news u can use...jan 01, 2021 · the natural gas sector witnessed the maximum contraction of 9.3%...

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NEWS U CAN USE January 01, 2021


The Week that was…

28th Dec to 01st Jan

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Indian Economy• Data from Reserve Bank of India showed that India’s current account surplus moderated

to US$ 15.5 billion (2.4% of GDP) in Q2 of FY21 from US$ 19.2 billion (3.8% of GDP) in Q1of FY21. India has a current account deficit of US$ 7.6 billion (1.1% of GDP) in the sameperiod of the previous year. The current account surplus moderated on account ofwidening of the merchandise trade deficit which increased to US$ 14.8 billion in thequarter under review from US$ 10.8 billion in the preceding quarter. However, India’scurrent account surplus rose to 3.1% of GDP in H1 of FY21 as against a deficit of 1.6% inH1 of FY20 due to a sharp contraction in the trade deficit.

• Infrastructure output contracted 2.6% in Nov 2020 as compared to a contraction of 0.9%in Oct 2020 and an expansion of 0.7% in the same period of the previous year. India'sinfrastructure output thus contracted for the ninth consecutive month. The natural gassector witnessed the maximum contraction of 9.3% followed by cement sector and crudeoil sector which contracted 7.1% and 4.9% respectively. The sectors which witnessedexpansion over the month are coal, fertilizers and electricity sector which grew 2.9%, 1.6%,and 2.2% respectively.

• Fiscal deficit for the period from Apr to Nov of 2020 came in at Rs. 10.76 lakh crore or135.1% of the budget estimate for FY21 as compared to 114.8% in the correspondingperiod of the previous year. Revenue deficit came in at Rs. 8.52 lakh crore or 139.9% of thebudget estimate as compared to 128.3% of the budget estimate in the correspondingperiod of the previous year.

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Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.4

Domestic Equity Market Indices

Indices 01-Jan-21 1 Week Return YTD Return

S&P BSE Sensex 47,868.98 1.91% 0.25%

Nifty 50 14,018.5 1.96% 0.26%

S&P BSE Mid-Cap 18,164.48 2.76% 1.24%

S&P BSE Small-Cap 18,261.03 3.31% 0.90%Source: MFI Explorer

NSE Advance/Decline Ratio

Date Advances Declines Advance/Decline Ratio

28-Dec-20 1381 576 2.4029-Dec-20 944 1008 0.9430-Dec-20 1020 889 1.1531-Dec-20 1113 797 1.4001-Jan-21 1317 591 2.23

Source: NSE

• Indian equity rallied during the weekwith Nifty 50 surpassing the 14,000mark and Sensex nearing 48,000-mark.Upbeat global cues helped domesticequity market indices touch freshclosing highs. Investors around theworld cheered after U.S. Presidentsigned a $2.3 trillion spending package.Further, market participants continuedto celebrate post Brexit trade dealbetween Britain and European Union.

• Optimism over additional U.S. fiscal aidand massive vaccination efforts spurredhopes of a strong global economicrecovery in 2021. Meanwhile, Britainapproved a COVID-19 vaccinedeveloped by AstraZeneca and OxfordUniversity for emergency supply in theU.K.

RatiosS&P BSE Sensex

Nifty 50S&P BSE Mid Cap

S&P BSE Small Cap

P/E 33.50 38.55 67.07 223.08P/B 3.27 3.97 2.73 2.49Dividend Yield 0.83 1.13 0.99 0.91Source: BSE, NSE Value as on Jan 01, 2021

Indian Equity Market


Sectoral Indices

IndicesLast

Closing* Returns (in %)1-Wk 1-Mth

S&P BSE Auto 20,985.85 3.29% 3.05%

S&P BSE Bankex 35,798.50 2.50% 4.99%

S&P BSE CD 30,359.97 3.95% 12.43%

S&P BSE CG 18,946.05 3.02% 10.45%

S&P BSE FMCG 12,695.91 0.84% 8.23%

S&P BSE HC 21,854.61 1.10% 6.06%

S&P BSE IT 24,470.78 1.90% 10.47%

S&P BSE Metal 11,606.63 2.76% 11.90%

S&P BSE Oil & Gas 14,140.03 1.26% 4.50%Source: Refinitiv *Value as on Jan 01, 2021

• On the BSE sectoral front, all the major indicesclosed in the green. S&P BSE Realty was thetop gainer, up 5.94%, followed by S&P BSEConsumer Durables and S&P BSE Auto whichrose 3.95% and 3.29%, respectively.

• Realty sector rose amid growing expectationover rise in demand in both residential andcommercial real estate going ahead.

Indian Derivatives Market Review• Nifty Jan 2021 Futures stood at 14,053.85, a premium of 35.35 points above the spot

closing of 14,018.50. The total turnover on NSE’s Futures and Options segment for theweek stood at Rs. 138.82 lakh crore as against Rs. 157.85 lakh crore for the week to Dec 24.

• The Put-Call ratio stood at 0.95 compared with the previous week’s close of 1.03.

• The Nifty Put-Call ratio stood at 1.37 compared with the previous week’s close of 1.58.

Indian Equity Market (contd.)


Debt Indicators (%)

Current Value

1-Wk Ago

1-Mth Ago

6-Mth Ago

Call Rate 3.20 3.23 3.09 3.55

91 Day T-Bill 3.03 3.13 2.96 3.14

05.22% 2025, (5 Yr GOI) 5.04 5.07 5.10 5.05

05.77% 2030, (10 Yr GOI) 5.90 5.93 5.91 5.84

Source: Refinitiv Value as on Jan 01, 2021

• Bond yields decline on expectations ofadditional open market operations(OMO) by the Reserve Bank of India (RBI).

• Yield on the 10-year benchmark paper(5.77% GS 2030) fell 3 bps to 5.90% fromthe previous close of 5.93% after tradingin the range of 5.89% to 5.94%.

• RBI conducted the auction of specialOMO of simultaneous purchase and saleof government of India securities for anotified amount of Rs. 10,000 crore each,which were fully accepted. RBI bought 8,10 & 14 year maturities and soldsecurities maturing within one year.

• According to the sectoral deployment ofbank credit for Nov 2020, non-food bankcredit grew 6.0% in Nov 2020, slowerthan 7.2% in Nov 2019.

Domestic Debt Market

5.88

5.91

5.94

28-Dec 29-Dec 30-Dec 31-Dec 1-Jan

Yiel

d in

%

10 -Yr Benchmark Bond ( % )

Source: CCIL


MaturityG-Sec Yield

(%) Corporate Yield

(%) Spread

bps

1 Year 3.80 4.71 91

3 Year 4.46 5.40 95

5 Year 5.17 6.30 113

10 Year 5.99 6.99 101

Source: Refinitiv Value as on Jan 01, 2021

• Yields on gilt securities fell across maturitiesby up to 7 bps barring 4- and 12-year paperwhich increased 25 and 1 bps respectively.

• Corporate bond yields fell across maturitiesin the range of 4 to 26 bps. The maximum fallwas seen on 1-year paper and the minimumfall was witnessed on 15-year paper.

• Difference in spread between AAA corporatebond and gilt contracted across thematurities by up to 31 bps barring 15-yearpaper which expanded 1 bps.

Domestic Debt Market (Spread Analysis)

-25

-12

2

6.10

6.85

7.60

3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs

India Yield Curve Shift (%) (W-o-W)

Change in bps 01-Jan-21 24-Dec-20

Yiel

din

%

Change

in bps

Source: Thomson Reuters Eikon


• Capital market regulator Securities and Exchange Board of India (SEBI) gave an extension tothe date of implementation of uniformity in applicability of NAV (Net Asset Value) onrealisation of funds to Feb 1, 2021 from Jan 1, 2021. Under the new rules which wasannounced in Sep 2020, investors will purchase NAV of the day when investor’s moneyreaches the asset management company, irrespective of the size of the investments

• SEBI has decided to extend the deadline for implementation of diligence framework fordebenture trustees to Apr 1, 2021 from Jan 1, 2021. The move comes after SEBI took intoaccount the challenges arising out of the prevailing business and market conditions onaccount of COVID-19 pandemic.

• SEBI after taking into account the challenges arising out of the prevailing business andmarket conditions on account of COVID-19 pandemic has decided to extend the timeline forcompliance with various regulatory requirements. The timeline for maintaining callrecordings of orders/instructions received from clients has been extended to Feb 28, 2021.The deadline for uploading KYC (Know Your Customer) application form and othersupporting documents on system of KRA ((KYC Registration Agency) within 10 working dayshas been extended from Jan 1, 2021 to Feb 28, 2021. SEBI also gave a 15-day time periodafter Feb 28, 2021 to clear the backlog.

Regulatory Updates in India


• SEBI mandated that proxy advisors need to alert clients within 24 hours of receipt ofinformation regarding any impending material modifications or factual errors in theirreports. In addition, SEBI added that any such material revisions in their reports need to becommunicated to the clients within 72 hours of the receipt of information in order toensure that the client has adequate time for making any informed decision.

• According to media reports, IRDAI has issued draft guidelines wherein it proposed astandard travel insurance policy with common coverage and policy wordings across theindustry. The move is aimed at increasing penetration of the product. The product may beboth as an individual product and as a group product. The insurance regulator said that theinsurer will pay as compensation to the legal heirs/nominee the amount stated as suminsured if the insured suffers accidental bodily injury while overseas and this is the sole anddirect cause of his death within the period of 365 days. In the event of accidental death ofa minor below 18 years of age, the maximum liability of the insurer would be limited to50% of the sum insured.

• The Union Cabinet approved the export of Akash Missile System. In addition, the UnionCabinet also created a committee for faster Approval of Exports. The committee wouldauthorise subsequent exports of major indigenous platforms to various countries.

Regulatory Updates in India (contd..)


• According to a report released by the Labor Department, U.S. initial jobless claims fell19,000 to 787,000 for the week ended Dec 26, 2020 from the previous week's revised levelof 806,000.

• According to the National Association of Realtors, U.S. pending home sales index fell 2.6%to 125.7 in Nov 2020 after falling 0.9% to 129.1 in Oct 2020.

• The National Bureau of Statistics revised down China’s GDP growth for 2019 to 6.0% from6.1%. For 2019, the government had targeted 6.0% - 6.5% annual expansion. Chinaresisted setting economic growth goals for the first time this year because of theuncertainty created by the Covid-19 outbreak.

• According to the Ministry of Economy, Trade and Industry, Japan’s industrial outputremained flat on a seasonally adjusted basis in Nov 2020 following the 4.0% gain in Oct2020. On a yearly basis, industrial production fell 3.4% as against 3% fall in the previousmonth.

• According to the National Bureau of Statistics, China’s manufacturing PurchasingManagers' Index (PMI) fell to 51.9 in Dec 2020 from 52.1 in Nov 2020. The non-manufacturing PMI fell to 55.7 in Dec from 56.4 in Nov.

• According to the Ministry of Economy, Trade and Industry, Japan’s retail sales grew 0.7% inNov 2020 YoY, slower than 6.4% growth in Oct 2020.

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Global News/Economy


Global Indices

Indices 31-Dec-201-WeekReturn

YTDReturn

Russell 3000 1,952.61 0.63% 36.92%

Nasdaq 100 12,888.28 1.39% 47.58%

FTSE 100 6,460.52 -0.64% -14.34%

DAX Index* 13,718.78 0.97% 3.55%

Nikkei Average* 27,444.17 2.95% 16.01%

Straits Times 2,843.81 0.06% -11.76%Source: Refinitiv Value as on Dec 31, 2020, * as on Dec 30, 2020

U.S.• U.S. markets rose in reaction to news

that the U.S. President has finally signeda $2.3 trillion government spending billthat includes approximately $900 billionin coronavirus relief funds.

• News that U.K. regulators haveapproved COVID-19 vaccine developedby AstraZeneca and the University ofOxford for emergency use alsogenerated positive sentiment.Europe

• European markets rose as the agreement between the European Union and Britain over apost-Brexit trade deal kept investor sentiment upbeat. Nonetheless, worries about risingcoronavirus cases and tighter restrictions on movements restricted gains.

Asia• Asian markets went up in line with other global peers with investors taking positive cues

from news about U.S. President signing a $2.3 trillion government spending bill and apost-Brexit trade agreement between the European Union and the U.K.

Global Equity Markets


• Yields on the 10-year U.S. Treasury fell 2bps to close at 0.91% compared with theprevious week’s close of 0.93%.

• U.S. Treasury prices rose amid thinvolumes as market participants boughtlonger-dated debt to rebalance theirportfolios ahead of the month-end.

• Treasury prices rose further despite anunexpected drop in unemploymentclaims for a second straight week.

Global Debt (U.S.)

0.90

0.93

0.96

28-Dec 29-Dec 30-Dec 31-Dec

US 10-Year Treasury Yield Movement



Performance of various commodities

Commodities Last Closing* 1-Week Ago

Brent Crude($/Barrel) ^ 50.86 50.43

Gold ($/Oz) 1898.10 1875.83

Gold (Rs/10 gm) 50,040 49,787

Silver ($/Oz) 26.36 25.85

Silver (Rs/Kg) 66,966 66,223

Source: Refinitiv *Value as on Jan 01, 2021, ^as on Dec 31, 2020

Gold

• Gold prices rose as the greenbackremained under pressure followingapproval of the COVID-19 relief package inU.S. However, global COVID-19 vaccinerollouts boosted the investor risksentiment which capped the gains.

Brent Crude

• Brent crude prices rose on hopes that theU.S. government may expand its COVID-19relief package which improved the demandoutlook of the commodity. A Brexit dealbetween Europe and Britain added to thegains.

Baltic Dry Index

• The index remained closed during theweek.

Commodities Market

9.8010.0010.2010.4010.6010.8011.0011.2011.40

1-Dec-20 17-Dec-20

Global Commodity Movement

Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)

Glo

bal

Co

mm

od

ity

Pri

ces Rebased to 10


1.97%

0.85%

1.19%

01-Jan-21


Movement of Rupee vs Other Currencies

Currency Last Closing* 1-Wk Ago

US Dollar 73.03 73.58

Pound Sterling 99.80 99.75

EURO 89.23 89.81

100 Yen 70.70 71.05

Source: Refinitiv Figures in INR , *Value as on Jan 01, 2021

Rupee• The rupee rose and recorded its biggest weekly

rise in six weeks against the U.S. dollar ongreenback selling from exporters and losses inU.S. dollar index. Consistent greenback inflowsinto domestic equity market further supportedthe upside.

Euro• Euro was little changed against the greenback

as expectations of more U.S. fiscal supportneutralised the downside due to rebalancing ofmonth end portfolio.

Pound• Pound rose against the U.S. dollar on broad

weakness in greenback and Britain rolling outanother vaccine to tackle pandemic.

Yen• Yen rose against the greenback on broad

weakness in U.S. dollar index.

Currencies Markets

9.90

9.95

10.00

10.05

10.10

10.15

10.20

10.25

10.30

1-Dec-20 17-Dec-20

USD GBP Euro JPYSource: Refinitiv Eikon

Cur

renc

y P

rice

s (i

n te

rms

of

INR

)

Rebased to 10

Currency Movement

-0.65%

0.05%

-0.75%

-0.49%

01-Jan-21


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The Week that was…

28th Dec to 01st Jan


The Week that was (Dec 28 – Jan 01)

Date Events Present Value Previous Value

Monday,December 28, 2020

• Spain Retail Sales (YoY)(Nov) -4.3% -3.0%

• U.S. Dallas Fed Manufacturing Business Index(Dec) 9.7 12

Tuesday,December 29, 2020

• U.S. Redbook Index (YoY) (Dec 25) 8.90% 6.50%

• U.S. S&P/Case-Shiller Home Price Indices (YoY)(Oct) 7.90% 6.60%

Wednesday,December 30, 2020

• U.K. Nationwide Housing Prices (YoY)(Dec) 7.30% 6.50%

• U.S. Wholesale Inventories(Nov) PREL -0.10% 1.20%

• U.S. Goods Trade Balance(Nov) USD -84.82B -80.29B

• U.S. Pending Home Sales (MoM) (Nov) -2.60% -0.90%

Thursday,December 31, 2020

• China Non-Manufacturing PMI (Dec) 55.7 56.4

• China NBS Manufacturing PMI (Dec) 51.9 52.1

• U.S. Initial Jobless Claims (Dec 25) 787K 806K

Friday,January 01, 2021

• South Korea Balance of Trade (Dec) USD 6.94B 5.93B


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The Week Ahead

04th Jan to 8th Jan


Day Event

Monday,

Jan 04, 2021

• China Caixin Manufacturing PMI (Dec)• Germany Markit Manufacturing PMI (Dec)• U.K. Markit Manufacturing PMI (Dec)• U.S. Markit Manufacturing PMI (Dec)

Tuesday,

Jan 05, 2021

• Germany Retail Sales (YoY) (Nov) • Germany Unemployment Change (Dec)• U.S. ISM Manufacturing PMI (Dec)

Wednesday,

Jan 06, 2021

• China Caixin Services PMI (Dec)• Eurozone Markit PMI Composite (Dec)• Eurozone Harmonized Index of Consumer Prices (YoY) (Dec) PREL• U.S. ADP Employment Change (Dec)

Thursday,

Jan 07, 2021

• Eurozone Retail Sales (YoY) (Nov)• Eurozone Consumer Price Index (YoY) (Dec) PREL• U.S. Trade Balance (Nov)• U.S. ISM Services PMI (Dec)

Friday,

Jan 08, 2021

• U.S. Nonfarm Payrolls (Dec)• U.S. Unemployment Rate (Dec)• Eurozone Industrial Production (YoY)(Nov)

The Week Ahead


The information herein is meant only for general reading purposes and contains all factual and statistical information pertaining to Industry andmarkets which have been obtained from independent third party sources and which are deemed to be reliable. The information provided cannot beconsidered as guidelines, recommendations or as a professional guide for the readers. It may be noted that since Nippon Life India AssetManagement Limited (NAM India) has not independently verified the accuracy or authenticity of such information or data, or for that matter thereasonableness of the assumptions upon which such data and information has been processed or arrive data; NAM India does not in any mannerassures the accuracy or authenticity of such data and information. Some of the statements & assertions contained in these materials may reflect NAMIndia’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, theTrustee 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 isnot intended to be an offer or solicitation for the purchase or sale of any financial product or instrument. Recipients of this information should relyon information/data arising out of their own investigations. Before making any investments, the readers are advised to seek independentprofessional advice, verify the contents in order to arrive at an informed investment decision. None of the Sponsor(s), the Investment Manager, theTrustee, 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.

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news u can use...jan 01, 2021 · the natural gas sector witnessed the maximum contraction of 9.3%...

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