2023-09-22_news-u-can-use-sep-22-2023

NEWS U CAN USE
September 22, 2023
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
The Week that was…
18th Sep to 22nd Sep
Indian Economy
• Organisation for Economic Co-operation and Development (OECD) increased the expected
average growth of India to 6.3% for FY24 from its earlier estimate of 6%. However, it
revised the domestic inflation rate upward to 5.3% from the earlier projection of 4.8% and
suggested for tight monetary policy to curb the inflation.
• The Asian Development Bank (ADB) has reduced India's GDP prediction from 6.4% to 6.3%
for FY24 due to the negative effect of unpredictable monsoon on agricultural output. Due
to surprisingly high food prices, ADB also increased its inflation projection from 5% to
5.5%. ADB, however, kept its growth prediction for the following year, predicting a growth
of 6.7% in FY25, led by growing industrial output and private investment.
• According to a major foreign consulting firm, India has emerged as a global manufacturing
leader with a $23 billion increase in exports to the US which is 44% increase from 2018 to
2022. In contrast, during the same time period, exports from China to the US fell by 10%.
Trade conflicts, the pandemic, geopolitical unrest and supply constraints all played a role
in this shift in manufacturing and sourcing.
• According to the Defence Ministry, the Defence Acquisition Council (DAC) approved the
purchase of a number of weapons systems and platforms for about Rs 45,000 crore. All of
these purchases will be made from Indian suppliers under Buy Indian-Indigenously
Designed Developed and Manufactured (IDMM)/Buy (Indian) category, which will
significantly help the Indian defense industry's efforts to realize the "Aatmanirbhar
Bharat" objective.
3
Indian Equity Market
• Domestic equity markets fell after
Domestic Equity Market Indices rising for three consecutive weeks as
Indices 22-Sep-23 1 Week Return YTD Return key benchmark indices S&P BSE Sensex
S&P BSE Sensex 66,009.15 -2.70% 8.50% and Nifty 50 fell around 3%. Sensex
Nifty 50 19,674.25 -2.57% 8.67% logged its worst week in over 15
S&P BSE Mid-Cap 31,948.76 -1.71% 26.21% months while Nifty 50 witnessed its
S&P BSE Small-Cap 37,057.48 -2.04% 28.11% worst week in about 7 months. The
Source: Refinitiv Values as on Sep 22, 2023 losses were widespread as the mid cap
segment and the small cap segment
Ratios
S&P BSE
Nifty 50
S&P BSE S&P BSE also closed the week in red.
Sensex Mid Cap Small Cap
• Domestic equities started the week on
P/E 24.23 22.22 25.49 29.25
P/B 3.60 4.36 3.15 3.07 a negative note as the Sensex took a
Dividend Yield 1.23 1.37 1.05 0.77 breather from a record setting run and
Source: NSE, BSE Values as on Sep 22, 2023 snapped a 11-day winning streak.
NSE Advance/Decline Ratio Markets participants exercised caution
and remained on the sidelines as they
Date Advances Declines Advance/Decline Ratio
awaited the outcome of the much-
18-Sep-23 912 1,499 0.61 anticipated U.S. Federal Reserve
20-Sep-23 774 1,581 0.49 monetary policy review for clarity on
21-Sep-23 662 1,702 0.39 the future interest rate trajectory in
22-Sep-23 1084 1280 0.85
U.S.
Source: NSE
4
Indian Equity Market (contd.)
Sectoral Indices • On the BSE sectoral front, all the sectoral
Indices
Last Returns (in %) indices closed in the red barring S&P BSE PSU
Closing 1-Wk 1-Mth and S&P BSE Power which rose 0.57% and
S&P BSE Auto 36,799.71 -0.97% 4.38% 0.06% respectively. PSU stocks rose on hopes
S&P BSE Bankex 50,201.45 -3.17% 1.69% that the government may boost its social
S&P BSE CD 45,951.33 -0.68% 4.71% spending ahead of the general elections. The
S&P BSE CG 46,719.77 -0.69% 5.73% power sector also benefitted on anticipation
S&P BSE FMCG 18,663.9 -0.71% -0.77% that power demand may go up as India enters
S&P BSE HC 27,763.92 -3.20% -1.05%
a phase of capex-driven GDP growth. Other
S&P BSE IT 32,993.54 -1.42% 5.86%
sectoral indices fell on profit booking and as
S&P BSE Metal 36,799.71 -3.25% 6.31%
the overall market sentiment remained
S&P BSE Oil & Gas 19,004 -1.33% 0.67%
Source:BSE Values as on Sep 22, 2023
subdued.
Indian Derivatives Market Review
• Nifty Sep 2023 Futures stood at 19,708.25, a premium of 34.00 points above the spot
closing of 19,674.25.
• The total turnover on NSE’s Futures and Options segment for the week stood at Rs.
1,342.28 lakh crore as against Rs. 1,821.92 lakh crore for the week to Sep 15.
• The Put-Call ratio stood at 0.96 compared with the previous week’s close of 0.91.
• The Nifty Put-Call ratio stood at 0.93 compared with the previous week’s close of 1.31.
5
Domestic Debt Market
Debt Indicators Current 1-Wk 1-Mth 6-Mth • Bond yields was almost steady as
(%) Value Ago Ago Ago optimism over inclusion of Indian bonds
in global indexes outweighed the
Call Rate 6.77 6.75 6.76 6.65
bearishness triggered by rising U.S. peers.
91 Day T-Bill 6.82 6.86 6.86 6.78
• Yield on the old 10-year benchmark
05.74% 2026, (5 Yr GOI) 7.20 7.02 7.21 7.23
paper (7.26% GS 2033) remain steady to
07.26% 2033, (10 Yr GOI) 7.19 7.19 7.22 7.33 close at 7.19% from the previous week’s
Source: Refinitiv Values as on Sep 22, 2023 close.
• Yield on the new 10-year benchmark
10 -Yr Benchmark Bond ( % )
paper (7.18% GS 2033) closed steady to
7.40 close at 7.16% from the previous week’s
7.05 close.
Yield in %
6.70
6.35
6.00
18-Sep 20-Sep 21-Sep 22-Sep
Source: CCIL
6
Domestic Debt Market (Spread Analysis)
• Yields on gilt moved 1 bps or remained unchanged
G-Sec Yield Corporate Yield Spread across the maturities, leaving 1, 6 & 30 year papers
Maturity
(%) (%) bps that fell 2, 3 or 7 bps while 2, 3 & 15 year papers
rose between 1 to 3 bps.
1 Year 7.17 7.81 64 • Corporate bond yields rose by up to 3 bps across
the curve, barring 9, 10 & 15 year papers that fell 1
3 Year 7.31 7.73 42 or 3 bps, while 7 & 8 year papers were steady.
5 Year 7.31 7.54 23 • Difference in spread between AAA corporate bond

and gilt was steady across the segments, barring 1,
10 Year 7.28 7.54 26 4 and 6 year papers expanded 1, 4 or 10 bps, while
15 year paper was contracted by 5 bps.
Source: Refinitiv Value as on Sep 22, 2023
India Yield Curve Shift (%) (W-o-W)
Change in bps
7.60 2
Yield in %
7.40
7.20 -1
7.00
6.80 -5
6.60
6.40 -8
3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs
Source: Refinitiv Change in bps 22-Sep-23 15-Sep-23
7
Regulatory Updates in India
• According to media reports, JP Morgan is set to include India in its emerging market debt
index starting from Jun 28, 2024. India's weight is expected to reach the maximum weight
threshold of 10% in the GBI-EM Global Diversified and approximately 8.7% in the GBI-EM
Global index with 1% increment on its index weighting from starting. The inclusion of the
bonds is expected to see inflows of $24 billion into Indian government bonds over the 10
month period.
• According to the RBI monthly bulletin, the global economy could grow slowly in 2024 after
outperforming expectations in 2023, as tighter financial conditions might prevail. RBI is
concerned on crude oil price above $90 per barrel as it might bring new risk to global
financial stability. However, the RBI sees stabilizing the core inflation as food price pressures
in the economy are easing.
• The RBI has recommended stricter guidelines for the treatment of willful defaulters,
requiring banks and lenders to investigate all accounts with outstanding balances of Rs. 25
lakh or more to find cases of intentional loan default. Additionally, the draft Master
Direction on Treatment of willful Defaulters and Large Defaulters broadens the definition of
willful default and requires a review procedure to be started within six months of an
account being designated as a non-performing asset.
8
Regulatory Updates in India (contd..)
• SEBI relaxed the framework mandating large corporates (LCs) to access the corporate
bond market for debt-raising. The capital markets regulator raised the threshold for LC
definitions and eliminated fines for businesses that failed to issue the required number of
debt securities in order to raise the required amount. With the introduction of a higher
monetary threshold for identifying LCs, the scope of these measures will be applicable to
fewer companies.
• The Insolvency and Bankruptcy Board of India (IBBI) has introduced a simplified enrolment
and registration processes for insolvency professionals with a broader motive to expedite
the insolvency resolution process and prevent erosion of stressed asset value. The IBBI has
introduced a common application form and set a timeline of 60 days for the approval of
the unified application (for enrolment) by the insolvency professional agency (IPA) and of
30 days for forwarding the application (for registration) to the regulator.
• According to the deputy governor of the RBI, India is on course to have a $5 trillion GDP by
2027 and there are currently no symptoms of overheating. He also stated that present
rates of credit expansion do not signal any systemic concern. According to the most recent
RBI data, bank loans climbed 19.8% YoY in the two weeks ending Aug 25, 2023. The net
interest margin in the banking system, which typically hovering around 3.8% and are below
the 5% ceiling, are also in good shape.
9
Global News/Economy
• The U.S. Fed kept interest rates unchanged. However, the central bank's latest projections
suggest Fed officials expect one more rate hike this year. The U.S. Fed said it decided to
maintain the target range for the federal funds rate at 5.25 to 5.50% after raising rates by
25 basis points in Jul 2023.
• According to official data, U.K. retail sales expanded of 0.4% in Aug 2023, in contrast to the
1.1% decline seen in Jul 2023. However, sales volume fell short of the economists'
predicted increase of 0.5%.
• The Bank of England kept its benchmark rate unchanged at 5.25% unexpectedly for the
first time since Nov 2021 as inflation eased, while the economy is moving closer to a mild
recession.
• According to the Office for National Statistics, U.K. consumer price index posted an annual
increase of 6.7% in Aug 2023 after rising 6.8% in Jul 2023.
• Japan’s Central bank decided to retain a negative interest rate of 0.1% on current accounts
that financial institutions maintain at the central bank. The Bank of Japan board also voted
to keep the cap on the 10-year Japanese government bonds yield at around zero percent.
• Hong Kong’s central bank decided to keep its benchmark rate unchanged at 5.75%.
• According to The People's Bank of China, the one-year loan prime rate was kept
unchanged at 3.45% and the five-year LPR, the benchmark for mortgage rates, was
retained at 4.20%.
10
Global Equity Markets
U.S.
Global Indices
•
U.S. equity markets fell initially as
1-Week YTD
Indices 22-Sep-23
Return Return
market participants awaited the
outcome of the much-anticipated U.S.
Russell 3000 2,115.24 -3.39% 23.21%
Federal Reserve monetary policy review.
Nasdaq 100 14,701.1 -3.30% 34.38%
Markets fell further as concerns about
FTSE 100 7,683.91 -0.36% 3.12%
the outlook for interest rates continued
DAX Index 15,557.29 -2.12% 11.73%
to weigh on the markets after the U.S.
Nikkei Average 32,402.41 -3.37% 24.17%
Federal Reserve left interest rates
Straits Times 3,204.82 -2.31% -1.43%
Source: Refinitiv Value as on Sep 22, 2023
unchanged as widely expected but
forecasted another rate hike before the
Europe end of the year.
• European equity markets fell as concerns of further monetary policy tightening and its
impact on global growth weighed on the markets. The U.S. Federal Reserve kept interest
rates on hold but indicated another rate hike by the end of the year. Meanwhile, Bank of
England left its policy rate unchanged. However, further losses were restricted after U.K.
consumer price inflation slowed in Aug 2023 and U.K. retail sales rose in the same month.
Asia
• Asian equity markets closed on a mixed note. Markets remained under pressure on
concerns that the U.S. Federal Reserve will keep interest rates at higher levels for an
extended period to combat high inflation.
11
Global Debt (U.S.)
• Yields on the 10-year U.S. Treasury rose
US 10-Year Treasury Yield Movement 12 bps to close at 4.44% from the
previous week’s close of 4.32%.
4.50
• U.S. Treasury prices plunged after U.S.
Federal Reserve surprised market
4.40
Yield in %
participants by predicting lesser rate

cuts in 2024 than it previously expected
4.30 in its latest monetary policy review. Also
the U.S. central bank may raise rates in
the current year by one more time as it
4.20
18-Sep 19-Sep 20-Sep 21-Sep 22-Sep fights to bring inflation closer to its 2%
Source: Refinitiv annual target.
• Losses were restricted as investors were
waiting for key economic data for the
future outlook of interest rates.
12
Commodities Market
Global Commodity Movement Gold
11.60 Rebased to 10 • Gold prices fell initially on growing chances
Global Commodity Prices
11.20 -0.93% that the U.S. Federal Reserve may keep

interest rates at higher levels for an
10.80
extended period to combat high inflation.
10.40 However, losses were neutralized, and gold
0.07%
10.00 2.27% prices rose marginally over the week as
9.60 market participants awaited the release of
23-Aug-23 2-Sep-23 12-Sep-23 22-Sep-23 key U.S. economic data.
Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl) Brent Crude
Source: Refinitiv
• Brent crude oil prices fell after the U.S.
Performance of various commodities Federal Reserve indicated that interest
Commodities Last Closing* 1-Week Ago rates may remain at higher levels for an
Brent Crude($/Barrel) 95.23 96.12 extended period. However, supply
Gold ($/Oz) 1,924.99 1,923.58 concerns due to Russia’s fuel export ban
Gold (Rs/10 gm) 58,870 58,790 restricted further losses.
Silver ($/Oz) 23.53 23.01 Baltic Dry Index
Silver (Rs/Kg) 73,004 71,564
• The index rose over the week due to
Source: Refinitiv *Value as on Sep 22, 2023
improved capesize and panamax activities.
13
Currencies Markets
Rupee
Currency Movement • The Indian rupee in the spot trade rose against
10.10 Rebased to 10 the U.S. dollar because of falling crude oil prices
Currency Prices ( in terms of
-0.13% and greenback selling by the RBI.

9.90
-0.52%
Euro
INR)
• Euro was steady against the U.S. dollar as initial

-0.25%
9.70 gains tracking rise in German bund yields was
-1.32% neutralized after a survey showed that the
9.50 entire euro zone indicated that GDP probably
22-Aug-23 1-Sep-23 11-Sep-23 22-Sep-23
21-Sep-23 shrank in the third quarter.
Source: Refinitiv
USD GBP Euro JPY Pound
• Pound declined against the U.S. dollar as the
Movement of Rupee vs Other Currencies
latest set of data on economic activity from
Currency Last Closing* 1-Wk Ago around the world demonstrated the U.S.'
US Dollar 82.95 83.06 superior position than other major economies.
Pound Sterling 101.87 103.23 Yen
EURO 88.35 88.57 • Yen fell against the U.S. dollar as the latest set
of data on economic activity from around the
100 Yen 55.99 56.28
world demonstrated the U.S.' superior position
Source: Refinitiv Figures in INR , *Value as on Sep 22, 2023
compared to major economies.
14
The Week that was…
18th Sep to 22nd Sep
15
The Week that was (Sep 18 – Sep 22)
Present Previous
Date Events
Value Value
Monday, • U.S. NAHB Housing Market Index (Sep) 45 50

September 18, 2023 • Germany 12-Month Bubill Auction 3.73% 3.61%
• Eurozone Core Harmonized Index of Consumer Prices (YoY)(Aug) 5.30% 5.30%

Tuesday,
September 19, 2023 • U.S. Housing Starts (MoM)(Aug) 1.283M 1.447M
• Japan Exports (YoY)(Aug) -0.80% -0.30%
• China PBoC Interest Rate Decision 3.45% 3.45%
• U.K. Consumer Price Index (YoY)(Aug) 6.70% 6.80%
Wednesday,
• U.K. Retail Price Index (YoY)(Aug) 9.10% 9%
September 20, 2023
• U.S. Fed Interest Rate Decision 5.50% 5.50%
• Germany Producer Price Index (YoY)(Aug) -12.60% -6%
• Bank of England Interest Rate Decision 5.25% 5.25%
• U.S. Initial Jobless Claims (Sep 15) 201K 221K
Thursday,
September 21, 2023 • U.K. GfK Consumer Confidence(Sep) -21 -25
• Eurozone Consumer Confidence(Sep) PREL -17.8 -16
• Japan National CPI ex-Fresh Food (YoY)(Aug) 3.10% 3.10%
Friday, • Bank of Japan Interest Rate Decision -0.10% -0.10%

September 22, 2023 • U.K. Retail Sales (MoM)(Aug) 0.40% -1.10%
16
The Week Ahead
25th Sep to 29th Sep
17
The Week Ahead
Day Event
Monday, • German IFO – Business Climate (Sep)
Sep 25, 2023 • Japan Corporate Service Price Index (YoY)(Aug)
Tuesday, • U.S. Housing Price Index (MoM) (Jul)

• Bank of Japan Monetary Policy Meeting Minutes
Sep 26, 2023 • U.S. Consumer Confidence (Sep)
Wednesday, • Germany Gfk Consumer Confidence Survey (Oct)
Sep 27, 2023 • U.S. Durable Goods Orders (Aug)
• Eurozone Business Climate (Sep)

Thursday, • Germany Consumer Price Index (YoY) (Sep) PREL
Sep 28, 2023 • U.S. Gross Domestic Product Annualized(Q2)
• U.S. Personal Consumption Expenditures Prices (QoQ)(Q2)
• India Infrastructure Output (YoY) (Aug)
• India Current Account (Q2)
Friday, • U.K. Gross Domestic Product (QoQ)(Q2)
Sep 29, 2023 • Germany Retail Sales (YoY) (Aug)
• Eurozone Core Harmonized Index of Consumer Prices (MoM)(Sep) PREL
• U.S. Core Personal Consumption Expenditures - Price Index (YoY)(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
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19
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NEWS U CAN USE

September 22, 2023

5 Year 7.31 7.54 23 • Difference in spread between AAA corporate bond

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

participants by predicting lesser rate

11.20 -0.93% that the U.S. Federal Reserve may keep

-0.13% and greenback selling by the RBI.

• Euro was steady against the U.S. dollar as initial

Monday, • U.S. NAHB Housing Market Index (Sep) 45 50

• Eurozone Core Harmonized Index of Consumer Prices (YoY)(Aug) 5.30% 5.30%

Friday, • Bank of Japan Interest Rate Decision -0.10% -0.10%

Tuesday, • U.S. Housing Price Index (MoM) (Jul)

• Eurozone Business Climate (Sep)

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