September 17, 2021 `
Indian equity benchmark indices’ returns Indian equity market summary % change % change ■ Positive momentum in Indian equities continued for the fourth consecutive Broad indices Sep 17 for week for YTD week. The S&P BSE Sensex and Nifty 50 advanced 1.2% each S&P BSE Midcap 25,046 1.38 39.60 ■ Market sentiments got a boost after the government announced a slew of S&P BSE SMALLCAP 28,007 1.31 54.75 reforms for the telecom and auto sectors Nifty 500 15,027 1.29 30.46 S&P BSE 100 17,871 1.25 26.74 ■ The markets also gained tracking similar trend in the US market after lower- Nifty 50 17,585 1.24 25.77 than-expected rise in inflation raised hopes that the US Federal Reserve S&P BSE Sensex 59,016 1.22 23.59 (Fed) will continue with its accommodative policy stance % change % change Sectoral indices Sep 17 for week for YTD ■ Bank, auto and power counters witnessed heavy buying this week. The S&P S&P BSE Bankex 43,262 3.46 20.55 Bankex gained 3.5%, S&P BSE Auto 2.6% and S&P BSE Power 1.7% S&P BSE Auto 23,282 2.60 11.87 ■ Metal and realty sectors ended in the red. The S&P BSE Metal and S&P S&P BSE Power 3,094 1.67 50.06 S&P BSE CD 40,906 1.65 34.59 BSE Realty fell around 1% each S&P BSE IT 34,850 1.55 43.72 S&P BSE Oil & Gas 17,617 1.09 25.03 Other major domestic news S&P BSE CG 26,041 1.06 38.93 ■ India's Index of Industrial Production rose 11.5% in July compared with S&P BSE FMCG 15,056 0.76 19.40 S&P BSE Healthcare 26,553 0.14 22.47 13.6% growth in June and a contraction of 10.5% in July 2020 S&P BSE Realty 3,299 -0.69 33.14 ■ India’s consumer price inflation eased to 5.30% in August, compared with Index S&P BSE Metal 20,478 -1.09 76.54 5.59% in July, owing to a pullback in prices of food items Source: Bombay Stock Exchange, National Stock Exchange (NSE) ■ India’s wholesale price inflation rose to 11.39% in August, compared with 11.16% in July, as prices of non-food articles, mineral oils hardened FII and mutual fund investment versus Nifty ■ India's exports rose 45.76% to $33.28 billion in August and imports 51.72% (FII/MF (Nifty) Inv Rs Cr ) to $47.09 billion, resulting in a trade deficit of $13.81 billion in August as 17800 4,000 against $8.2 billion a year ago 17500 3,000 2,000 ■ The United Nations Conference on Trade and Development expects India's 17200 1,000 16900 0 economic growth rate to hit a four-year high of 7.2% in 2021 against a -1,000 16600 -2,000 contraction of 7% in 2020 16300 -3,000
■ The Cabinet approved production-linked incentive (PLI) scheme worth Rs
3-Sep 2-Sep 6-Sep 7-Sep 8-Sep 9-Sep
1-Sep 26,058 crore for auto and drone sectors
23-Aug 16-Sep 16-Aug 17-Aug 18-Aug 20-Aug 24-Aug 25-Aug 26-Aug 27-Aug 30-Aug 31-Aug 13-Sep 14-Sep 15-Sep
FII Net Investment MF Net Investment Nifty ■ The Cabinet announced a relief package for the telecom sector. The
measures included rationalisation of the adjusted gross revenue (AGR) FII – Foreign institutional investor definition; a four-year moratorium on payment of AGR and spectrum dues; Source: Securities and Exchange Board of India (SEBI), NSE increase in the foreign direct investment under automatic route to 100% from
FII and mutual fund weekly investment 49%; increase in spectrum tenure from 20 to 30 years in future auctions; Sep 9 – Sep 16 and permission for spectrum sharing Rs crore FII investment MF investment ■ Finance Minister Nirmala Sitharaman announced a government guarantee (equity) (equity)* of up to Rs 30,600 crore on the securities receipts issued by the National Buy 51,650 NA Asset Reconstruction Company (NARCL) Sell 44,747 NA ■ The Ministry of Finance allowed 11 states to borrow an additional Rs 15,721 Net 6,903 NA crore this fiscal YTD 61,788 18,468 ■ The government received an investment proposal of around Rs 6,000 cr Source: SEBI, National Securities Depository Ltd (NSDL) under the PLI scheme for white goods comprising components for air- *Data as of Sep 8 conditioners and LED lights
■ The Reserve Bank of India (RBI) will link its payment system, Unified Domestic macro indicators Payments Interface, with that of the Monetary Authority of Singapore, Indicators Current Previous PayNow, to enable instant, low-cost fund transfers for users 5.30% 5.59% Monthly CPI inflation (Aug-21) (Jul-21) ■ The RBI cautioned the public against frauds being committed on the pretext 11.39% 11.16% of updating know your customer details Monthly WPI inflation (Aug-21) (Jul-21) ■ The Securities and Exchange Board of India (SEBI) proposed to overhaul 11.5% 13.6% IIP (Jul-21) (Jun-21) the framework governing consent settlements with an aim to making the 20.10% 1.60% system more efficient GDP (Apr-Jun 21) (Jan-Mar 21) CPI – Consumer Price Index, WPI – Wholesale Price Index, IIP – ■ It notified certification requirements for associated persons engaged by Index of Industrial Production portfolio managers as distributors or employees having decision-making Source: CRISIL Centre for Economic Research authority related to fund management
Indian debt market indicators Indian debt market summary Previous ■ The interbank call money rate settled at 3.10% on September 17, Indicators Sep 17 Trend week unchanged from September 9 Call rate 3.10% 3.10% ■ The RBI conducted a seven-day variable rate reverse repo auction for a 3-month CP 3.57% 3.60% notified Rs 1 lakh crore on September 14, which saw offers amounting to Rs 1-year CP 4.35% 4.40% 2.46 lakh crore 3-month CD 3.36% 3.30% ■ Government bond prices ended nearly flat for the week. The yield of the 10- 3.85% 3.84% 1-year CD year benchmark 6.10% 2031 paper settled at 6.17% on September 17 5.15% 5.15% 3-year AAA compared with 6.18% on September 9 5-year AAA 6.05% 6.10% ■ Prices received support as data showed domestic retail prices had eased to 1-year G-Sec* 3.90% 4.85% 5.30% on year in August from 5.59% in July, staying in the RBI’s upper 3-year G-Sec* 4.84% 4.85% tolerance limit for the second month in a row 5-year G-Sec* 5.61% 5.61% ■ A decline in US benchmark treasury yields after a US inflation report showed 10-year G-Sec* 6.18% 6.18% $ 641.11 $ 642.45 a smaller-than-expected rise in prices in August aided domestic gilts Forex reserves billion billion intraweek (Sep 10) (Sep 3) ■ Uncertainty about the government’s borrowing plans in the second half of *Weighted average yield this fiscal put bonds under brief pressure Source: CRISIL Fixed Income database, RBI ■ Some price gains got erased because of an uptick in crude oil prices over Corporate bond spreads over G-secs the week and as the RBI did not make any bond purchase announcements Spreads AAA AA+ AA AA- A+ ■ In the weekly gilt sale, the RBI sold the 4.26% 2023 paper, the 6.76% 2061 3 yr 0.25% 1.65% 2.83% 3.54% 4.37% paper, and the 6.10% 2031 paper for a total notified amount of Rs 26,000 Sep 17, 5 yr 0.36% 2.32% 3.51% 4.21% 5.11% crore 2021 10 yr 0.58% 2.54% 3.73% 4.43% 5.33% ■ At the state development bond auction, states raised a total notified Rs 3 yr 0.24% 1.63% 2.82% 3.53% 4.36% Previous 13,847 crore via sale of dated securities 5 yr 0.42% 2.38% 3.57% 4.27% 5.17% week ■ Further, the central bank announced it would conduct a gilt switch auction 10 yr 0.63% 2.59% 3.78% 4.48% 5.38% for an aggregate amount of Rs 10,000 crore on September 20 Source: CRISIL fixed income database ■ The rupee ended marginally higher 10-year benchmark G-sec movement ■ The Indian unit started the week on a dim note, weighed by the dollar’s broad strength 6.60% ■ Increasing risks stemming from the rapidly spreading delta variant of the 6.40% coronavirus, and a selloff in US equities fuelled demand for the safe-haven 6.20% dollar, thereby putting the rupee under pressure. US equities fell sharply
6.00% after data showed that US producer price inflation had quickened at an annual pace of 8.3% in August, the most in more than a decade 5.80% ■ Intermittent dollar demand from state-owned banks on behalf of importers 5.60% added to the pressure on the rupee
■ The rupee staged a recovery helped by weakening of the US dollar index
17-Jul-21
17-Apr-21 17-Oct-20
17-Jan-21 17-Jun-21
17-Feb-21 17-Mar-21
17-Nov-20 17-Dec-20
17-Sep-21 17-Sep-20 17-Aug-21 17-May-21 following the release of the latest US consumer inflation figures Source: CRISIL Fixed Income database ■ The dollar index fell as the inflation data supported the view that the Fed would refrain from making any changes to its monthly bond purchases at India yield curve shift (on-week)* the next week’s meeting 7.50 4 ■ Gains in Indian equities, which hit fresh record highs during the week, also 2 2 6.50 benefitted the rupee
0 0 0 bpsin Change 0 0 5.50 Currencies versus rupee -2 4.50 Currency Sep 17 Week ago 3 months ago 1 year ago Yield Yield in % -4 USD 73.48 73.50 74.07 73.65 3.50 -6 -6 GBP 101.18 101.56 103.52 95.39 -7 2.50 -8 Euro 86.37 86.97 88.53 86.97 3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs 100 Yen 66.84 66.93 66.93 70.31 Change in bps 17-Sep 9-Sep
*Weighted average yield Source: CRISIL Source: CRISIL Fixed Income database
Global equity benchmark indices’ returns Global market summary % % ■ The performance of global equities was mixed this week because of region- Sep change change specific cues. US treasury prices ended slightly higher buoyed by a lower- Country/Region Indices 17 for for than-expected rise in consumer inflation. Crude oil price rose on supply week YTD tightness in the US, hopes of better US-China trade relations and on DJIA* 34,751 0.41 13.54 expectations of higher demand following improvement in vaccination rollouts Nasdaq 15,182 0.44 17.80 ■ US stocks ended higher as strong economic data bolstered investors’ US Composite* confidence about revival in economic activity Russell 3000 2,322 0.52 18.91 Growth* o US industrial production rose 0.4% in August after rising by a UK FTSE 100* 7,027 -0.02 8.78 downwardly revised 0.8% in July France CAC 40* 6,623 -0.62 19.30 o US retail sales rose 0.7% in August after plunging 1.8% in July Germany XetraDax* 15,652 0.27 14.09 o US consumer prices rose 5.3% on-year in August from 5.4% in July Japan Nikkei 225 30,500 0.39 11.13 ■ However, stock-specific selling and uncertainties over growing chances of Singapore Straits Times 3,071 -0.89 8.00 corporate tax rate hike kept the gains under check Hong Kong Hang Seng 24,921 -4.90 -8.48 Shanghai ■ Britain’s FTSE ended flat. Markets fell earlier after an uptick in domestic China 3,614 -2.41 4.06 Comp inflation raised concerns of stimulus tapering by the Bank of England Source: Websites of respective stock exchanges; *As of Sep 16 o UK consumer price index in August rose 3.2% on-year versus a 2.0%
rise in July; meanwhile, output price inflation increased to 5.9% from Macro indicators 5.1% Indicators Current Previous o UK GDP rose 0.1% in July following a 5.7% growth in June 0.4% 0.8% US Industrial Production (Aug 2021) (Jul 2021) ■ However, the losses were recouped due to buying in basic resources, 5.3% 5.4% industrial metals and energy-linked stocks US Consumer Prices (Aug 2021) (Jul 2021) ■ Other European equities saw a mixed trend. France’s CAC 40 fell 0.6%, Eurozone Industrial 1.5% -0.1% while Germany’s DAX gained 0.3%. Markets retreated after the European Production (Jul 2021) (Jun 2021) Central Bank kept its main refinancing rate unchanged but said it would slow 3.2% 2.0% down the pace of its emergency asset purchases UK Consumer Prices (Aug 2021) (Jul 2021) 5.3% 6.4% ■ However, gains in oil-related, bank and utility stocks provided some support China Industrial Production (Aug 2021) (Jul 2021) to the market Source: CRISIL internal research ■ Asian equities posted varied performance. Japan’s Nikkei rose 0.4% on Major global bond yields hopes of an economic recovery after the government said more than 50% Indicators Sep 17 Sep 10 of the country's population have been fully vaccinated US 10-year* 1.33 1.34 ■ However, the rally was capped because of profit-booking after the market UK 10-year* 0.82 0.76 peaked 31-year high during the week German 10-year* -0.31 -0.33 Japan10-year 0.05 0.04 o Japan’s industrial production fell 1.5% on-month in July compared with Source: Bloomberg.com; *As of Sep 16 a 6.5% rise in June
Commodity prices ■ Hong Kong’s Hang Seng slumped about 5% after Beijing tightened % regulations on the technology and gaming sector, and due to concerns over % change Commodity Sep 17 change fast spreading delta variant for YTD for week ■ China’s Shanghai Composite declined 2.4% on weaker economic data amid NYMEX crude oil ($ per 72.61 4.15 49.65 resurgence of Covid-19 cases in the country barrel)* o China’s industrial production grew a moderate 5.3% on-year in August, Brent crude oil ($ per 75.67 3.77 46.08 barrel)* slower than 6.4% seen in July Gold ($ per ounce)* 1747.95 -2.58 -7.40 o China’s retail sales grew 2.5% on year in August vs 8.5% in July Silver (Rs per kg) 61131.00 -4.58 -9.14 Source: Respective commodity exchanges, goldprice.org, ibjarates.com; *As of Sep 16
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