WEEKLY YIELD – December 11, 2020 DOMESTIC EQUITY GLOBAL EQUITY The uptrend in Indian equities persisted for the US stocks ended lower due to uncertainty sixth consecutive week. S&P BSE Sensex and regarding further stimulus support and downbeat Nifty 50 rose about 2% each. jobless claims data. Sentiments were boosted on positive global cues Britain’s FTSE index rose nearly 1% owing to including hopes of progress in the development of buying in energy stocks and as a weaker pound Covid-19 vaccine. boosted exporters’ stocks. A rally in fast moving consumer goods (FMCG), Asian equities ended in the red. Japan’s Nikkei fell realty, oil & gas, banking and information 0.4% due to profit booking after the recent rally technology counters buoyed the market. S&P BSE and uncertainty regarding fresh US stimulus FMCG (topmost sectoral gainer), S&P BSE Realty, measures. S&P BSE Oil & Gas, S&P BSE Bankex and S&P Hong Kong’s Hang Seng index fell 1.2% on BSE IT jumped 6%, 3.2%, 3%, 2% and 1.8%, concerns over local Covid-19 infections and US respectively. sanctions on Chinese companies. However, some gains were trimmed due to China’s Shanghai Composite lost nearly 3% on intermittent profit booking and concerns over renewed Sino-US tensions and worries that Beijing fading prospects of a US stimulus deal. could start policy tightening soon amid a strong A sell-off in auto, power and consumer durables economic recovery and rising commodity prices. stocks affected the markets to some extent. DOMESTIC DEBT Week 3 month 1 year Broad Indices Dec 11, Previous change% change% change% Indicators Trend S&P BSE Sensex 2.26 18.65 14.07 2020 Week Nifty 50 1.93 17.88 13.46 Call Rate 2.00% 1.50% S&P BSE Midcap 0.76 19.52 20.05 3 M CP 3.34% 3.34% S&P BSE Smallcap 1.36 20.57 33.51 1 Yr CP 4.11% 4.15% S&P BSE Bankex 1.94 37.33 -1.86 3 M CD 3.09% 3.11% S&P BSE CG 1.14 28.62 7.34 1 Yr CD 3.68% 3.65% S&P BSE FMCG 6.07 10.95 11.35 5 Yr AAA 5.50% 5.50% S&P BSE IT 1.80 21.24 51.24 1 Yr G-Sec* 3.39% 3.38% S&P BSE Healthcare 0.24 11.65 58.35 5 Yr G-Sec* 5.10% 5.03% Source: BSE, NSE 10 Yr G-Sec* 5.95% 5.90% (FII/MF USD/INR 73.65 73.79 (Nifty) Inv Rs Cr ) 13700 10,000 Source: CRISIL Fixed Income Database, RBI *Weighted Average Yield 13400 8,000 13100 6,000 Government bond prices ended lower. The yield of 12800 4,000 12500 2,000 the 10-year benchmark 5.77% 2030 paper settled 12200 0 at 5.96% on December 11, 2020 compared with 11900 -2,000 11600 -4,000 5.90% on December 4, 2020. The yield of the 10- year benchmark 5.85% 2030 paper settled at 1-Dec 2-Dec 3-Dec 4-Dec 7-Dec 8-Dec 9-Dec 18-Nov 23-Nov 26-Nov 11-Nov 12-Nov 13-Nov 14-Nov 17-Nov 19-Nov 20-Nov 24-Nov 25-Nov 27-Nov 10-Dec 10-Nov 5.89% on December 11, 2020 compared with FII Net Investment MF Net Investment Nifty 5.82% on December 4, 2020. Source: SEBI, NSE WEEKLY YIELD – December 11, 2020 Sentiment for dated securities remained weak economic cues and surging Covid-19 cases early in the week due to the absence of any open dampened hopes of economic recovery. market bond purchase announcements from the Bond prices rose after the release of weak US jobs central bank. data for November 2020 and sharp jump in the Comments from the finance minister regarding the initial jobless claims for the week ended December fiscal deficit also put bonds under pressure 5, 2020. midweek. The finance minister’s remarks indicated More gains were seen owing to worries about that India would be looking to step up spending to rising covid-19 cases across the globe and support economic growth, and that the budget concerns about how quickly and widely vaccine deficit target may be missed. will be available. Some news reports that suggested that the Uncertainty about the Brexit deal coupled with government was in favour of loosening the central tensions between US and China also supported bank’s inflation target to support economic growth, the treasury prices. gave bond prices some support. The yield of the 10 year benchmark bond fell Prices dipped in the final session as the Reserve sharply to 0.91% on December 10, 2020 Bank of India (RBI) announced a special open compared to 0.97% on December 4, 2020. market operation involving simultaneous purchase and sale of securities, thereby dashing the Some gains were chipped off due to hopes of US market’s hopes of an outright bond purchase stimulus package and Britain became the first announcement. Western nation to begin a mass immunization program. The banking regulator announced that it would buy and simultaneously sell securities for a total DOMESTIC NEWS notified Rs 10,000 crore each on December 17, The Asian Development Bank (ADB) upgraded its 2020. forecast for the Indian economy, projecting 8% contraction in fiscal year 2020-21 as compared to 10-Year Benchmark G-Sec Yield 7.50% 9% de-growth estimated earlier, on the back of faster than expected recovery. 7.00% India’s industrial production index (IIP) rose 3.6% 6.50% in October 2020, mainly due to better performance of manufacturing and electricity generation 6.00% sectors; the IIP had expanded by a revised 0.49% 5.50% in September 2020, contracted by 10.55% in July 2020, and declined by 6.6% in October 2019. 11-Jul-20 11-Apr-20 11-Oct-20 11-Jun-20 11-Jan-20 Niti Aayog vice chairman Rajiv Kumar said India's 11-Mar-20 11-Feb-20 11-Dec-19 11-Aug-20 11-Sep-20 11-Nov-20 11-Dec-20 11-May-20 economic growth is likely to reach pre-Covid-19 Source: CRISIL Fixed Income Database levels by the end of the 2021-22 fiscal as the gross domestic product (GDP) contraction in this GLOBAL DEBT financial year is expected to be less than 8%. US treasury prices ended higher in the week Finance Ministry released Rs 6000 crore as ended December 10, 2020 as weak domestic weekly instalment to 23 states and three union WEEKLY YIELD – December 11, 2020 territories with legislature to meet the goods and The White House unveiled a $916 billion stimulus services tax (GST) shortfall. proposal to break logjam over new aid for the US economy. Finance Ministry notified the updated Viability Gap Funding (VGF) scheme which gives a push to the US nonfarm payrolls rose by 245,000 in November social infrastructure sector in India along with 2020 followed by downwardly revised reading of extending the existing scheme to continue support 610,000 for October 2020. The unemployment rate to core sector infrastructure. fell to 6.7% in November 2020 from 6.9% in October 2020. The Cabinet approved the earlier announced special Employees' Provident Fund (EPF) scheme, US nonfarm productivity increased at a 4.6% Atmanirbhar Bharat Rozgar Yojana at an annualized rate in third quarter of 2020, following a expenditure of Rs 1584 crore for the current fiscal 10.6% rate of growth in the second quarter of and Rs 22810 crore during the entire period of 2020; unit labor costs plunged at a 6.6% rate in Q3 2020-2023. 2020 compared to a rise of 12.3% in the second quarter of 2020. The RBI to use scale-based approach factors in systemic risk contribution while regulating non- US consumer price index rose by 0.2% in banking finance companies (NBFCs). The November 2020 after coming in unchanged in regulator will also prescribe norms for dividend October 2020. distribution by NBFCs. Eurozone GDP declined 4.3% year-on-year in Q3 The Securities and Exchange Board of India 2020 after contracting by 14.7% in the previous (SEBI) extended till December 24, 2020 the quarter. deadline for submission of public comments on European Central Bank (ECB) increased review of the minimum public offer requirement for Pandemic Emergency Purchase Program by 500 large issuers. billion euros to 1.85 trillion euros, and extends it by Insurance Regulatory and Development Authority nine months to at least the end of March 2022; (IRDAI) proposed a standard personal accident held interest rates on its main refinancing product with common coverage and policy operations at 0.00%. wordings across the industry, a move aimed at UK’s GDP rose 0.4% in October 2020 after increasing penetration of the product. expanding 1.1% in September 2020. IRDAI proposed a ban on credit-linked group Japan’s economy grew an annualized 22.9% in health policies such as critical illness covers that the July-September 2020 compared with the are bundled with home loans. preliminary figure of 21.4% and 29.2% contraction GLOBAL NEWS in the April-June 2020. DAY ECONOMIC EVENTS IN THE WEEK AHEAD Japan Tertiary Industry Activity Index, October 2020 Monday, December 14, 2020 India Consumer Inflation, November 2020 India Wholesale Inflation, November 2020 Tuesday, December 15, 2020 US Industrial Production / Capacity Utilization, November 2020 WEEKLY YIELD – December 11, 2020 US Import / Export Prices, November 2020 China Industrial Production, November 2020 China Retail Sales, November 2020 US Federal Reserve Interest Rate Decision US Retail Sales, November 2020 Wednesday, December 16, 2020 UK Manufacturing, Services & Composite PMI, December 2020 UK Consumer Prices, November 2020 US Housing Starts / Building Permits, November 2020 Thursday, December 17, 2020 Eurozone Consumer Prices, November 2020 Bank of England Interest Rate Decision UK Retail Sales, November 2020 Friday, December 18, 2020 Bank of Japan Interest Rate Decision Source: CRISIL Disclaimer: CRISIL Research, a division of CRISIL Limited (CRISIL) has taken due care and caution in preparing this Report based on the information obtained by CRISIL from sources which it considers reliable (Data).