Monthly Market Update (India) - February2020 |iFAST Research - Fundsupermart.com
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Monthly Market Update (India) – February2020 |iFAST Research
MARKETS ACROSS THE GLOBE
2020 2019-20 2019
MTD 1Y (%) Return (%)
Asia ex Japan (MSCI Asia ex Japan) -4.47% 2.73% 15.37%
Emerging Markets (MSCI EM) -4.69% 1.18% 15.42%
Europe (Stoxx 600) -1.23% 14.51% 23.16%
Japan (Nikkei 225) -1.91% 11.71% 18.20%
USA (S&P 500) -0.16% 19.28% 28.88%
Brazil (IBOV) -1.63% 16.80% 31.58%
China (HS Mainland 100) -7.94% -5.19% 12.12%
Hong Kong (HSI) -6.66% -5.83% 9.07%
India (SENSEX) -1.29% 12.32% 14.38%
Indonesia (JCI) -5.71% -9.08% 1.70%
Malaysia (KLCI) -3.63% -9.06% -6.02%
Russia (RTSI$) 1.01% 22.04% 28.55%
Singapore (STI) -2.14% -1.14% 5.02%
South Korea (KOSPI) -3.58% -3.89% 7.67%
Taiwan (Taiwan Weighted) -4.18% 15.73% 23.33%
Thailand (SET Index) -4.16% -7.77% 1.02%
*Returns are as at 31 January 2020. Source: Bloomberg, iFAST Compilations All returns are in respective local
currency terms and MSCI Index returns are in USD
Monthly Market Update (India) – February2020 |iFAST ResearchECONOMIC INDICATORS
Trade (December’19) Markets & Valuations Inflation (December’19)
India’s exports during December 2019 were valued at USD (As on January 31, 2020) India’s CPI came up at 7.35% during the month of
27.36 billion registering a negative growth of -1.80% in December 2019 as against 5.54% during the previous
The benchmark Index (Sensex) was at 40,723.49
dollar terms as compared to USD 27.86 billion during the month. Food and Beverages which have a weightage of
Estimated PE & earnings growth for BSE Sensex
month of December 2018. Imports during December 2019 54.18% in the CPI basket reported increased in prices by
were valued at USD 38.61 billion which was 8.83% lower 12.16% in December 19. Within the food and beverages
2019-20 2020-21 2021-22
in dollar terms as compared to imports which were valued segment, prices of Cereals increased 4.36%, prices of milk
Price/Earnings 22.78 18.40 15.34 products increased by 4.22%, vegetable prices increased
at USD 42.35 billion in December 2018.
Earnings Growth 15.81% 23.77% 19.95% 60.50% and pulses & products prices increased
For exports, the major commodity groups showing 15.44%.Housing and Fuel & light prices increased by 4.30%
positive growth over the corresponding month of last year and 0.70% respectively.
are Engineering Goods (30.36%), Marine Products (7.84%),
RMG of all Textiles (2.42%) and Drugs & Pharmaceuticals
(13%).
For imports, major commodity groups showing high
changes in December 2019 over the corresponding month
of last year are Transport Equipment (-30.12%), Electronic
Goods (-1.42%) and Petroleum, Crude & Products (-
11.98%). The trade deficit for the month of December
2019 stood at USD 11.45 billion vis-à-vis a deficit of USD
14.49 billion during December 2018.
Industrial Production (November‘19)
IIP was down 1.8% y-o-y in November 19 as compared to
3.8% y-o-y in October 19. The major sectors like Mining,
Manufacturing and Electricity registered year-on-year
contraction rates of 1.7%, 2.7% and -5.0% respectively. As
per Use-based classification, the growth rates in
November 2019 over November 2018 are (-) 0.3 % in
Primary goods, (-) 8.6 % in Capital goods, 17.1 % in
Intermediate goods and (-) 3.5 % in Infrastructure/
Construction Goods. The Consumer durables and
Consumer non-durables have recorded growth of (-) 1.5 %
and 2.0 % respectively.
Monthly Market Update (India) – February2020 |iFAST ResearchEQUITY MARKET
BSE Sensex - Top & bottom performers in January 2020. entering at lower prices. Investors should enter the market via STP or SIP route depending on their
risk profile and time horizon.
Top Performers MTD Bottom Performers MTD
UltraTech Cement Ltd 9% IndusInd Bank Ltd -16.7% Broader Indices (Performance % in January 2020)*
BSE SMALL CAP 7.07
Oil & Natural Gas
Bharti Airtel Ltd 9% Corp Ltd -15.4% BSE MID CAP 3.30
Mahindra & Mahindra
Ltd 7% Tata Steel Ltd -7.0% BSE Sensex -1.29
Nifty Index -1.70
Earnings growth estimates of top weighted stocks:
Stock FY-20 FY-21 FY-22
-5 0 5 10
HDFC Bank Ltd. 17.22% 20.92% 20.28%
Reliance Industries Ltd. 11.47% 33.94% 16.88%
Sectoral Indices (Performance % in January 2020)*
Equity View BSE Realty 10.77
In January 2020 we saw the BSE S&P Sensex give a negative return of -1.29%,
BSE CD 4.54
BSE-HC 3.93
declining from last month’s positive return of 1.13%. Markets started the month
BSE CG 3.06
with record highs on upbeat economic data and a good start to the earnings BSE IT 2.56
season. India’s industrial output showed growth after three months of BSE TECK 2.52
contraction. Market sentiment also received some support from the government BSE FMCG 2.07
announcing investments worth Rs. 100 lakh crore in roads, railways, airports and BSE Power -1.40
agricultural projects over the next five years to boost slowing economic growth. BSE AUTO -1.75
The U.S. and China signing a phase one trade deal buoyed sentiment. On the BSE Bankex -3.77
BSE Oil & Gas -5.57
other hand, the finance minister’s budget for FY 2020-21 did not fulfill investors’
BSE METAL -8.96
expectations; rise in custom duty in most sectors, marginal relief for income
taxpayers, and less than expected rise in infrastructure spending played on their -4 -2 0 2 4 6 8 10 12 14
minds. The U.S.-Iran tensions dominated market sentiment throughout the
second week, fresh on the heels of the U.S. attack in Iraq killing a top Iranian
military general on January 3, 2020. Source: Bloomberg, iFAST Compilations. All returns are in respective local currency terms
We advise our investors to stay invested in large cap funds. Small and midcap
funds are at reasonably lower valuations and one can gain an advantage by
Monthly Market Update (India) – February2020 |iFAST ResearchDEBT MARKET OUTLOOK
10 Year G-sec Yield Curve
Fixed Income View 7.40
During January 2020, the 10-year G-Sec yield increased from 6.51% at the 7.20
beginning of the month to 6.60% by the end of the month. Bond yields rose 7.00
during the month under review as concerns over fiscal slippage weighed on 6.80
sentiment. However, there were some positives for the markets as well; prices of
6.60
10-year G-sec bonds rose on speculations of a fourth round of special open
market operation by the RBI ahead of the federal budget, and a steep fall in 6.40
global crude oil prices amid fears about the spread of the coronavirus affecting 6.20
global economic growth. 6.00
1-Jan-20
3-Jan-20
5-Jan-20
7-Jan-20
9-Jan-20
11-Jan-20
13-Jan-20
15-Jan-20
17-Jan-20
19-Jan-20
21-Jan-20
23-Jan-20
25-Jan-20
27-Jan-20
29-Jan-20
31-Jan-20
We advise investors to stay invested in ultra short duration, short duration and
corporate bond funds.
Monthly Market Update (India) – February2020 |iFAST ResearchGLOBAL MARKET UPDATE – GROUP 7 COUNTRIES
G7 Countries - Performance in January 2020* Europe
The downtrend in economic momentum has likely bottomed for Europe but a recovery is expected. It
Canada (S&P/TSX) 1.33%
is likely to be gradual as the larger economies (i e Germany) are still struggling to recover .Germany’s
USA (S&P 500) -0.16% exposure to China has taken a toll on its economy, with its manufacturing activities deteriorating
Italy (FTSE MIB) -1.15% drastically across last year .While the export dependent .German economy faces the growing threat of
Japan (Nikkei 225) -1.91% a recession, its neighbour France and Italy are less exposed and have been more willing to use fiscal
-2.02% levers .Strong fiscal stimulus is helping the consumption driven France offset impacts of a global
Germany (DAX)
demand slowdown, while Italy aims to boost growth through investment and lower labour taxes We
France (CAC-40) -2.87% expect European corporate earnings growth to be lacklustre this year while economic growth slowly
UK (FTSE 100) -3.40% recovers Yet, Europe’s premium valuation is simply not justifiable with such an unimpressive outlook..
At the current juncture, we are maintaining a 2.5 Stars “Neutral” rating for Europe.
-4% -2% 0% 2%
Japan
*Source: Bloomberg, iFAST Compilations. All returns are in respective local currency terms
Economic growth in the North Asian region had been hampered in 2019 as headwinds dragged down
exports .This arose due to a combination of slowdown in China’s demand (their biggest trading
Our View
partner), the global semiconductor down cycle and uncertainties brought forth by the US China trade
USA war .However, we believe a rebound in Asian exports is imminent as the global semiconductor
Economic growth for the US is still holding up at the current juncture, underpinned by industry goes back to an upcycle and new orders continue to be re directed into existing production
resilient domestic consumption .The robust consumer spending and tight labour market capacity in other Asian economies .The export heavy Asian markets have started to see a rebound in
have helped to offset the weaker manufacturing and business sectors Yet, with the US exports and manufacturing activities over the past few months .We believe this recovery will swing
economy progressing further into its economic cycle, we expect greater late cycle economic momentum positively and potentially drive corporate earnings higher for North Asian
headwinds which may weigh on the US labour market Business sentiment has been equities. Business condition for Japanese small, medium and large enterprises continue to fall.
fragile (due to the trade conflict) and can remain weak under the political uncertainty Valuations remained cheap and Japan remains attractive.We maintain our star ratings of the
from the general election .This can mount immense stress on household expenditure, Japanese market at an “Attractive” rating of 3.5 stars.
thereby unravelling the domestic consumption that is single handedly buttressing
economic growth. While services PMI improved, manufacturing PMI has dipped. This
signals that the US is still facing external weakness while the domestic economy
remains resilient. Industrial production continues its downtrend, highlighting a
contraction in business activities .It continues to contract due to external weaknesses as
suggested by the manufacturing PMI.US remains unattractive. We maintain our rating
of 2.0 Stars “Unattractive” for the US equity market.
Monthly Market Update (India) – February2020 |iFAST ResearchGLOBAL MARKET UPDATE – ASIA PACIFIC (Ex-JAPAN)
Asia Pacific (Ex Japan) - Performance in January 2020*
Australia (S&P/ASX 200) 4.98%
Singapore (STI) -2.14%
South Korea (KOSPI) -3.58%
Malaysia (KLCI) -3.63%
Thailand (SET Index) -4.16%
Taiwan (Taiwan Weighted) -4.18%
Indonesia (JCI) -5.71%
Hong Kong (HSI) -6.66%
-8% -6% -4% -2% 0% 2% 4% 6%
*Source: Bloomberg, iFAST Compilations. All returns are in respective local currency terms
Our View
Asia ex Japan
The recovery in the global semiconductor cycle and recent positive developments in
trade talks are two key drivers for a rebound in economic growth among SEA
economies .Prior weakness in exports and manufacturing have gradually recovered
over the past few months .SEA economies are also primed to be one of the biggest
beneficiaries of the trade war .With the US China trade war expected to persist in a
truce, firms have started to relocate production lines to South East Asian economies,
where cost of land and labour are lower .We expect the influx of foreign investment
dollars to continue accelerating, especially as the infrastructure within the region
gradually improve .Valuation for ASEAN equities are still attractive and earnings outlook
is progressively more optimistic as several positive earnings catalysts materialise. We
maintain a 4.5 Stars “Very Attractive” rating.
Monthly Market Update (India) – February2020 |iFAST ResearchGLOBAL MARKET UPDATE – BRIC (Ex-India)
two years. We maintain for China A-‘4.0 stars’, China H-‘4.5 stars’ “Very Attractive”.
BRIC (Ex-India) - Performance in January 2020*
Brazil (IBOV) -1.63%
Russia (RTSI$) -2.06%
China (HS Mainland 100) -7.94%
-10% -8% -6% -4% -2% 0%
*Source: Bloomberg, iFAST Compilations. All returns are in respective local currency terms
Our View
China
While China’s GDP growth has slipped amid domestic and external challenges,
we think investors are overly pessimistic about the economy .Looking ahead,
the economy has already started to improve with the series of supportive fiscal
and monetary policies from the central government .Several leading indicators
have bottomed and rebounded in recent months, pointing to a possible
recovery in economic activity, despite the ongoing Coronavirus .While external
demand gradually recovers, domestic demand continues to display robust signs
of resiliency .With economic growth expected to hold up ahead, corporate
earnings in China are set to expand at a robust double digit pace in the next
Monthly Market Update (India) – February2020 |iFAST ResearchFUND CATEGORY RETURNS
Fund Category Returns (As on January 2020 end)
1 Month 1 Year
Equity: Large Cap -0.29 12.42
Equity: Multi Cap 1.31 12.88
Equity: Mid Cap 5.51 13.91
Equity: Small Cap 7.48 11.71
Equity: ELSS 0.95 11.71
Equity: Index -0.94 10.04
Hybrid: Aggressive Hybrid Funds 0.73 10.36
Hybrid: Conservative Hybrid Fund 0.25 6.87
Debt: Gilt 0.34 11.16
Debt: Medium to Long Duration Fund 0.11 7.76
Debt: Short Duration Fund 0.57 4.36
Debt: Ultra Short Duration Fund 0.36 6.84
Debt: Liquid 0.42 6.22
Other: FOF Overseas -1.68 12.36
Solution Oriented Fund 0.83 9.96
Source: NAV India, iFAST Compilations
Monthly Market Update (India) – February2020 |iFAST ResearchTOP & BOTTOM EQUITY FUNDS
Top and Bottom Performing Equity Funds on our Platform as on 31st January 2020
Large Cap Funds Multi Cap Funds
Scheme 1 Month 1 Year Scheme 1 Month 1 Year
Canara Robeco Bluechip Equity Fund (G) 1.36 17.36 Invesco India Multicap Fund (G) 4.55 13.19
Edelweiss Large Cap Fund (G) 1.04 13.68 UTI-Equity Fund (G) 3.46 17.53
Indiabulls Bluechip Fund (G) -1.73 11.68 ICICI Pru Multicap Fund - (G) -0.25 8.38
HDFC Top 100 Fund (G) -2.78 4.35 HDFC Equity Fund - (G) -1.93 4.79
Mid Cap Funds ELSS Funds
Scheme 1 Month 1 Year Scheme 1 Month 1 Year
SBI Magnum Midcap Fund (G) 8.04 10.81 BOI AXA Tax Advantage Fund (G) 3.55 23.67
Tata Mid Cap Growth Fund - (G) 6.91 18.87 Kotak Tax Saver Fund (G) 3.38 17.98
Franklin India Prima Fund - (G) 3.10 9.19 Nippon India Tax Saver (ELSS) Fund - (G) -1.66 4.50
Mirae Asset Midcap Fund (G) 2.48 0.00 HDFC Tax Saver Fund (G) -1.86 2.92
Small Cap Funds
Scheme 1 Month 1 Year
BOI AXA Small Cap Fund (G) 10.70 17.07
Canara Robeco Small Cap Fund - Regular (G) 10.17 0.00
HDFC Small Cap Fund (G) 4.52 -3.22
L&T Emerging Businesses Fund (G) 3.50 0.15
Source: NAV India, iFAST Compilations
Monthly Market Update (India) – February2020 |iFAST ResearchTOP & BOTTOM DEBT and HYBRID FUNDS
Top and Bottom Performing Debt and Hybrid Funds on our Platform as on 31st January 2020
Aggressive Hybrid Funds Conservative Hybrid Funds
Scheme 1 Month 1 Year Scheme 1 Month 1 Year
BOI AXA Mid & Small Cap Equity & Debt Fund (G) 6.83 6.65 DSP Regular Savings Fund (G) 1.19 9.55
DSP Equity & Bond Fund - (G) 2.60 19.26 Canara Robeco Conservative Hybrid Fund (G) 1.07 11.38
ICICI Pru Equity & Debt Fund - (G) -1.09 9.80 UTI-Regular Savings Fund (G) -1.52 1.50
JM Equity Hybrid Fund - (G) -1.57 -9.42 Nippon India Hybrid Bond Fund (G) -3.93 -1.90
Medium to Long Duration Funds Gilt
Scheme 1 Month 1 Year Scheme 1 Month 1 Year
SBI Magnum Income Fund - (G) 0.82 12.40 HDFC Gilt Fund (G) 0.56 8.68
Tata Income Fund - (Growth) 0.64 9.69 IDFC GSF Constant Maturity Plan (G) 0.52 14.93
Nippon India Income Fund - (G) 0.22 11.76 Edelweiss Govt Securities Fund (G) 0.08 10.77
UTI-Bond Fund (G) -4.50 -8.01 IDBI Gilt Fund (G) 0.08 7.65
Short Duration Funds
Scheme 1 Month 1 Year
Edelweiss Short Term Fund (G) 1.01 -0.88
BNP Paribas Short Term Fund - Regular (G) 0.95 7.47
PGIM India Short Maturity Fund (G) 0.13 -1.10
Franklin India Short Term Income (G) -3.39 -0.06
Source: NAV India, iFAST Compilations
Monthly Market Update (India) – February2020 |iFAST ResearchTOP & BOTTOM OTHER & SOLUTION ORIENTED FUNDS
Top and Bottom Performing Other Funds on our Platform as on 31st January 2020
FOF Overseas Funds
Scheme 1 Month 1 Year
Motilal Oswal Nasdaq 100 FOF - Regular (G) 5.09 33.42
PGIM India GEO Fund (G) 4.45 22.29
Franklin India Feeder - FEG Fund (G) -6.60 -1.51
HSBC Brazil Fund (G) -8.03 -3.28
Top and Bottom Performing Solution Oriented Funds on our Platform as on 31st January 2020
Solution Oriented Funds
Scheme 1 Month 1 Year
UTI-CCF Investment Plan - (G) 1.81 11.55
AXIS Retirement Savings Fund - AP - Reg (G) 1.70 0.00
Nippon India Retirement Fund-IG (G) -0.25 9.13
Nippon India Retirement Fund-WC (G) -0.95 7.14
Source: NAV India, iFAST Compilations
Monthly Market Update (India) – February2020 |iFAST ResearchDISCLAIMER: THIS REPORT IS NOT TO BE CONSTRUED AS AN OFFER OR SOLICITATION FOR THE SUBSCRIPTION, PURCHASE OR SALE OF ANY MUTUAL FUND. ANY ADVICE HEREIN IS MADE
ON A GENERAL BASIS AND DOES NOT TAKE INTO ACCOUNT THE SPECIFIC INVESTMENT OBJECTIVE OF THE SPECIFIC PERSON OR GROUP OF PERSONS. PAST PERFORMANCE AND ANY
FORECAST IS NOT NECESSARILY INDICATIVE OF THE FUTURE OR LIKE PERFORMANCE OF THE MUTUAL FUND. THE VALUE OF UNITS AND THE INCOME FROM THEM MAY FALL AS WELL AS
RISE. OPINIONS EXPRESSED HEREIN ARE SUBJECT TO CHANGE WITHOUT NOTICE.
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.
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