September 9, 2021 ` Indian equity benchmark indices’ returns Indian equity market summary % change % change ■ The upward trend in Indian equities persisted for the third consecutive week. Broad indices Sep 9 for week for YTD S&P BSE Sensex and Nifty 50 advanced 0.3% each. S&P BSE Midcap 24,705 1.33 37.70 ■ Buying interest in consumer durables, power and fast-moving consumer S&P BSE SMALLCAP 27,645 1.24 52.75 goods (FMCG) stocks buoyed the market. S&P Consumer Durables, S&P Nifty 500 14,836 0.52 28.81 S&P BSE 100 17,650 0.31 25.18 BSE Power and S&P BSE FMCG gained 3.5%, 1.5% and 1%, respectively. S&P BSE Sensex 58,305 0.30 22.10 ■ Receding concerns over the early withdrawal of the US Federal Reserve’s Nifty 50 17,369 0.26 24.23 monetary stimulus also boosted market sentiment. % change % change Sectoral indices Sep 9 for week for YTD ■ However, some gains were capped on worries over global economic S&P BSE CD 40,243 3.50 32.41 recovery amid a resurgence in Covid-19 cases. S&P BSE Power 3,044 1.51 47.59 ■ A pullback in healthcare, oil & gas and information technology (IT) stocks S&P BSE FMCG 14,942 0.92 18.50 S&P BSE CG 25,767 0.81 37.46 weighed on the market to a certain extent. S&P BSE Healthcare, S&P BSE S&P BSE Metal 20,704 0.42 78.49 Oil & Gas and S&P BSE IT fell 0.9%, 0.7% and 0.3%, respectively, this S&P BSE Auto 22,693 0.07 9.04 week. S&P BSE Realty 3,322 -0.07 34.06 Index S&P BSE Bankex 41,814 -0.16 16.51 Other major domestic news S&P BSE IT 34,320 -0.26 41.53 ■ India’s IHS Markit services PMI rose to 56.7 in August from 45.4 in the S&P BSE Oil & Gas 17,427 -0.71 23.68 previous month; the composite PMI increased to 55.4 in August from 49.2 S&P BSE Healthcare 26,515 -0.90 22.29 in July. Source: Bombay Stock Exchange, National Stock Exchange (NSE) ■ S&P Global expects India’s economy to grow 9.5% in the current fiscal year, FII and mutual fund investment versus Nifty followed by 7% expansion in the next year. (FII/MF ■ The Cabinet approved a Rs 10683 crore production-linked incentive scheme (Nifty) Inv Rs Cr ) 17500 4,000 for the textile sector. 17200 3,000 2,000 ■ The Cabinet approved the signing of a pact between Russia and India for 16900 1,000 cooperation in the field of geosciences. 16600 0 -1,000 16300 -2,000 ■ The Cabinet approved an increase in the minimum support price for all the 16000 -3,000 mandated Rabi crops for the Rabi Marketing Season 2022-23. ■ The Indian government and the Asian Development Bank (ADB) signed an 6-Aug 9-Aug 1-Sep 2-Sep 3-Sep 6-Sep 7-Sep 8-Sep 18-Aug 30-Aug 10-Aug 11-Aug 12-Aug 13-Aug 16-Aug 17-Aug 20-Aug 23-Aug 24-Aug 25-Aug 26-Aug 27-Aug 31-Aug agreement for a $300 million loan as additional financing to scale up FII Net Investment MF Net Investment Nifty connectivity to boost the rural economy in Maharashtra. FII – Foreign institutional investor ■ ADB approved a $150 million loan for a sustainable housing project for Source: Securities and Exchange Board of India (SEBI), NSE urban poor in Tamil Nadu. FII and mutual fund weekly investment ■ The Ministry of Finance said electronic records submitted through the Sep 3 – Sep 8 registered account of taxpayers in the income tax portal shall be deemed to Rs crore FII investment MF investment be authenticated by taxpayers by electronic verification code. (equity) (equity)* ■ India and the United States inked a pact for cooperation in the development Buy 28,542 NA of an air-launched unmanned aerial vehicle. Sell 28,944 NA ■ The Reserve Bank of India (RBI) enhanced the scope of tokenisation to Net -402 NA YTD 54,885 17,177 ensure security of card data, permitting card issuers to act as token service providers. Source: SEBI, National Securities Depository Ltd (NSDL) *Data as of Sep 2 ■ RBI refused to extend its deadline for card tokenisation beyond January 1, 2022, making it impossible for one-click purchases on merchant sites. ■ According to RBI data, sales of 1,647 listed private manufacturing Domestic macro indicators companies recorded growth of 75% in the first quarter of current fiscal mainly Indicators Current Previous due to a very low base in the pandemic-hit year-ago period. 5.59% 6.26% Monthly CPI inflation (Jul-21) (Jun-21) ■ The Securities and Exchange Board of India (SEBI) introduced a T+1 11.16% 12.07% settlement cycle for completion of share transactions on an optional basis to Monthly WPI inflation (Jul-21) (Jun-21) enhance market liquidity. 13.6% 28.6% IIP (Jun-21) (May-21) ■ SEBI asked asset management companies (AMCs) to invest in schemes 20.10% 1.60% GDP based on risk and quantify the minimum amount to be invested in their own (Apr-Jun 21) (Jan-Mar 21) CPI – Consumer Price Index, WPI – Wholesale Price Index, IIP – mutual fund schemes. Index of Industrial Production Source: CRISIL Centre for Economic Research ■ SEBI asked stock exchanges and brokers to increase investor awareness, especially among the new entrants, about the risks of option trades. Indian debt market indicators Indian debt market summary Previous ■ The interbank call money rate settled at 3.10% on September 9 compared Indicators Sep 9 Trend week with 3.25% on September 3. Call rate 3.10% 3.25% ■ The RBI conducted two variable rate reverse repo auctions over the week 3-month CP 3.60% 3.54% noting the liquidity conditions. The first auction was of a 7-day duration and 1-year CP 4.40% 4.40% conducted on September 7 for a notified Rs 50,000 crore and the second 3-month CD 3.30% 3.30% auction on September 9 was for a notified Rs 3.5 lakh crore. 3.84% 3.78% 1-year CD ■ The central bank received offers amounting to ~Rs 2.64 lakh crore in the 5.15% 5.15% 3-year AAA first auction and ~Rs 5.21 lakh crore in the second auction. 5-year AAA 6.10% 6.10% ■ Government bond prices ended lower and the yield of the 10-year 1-year G-Sec* 4.85% 4.80% benchmark 6.10% 2031 paper settled at 6.18% on September 9 compared 3-year G-Sec* 4.85% 4.80% with 6.16% on September 3. 5-year G-Sec* 5.61% 5.58% ■ A midweek rise in US benchmark treasury yields put local bond prices under 10-year G-Sec* 6.18% 6.16% $ 633.56 $ 6 16.90 pressure. Forex reserves billion billion ■ US bond yields rose amid investor concerns over US inflation and (Aug 27) (Aug 20) nervousness ahead of the European Central Bank’s monetary policy *Weighted average yield meeting. Source: CRISIL Fixed Income database, RBI ■ Intermittent profit sales pulled down local bond prices further. Corporate bond spreads over G-secs ■ Hopes that domestic fiscal and monetary policy will stay benign going Spreads AAA AA+ AA AA- A+ forward supported market sentiment. 3 yr 0.24% 1.63% 2.82% 3.53% 4.36% Sep 9, ■ Firm demand for debt in the previous week’s gilt sale and the government’s 5 yr 0.42% 2.38% 3.57% 4.27% 5.17% 2021 decision to sell a new 14-year note in the current week’s auction aided bond 10 yr 0.63% 2.59% 3.78% 4.48% 5.38% prices. 3 yr 0.30% 1.69% 2.88% 3.58% 4.42% Previous ■ In the weekly gilt auction, the RBI sold the 5.63% 2026 paper, the 6.67% 5 yr 0.44% 2.40% 3.59% 4.29% 5.19% week 2050 paper, a floating rate bond maturing in 2034, and a new paper maturing 10 yr 0.64% 2.61% 3.79% 4.50% 5.39% in 2035. Source: CRISIL fixed income database ■ Prices received a boost in the final session as the central bank sold a 10-year benchmark G-sec movement greater-than-scheduled quantum of bonds in the auction at lower-than- expected cut-off yields. 6.60% ■ The rupee ended lower against the US dollar weighed by greenback 6.40% demand from importers. 6.20% ■ Gains registered by the US dollar index amid weakness in investor risk 6.00% appetite due to uncertainty around a bond taper timeline in the US and the rapidly spreading delta variant of the coronavirus globally, added to the 5.80% pressure on the rupee. 5.60% ■ Dollar sales by some foreign banks prevented the rupee from depreciating further. 9-Jul-21 9-Oct-20 9-Apr-21 9-Jan-21 9-Jun-21 9-Feb-21 9-Mar-21 9-Sep-20 9-Nov-20 9-Dec-20 9-Aug-21 9-Sep-21 9-May-21 Currencies versus rupee Source: CRISIL Fixed Income database Currency Sep 9 Week ago 3 months ago 1 year ago India yield curve shift (on-week)* USD 73.50 73.02 72.97 73.54 101.56 101.04 103.45 95.28 8.00 6 GBP 5 Euro 86.97 86.67 88.96 86.62 4 7.00 3 100 Yen 66.93 66.43 66.68 69.36 2 2 Change in bps 2 6.00 Source: CRISIL 0 5.00 Yield Yield in % -2 -2 4.00 -3 -3 -4 3.00 -6 3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs Change in bps 9-Sep 3-Sep *Weighted average yield Source: CRISIL Fixed Income database Global equity benchmark indices’ returns Global market summary % % ■ Global equities ended mixed this week amid region-specific cues.