NEWS U CAN USE September 24, 2021 - Mutual Fund Investments are subject to market risks, read all scheme related documents carefully - Nippon ...
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NEWS U CAN USE
September 24, 2021
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.The Week that was…
20th Sep to 24th Sep
2
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.Indian Economy
• The Asian Development Bank (ADB) has lowered India's GDP forecast for FY22 to 10%
from 11% earlier, citing the impact of the second wave of the Covid-19 pandemic on
services, domestic consumption, and the urban informal sector. India's economic recovery
has been hampered by a spike of Covid-19 cases in May, which has resulted in a negative
reduction in growth forecast. The pandemic, however, subsided faster than expected, with
several states relaxing their lockdown measures.
• The Organisation for Economic Co-operation and Development (OECD) has marginally
lowered India's growth projection by 20 basis points (bps) to 9.7% in FY22. OECD also
lowered growth projection by 30 bps to 7.9% for FY23. The reduction growth projection
came due to pandemic risks.
• Foreign direct investments (FDI) in India rose 112% to $20.42 billion during the Apr 2021
to Jul 2021 as against $9.61 billion of FDI equity inflows in the same period last year.
During the first four months of FY22, the Automobile Industry emerged as the leading
industry, accounting for 23% of total FDI Equity inflow, followed by Computer Software &
Hardware(18%) and Services Sector(9%), respectively.
• According to a Reserve Bank of India study, total software services exports increased by
2.1% in FY21 to USD 148.3 billion, including services given by foreign affiliates of Indian
enterprises. Computer and ITES services accounted for 65.3% and 34.7% of total software
services exports, respectively. BPO services made up the majority of IT enabled service
exports (ITES).
3
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.Indian Equity Market
• Indian equity markets oscillated
Domestic Equity Market Indices between gains and losses before
Indices 24-Sep-21 1 Week Return YTD Return ending the week in the positive
S&P BSE Sensex 60,048.47 1.75% 25.75% territory with Sensex breaching the
Nifty 50 17,853.20 1.52% 27.69% 60,000 milestone. Weak global cues
S&P BSE Mid-Cap 25,194.84 0.59% 40.43% kept bourses under pressure amid
S&P BSE Small-Cap 28,023.34 0.06% 54.84% concerns over inability of a major
Source: MFI Explorer Chinese property developer to pay part
of its huge debt.
S&P BSE S&P BSE S&P BSE
Ratios
Sensex
Nifty 50
Mid Cap Small Cap • Markets managed to recoup its initial
weakness with investors shrugging off
P/E 31.34 27.34 33.44 43.98
P/B 3.85 4.47 3.40 3.40 U.S. Fed’s comment that it may start
Dividend Yield 0.90 1.11 0.88 0.67 tapering as early as Nov and a probable
Source: BSE, NSE Value as on Sep 24, 2021 rate hike in 2022. Receding concerns on
NSE Advance/Decline Ratio debt crisis of one of Chinese property
Date Advances Declines Advance/Decline Ratio developers later during the week
20-Sep-21 448 1618 0.28 supported buying interest. Reduction in
21-Sep-21 971 1036 0.94 covid cases and the strong vaccination
22-Sep-21 1353 654 2.07
23-Sep-21 1240 779 1.59
numbers coupled with optimism
24-Sep-21 736 1298 0.57 around the capex cycle revival also
Source: NSE boosted sentiments.
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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 indices closed in the green. S&P BSE Realty
Closing* 1-Wk 1-Mth
S&P BSE Auto 23,475.46 0.83% 6.17% recorded double digit gains during the week,
S&P BSE Bankex 43,245.49 -0.04% 6.82% up 21.31%, followed by S&P BSE Teck and S&P
S&P BSE CD 40,776.48 -0.32% 12.75% BSE IT, which rose 4.00% and 3.53%,
S&P BSE CG 26,356.30 1.21% 10.62% respectively.
S&P BSE FMCG 15,089.75 0.23% 6.68%
• Realty became investors’ most preferred
S&P BSE HC 26,207.36 -1.30% 1.73%
sector as the interest rates have been low and
S&P BSE IT 36,079.18 3.53% 7.11%
S&P BSE Metal
the government policies remained supportive.
19,764.00 -3.49% 0.12%
S&P BSE Oil & Gas 17,638.87 0.12% 9.21%
The technological advancements in the sector
Source: Refinitiv *Value as on Sep 24, 2021 have also been one of the reasons that have
led to the bullish movement.
Indian Derivatives Market Review
• Nifty Sep 2021 Futures stood at 17,853.60, a premium of 0.40 points above the spot closing
of 17,853.20. The total turnover on NSE’s Futures and Options segment for the week stood
at Rs. 348.15 lakh crore as against Rs. 315.10 lakh crore for the week to Sep 17.
• The Put-Call ratio remained unchanged compared to previous week’s close at 0.88.
• The Nifty Put-Call ratio stood at 1.27 compared with the previous week’s close of 1.15.
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Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.Domestic Debt Market
• Bond yields fell initially on reports about
Debt Indicators Current 1-Wk 1-Mth 6-Mth the inclusion of domestic debt in global
(%) Value Ago Ago Ago
bond indices in the current financial year
Call Rate 3.15 3.22 3.15 3.26 and expectations that the benchmark 10
91 Day T-Bill 3.37 3.30 3.33 3.33
year paper to be again included in the
RBI’s bond purchases in the next auction
05.22% 2025, (5 Yr GOI) 5.29 5.22 5.33 5.61
also.
06.10% 2031, (10 Yr GOI) 6.18 6.17 6.25 --
• However, gains reversed at the end
Source: Refinitiv Value as on Sep 24, 2021
following surge in U.S. Treasury yields
10 -Yr Benchmark Bond ( % ) and global crude oil prices. Also central
6.20
government raised Rs. 31,000 crore at its
last weekly auction for the first half of
Yield in %
FY22.
6.15
• RBI conducted the open market purchase
of three government Securities under G-
6.10 sec Acquisition Programme (G-SAP 2.0)
20-Sep 21-Sep 22-Sep 23-Sep 24-Sep
and simultaneous sale of government
Source: CCIL
securities for an aggregate amount of Rs.
15,000 crore each, which were
completely accepted.
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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 rose by up to 24 bps
on 1 to 7, 10 and 14 year papers while
G-Sec Yield Corporate Yield Spread
Maturity
(%) (%) bps
remaining securities fell in the range of 3 to
22 bps.
1 Year 4.18 5.28 110 • Corporate bond yields rose in the range of 4
to 16 bps across the curve, leaving 1 year
3 Year 4.98 5.26 27 paper that fell 9 bps.
5 Year 5.74 6.31 57 • Spread between AAA corporate bond and gilt
expanded in the range of 3 to 18 bps across
10 Year 6.28 7.02 75
segments, except 1 and 2 year papers that
Source: Refinitiv Value as on Sep 24, 2021 contracted 33 & 9 bps, respectively.
India Yield Curve Shift (%) (W-o-W)
7.80 34
Change in bps
Yield in %
5.30 4
2.80 -26
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
Source: Refinitiv
Change in bps 24-Sep-21 17-Sep-21
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Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.Regulatory Updates in India
• SEBI has issued a clarification circular on ‘Alignment of interest of Key Employees
(‘Designated Employees’) of Asset Management Companies (AMCs) with the Unitholders of
the Mutual Fund. Among the several clarifications stated by the capital market regulator, it
is stated that junior employees shall be required to invest 10% during Oct 01, 2021 to Sep
30, 2022 and 15% during Oct 01, 2022 to Sep 30, 2023. Moreover, all junior employees shall
be mandatorily required to invest 20% of the Alignment circular with effect from Oct 01,
2023 onwards. The phased implementation for junior employees shall cease to apply from
the date such employee attains the age of 35 years.
• The GST Council clarified, that the unutilized balance in CGST and IGST cash ledger would be
transferred between distinct persons (with same PAN, registered across different states)
without going over the refund procedure. It would benefit telecom companies, insurers and
banks having operations across several states, as well as captives of foreign companies in
India that deal with other overseas businesses of the mother company.
• At the next meeting of the GST Council, some states are expected to raise the issue of
extending by five years the compensation period of the Goods and Services Tax (GST)
beyond 2022. Kerala, Punjab and Chhattisgarh are among those that have said the
compensation is inadequate. This compensation for revenue shortfall will end in Jun 2022.
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Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.Regulatory Updates in India (contd..)
• The Reserve Bank of India issued a Master Direction on loan transfers, requiring banks and
other lending institutions to have a thorough strategy for such transactions that has been
approved by the board of directors. Lending institutions use loan transfers for a variety of
reasons, including liquidity management, exposure rebalancing, and strategic sales.
Additionally, a strong secondary market for loans will aid in the creation of new liquidity
sources.
• The Reserve Bank of India released a Master Direction on the securitization of standard
assets to make it easier to repackage them into tradable securities with various risk
profiles. Prudently constructed securitisation transactions can help a well-functioning
financial market by improving risk distribution and liquidity for lenders when originating
new loan exposures. The Minimum Retention Requirement (MRR) has been established by
the central bank for various asset types.
• The Commerce and Industry Minister soft launched the National Single Window System
for Enterprises, claiming that it will free businesses from the burden of running to
government offices for permissions and registrations. He went on to say that the site will
improve the ecosystem's transparency, accountability, and responsiveness, and that all
information would be accessible from a single dashboard.
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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 kept interest rates on hold in its monetary policy review and
indicated that tapering of the central bank's asset purchases could begin in the near future
but did not specifically indicate though, as to when that might happen. The U.S. central
bank also downwardly revised forecasts for U.S. GDP growth in 2021 to 5.9% from 7.0%,
while forecasts for GDP growth in 2022 were upwardly revised to 3.8% from 3.3%. The U.S.
Federal Reserve also attributed elevated inflationary pressures in U.S. to "transitory
factors.“
• According to the Organisation for Economic Cooperation and Development, the global
growth forecast for 2022 is now 4.5%, up from 4.4% in May 2021. The forecast for 2021
has been lowered to 5.7% from 5.8% in May 2021.
• The Bank of England has chosen to keep the key interest rate of 0.10% unchanged. The
MPC also kept the existing stock of corporate bond purchases at GBP 20 billion and the
objective for government bond purchases at GBP 875 billion, bringing the entire
quantitative easing programme to GBP 895 billion. The bank lowered its growth forecast
for the third quarter of 2021, citing production supply concerns. Since the Aug report, the
level of U.K. GDP for the third quarter has been revised down by about 1%.
• The Bank of Japan maintained its monetary policy on current accounts held by financial
institutions at the central bank at -0.1%. The bank will continue to buy a sufficient number
of Japanese government bonds without imposing an upper limit, ensuring that 10-year
JGB yields stay around 0%.
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Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.Global Equity Markets
Global Indices
U.S.
• Majority of the U.S. equity markets rose
1-Week YTD
Indices 24-Sep-21
Return Return after the U.S. Fed, in its monetary policy
Russell 3000 2,305.53 0.31% 18.07%
review, indicated no imminent removal
Nasdaq 100 15,329.68 -0.02% 18.94%
of its ultra-easy monetary policy.
FTSE 100 7,051.48 1.26% 9.15% • Concerns over the debt crisis of a major
DAX Index 15,531.75 0.27% 13.22% real estate developer in China also
Nikkei Average 30,248.81 -0.82% 10.22% eased to some extent after the Chinese
Straits Times 3,061.35 -0.32% 7.65% property developer reached a
Source: Refinitiv Value as on Sep 24, 2021 settlement with mainland bondholders.
Europe
• European equity markets went up after euro area consumer confidence improved in Sep
2021 while Germany's Ifo Institute projected the German economy to grow faster than
previously estimated next year.
Asia
• Asian markets fell as investors continued to assess the debt crisis scenario of China’s major
property developer. Although, the company reached a settlement with mainland
bondholders, no tangible progress was noted, and no clarifications were forthcoming
from the company on the payment of coupon.
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
1.50 bps to close at 1.45%, from the previous
week’s close of 1.36%.
• U.S. Treasury prices rose initially as
concerns over solvency issues of a major
1.35
Chinese property developer spooked
global financial markets which boosted
the safe-haven appeal of U.S. Treasuries.
1.20 • However, the trend reversed soon as U.S.
20-Sep 21-Sep 22-Sep 23-Sep 24-Sep
Treasury prices fell sharply after the U.S.
Source: Refinitiv
Federal Reserve opened the door to
raising interest rates as early as next year,
a potential move that was reinforced by
the Bank of England's outlook on rates
and a rate hike by the Norges Bank
(Central Bank of Norway). The Norges
Bank become the first major Western
central bank to raise interest rates
following the onset of the coronavirus
pandemic.
12
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.Commodities Market
Global Commodity Movement Gold
10.70 3.93%
Rebased to 10 • Gold prices fell after the U.S. Federal
Global Commodity Prices
Reserve in its monetary policy review
indicated that interest rates in U.S. may be
9.95 raised sooner than expected.
-0.24%
0.10% Brent Crude
9.20 • Brent crude oil prices rose amid rising fuel
24-Aug-21 9-Sep-21 24-Sep-21 demand and reduction in U.S. crude
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
inventory in the week ended Sep 17, 2021
Source: Refinitiv
which was the lowest since Oct 2018.
Delayed recovery in output from the Gulf
Performance of various commodities
of Mexico region, which has been severely
Commodities Last Closing* 1-Week Ago
disrupted by two hurricanes, also provided
Brent Crude($/Barrel) 76.75 73.85
support to the oil prices.
Gold ($/Oz) 1,749.86 1,754.16
Gold (Rs/10 gm) 46,058 46,178 Baltic Dry Index
Silver ($/Oz) 22.42 22.39 • The index rose during week due to
Silver (Rs/Kg) 60,385 61,067 improved capesize and panamax activites.
Source: Refinitiv *Value as on Sep 24, 2021
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Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.Currencies Markets
Currency Movement Rupee
• The Indian rupee fell against the greenback on
Currency Prices ( in terms of INR)
10.05 Rebased to 10
anticipation of withdrawal of policy support by
10.00 the U.S. Fed and on worries over solvency issues
9.95 0.27% of a major Chinese property developer.
-0.06%
9.90 -0.26%
Euro
-0.34% • The euro fell against the greenback as concerns
9.85
over solvency issues of a major Chinese
9.80 property developer spooked global financial
24-Aug-21 9-Sep-21 24-Sep-21 markets
Source: Refinitiv
USD GBP Euro JPY
Pound
Movement of Rupee vs Other Currencies
• Sterling fell against a dollar on persistent
default worries surrounding a major Chinese
Currency Last Closing* 1-Wk Ago
property developer.
US Dollar 73.69 73.49
Yen
Pound Sterling 101.12 101.38
• The yen fell against the greenback on
EURO 86.47 86.52 anticipation of withdrawal of policy support by
100 Yen 66.66 66.89 the U.S. Fed and worries that interest rate hikes
in U.S. may come sooner than expected.
Source: Refinitiv Figures in INR , *Value as on Sep 24, 2021
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Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.The Week that was…
20th Sep to 24th Sep
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Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.The Week that was (Sep 20– Sep 24)
Present Previous
Date Events
Value Value
Monday, • Germany Producer Price Index (MoM)(Aug) 1.50% 1.90%
September 20, 2021 • U.K. Rightmove House Price Index (YoY)(Sep) 5.80% 5.60%
Tuesday, • U.S. Housing Starts (MoM)(Aug) 1.615M 1.534M
September 21, 2021 • U.S. Building Permits (MoM)(Aug) 1.728M 1.63M
Wednesday, • Eurozone Consumer Confidence(Sep) -4 -5.3
September 22, 2021 • U.S. Existing Home Sales Change (MoM)(Aug) 2% 2.20%
• Germany Markit PMI Composite(Sep) PREL 55.3 60
Thursday
• Eurozone Markit PMI Composite(Sep) PREL 56.1 59
September 23, 2021
• U.S. Markit PMI Composite(Sep) PREL 54.5 55.4
• U.K. GfK Consumer Confidence(Sep) -13 -8
Friday, • Japan National Consumer Price Index (YoY)(Aug) -0.40% -0.30%
September 24, 2021 • Germany IFO – Business Climate(Sep) 98.8 99.4
• U.S. New Home Sales (MoM)(Aug) 0.74M 0.708M
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Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.The Week Ahead
27th Sep to 01st Oct
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Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.The Week Ahead
Day Event
Monday, • U.S. Durable Goods Orders (Aug)
Sep 27, 2021 • Eurozone M3 Money Supply (YoY)(Aug)
Tuesday, • U.S. Housing Price Index (MoM)(Jul)
Sep 28, 2021 • U.S. Consumer Confidence (Sep)
Wednesday, • U.S. Pending Home Sales (MoM)(Aug)
• Eurozone Consumer Confidence (Sep)
Sep 29, 2021 • Japan Retail Trade (YoY)(Jul)
• U.K. Gross Domestic Product (QoQ)(Q2)
Thursday, • U.S. Gross Domestic Product Annualized (Q2)
• Eurozone Consumer Price Index (YoY)(Sep) PREL
Sep 30, 2021 • Germany Harmonized Index of Consumer Prices (YoY)(Sep) PREL
• China Non-Manufacturing PMI (Sep)
• U.S. ISM Manufacturing PMI (Sep)
Friday, • Japan Tankan Large Manufacturing Index (Q3)
• Germany Markit Manufacturing PMI (Sep)
Oct 01, 2021 • U.K. Markit Manufacturing PMI (Sep)
• U.S. Unemployment Rate (Sep)
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
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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.
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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
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19
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