation between the two countries through joint
initiatives and technology development in the health sector.
• The Union Cabinet approved the signing of the Memorandum of Cooperation between India
and Japan on bilateral cooperation in the field of Information and Communication
Technologies (ICTs). The objective of the move is to enhance cooperation between two
countries in various fields like 5G network, telecom security, Submarine cable, standard
certification of communication equipment, utilization of latest Wireless Technologies and
ICTs, ICTs capacity building, Public Protection and Disaster Relief, Artificial Intelligence (AI) /
Block Chain, Spectrum Chain, Spectrum Management, Cooperation on Multilateral
platforms etc.
Regulatory Updates in India
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
9
• The Cabinet Committee on Economic Affairs approved that 100% of the food grains and
20% of the sugar need to be mandatorily packed in diversified jute bags. The objective of
the move is to give a push to the diversification of the jute industry and help in price
discovery.
• The Reserve Bank has asked all lending institutions, including non-banking financial firms,
to implement the waiver of difference between simple interest and compound interest on
loans up to Rs. 2 crore for a six-month moratorium starting on 1 Mar 2020. Government
announced the interest waiver scheme on Oct 23, 2020.
• According to media reports, capital market regulator Securities and Exchange Board of
India (SEBI) mandated investment bankers and other entities involved in primary market
issuances not to share bidding data directly to investors. Instead, investment bankers need
to direct investors to stock exchanges where such data is publicly available.
• According to media reports, SEBI has clarified that existing clients who have invested in
Portfolio Management Services (PMS) to the extent of Rs.25 lakh (earlier regulations) will
have to invest such that they meet minimum investment value of Rs.50 lakh in PMS in
order to top up his investment portfolio in PMS. Additionally, SEBI has clarified that partial
withdrawal is allowed in PMS to the extent that they maintain a minimum investment
value of Rs. 50 lakh in PMS.
Regulatory Updates in India (contd..)
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
• Data from the U.S. Commerce Department report showed, U.S. real Gross Domestic
Product (GDP) surged 33.1% in the Sep quarter of 2020 after plummeting 31.4% in the Jun
quarter of 2020. Rebound in GDP was due to consumer spending that rose sharply by
40.7% in Sep quarter after 33.2% plunge in the second quarter. The positive contributions
to GDP were partly neutralised by fall in federal government spending and state and local
government spending as well as an increase in imports.
• Preliminary flash estimate from Eurostat showed, euro area Gross Domestic Product (GDP)
surged 12.7% QoQ in the Sep quarter of 2020, compared with a fall of 11.8% in the
previous quarter. Rise in GDP was the sharpest seen since the series started in 1995.
Among member countries, France recorded the largest rise of 18.2% sequentially,
followed by Spain and Italy. Germany grew 8.2%. Annually, GDP contracted 4.3% YoY in the
Sep quarter of 2020, slower than 14.8% fall in the prior quarter.
• The Bank of Japan retained the interest rate at -0.1% on current accounts that financial
institutions maintain at the central bank. Without setting an upper limit, the bank will
continue to buy the appropriate amount of Japanese government bonds, so that 10-year
JGB yields will remain at around zero percent. The bank said that, with economic activity
resuming and the influence of the coronavirus steadily diminishing, the economy is likely to
follow an improving trend. But it is predicted that the pace will be moderate. The economy
is forecast to shrink 5.5% in FY20, weaker than the previous outlook of -4.7%. Overall
consumer prices are expected to fall 0.6% versus a 0.5% fall projected in Jul.
10
Global News/Economy
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
11
Global Indices
Indices
30-Oct-20
1-Week
Return
YTD
Return
Russell 3000 1,684.78 -5.89% 18.14%
Nasdaq 100 11,052.95 -5.47% 26.56%
FTSE 100 5,577.27 -4.83% -26.05%
DAX Index 11,556.48 -8.61% -12.77%
Nikkei Average 22,977.13 -2.29% -2.87%
Straits Times 2,423.84 -4.48% -24.79%
Source: Refinitiv Value as on Oct 30, 2020
U.S.
• U.S. markets closed lower amid
concerns about the recent spike in
coronavirus cases coupled with
uncertainty about the prospects for a
new stimulus bill.
• The downturn was restricted following
the release of a report from the
Commerce Department showing a
stronger than expected rebound by the
U.S. economy in the third quarter of
2020.
Europe
• European markets settled in the red as worries about continued spikes in coronavirus
cases across Europe and the U.S. and tougher lockdown restrictions in several countries,
including the U.K., France, Germany and Spain, renewed concerns about economic
recovery.
Asia
• Asian markets retreated as rising coronavirus infections and new restrictions introduced in
European countries added to worries about the economic outlook.
Global Equity Markets
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
12
• Yields on the 10-year U.S. Treasury rose
2 bps to close at 0.86% compared with
the previous week’s close of 0.84%.
• U.S. Treasury prices rose initially during
the week under review as its safe haven
appeal improved due to persisting
concerns over COVID-19 pandemic amid
increase in coronavirus infection cases in
U.S. and Europe. Uncertainty ahead of
the upcoming U.S. Presidential elections
also contributed to the upside.
• Gains were extended as hopes faded for
a stimulus deal in U.S. which kept
market participants on tenterhooks.
• However, the trend reversed towards
the end of the week as U.S. Treasury
prices fell on expectations of heavy
issuance of new supply of U.S. debt that
may come from a post-election stimulus
package.
Global Debt (U.S.)
0.75
0.80
0.85
0.90
26-Oct 27-Oct 28-Oct 29-Oct 30-Oct
US 10-Year Treasury Yield Movement
Source: Refinitiv
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
13
Performance of various commodities
Commodities
Last Closing* 1-Week Ago
Brent Crude($/Barrel)
35.76 40.85
Gold ($/Oz)
1,877.95 1900.79
Gold (Rs/10 gm)
50,645 51044
Silver ($/Oz)
23.63 24.58
Silver (Rs/Kg)
60,471 62578
Source: Refinitiv *Value as on Oct 30, 2020
Gold
• Gold prices fell as the safe haven appeal of
the greenback improved amid persisting
concerns over the COVID-19 pandemic and
uncertainty over the upcoming U.S.
Presidential elections.
Brent Crude
• Brent crude prices slipped below $40 per
barrel level amid persisting concerns over
COVID-19 pandemic and worries on
renewed lockdowns. Losses were extended
as data from U.S. Energy Information
Administration showed that oil inventory
increased by 4.3 million barrels for the
week ended Oct 23.
Baltic Dry Index
• The index fell due to sluggish capesize and
panamax activities.
Commodities Market
8.40
9.90
11.40
30-Sep-20 15-Oct-20 30-Oct-20
Global Commodity Movement
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
Global Commodity Prices
Rebased to 10
Source: Refinitiv
-3.86%
-12.46%
-1.20%
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
14
Movement of Rupee vs Other Currencies
Currency
Last Closing* 1-Wk Ago
US Dollar
73.97 73.58
Pound Sterling
96.33 96.06
EURO
86.97 86.78
100 Yen
70.87 70.26
Source:
RBI Figures in INR , *Value as on Oct 29, 2020
Rupee
• The Indian rupee weakened against the U.S.
dollar as surging coronavirus cases in
Europe and the U.S. dampened risk
appetite in the region.
Euro
• Euro plunged against the safe haven U.S.
dollar after the ECB president flagged
further monetary easing in December.
Pound
• Sterling fell against the greenback amid
surging coronavirus cases in Europe and the
United States as well as a lack of progress
on a U.S. stimulus package, increased
losses.
Yen
• Yen gained marginally against the U.S.
dollar as safe haven improved amid surging
coronavirus cases in Europe and U.S.
Currencies Markets
9.70
10.00
10.30
30-Sep-20 16-Oct-20
USD GBP Euro JPY
Source: Refinitiv
Currency Prices ( in terms of INR)
Rebased to 10
Currency Movement
0.22%
0.87%
0.54%
0.28%
29-Oct-20
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
15
The Week that was…
26
th
Oct to 30
th
Oct
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
16
The Week that was (Oct 26 – Oct 30)
Date Events
Present
Value
Previous
Value
Monday,
Oct 26, 2020
• Japan Leading Economic Index Final (Aug) 88.4 86.7
• U.S. New Home Sales MoM (Sep) -3.5% 3.0%
• Germany Ifo Business Climate (Oct) 92.7 93.2
• U.S. Chicago Fed National Activity Index (Sep) 0.27 1.11
Tuesday,
Oct 27, 2020
• China Industrial Profits (YTD) YoY (Sep) -2.4% -4.4%
• U.S. Durable Goods Orders MoM (Sep) 1.9% 0.4%
• U.S. House Price Index MoM (Aug) 1.5% 1.1%
• U.S. CB Consumer Confidence (Oct) 100.9 101.3
Wednesday,
Oct 28, 2020
• U.S. Goods Trade Balance Adv (Sep) $-79.37B $-83.11B
Thursday,
Oct 29, 2020
• Bank of Japan Interest Rate Decision -0.1% -0.1%
• Germany Unemployment Change (Oct) -35K -10K
• Eurozone Economic Sentiment (Oct) 90.9 90.9
• U.S. GDP Growth Rate QoQ Adv (Q3) 33.1% -31.4%
• European Central Bank Interest Rate Decision 0% 0%
• Germany Inflation Rate YoY P (Oct) -0.2% -0.2%
Friday,
Oct 30, 2020
• Germany GDP Growth Rate YoY Flash (Q3) -4.3% -11.3%
• Eurozone GDP Growth Rate YoY Flash (Q3) -4.3% -14.8%
• U.S. PCE Price Index YoY (Sep) 1.4% 1.3%
• India Federal Fiscal Deficit, INR (Sep) 9139.93 B 8703.47 B
• India Infrastructure Output (YoY) (Sep) -0.8% -7.3%
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
17
The Week Ahead
2
nd
Nov to 6
th
Nov
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
18
Day Event
Monday,
Nov 2, 2020
• India Markit Manufacturing PMI (Oct)
• U.S. Markit Manufacturing PMI Final (Oct)
• U.S. ISM Manufacturing PMI (Oct)
• Germany Markit Manufacturing PMI Final (Oct)
Tuesday,
Nov 3, 2020
• U.S. Factory Orders MoM (Sep)
Wednesday,
Nov 4, 2020
• China Caixin Composite PMI (Oct)
• Germany Markit Composite PMI Final (Oct)
• Eurozone Markit Composite PMI Final (Oct)
• U.K. Markit/CIPS Composite PMI Final (Oct)
• U.S. ADP Employment Change (Oct)
Thursday,
Nov 5, 2020
• Bank of England Interest Rate Decision
• U.S. Initial Jobless Claims (31 Oct)
• Eurozone Retail Sales YoY (Sep)
Friday,
Nov 6, 2020
• U.S. Fed Interest Rate Decision
• U.S. Non-Farm Payrolls (Oct)
• U.S. Unemployment Rate (Oct)
The Week Ahead
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
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
India’s views or opinions, which in turn may have been formed on the basis of such data or information. The Sponsor(s), the Investment Manager, the
Trustee or any of their respective directors, employees, affiliates or representatives do not assume any responsibility for, or warrant the accuracy,
completeness, adequacy and reliability of such data or information. Whilst no action has been solicited based upon the information provided herein,
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
not intended to be an offer or solicitation for the purchase or sale of any financial product or instrument. Recipients of this information should rely
on information/data arising out of their own investigations. Before making any investments, the readers are advised to seek independent
professional advice, verify the contents in order to arrive at an informed investment decision. None of the Sponsor(s), the Investment Manager, the
Trustee, their respective directors, employees, affiliates or representatives shall be liable in any way for any direct, indirect, special, incidental,
consequential, punitive or exemplary damages, including on account of lost profits arising from the information contained in this material.
All information contained in this document has been obtained by ICRA Analytics Limited from sources believed by it to be accurate and reliable.
Although reasonable care has been taken to ensure that the information herein is true, such information is provided ‘as is’ without any warranty of
any kind, and ICRA Analytics Limited or its affiliates or group companies and its respective directors, officers, or employees in particular, makes no
representation or warranty, express or implied, as to the accuracy, suitability, reliability, timelines or completeness of any such information. All
information contained herein must be construed solely as statements of opinion, and ICRA Analytics Limited, or its affiliates or group companies and
its respective directors, officers, or employees shall not be liable for any losses or injury, liability or damage of any kind incurred from and arising out
of any use of this document or its contents in any manner, whatsoever. Opinions expressed in this document are not the opinions of our holding
company, ICRA Limited (ICRA), and should not be construed as any indication of credit rating or grading of ICRA for any instruments that have been
issued or are to be issued by any entity.
19
Disclaimer
Thank you for
your time.
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
Thank you for
your time.
