NEWS U CAN USE March 19, 2021 - Mutual Fund Investments are subject to market risks, read all scheme related documents carefully - Nippon India ...
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NEWS U CAN USE
March 19, 2021
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.The Week that was…
15th Mar to 19th Mar
2
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.Indian Economy
• The wholesale price index (WPI) based inflation rose 27-month high to 4.17% in Feb 2021
from 2.03% in the previous month and 2.26% in the same month of the previous year. The
WPI Food Index rose 3.31% in Feb 2021 from contraction of 0.26% in the previous month
and growth of 1.11% in Dec 2020. Under food articles, WPI inflation for vegetables
contracted 2.90% in Feb 2021 as compared to contraction of 20.82% in the previous
month. WPI inflation for potato contracted 29.78% as compared to contraction of 22.04%
in the previous month. WPI inflation for fuel and power rose 0.58% in Feb 2021 after
contracting for seven consecutive months.
• India’s trade deficit widened to $12.62 billion in Feb 2021 from $10.16 billion in the same
period of the previous year. Exports grew to $27.93 billion in Feb 2021 over the year from
$27.74 billion in Feb 2020. Imports rose to $40.54 billion in Feb 2021 over the year from
$37.90 billion in Feb 2020. For the period from Apr 2020 to Feb of 2021, trade deficit
narrowed sharply to $84.62 billion from $151.37 billion in the same period of the previous
year. Imports fell 23.11% on a yearly basis during the period from Apr 2020 to Feb 2021
while exports came down 12.23%. Oil imports in Feb 2021 was 16.63% lower in dollar
terms compared to the same period of the previous year while non-oil imports in dollar
terms rose 16.34% on a yearly basis in Feb 2021.
• According to the Union Minister of State for Finance & Corporate Affairs, fiscal deficit for
FY22 is estimated at 6.8%. The minister further added that under the restructured fiscal
consolidation path the government aims to reach fiscal deficit at 4.5% of GDP by FY26.
3
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.Indian Equity Market
• Indian equity markets settled for the
Domestic Equity Market Indices week with modest losses. Bourses were
Indices 19-Mar-21 1 Week Return YTD Return dragged initially by weak
S&P BSE Sensex 49,858.24 -1.84% 4.41% macroeconomic data. Besides, elevated
Nifty 50 14,744.00 -1.91% 5.45% crude prices weighed on sentiment.
S&P BSE Mid-Cap 20,044.50 -2.59% 11.72%
• Additionally, rising COVID-19 cases
S&P BSE Small-Cap 20,470.54 -3.48% 13.11%
increased the risk of a second wave.
Source: MFI Explorer
Market participants were worried after
Gujarat decided to impose night curfew
S&P BSE S&P BSE S&P BSE
Ratios
Sensex
Nifty 50
Mid Cap Small Cap in Surat, Rajkot, Ahmedabad, and
Vadodara for the next fortnight owing
P/E 34.71 40.16 56.58 743.48
P/B 3.36 4.18 2.93 2.77 to rising cases of COVID-19 infection.
Dividend Yield 0.72 1.08 0.92 0.87
Source: BSE, NSE Value as on Mar 19, 2021
• Further, elevated U.S. Treasury yield
triggered fears regarding outflow of
NSE Advance/Decline Ratio
foreign money from domestic equities
Date Advances Declines Advance/Decline Ratio
to U.S. bond market.
15-Mar-21 691 1316 0.53
16-Mar-21 913 1022 0.89
17-Mar-21 382 1582 0.24
18-Mar-21 425 1529 0.28
Source: NSE
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Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.Indian Equity Market (contd.)
Sectoral Indices
Last Returns (in %) • On the BSE sectoral front, majority of the
Indices sectors closed in the red. S&P BSE Realty was
Closing* 1-Wk 1-Mth
S&P BSE Auto 23,000.7 -1.92% -3.34% the major loser, down 5.93%, followed by S&P
S&P BSE Bankex 38,468.5 -3.82% -4.62% BSE Capital Goods and S&P BSE Oil & Gas,
S&P BSE CD 32,432.4 -2.57% 1.87% which dipped 5.20% and 4.06%, respectively.
S&P BSE CG 21,087.9 -5.20% -3.21%
• Meanwhile, S&P BSE FMCG, S&P BSE Power
S&P BSE FMCG 12,574.6 2.81% 2.37%
and S&P BSE Metal were the only gainers, up
S&P BSE HC 20,545.1 -3.48% -3.69%
2.81%, 0.64% and 0.06%, respectively.
S&P BSE IT 25,995.5 -1.10% 2.17%
S&P BSE Metal 13,879.3 0.06% 8.38%
S&P BSE Oil & Gas 15,246.5 -4.06% -1.21%
Source: Refinitiv *Value as on Mar 19, 2021
Indian Derivatives Market Review
• Nifty Mar 2021 Futures stood at 14,756.45, a premium of 12.45 points above the spot
closing of 14,744.00. The total turnover on NSE’s Futures and Options segment for the
week stood at Rs. 233.22 lakh crore as against Rs. 181.40 lakh crore for the week to Mar 12.
• The Put-Call ratio stood at 0.88 compared with the previous week’s close of 0.99.
• The Nifty Put-Call ratio stood at 1.20 compared with the previous week’s close of 1.02.
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Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.Domestic Debt Market
• Bond yields fell as market participants
Debt Indicators Current 1-Wk 1-Mth 6-Mth expect open market operations (OMO)
(%) Value Ago Ago Ago
purchases by the Reserve Bank of India
Call Rate 3.25 3.22 3.21 3.41 (RBI) to continue till the current fiscal
91 Day T-Bill 3.33 3.30 3.23 3.35
year end. Yields further fell on
expectations that RBI will cancel the last
05.22% 2025, (5 Yr GOI) 5.66 5.77 5.56 5.41
scheduled weekly government securities
05.85% 2030, (10 Yr GOI) 6.19 6.23 6.13 6.01 auction for the current financial year.
Source: Refinitiv Value as on Mar 19, 2021
• Yield on the 10-year benchmark paper
(5.85% GS 2030) fell 4 bps to close at
10 -Yr Benchmark Bond ( % )
6.22 6.19% from the previous week’s close of
6.23% after moving in a range of 6.17%
Yield in %
to 6.25%.
6.18
• RBI conducted the auction of four
government securities- 5.15% GS 2025,
6.14 5.85% GS 2030 and 6.76% GS 2061 for a
15-Mar 16-Mar 17-Mar 18-Mar 19-Mar cumulative amount of Rs. 33,000 crore,
Source: CCIL
which was oversubscribed.
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Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.Domestic Debt Market (Spread Analysis)
• Yields on gilt securities fell by up to 12 bps
G-Sec Yield Corporate Yield Spread across maturities, barring 2-year paper that
Maturity
(%) (%) bps rose 5 bps and 30-year paper was steady.
Yield fell the most on 6-year paper.
1 Year 4.17 4.48 31 • Corporate bond yields rose in the range of 3
to 35 bps across the curve, leaving 10- & 15-
3 Year 5.10 5.71 61
year papers that fell 4 & 22 bps, respectively.
5 Year 5.85 6.62 77
• Spread between AAA corporate bond and gilt
10 Year 6.29 7.49 120 expanded in the range of 14 to 46 bps across
the segments, except 15-year paper that
Source: Refinitiv Value as on Mar 19, 2021 contracted 12 bps and 10-year paper was
steady.
India Yield Curve Shift (%) (W-o-W)
Change in bps
8.00 6
Yield in %
5.00 -4
2.00 -14
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
Source: Refinitiv Change in bps 19-Mar-21 12-Mar-21
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Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.Regulatory Updates in India
• The Union Minister for Road Transport and Highways unveiled the vehicle scrapping policy,
stating that vehicle owners who scrap their old vehicles are likely to receive financial
incentives. The Union Government proposed to offer a road-tax rebate of up to 25% for
personal vehicles and up to 15% for commercial vehicles. Vehicle manufacturers are also
encouraged to offer a 5% discount on the purchase of a new vehicle in exchange for the
scrapping certificate. In addition, if a new vehicle is purchased with a scrapping certificate,
the registration fee may be waived.
• The Reserve Bank of India (RBI) has maintained its stance on cryptocurrencies, informing the
government of its decision to pursue a ban on such instruments after previously expressing
serious concerns. While stating that blockchain technology should be promoted, the central
bank has challenged the utility of cryptocurrencies being classified as a currency. The central
bank has also raised security concerns about cryptocurrencies, claiming that the anonymity
of the transactions could lead to money laundering and terror financing. The regulator
believes that allowing cryptocurrency into the economy will undo the current government's
efforts to restrict black money movement, as a large amount of illicit cash stashed abroad
might return through this path.
• According to media reports, The Reserve Bank of India will have to postpone the start of
monetary policy normalisation by three months due to an increase in COVID-19 cases, but
there is no major threat to the economy's recovery unless stringent lockdowns are
reinstated.
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Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.Regulatory Updates in India (contd..)
• Finance Minister introduced a Bill in Rajya Sabha to amend the Insurance Act, allowing for
74% foreign direct investment (FDI) in the sector. Amendments to the Insurance
Amendment Bill 2021 have been approved by the Union Cabinet. Currently, the maximum
amount of foreign direct investment (FDI) allowed in life and general insurance is 49%,
with Indian ownership and management control. Increased FDI would aid in the country's
life insurance penetration. The country's life insurance premiums are 3.6% of GDP, well
below the global average of 7.13%, and general insurance premiums are even worse, at
0.94% of GDP, well below the global average of 2.88%.
• The Securities and Exchange Board of India (Sebi) has proposed to streamline the initial
public offering (IPO) process with unified payment interface (UPI) in application supported
by blocked amount (ASBA) and redressal of investor grievances.
• Government has formed an expert advisory committee that will oversee the Startup India
Seed Fund Scheme's overall execution and monitoring. According to an office
memorandum from the Department for Promotion of Industry and Internal Trade (DPIIT),
the committee will evaluate and select incubators for allotment of funds under the
scheme, track progress, and take all appropriate steps for efficient utilisation of funds
against the scheme's objectives
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Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.Global News/Economy
• The U.S. Federal Reserve (Fed) kept interest rates unchanged in its monetary policy review.
The U.S. Central Bank also decided to continue with its asset purchase program in which it
buys at least $120 billion of bonds a month. The U.S. Federal Reserve indicated no rate
hikes likely through 2023 despite an improving outlook and higher inflation. In addition,
the U.S. Central Bank now expects the U.S. economy to grow by 6.5% in 2021 as compared
to its earlier projection of 4.2% in Dec 2020.
• A global rating agency has affirmed the sovereign ratings of the U.S. at 'AA+' with 'stable'
outlook. The agency retained the ratings because of the country's strong institutions,
dynamic and resilient economy, monetary policy stability, and unique position as the
world's leading reserve currency issuer. However, the agency mentioned that the ratings
were hindered by high general government debt and fiscal deficits, all of which
deteriorated last year because of the pandemic's economic shock.
• According to data of Commerce Department, U.S. retail sales fell 3% in Feb 2021 after
rising by an upwardly revised 7.6% in Jan 2021.
• Bank of England policymakers unanimously agreed to keep the benchmark rate unchanged
at 0.10% and quantitative easing unchanged at GBP 895 billion. The committee stated that
it would not tighten monetary policy until clear proof of substantial progress in removing
spare capacity and achieving the 2% inflation goal on a long-term basis. It also stated that if
the outlook for inflation deteriorated the committee would be prepared to take whatever
additional steps were required to fulfil its mandate.
10
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.Global Equity Markets
Global Indices
U.S.
• U.S. markets largely remained under
1-Week YTD
Indices 19-Mar-21
Return Return pressure as recent spike in treasury
Russell 3000 1,941.82 -1.00% -0.55%
yields renewed concerns about the
Nasdaq 100 12,866.99 -0.54% -0.17%
outlook for high-growth companies.
FTSE 100 6,708.71 -0.78% 3.84% • The downturn was restricted by U.S.
DAX Index 14,621.00 0.82% 6.58% Fed’s forecast on stronger economic
Nikkei Average 29,792.05 0.25% 8.56% growth and higher inflation this year
Straits Times 3,134.54 1.27% 10.22% although it expects to keep interest
Source: Refinitiv Value as on Mar 19, 2021 rates at near-zero levels through 2023.
Europe
• European markets largely went up during the week with investors cheering the Fed's
pledge to continue its accommodative policy and taking positive cues from the Bank of
England's monetary policy announcement.
Asia
• Majority of the Asian markets rose during the week after U.S. Fed reiterated its
accommodative monetary policy and projected the U.S. economy to grow 6.5% this year.
Nonetheless, rise in U.S. Treasury yield kept investors wary.
11
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.Global Debt (U.S.)
US 10-Year Treasury Yield Movement • Yields on the 10-year U.S. Treasury rose 9
1.76 bps to close at 1.73%, from the previous
week’s close of 1.64%. Yield rose to its
highest level in 14 months.
1.67 • U.S. Treasury prices fell despite strong
demand for a 20-year bond auction. Prices
declined further after the U.S. Federal
Reserve projected a sharp rise in
1.58 economic growth with no interest rate
15-Mar 16-Mar 17-Mar 18-Mar 19-Mar
Source: Refinitiv
hikes through 2023.
• The fall in treasury prices accentuated by
the end of week as market participants
expect higher inflation as the economic
recovery in the U.S. gathers steam.
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Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.Commodities Market
Global Commodity Movement Gold
11.00 Rebased to 10 • Gold prices went up after U.S. Federal
Global Commodity Prices
10.50 Reserve kept interest rates unchanged and
indicated that there are no interest rate
10.00 -8.76% hikes likely through 2023 despite an
1.06%
9.50
improving outlook and higher inflation.
1.28%
9.00
Brent Crude
19-Feb-21 5-Mar-21 19-Mar-21 • Brent crude prices plunged after data from
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
the EIA showed that U.S. crude inventories
Source: Refinitiv rose by 2.4 million barrels for the week
ended Mar 12, 2021. Persisting concerns
Performance of various commodities
over the COVID-19 pandemic after some
Commodities Last Closing* 1-Week Ago
European countries halted the use of the
Brent Crude($/Barrel) 63.23 69.30
AstraZeneca vaccine also dampened
Gold ($/Oz) 1744.74 1726.41
sentiments.
Gold (Rs/10 gm) 44788 44177
Silver ($/Oz) 26.25 25.91 Baltic Dry Index
Silver (Rs/Kg) 66744 65835 • The index rose during the week due to
Source: Refinitiv *Value as on Mar 19, 2021 improved capesize and panamax activities.
13
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.Currencies Markets
Currency Movement
Rupee
10.30 • The Indian rupee rose against the U.S. dollar on
Rebased to 10
greenback inflows associated with initial public
Currency Prices ( in terms of INR)
10.20
10.10 offerings of corporates.
-0.52%
10.00 Euro
-0.23%
9.90 • Euro fell against the U.S. dollar on rise in U.S.
9.80
-0.49%
Treasury yields. However, losses were limited as
9.70 the U.S. Fed does not expect to increase
-0.19%
9.60 interest rates till the end of 2023.
19-Feb-21 5-Mar-21 19-Mar-21
USD GBP Euro JPY
Pound
Source: Refinitiv
• Pound fell against the U.S. dollar on possible
Movement of Rupee vs Other Currencies
downside risks relating to the UK's Covid-19
vaccine rollout and tensions with the European
Currency Last Closing* 1-Wk Ago
Union.
US Dollar 72.52 72.68
Yen
Pound Sterling 100.94 101.47 • Yen was little changed against the U.S. dollar as
EURO 86.45 86.88 fall due to rise in U.S. treasury yields neutralised
100 Yen 66.64 66.77 gains as the U.S. Fed does not expect to
increase interest rates till the end of 2023.
Source: Refinitiv Figures in INR , *Value as on Mar 19, 2021
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Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.The Week that was…
15th Mar to 19th Mar
15
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.The Week that was (Mar 15 – Mar 19)
Present Previous
Date Events
Value Value
• India Wholesale Price Inflation (Feb) 4.17% 2.03%
Monday, • India Trade Deficit (Feb) (USD) 12.62B 14.54B
March 15, 2021 • China Retail Sales (YoY)(Feb) 33.80% 4.60%
• China Industrial Production (YoY)(Feb) 35.10% 7.30%
• U.S. Retail Sales (MoM)(Feb) -3% 7.60%
• Japan Industrial Production (YoY)(Jan) -5.20% -5.30%
Tuesday,
• Japan Merchandise Trade Balance Total (Feb) (Yen) 217.4B -325.4B
March 16, 2021
• Germany ZEW Survey - Economic Sentiment (Mar) 76.6 71.2
• Eurozone ZEW Survey - Economic Sentiment (Mar) 74 69.6
Wednesday, • Eurozone Consumer Price Index (MoM)(Feb) 0.20% 0.20%
March 17, 2021 • U.S. Housing Starts (MoM)(Feb) 1.421M 1.584M
• Japan National Consumer Price Index (YoY)(Feb) -0.40% -0.60%
Thursday,
• Eurozone Labor Cost(Q4) 3% 1.60%
March 18, 2021
• U.S. Initial Jobless Claims (Mar 12) 770K 725K
Friday, • U.K. GfK Consumer Confidence (Mar) -16 -23
March 19, 2021 • Eurozone Producer Price Index (MoM) (Feb) 0.70% 1.40%
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Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.The Week Ahead
22nd Mar to 26th Mar
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Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.The Week Ahead
Day Event
Monday, • People’s Bank of China Interest Rate Decision
Mar 22, 2021 • Japan Leading Economic Index (Jan)
Tuesday, • U.K. ILO Unemployment Rate (3M) (Jan)
• U.S. New Home Sales (MoM)(Feb)
Mar 23, 2021 • Bank of Japan Monetary Policy Meeting Minutes
• U.K. Consumer Price Index (YoY)(Feb)
Wednesday, • U.S. Durable Goods Orders (Feb)
• Germany Markit PMI Composite (Mar) PREL
Mar 24, 2021 • Eurozone Markit PMI Composite (Mar) PREL
• U.K. Markit Services PMI (Mar) PREL
Thursday, • U.S. Gross Domestic Product Annualized (Q4)
Mar 25, 2021 • Germany Gfk Consumer Confidence Survey (Apr)
• U.S. Michigan Consumer Sentiment Index (Mar)
Friday, • U.S. Core Personal Consumption Expenditure - Price Index (MoM) (Feb)
Mar 26, 2021 • U.K. Retail Sales (YoY) (Feb)
• Germany IFO – Business Climate (Mar)
18
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.Disclaimer
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, associates 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, associates 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
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issued or are to be issued by any entity.
19
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