2023-10-06_news-u-can-use-oct-06-2023

NEWS U CAN USE
October 06, 2023
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
The Week that was…
02nd Oct to 06th Oct
Indian Economy
• The Manufacturing Purchasing Managers' Index fell to 57.5 in Sep 2023, compared to 58.6
in Aug 2023. Although demand and output significantly improved in Sep 2023 despite
increased inflationary pressures, Indian manufacturing expanded at its slowest rate in five
months.
• RBI projected the CPI inflation at 5.4% for FY24, with Q2 at 6.4%, Q3 at 5.6% and Q4 at
5.2%. CPI inflation for Q1 of FY25 is projected at 5.2%. Inflation outlook is anticipated to
improve amid recent drop in LPG prices and the correction in vegetable prices. A number
of variables, including a decrease in the area planted in pulses, a drop in reservoir levels, El
Nino conditions, and unstable global energy and food prices, will influence the future
trajectory.
• RBI projected real GDP growth for FY24 at 6.5%, with Q2 at 6.5%, Q3 at 6.0%, and Q4 at
5.7%. Real GDP growth for Q1 of FY25 is projected at 6.6%. The government's push for
capex, the government's continuous buoyancy in services, the recovery in rural demand,
consumer and business optimism, and the sound balance sheets of banks and corporations
are all likely to help domestic demand conditions. However, RBI raised few concerns for
the growth of Indian economy due to global variables such geopolitical tensions, erratic
energy and financial markets, and climatic shocks.
• The Finance Ministry announced that India's GST collections increased to Rs. 1.63 lakh
crore in Sep 2023, up by 10% from the corresponding month of last year. The gross GST
collection exceeded Rs. 1.60 lakh crore for the fourth time in FY24.
3
Indian Equity Market
Domestic Equity Market Indices • Domestic equity markets rose as key
Indices 06-Oct-23 1 Week Return YTD Return benchmark indices S&P BSE Sensex and
S&P BSE Sensex 65,995.63 0.25% 8.47%
Nifty 50 rose 0.25% and 0.08%
respectively. However, there was some
Nifty 50 19,653.5 0.08% 8.55%
volatility in the market as S&P BSE
S&P BSE Mid-Cap 32,077.66 -0.81% 26.72%
Midcap fell 0.81% while the S&P BSE
S&P BSE Small-Cap 37,860.58 0.79% 30.88%
SmallCap rose 0.79%.
Source: Refinitiv Values as on Oct 06, 2023
• Domestic equities initially remained

S&P BSE S&P BSE S&P BSE under pressure amid mounting
Ratios Nifty 50
Sensex Mid Cap Small Cap concerns that the U.S. Federal Reserve
P/E 24.18 22.23 25.55 29.83 will keep interest rates at higher levels
P/B 3.59 3.45 3.16 3.13 for an extended period to bring
Dividend Yield 1.24 1.37 1.05 0.76
Source: NSE, BSE Values as on Oct 06, 2023
inflation back to the 2% target.
However, the trend reversed, and
NSE Advance/Decline Ratio
domestic equities closed the week with
Date Advances Declines Advance/Decline Ratio modest gains after the Monetary Policy
03-Oct-23 1,114 1,327 0.84 Committee of the RBI maintained a
04-Oct-23 669 1,746 0.38 status quo on repo rates and policy
05-Oct-23 1,497 879 1.70
06-Oct-23 1,543 870 1.77
stance which was in line with market
Source: NSE
expectations.
4
Indian Equity Market (contd.)
Sectoral Indices • On the BSE sectoral front, S&P BSE Consumer
Indices
Last Returns (in %) Durables rose the most by 2.58% followed by
Closing 1-Wk 1-Mth S&P BSE Realty which rose 1.94%. Consumer
S&P BSE Auto 36,233.5 -1.08% 0.32% durables stocks rose on hopes of improvement
S&P BSE Bankex 49,851.9 -0.64% 0.24% in demand due to the upcoming festive
S&P BSE CD 46,528.8 2.58% 2.62% season. Realty stocks also benefitted after the
S&P BSE CG 48,205.1 1.00% 5.15% key policy repo rate was kept on hold which
S&P BSE FMCG 18,676.5 -0.02% -0.84% provided some relief to the domestic housing
S&P BSE HC 28,065.9 -1.51% -1.03% sector. IT stocks gained due to investor
S&P BSE IT 32,643.7 1.80% 0.05% optimism ahead of the Q2 earnings season.
S&P BSE Metal 22,654.8 -2.38% -2.05%
However, the auto sector remained under
S&P BSE Oil & Gas 18,704.4 -1.69% -2.40%
Source:BSE Values as on Oct 06, 2023
pressure after automobile wholesale sales for
Indian Derivatives Market Review Sep 2023 came along mixed lines.
• Nifty Oct 2023 Futures stood at 19,678.50, a premium of 25.00 points above the spot
closing of 19,653.50.
• The total turnover on NSE’s Futures and Options segment for the week stood at Rs.
1,245.76 lakh crore as against Rs. 1,151.48 lakh crore for the week to Sep 29.
• The Put-Call ratio stood at 0.89 compared with the previous week’s close of 0.91.
• The Nifty Put-Call ratio stood at 1.12 compared with the previous week’s close of 1.03.
5
Domestic Debt Market
• Bond yields climbed sharply as market
Debt Indicators Current 1-Wk 1-Mth 6-Mth
(%) Value Ago Ago Ago participants were surprised due to RBI’s
announcement to conduct open market
Call Rate 6.74 6.87 6.33 6.40 sale of bonds through auction.
91 Day T-Bill 6.88 6.87 6.82 6.78
• Yield on the 10-year benchmark paper
05.74% 2026, (5 Yr GOI) 7.37 7.27 7.18 7.01 (7.26% GS 2033) increased by 14 bps to
07.26% 2033, (10 Yr GOI) 7.39 7.25 7.21 7.20 close at 7.39% from the previous week’s
close of 7.25%.
• Data from RBI showed that India's
foreign exchange reserves plunged to
10 -Yr Benchmark Bond ( % )
7.45 $586.91 billion for the week ended Sep
7.40 29, 2023 compared with $590.7 billion a
Yield in %
7.35
7.30
week earlier.
7.25
• RBI conducted the auction of 14-day
7.20
7.15 Variable Rate Reverse Repo for the
3-Oct 4-Oct 5-Oct 6-Oct notified amount of Rs. 50,000 crore for
Source: CCIL which the amount accepted was Rs.
6,668 crore and the cut-off yield stood at
6.49%.
6
Domestic Debt Market (Spread Analysis)
• Yields on gilt increased in the range of 8 to 39 bps
G-Sec Yield Corporate Yield Spread across the maturities.
Maturity
(%) (%) bps
• Corporate bond yields rose between 10 to 18 bps
across the curve.
1 Year 7.49 7.98 49
• Difference in spread between AAA corporate bond
3 Year 7.48 7.97 49
and gilt contracted between 2 to 23 bps across the
segments, barring 2 to 4 year papers that expanded
5 Year 7.53 7.74 21 by up to 9 bps.
10 Year 7.47 7.66 19
India Yield Curve Shift (%) (W-o-W)
Change in bps
8.00 40
Yield in %
7.50 30
20
7.00 10
6.50 0
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
Source: Refinitiv Change in bps 06-Oct-23 29-Sep-23
7
Regulatory Updates in India
• The Monetary Policy Committee (MPC) in its fourth bi-monthly monetary policy review of
FY24 kept key policy repo rate unchanged at 6.50% with immediate effect for the fourth
consecutive time. The standing deposit facility (SDF) rate also remains unchanged at 6.25%.
All six members unanimously voted to keep the policy repo rate unchanged. The MPC also
remained focused on withdrawal of accommodation to ensure that inflation progressively
aligns with the target, while supporting growth.
• The MPC noted that the unprecedented food price shocks are having an impact on the
evolving inflation's trajectory and that the recurrence of such overlapping shocks can lead to
generalisation and persistence. Given the current climate of elevated global food and
energy prices and global financial market volatility, the MPC consequently decided to
maintain a state of high vigilance. The MPC noted that headline inflation is currently
outpacing the tolerance zone and is deviating from the objective. Consequently, monetary
policy must continue to be actively deflationary.
• SEBI introduced a centralized system that allows nominees to notify mutual fund companies
or registrars to report the death of an investor, which will then be updated across all fund
houses. While the nominee will continue to reach different fund houses to make request for
the transfer of MF units, the documentation process will get easier and proceeds will arrive
in the nominee's account more quickly. SEBI has asked market intermediaries including
mutual fund companies, RTAs and KRAs to facilitate online and offline process to verify the
death certificate by the next working day from the date of submission.
8
Regulatory Updates in India (contd..)
• SEBI has asked AMCs to inform MFD associations that they must change the name of their
organizations to eliminate the term ‘IFA’ or ‘independent financial advisor’. SEBI also
noticed some malpractices that a few Registered Investment Advisers have been using
their licenses for illegal license rentals. It also highlighted that a direct plan platform for
mutual funds received advertising revenue from an AMC that is exactly in line with the
commission.
• The Ministry of Corporate Affairs provided a significant relief to aircraft lessors by
exempting all transactions, arrangements or agreements, under the Convention and the
Protocol, relating to aircraft, aircraft engines, airframes and helicopters from the
moratorium under Section 14 of the Insolvency and Bankruptcy Code (IBC).
• The Union Cabinet increased the subsidy on LPG cooking gas under Pradhan Mantri Ujjwala
Yojana (PMUY) by Rs. 100 ahead of the festive season. Around 103 million beneficiaries will
get the subsidy under the scheme.
• According to the media reports, the ministries of finance and corporate affairs are close to
finalizing the framework that will allow Indian companies to list directly abroad later this
fiscal year. The action could also encourage more startups with Indian founders to
incorporate in India rather than in places like Singapore, paving the way for unicorns and
other entities to have easier access to a larger pool of foreign capital.
9
Global News/Economy
• According to the Labor Department, U.S. non-farm payroll employment shot up by 336,000
jobs in Sep 2023 compared to economist estimates for an increase of about 170,000 jobs.
• According to the Labor Department, U.S. initial jobless claims crept up to 207,000 in the
week ended Sep 30th, 2023, an increase of 2,000 from the previous week's revised level of
205,000.
• According to the Institute for Supply Management, U.S. services PMI edged down to 53.6 in
Sep 2023 from 54.5 in Aug 2023. Meanwhile, the business activity index rose to 58.8 in Sep
2023 from 57.3 in Aug 2023, indicating a modestly faster pace of growth.
• According to Eurostat, eurozone’s producer prices slid 11.5% from a year ago in Aug 2023,
following a 7.6% decrease in Jul 2023. Data showed that energy prices plunged 30.6%
annually after easing 24.2% a month ago.
• According to Eurostat, eurozone’s inflation eased sharply to 4.3% in Sep 2023 from 5.2% in
Aug 2023. The core rate, which excludes volatile energy, food, alcohol and tobacco, slowed
more-than-expected to 4.5% from 5.3% in the previous month.
• According to the Federal Labor Agency, Germany’s unemployed increased by only 10,000
in Sep 2023 after climbing 20,000 in Aug 2023.
• According to the Ministry of Internal Affairs and Communications, Japan’s household
spending was down 2.5% on year in Aug 2023. On a monthly basis, household spending
jumped 3.9%, again topping forecasts for a gain of 0.9% following the 2.7% fall in the
previous month.
10
Global Equity Markets
U.S.
Global Indices • U.S. equity markets rose during the
Indices 06-Oct-23
1-Week YTD week after U.S. service sector activity
Return Return and private sector job growth slowed in
Russell 3000 2,149.36 1.85% 25.20% Sep 2023 which eased concerns of
Nasdaq 100 14,973.24 1.75% 36.87% higher interest rates in U.S. to some
FTSE 100 7,494.58 -1.49% 0.57% extent. However, renewed concerns
DAX Index 15,229.77 -1.02% 9.38% about the outlook for interest rates
Nikkei Average 30,994.67 -4.25% 18.78% capped the gains after U.S. job openings
Straits Times 3,174.39 -1.34% -2.37% surged in Aug 2023 and U.S. non-farm
Source: Refinitiv Value as on Oct 06, 2023 payroll employment came better than
Europe expected in Sep 2023.
• European equity markets fell following a slew of weak economic data from euro zone
which led to concerns of slowdown in global growth. Eurozone manufacturing activity
sharply contracted in Sep 2023, British service sector activity hit an eight-month low in Sep
2023, Eurozone's retail sales declined on a monthly basis in Aug 2023, German exports too
fell on a monthly basis in Aug 2023.
Asia
• Asian equity markets fell amid lingering worries that U.S interest rates may stay higher for
longer period that may weigh on global growth. Persisting concerns over China’s property
sector also weighed on the market sentiment.
11
Global Debt (U.S.)
US 10-Year Treasury Yield Movement • Yields on the 10-year U.S. Treasury rose
21 bps to close at 4.78% from the
4.82
previous week’s close of 4.57%.
• U.S. Treasury prices plunged as an
agreement to prevent a partial
Yield in %
4.72 government shutdown reduced

demand for the debt.
• Losses increased after U.S. job openings
unexpectedly rose in Aug 2023. Losses
4.62 increased after data indicated that U.S.
2-Oct 3-Oct 4-Oct 5-Oct 6-Oct
nonfarm payroll data rose better than
market expectation in Sep 2023, with
Source: Refinitiv
worries about another rate increase.
12
Commodities Market
Global Commodity Movement Gold
11.00 Rebased to 10 • Gold prices fell after U.S. non-farm payroll
Global Commodity Prices
10.50 employment data for Sep 2023 came

10.00 -6.81%
better than market expectations which
increased the possibility of another rate
9.50 -0.87%
hike by the U.S. Federal Reserve.
-2.57%
9.00
Brent Crude
8.50
6-Sep-23 16-Sep-23 26-Sep-23 6-Oct-23 • Brent crude oil prices fell on concerns over
macroeconomic headwinds and worries
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)
that high interest will slow global growth
Source: Refinitiv
which hit the demand outlook of the
Performance of various commodities commodity. However, reports of improved
Commodities Last Closing* 1-Week Ago Chinese travel activity restricted further
Brent Crude($/Barrel) 90.26 96.86 losses.
Gold ($/Oz) 1,832.26 1,848.31
Baltic Dry Index
Gold (Rs/10 gm) 56,327 57,594
Silver ($/Oz) 21.59 22.16 • The index rose over the week due to
Silver (Rs/Kg) 66,907 71,449
improved capesize and panamax activities.
Source: Refinitiv *Value as on Oct 06, 2023
13
Currencies Markets
Rupee
Currency Movement
• The Indian rupee in the spot trade fell against
10.10 Rebased to 10
0.22% the U.S. dollar due to the strong greenback and
Currency Prices ( in terms of INR)
10.00 an initial rise in the U.S. Treasury yields.

0.13%
9.90 Euro
-0.29%
9.80 • Euro rose against the U.S. dollar as the U.S.
-0.37% Treasury yields stagnated and after U.S. private
9.70
payrolls numbers were higher than anticipated
9.60 but wages growth was slowing.
6-Sep-23 16-Sep-23 26-Sep-23 6-Oct-23
Pound
USD GBP Euro JPY
Source: Refinitiv
• Pound gained against the strong U.S. dollar
amid a mixed set of data from the U.S.
Movement of Rupee vs Other Currencies
indicating that there are certain areas of
Currency Last Closing* 1-Wk Ago weakness in the world's largest economy.
US Dollar 83.24 83.06 Yen
Pound Sterling 101.29 101.67 • Yen was almost steady against the U.S. dollar as
EURO 87.68 87.94 investors are evaluating whether the U.S.
Federal Reserve will raise interest rates next
100 Yen 55.88 55.81
month.
Source: Refinitiv Figures in INR , *Value as on Oct 06, 2023
14
The Week that was…
02nd Oct to 06th Oct
15
The Week that was (Oct 02 – Oct 06)
Date Events Present Value Previous Value
• Germany HCOB Manufacturing PMI (Sep) 39.6 39.8

Monday, • Eurozone Unemployment Rate (Aug) 6.40% 6.50%
October 02, 2023
• U.S. ISM Manufacturing PMI (Sep) 49 47.6
• India S&P Global Manufacturing PMI (Sep) 57.5 58.6

Tuesday,
October 03, 2023
• U.S. JOLTS Job Openings (Aug) 9.61M 8.92M
• Germany HCOB Composite PMI (Sep) 46.4 46.2

Wednesday,
• Eurozone Retail Sales (YoY) (Aug) -2.10% -1%
October 04, 2023
• U.S. ADP Employment Change (Sep) 89K 180K
• U.S. ISM Services PMI (Sep) 53.6 54.5
• India S&P Global Services PMI (Sep) 61 60.1
Thursday, • Germany Trade Balance s.a. (Aug) €16.6B €17.7B

October 05, 2023
• U.S. Initial Jobless Claims (Sep 29) 207K 205K
• Japan Labor Cash Earnings (YoY) (Aug) 1.10% 1.10%
• RBI Interest Rate Decision 6.50% 6.50%
Friday, • Germany Factory Orders (YoY) (Aug) -4.20% -10.10%

October 06, 2023 • U.S. Nonfarm Payrolls (Sep) 336K 227K
• U.S. Average Hourly Earnings (YoY) (Sep) 4.20% 4.30%
16
The Week Ahead
09th Oct to 13th Oct
17
The Week Ahead
Day Event
Monday, • Germany Industrial Production (YoY)(Aug)
Oct 09, 2023 • Japan Current Account (Aug)
Tuesday, • U.S. IMF Meeting
Oct 10, 2023 • China M2 Money Supply (YoY)(Sep)
Wednesday, • U.S. Producer Price Index ex Food & Energy (YoY)(Sep)

• U.S. FOMC Minutes
Oct 11, 2023 • Japan Bank Lending (YoY)(Sep)
• India Industrial Production (YoY) (Aug)
• India Inflation Rate YoY (Sep)
Thursday, • U.K. Gross Domestic Product (MoM)(Aug)
Oct 12, 2023 • European Central Bank Monetary Policy Meeting Accounts
• U.S. Consumer Price Index (MoM)(Sep)
• U.S. Initial Jobless Claims (Oct 6)
• India WPI Food Index (YoY) (Sep)
Friday, • China Consumer Price Index (YoY)(Sep)
Oct 13, 2023 • China Exports (YoY)(Sep)
• Eurozone Industrial Production (MoM)(Aug)
18
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
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19
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NEWS U CAN USE

October 06, 2023

• Domestic equities initially remained

10 Year 7.47 7.66 19

Source: Refinitiv Values as on Oct 06, 2023

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

4.72 government shutdown reduced

worries about another rate increase.

10.50 employment data for Sep 2023 came

10.00 an initial rise in the U.S. Treasury yields.

• Germany HCOB Manufacturing PMI (Sep) 39.6 39.8

• India S&P Global Manufacturing PMI (Sep) 57.5 58.6

• Germany HCOB Composite PMI (Sep) 46.4 46.2

• U.S. ISM Services PMI (Sep) 53.6 54.5

• India S&P Global Services PMI (Sep) 61 60.1

Thursday, • Germany Trade Balance s.a. (Aug) €16.6B €17.7B

• Japan Labor Cash Earnings (YoY) (Aug) 1.10% 1.10%

• RBI Interest Rate Decision 6.50% 6.50%

Friday, • Germany Factory Orders (YoY) (Aug) -4.20% -10.10%

• U.S. Average Hourly Earnings (YoY) (Sep) 4.20% 4.30%

Wednesday, • U.S. Producer Price Index ex Food & Energy (YoY)(Sep)

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