Dhara Mehta, CFA– dhara.mehta@nirmalbang.

com
Direct Line: 022-6273-8065

Table of Content Teresa John, CFA – teresa.john@nirmalbang.com

Mohit Khanchandani – mohit.khanchandani@nirmalbang.com
Pratik Matkar – pratik.matkar@nirmalbang.com

Section Page No.

NBIE Insights 3-9
Globe Trotting 10-20
Domestic Indicators 21-36
Market Indicators 37-43
Technical Charts To Watch 44-48
NBIE Top Picks 49

All Source: Bloomberg, NBIE Research

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NBIE - Global Insights

 Last week of the fortnight - the Dow fell by 5.6%, S&P 500 dropped 4.9% and the Nasdaq lost 2.3%. The declines
followed three straight weeks of gains for major US indices, led by shares of airlines, energy companies, banks
and other economically sensitive firms. Most Developed Markets are up 17%/30% in the last 3 months. Nasdaq is
up 33% in the last 3 months and YTD it is up 11.3% YoY. Brazilian market continues to rise every week from
March. The index is up +28% in the last 3 months, second best to Italy. Global yields have been on the rise. US
treasury yields have been rising since the start of June with average yields up by 12-15bps in the last 30 days.
Nifty has been one of the worst performing markets globally. Nifty’s last 3 months’ return is 4%, second worst to
Indonesia (0.55%).
 US markets have been on a roll since March with most of the US indices +15%/33% in the last 3 months. Further
adding to the boost was the Federal Reserve with its comment on expanding the scope of its US$750bn
emergency corporate debt loan facility to include individual corporate bonds. Nasdaq ended the fortnight less
than 3% off its all-time closing high set on June 10, with its biggest gains coming from FAANGS basket. In the
last 3 months, the FAANGs are up at least 40% followed by banking stocks like Citi and JP Morgan which are up
in high teens to high 30%.
 After the huge rise global, rally is simmering and down from its highs in the last fortnight. In the last 5 years in
USD terms – FTSE World is +21.49%, MSCI EM is 0.1% and Nifty is 3.08%. In the last fortnight in USD terms –
FTSE World is +0.43%, MSCI EM is 1.56% while Nifty has underperformed sharply by delivering negative 0.66%.

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NBIE - Global Insights
 FTSE World retraces from its +1.5SD levels last fortnight after rising from -1.5%. The market is up 2x on valuations in a
matter of 3 months. MSCI EM has finally made a move past a crucial level. However, if one were to map the previous
history, in the last 4 years it has stayed above this level for duration of 3-5 months only in 2016, rest of the times the
market has collapsed sharply exactly from there. After a sharp rise (yet to pass the previous peak levels) DJIA has
retraced. The trend remains positive as long as it remains above the +1 SD mark. Nikkei has seen the sharpest and the
highest move up among all markets in the last 3 months. This kind of move is first in the last 2 decades. Need to
monitor more to see if it is sustainable.
 As expected, DAX continues to be the second best index in the world in the last 3 months. However, in the last fortnight,
without any significant bearish leverage in sight, there is a high chance that investors chose to take a bit of profit.
Market is consolidating at highs. China markets are in a kangaroo mode. The markets are not giving any big indication
of up or down move in the near term. Stay invested. BOVESPA has baffled us completely. It has remained above +2SD
now for one whole month. We were expecting the markets to come off, but it is yet to show us any down move. Stay
Neutral. Nifty has remained below -1SD now for 3 straight months, which no other market has done in the world. It’s
concerning. Keep one leg at the door if there is sudden rush for the exit.
 The CBOE Volatility Index, also known as the “fear gauge,” has spiked 47% in the last fortnight, as US markets have
reported their worst week since March. Other VIX indicators have cooled off from the highs, but continue to remain
above 30 mark, which is concerning. Gold VIX has witnessed traction along with the CBOE VIX.
 After a huge fall US 10-year yields have risen by 12bps in the last 1 month (0.68%/0.70%, low was 0.48%). On the other
hand, Indian yields (as we roll over to new series in June) have slipped by 25bps to 5.75% from 6.04% on June 1st. The
current spread differential between India G-SEC and USTs stands at 500bps v/s 550bps last fortnight.

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NBIE - Domestic Insights
 Readings of few high-frequency economic indicators are showing positive trend. Google mobility data shows more and more people outside their homes.
Daily average e-way bills +71% in the 1st week of June. Non-Oil exports jumped 2x MoM in recent reporting. Other lag indicators like IIP, WPI and Core
WPI continue to disappoint - reporting sharp declines.
 CPI data was not available for the second straight month as the lockdown affected data collection. As per some reporting, food inflation eased against our
expectation of a flat reading. CPI food and beverage inflation eased to 7.4% in May’20 from 8.6% MoM. This was on account of a 10.7% MoM decline in
prices of vegetables. Prices of meat & fish rose significantly more than our estimate. At the same time, inflation was below our estimate in categories
such as milk, pulses and sugar. On the core side, healthcare inflation was higher than our estimate. Overall, CPI inflation is likely to have been lower than
our estimate of 5.97%.
 India Trade data: Merchandise exports contracted by 60% and imports plunged 58% in April amid shutdown. Out of 30 major exporting items, only iron
ore (17.5%) and pharmaceuticals (0.25%) recorded growth, while among top import items, all posted declines. The sharp 59.3% decline in non-oil exports
was driven by engineering goods, gems & jewellery and textiles. REER continues to stay at 111.6 (last 10 years avg is 119). Rupee fall doesn’t suffice to
allay exporters’ woes. As per the RBI index, the rupee was still 'over-valued' by almost 16% in April among 36 currencies.
 The India Manufacturing Purchasing Managers’ Index stood at 30.8 in May compared with 27.4 in April on a seasonally-adjusted basis. New orders placed
with goods producers continued to fall after April’s record contraction. The rate of decline decelerated but was still the second-fastest since the series’
inception in March 2005. Firms cut staff at the quickest pace since data collection began over 15 years ago.
 Output of eight infrastructure sectors contracted by 38.1% in April. Cement and Steel output shrank 86% and 83.9%, respectively, while electricity and
coal output fell 22.8% and 15.5%, respectively. During 2019-20, core industries recorded 0.6% growth against 4.4% growth in 2018-19.
 Automotive retail sales in India were down 89% in May 2020. Two-wheelers registered a drop of ~89% while Passenger Vehicles saw 87% drop. As per
FADA estimates for May end, out of 26,500 outlets about 60% showrooms and 80% workshops were operational across the country.
 In the last fortnight by May end, bank credit and deposits grew 6.25% and 10.64%, respectively. On a fortnightly basis, bank advances de-grew by 0.3%.
Deposit growth remained stable on a fortnight basis. On a YoY basis, non-food credit growth decelerated to 7.3% in April 2020 from 11.9%. In April 2019
(i) Loan growth to agriculture and allied activities decelerated to 3.9% in April 2020 (ii) Growth in advances to the services sector decelerated to 11.2%
from 16.8% (iii) Personal loans growth decelerated to 12.1% compared with 15.7%.

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NBIE - Domestic Insights
 The banking system liquidity continued to remain in a surplus position during the fortnight with the outstanding liquidity surplus reducing to Rs3.75 lakh
crs, same as the previous fortnight. CP markets in India are seeing active participation from 1st timers and AAA. The weighted average call rate stood at
2.94% as on 15th June. For the first 4 days of the month, the average call money rate stood at 3.66%, but declined significantly by more than 1% by 5th
June as new series was introduced in 10 year tenure.
 Banks have reduced their FD interest rates in tandem with the RBI’s decision to cut the repo rate, low credit growth and higher deposit growth. SBI, HDFC
Bank and ICICI Bank have reduced their FD rates so much in recent months that in many cases they appear to be at par with the savings account interest
rates offered by many banks. A majority of banks are currently offering interest rates between 4% and 6% on their FDs depending on the investment
tenure and the investor’s age.
 The Indian bond market is inching toward a curious limbo and even a quickening pace of sovereign debt sales is failing to stir it up. The yield on the AAA
bond saw daily average moves nosedive to 2 basis points in June, the lowest since 2016. The moves in the AAA tapered after there was a paper floated by
IRDA urging debt investment platforms to invest more in G-SECs rather than corporate debt paper.
 The weighted average call money rate in India stood at 2.94 % as of June 15th. As 10 year paper rolled over to new series in June, the 10year yields fell
from 6.04% on June 1st to 5.78% by June 15th. The spread differential between the short term paper and long term paper has contracted now to 278bps
from 350bps in May 2020.
 The EM currencies have remained in a stable range despite the COVID pandemic increase seen highest in Asia in the last 1 month. This is more to do with
the fact 1) FED is keeping loose policy commitment till 2022, 2) Imports are declining sharply and 3) Oil prices remain low. INR has been one of the worst
performing currencies in the last 1 month despite the FX of country reaching all time high to US$500bn. We believe that the RBI is using this current flow
of FX through QIPs to shore up their reserves for times unknown ahead.
 Net inflows into equity mutual funds declined by 12% in May. Redemptions from equity schemes eased to Rs7,283.23 crore in May from Rs8,104.46 crore
in April and Rs14,237.25 crore in May 2019. Inflows through SIP saw a marginal dip to Rs8,123,03 crore in May from Rs8,376.11 crore in April. Outflow
from credit risk funds decreased to Rs5,173.04 crore in May from Rs19,507.05 crore in April. Redemptions in credit risk funds stood at Rs5,264.76 crore in
May, down from a massive Rs19,238.98 crore in April. Overall, debt funds saw an inflow of Rs63,665.54 crore in May.
 The recent rise in the market has once again moved the Pivotal Fundamental indicators past their vital levels- where the markets had earlier been
compromised and moved in a sideway directions. The earnings de-growth in India is still evolving as the annual GDP number has moved from 0.5%
growth to now -5/-6%. Given the uncertainty factor being the highest ever now, the indicators showing a sharp rise is perturbing our 6th sense.

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 NBIE - Market Insights
 May vibes moved to June as Nifty moved past the 10,000 mark in the 1st week of June and corrected to 9900. The Nifty return for the fortnight was
1.29%. Barring two sectors – FMCG (-2%) and Commodities (-0.1%), all sectors have reported positive returns. The rally was led by Reliance Industries
(+6%), followed by M&M (+10%), Bajaj Fin (+9%) and IndusInd Bank (+17%).
 Auto Index: Looking at major level resistance being crossed we can now see more buyers ready to step in whenever price trades near this major key
level. Its a big move index in the near term. Realty: The index in the last fortnight has moved above its immediate resistance curve and with strength.
But, we think it’s more to do with short covering. The sector situation is evolving right, but in the medium term it will again slide to a new low as markets
wobble in months ahead. Banking: The banking index is not able to breakout from its aversion level despite such a big rally the index has shown in the
last 30 days. There is a possibility that in the coming fortnight it will reach out to break this aversion level, but it will be a false one. The structure is not
viable as yet. Commodities: As we have stated earlier that the mix of commodity index is very fluid, with cement, OMC and Oil related industries. It’s
difficult to give direction to same. FMCG Index: The worst structure has been constructed in the FMCG Index. It’s a little eerie structure and there is a
short and medium term falls indicated in the index. Avoid. No buy on dips too. Metal & Steel: As expected, the index has broken out from its short term
halts, although progress is slow. We would have liked if the upmove in the index was with strength. The index constitution remains positive for short to
medium term. IT: The index is making a Head & Shoulder pattern printed below the support levels (major key level). If aggressive supply erupts here, it
will open to potential downside move in the near term. Short term sell. Oil & Gas: The move in the index is wholly and solely driven by Reliance
Industries, which is ~35% of the Index - rest all participants are -3/-8% in fortnight. Sell the others Oil & Gas companies. Pharma Index: The index is
forming a hump at the highs, which means it flip flops in range of +2/-1% at the highs. It’s entering a consolidation stage. Expect the index to
underperform if the Nifty rises from current levels. Short term – Neutral. Power & Infra: Solid bullish structure combined with the break out of the recent
resistance area gives us a solid confluence for another upside push. Buy. Defty: The index is still in the range with more odds of it falling further. The
risk is on the Index and the currency. Sell.
 In the last fortnight, the side markets outperformed the lead Index sharply. This has been the trend since May. In the last fortnight, the Small Cap Index
was +5.59%, Midcap +2.83% and Nifty +0.89%. The advance:decline was 0.91 average through the fortnight with lower volume participation in the broad
Index.
 FIIs have remained positive for the June fortnight as multiple QIPs and block deal participation kept them active. For June, FIIs are +Rs77bn and DIIs are
+Rs2bn. Post May, June is proving to be a month where both major participants have remained positive in the equity markets.

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NBIE - Technical Charts To Watch
 Nifty Index: After facing resistance at the 100 day moving average, Nifty witnessed a correction but it managed to find support
near the 50% retracement level (9550) of the entire rise from May’20 lows. The index has recovered from the support and is
currently consolidating. Although the short term trend remains up, the volatility is expected to continue in the near term. The levels
of 10240 will act as a hurdle for the Nifty on the upside while on the downside, the 9550 levels will continue to be a crucial
support.

 India VIX: The India VIX has witnessed a considerable decline since Mar’20 highs but it has held important supports near the
28.5 levels. The volatility index has seen some recovery from support levels over the past few trading sessions. Although the 35
mark will act as an immediate resistance, the India VIX remains at high levels which suggests the volatility in the market is
expected to continue.

 Nifty IT Index: Since making lows in Mar’20, the Nifty IT Index has witnessed a sharp recovery over the past 2 months. The
index is currently trading close to a cluster of resistances around the range of 14600-15000 (61.8% retracement level of the entire
fall from Feb’20 highs, price congestion & 50 week moving average). The short term trend of the index remains firmly up but the
levels of 14600-15000 will continue to act as a major hurdle. The 14120 mark will be the 1st support for the index on the
downside.

 USDINR: The Indian Rupee has weakened against the US Dollar over the past fortnight and the currency cross which was
consolidating near supports levels has gained upside momentum. The current up move in the currency cross can extend to the
77.3 mark which suggests the Rupee is expected to depreciate further against the Dollar.

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Conclusion
 What was labelled “the most unloved bull market in history” came to an end in March. Equity markets sold off as lockdowns to halt the spread of novel
coronavirus were implemented — ending a more than decade-long rise in stock markets. Now, that unloved market has a rival for the title as equity prices
recover in a rally driven as much by extraordinary monetary policy and the absence of decent alternatives to stocks as by optimism about the strength of
the recovery. The recovery in investors’ appetite for taking risks can be explained in part by encouraging economic news on rich countries’ progress out
of the lockdown. The jobs data and retail sales from the US, tentative affirmative signs from Europe that a recovery is under way and google mobility data
indicate that world over more people are now moving out of their homes versus last month, providing further positive confirmation of green shoots. There
is no doubt that large central banks' stimulus has played a very important part in fuelling the rally, but the market wants to believe that zero or negative
growth is behind the world in the last few months. So, the music has started and the masses therefore shall flock to the dance floor in June. Are we out
from the armageddon? No as we continue to use the phrase "we don’t know what happens in July". One factor that participants have to keep in mind is
that none of the key global VIX key indicators (Gold, Oil, CBOE VIX) have come down below 25%. Until they don’t- Play the markets by the month.

 India: There’s little doubt that many investors exited during the market lows in March and largely missed the spectacular recovery that’s occurred in stock
prices over the next three months. This has happened all over the world and we have been a part of this too. June will turn out to be a positive month for
India as we see duds delivering 40%-60% returns. Nonetheless, some indicators are showing that there is complacency among investors (Small Caps/ Mid
Caps outperformance to lead Index, volume falling at highs and lower delivery markings). Trying to extrapolate the success of a knee-jerk investment
strategy into the future is both foolish and financially irresponsible. Perhaps, if somehow a vaccine were to be developed in the coming months, we could
envision the possibility of recapturing the economic lustre of days gone by in a matter of 7/9 months. But that is a probability in the coming months.
Probability has odds on both the sides. We have said this before, but it is worth saying again: “Central bankers cannot suspend the laws of the
economics any more than they can suspend the laws of gravity”.

NBIE Smart Quote:

“A gambler can only say he’s won after he has walked away
from the table”. - d

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Institutional Equities
 •Last week of the fortnight - the Dow fell 5.6%, the S&P dropped 4.9% and the Nasdaq lost 2.3%. The declines followed three straight weeks of gains for

World Macro major U.S. indexes, led by shares of airlines, energy companies, banks, and other economically sensitive firms. Most Developed markets are up 17/30%
in last 3months. Nasdaq is the only market which is up 33% in last 3months and YTD is positive 11.3% YoY.
•Brazil continues to rise every week from March. The index is up +28% in last 3months. Second best to Italy.

Indicators • Global yields have been on rise .US treasury yields have been on rise since June with average yields up by 12-15bps in last 30days.
•Nifty has been one of worst performing market globally currently. Our last 3months returns are 4% , Second worst to Indonesia (0.55%) .

Country Equity Perform ance (%) Real GDP (YoY %) CPI (YoY %) Yields (%) CBOE Volatility Index
1W 1M 3M 2017 2018 2019 2017 2018 2019 10Y 2Y spiked 47% last
Global fortnight post Fed talks
of longer recession.
US - S&P -4.73 6.20 23.27 2.40 2.90 2.30 2.10 2.50 1.80 0.68 0.19
US - NASDAQ -1.62 6.17 33.38 2.40 2.90 2.30 2.10 2.50 1.80 0.68 0.19 NASDAQ leaders: Apple
Japan -2.44 9.53 21.29 2.20 0.30 0.70 0.50 1.00 0.50 0.01 -0.16 Inc, Amazon.com and
Microsoft . Each of
Germany -6.99 10.44 30.43 2.50 1.50 0.60 1.70 1.90 1.40 -0.45 -0.66
these stocks, set an all-
UK -5.76 2.18 17.56 1.90 1.30 1.40 2.70 2.50 1.80 0.21 -0.04 time high last fortnight
France -6.89 8.32 20.96 2.30 1.70 1.30 1.20 2.10 1.30 -0.04 -0.54
Italy -6.44 8.47 27.98 1.70 0.80 0.30 1.30 1.30 0.70 1.46 0.19
Canada -3.65 2.93 23.18 3.20 2.00 1.60 1.60 2.30 1.90 0.50 0.29
Australia -2.52 8.32 10.51 2.50 2.80 1.80 1.90 1.90 1.60 0.86 0.27
Sw itzerland -3.87 0.80 21.53 1.90 2.80 0.90 0.50 1.00 0.40 -0.43 -0.67
Others
Emerging markets
China -0.19 1.40 0.36 6.90 6.70 6.10 1.60 2.10 2.90 2.81 2.21
facing draught in
India -1.66 8.56 4.48 8.30 7.00 6.10 3.30 4.00 3.70 5.79 4.39 midst of global
Brazil -1.95 19.16 27.85 1.30 1.30 1.10 3.50 3.70 3.70 6.86 3.71 liquidity run, as
South Korea -2.27 10.93 16.53 3.20 2.70 2.00 1.90 1.50 0.40 1.42 0.83 The region has been
driving the rise in new
Russia -0.40 -2.19 8.75 1.80 2.50 1.30 3.70 2.90 4.50 2.68 1.49 cases, with the global
Mex ico -3.26 0.72 3.33 2.00 2.00 -0.10 6.00 4.90 3.60 6.00 4.88 total passing the 7.2
Indonesia -1.34 6.80 0.55 5.10 5.20 5.00 3.80 3.20 3.00 7.24 5.94 million mark as of 9
June, and Latin
Taiw an -0.38 5.13 10.05 3.30 2.80 2.70 0.60 1.40 0.60 0.49 0.29
America, India, and
HongKong -1.80 1.22 1.13 3.80 2.90 -1.20 1.50 2.40 2.90 0.78 1.53 the Middle East the
Malay sia -0.56 12.29 10.39 5.70 4.70 4.30 3.90 1.00 0.70 2.91 2.21 current hot spots.
Vietnam -2.55 3.44 12.56 6.80 7.10 6.90 2.60 3.00 5.20 3.08 1.01

GLOBE TROTTING
11
 S&P - Sector • US markets have been on roll since March as most of the US indices are +15/33% in last 3months.
•Further add to the boost was the Federal Reserve with its comment on expanding the scope of its $750 billion emergency corporate

Performance
debt loan facility to include individual corporate bonds.
• Nasdaq ended the fortnight less than 3% off its all-time closing high set on June 10, with its biggest gains coming from FAANGS
basket. In last 3months the FAANGs are up atleast 40% followed then by Banking stocks like Citi and JP Morgan which are up in high
& Valuation teens to high 30%.

Sector Monthly Sector Performance (%) PE (x)

1W 1M 3M 2020E 2021E 30 Monthly Sector Performance (%)
IT -2.0 6.5 32.7 25.8 22.3 25
20
Financials -9.3 12.0 17.9 17.2 12.3
15
Health Care -5.5 -2.0 15.7 16.9 14.5 10
Cons. Discretionary -3.2 9.3 32.9 50.3 26.0 5
Industrials -8.0 13.7 18.8 30.6 18.1 -
(5)
Cons. Staples -3.9 0.8 11.4 20.1 18.6

Telecom
IT

Utilities
Industrials
Health Care

Materials

Autos
Cons. Discretionary

Energy

Real Estate
Cons. Staples
Financials
Energy -11.0 6.5 37.0 NA 42.3
Utilities -4.1 5.9 8.6 18.2 17.2
Real Estate -4.0 12.8 10.5 47.2 43.8
Materials -8.0 8.2 27.7 23.6 18.3
Autos -9.6 26.3 21.2 NA 10.2
Telecom -2.8 5.2 25.2 22.0 18.1

Nasdaq is currently the best performing

Indices in the world- with it being 11% up
Y0Y and just about 0.5% away from highs.

GLOBE TROTTING
12
 • After the huge rise- global rally is simmering and down from its highs in last fortnight.
World vs • In last 5years in USD terms – FTSE World is +21.49%, MSCI EM is 0.1% and Nifty is 3.08%
• In last fortnight in USD terms – FTSE World is +0.43%, MSCI EM is 1.56% and Nifty has underperformed sharply by delivering

EM & India
negative 0.66%.

150

140

130

120

110

100

90

80

70
Apr/15

Apr/16

Apr/17

Apr/18

Apr/19

Apr/20
Oct/15

Oct/16

Oct/17

Oct/18

Oct/19
Dec/15

Dec/16

Dec/17

Dec/18

Dec/19
Aug/16

Aug/19
Aug/15

Aug/17

Aug/18
Feb/15

Jun/15

Feb/17

Jun/17

Feb/19

Jun/19
Feb/16

Jun/16

Feb/18

Jun/18

Feb/20

Jun/20
MSCI India (%) MSCI EM (%) MSCI World (%)

GLOBE TROTTING
13
 • FTSE World retraces from its +1.5SD levels last fortnight after rising from -1.5%. The market is up 2x on valuations in a matter of 3months.

Global P/E
• MSCI EM finally makes a move pass a crucial level. However if one were to map the previous history, in last 4years- it has stayed above these
levels for a duration of 3-5months only in 2016, rest of the other time frames- the market has collapsed sharply exactly from there.
• DJIA after a sharp rise (yet to pass the previous peak levels) has retraced from there. The trend remains positive as long as it remains above
Indices the +1 SD mark.
•Nikkei saw the sharpest and highest move up in all markets in last 3months. This kind of move is first time in last 2 decades. Need to monitor
more to see if its sustainable.

23 FTSE WORLD INDEX 18

22 MSCI (EM)
17
21
20 16
19 15
18
14
17
13
16
15 12

14 11
13
10
Sep/15

Sep/16

Sep/17

Sep/18

Sep/19
Nov/15

Nov/17

Nov/18

Nov/19
Nov/16
Jul/15

Jul/18

Jul/19
May/15

May/16
Jul/16

Jul/17

May/18

May/19

May/20
May/17
Jan/15
Mar/15

Jan/16
Mar/16

Jan/17

Jan/18

Jan/19
Mar/17

Mar/18

Mar/19

Jan/20
Mar/20

Nov/15

Nov/16

Nov/17

Nov/18

Nov/19
Sep/15

Sep/16

Sep/17

Sep/18

Sep/19
Jul/15

Jul/16

Jul/17

Jul/19
May/15

May/16

May/17

May/18
Jul/18

May/20
May/19
Jan/15

Jan/16

Jan/17

Jan/18

Jan/19

Jan/20
Mar/15

Mar/16

Mar/17

Mar/18

Mar/19

Mar/20
PE MEAN +1SD -1SD
PE MEAN +1SD -1SD

22 DOW JONES INDUSTRIAL AVERAGE

NIKKEI 225
21
20 27
19 25
18 23
17 21
16 19
15 17
14 15
13 13
Sep/15

Sep/16

Sep/17

Sep/18

Sep/19
Nov/15

Nov/17

Nov/18

Nov/19
Nov/16
Jul/15

Jul/18

Jul/19
May/15

May/16
Jul/16

Jul/17

May/18

May/19

May/20
May/17
Jan/15

Jan/16

Jan/17

Jan/18

Jan/19

Jan/20
Mar/15

Mar/16

Mar/17

Mar/18

Mar/19

Mar/20

Nov/15

Nov/16

Nov/17

Nov/18

Nov/19
Sep/15

Sep/16

Sep/17

Sep/18

Sep/19
May/15
Jul/15

May/16
Jul/16

May/17
Jul/17

May/18
Jul/18

May/19
Jul/19

May/20
Mar/15

Mar/16

Mar/17

Mar/18

Mar/19

Mar/20
Jan/15

Jan/16

Jan/17

Jan/18

Jan/19

Jan/20
PE MEAN +1SD -1SD
PE MEAN +1SD -1SD

GLOBE TROTTING
14
 •As expected DAX continue is the second best index in the world in last 3months. However in last fortnight without any significant bearish

Global P/E
leverage in sight, there is a high chance that investors chose to take a bit of profit. Markets is consolidating at highs.
•China markets are in a kangaroo mode. The markets are not giving any big indication of up or down in near term. Stay invested.
•BOVESPA has baffled us completely. It has remained above +2SD now for one whole month. We were expecting the markets to come off-
Indices however its yet to show us any down move. Stay Neutral.
•Nifty has remained below -1SD now fro 3straight months- which no other markets have in the world. Its concerning. Keep one leg at the door if
there are sudden rush for exits.
22 SHANGHAI SE COMPOSITE
21
DAX INDEX
20
26 19
24 18
17
22
16
20 15
14
18
13
16 12
14 11
10
12

Apr/16

Apr/17

Apr/18

Apr/19
Aug/15

Aug/16

Aug/17

Aug/18
Dec/15

Dec/16

Dec/17

Dec/18

Nov/19
Jul/19
May/15
Jan/15

Mar/20
Nov/15

Nov/16

Nov/17

Nov/18

Nov/19
Jul/15
Sep/15

Jul/16

Jul/17

Jul/18

Jul/19
May/15

May/16

Sep/16

May/17

Sep/17

May/18

Sep/18

May/19

Sep/19

May/20
Jan/15

Jan/16

Jan/17

Jan/18

Jan/19

Jan/20
Mar/17

Mar/18

Mar/19

Mar/20
Mar/15

Mar/16

PE MEAN +1SD -1SD

PE MEAN +1SD -1SD

28 BRAZIL IBOVESPA INDEX NIFTY 50

26 28
24 27
26
22 25
24
20 23
18 22
21
16 20
19
14 18
17
12 16
10 15
14
8

Nov/15

Nov/16

Nov/17

Nov/18

Nov/19
Jul/15
Sep/15

Jul/16
Sep/16

Jul/17
Sep/17

Jul/18

Jul/19
Sep/19
May/15

May/16

May/17

May/18

Sep/18

May/19

May/20
Jan/15

Jan/16

Jan/17

Jan/18

Jan/19

Jan/20
Mar/16

Mar/17

Mar/19
Mar/15

Mar/18

Mar/20
Sep/15

Sep/16

Sep/17

Sep/18

Sep/19
Nov/15

Nov/16

Nov/17

Nov/18

Nov/19
Jul/15

Jul/17

Jul/18

Jul/19
May/16
Jul/16

May/17

May/18

May/19

May/20
May/15

Jan/16

Jan/17

Jan/18

Jan/19

Jan/20
Jan/15
Mar/15

Mar/16

Mar/17

Mar/18

Mar/19

Mar/20

PE MEAN +1SD -1SD PE MEAN +1SD -1SD

GLOBE TROTTING
15
 (USD)

600
1100
1600
2100
2600
3100
Jan-09
May-09
Aug-09
Nov-09
Feb-10
Jun-10
Sep-10
Dec-10
Mar-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Nov-12
Feb-13
May-13
Aug-13
Nov-13

S&P 500 Index (L1)

Mar-14
Jun-14
Sep-14
Dec-14
Apr-15
Jul-15
Oct-15
Jan-16
Apr-16
Aug-16
Global Money Supply (R1)

Nov-16
Feb-17
May-17
Sep-17
Dec-17
Global Money Supply Flow

Mar-18
Jun-18
Sep-18
Jan-19
Apr-19
Jul-19
Oct-19
Feb-20
May-20
(USD Tn)

37
42
47
52
57
62
67
72
77
82

16
Performance of various asset classes

1M Returns (%)

Junk Bond
Natural Gas
Palladium
Bitcoin
DAX Index
REITs
Gasoline RBOB
Heating Oil
Crude Oil- Brent
Tesla
Crude Oil- WTI
Short Term Bond
Bank of India
Zoominfo Technologies

-40 -20 0 20 40 60 80 100 120 140 160

GLOBE TROTTING
17
 10
20
30
40
50
60
70
80
90

10
20
30
40
50
60

-
Jan/15
Jan/15 Feb/15
Feb/15 Mar/15
Mar/15 Apr/15
Apr/15 May/15
May/15 Jun/15
Jun/15 Jul/15
Jul/15 Aug/15
Aug/15 Sep/15
Sep/15 Oct/15
Oct/15 Nov/15
Nov/15 Dec/15
Dec/15 Jan/16
Jan/16 Feb/16
Feb/16 Mar/16
Apr/16
Indices
Mar/16 May/16
Apr/16
Volatility

May/16 Jun/16
Jun/16 Jul/16
Jul/16 Aug/16
Aug/16 Sep/16
Sep/16 Oct/16
Oct/16 Nov/16
Nov/16 Dec/16
Dec/16 Jan/17
Jan/17 Feb/17
Feb/17 Mar/17
Mar/17 Apr/17
Apr/17 May/17
May/17 Jun/17
Jun/17 Jul/17
Jul/17 Aug/17
Aug/17 Sep/17
Sep/17 Oct/17
INDIA VIX

Oct/17 Nov/17
Dec/17

GOLD VIX
Nov/17 Jan/18
Dec/17 Feb/18
Jan/18 Mar/18
Feb/18 Apr/18
Mar/18 May/18
Apr/18 Jun/18
May/18 Jul/18
Jun/18 Aug/18
Jul/18 Sep/18
Aug/18 Oct/18
Sep/18 Nov/18
Oct/18 Dec/18
Nov/18 Jan/19
Dec/18 Feb/19
Jan/19 Mar/19
Feb/19 Apr/19
Mar/19 May/19
Apr/19 Jun/19
May/19 Jul/19
Jun/19 Aug/19
Jul/19 Sep/19
Aug/19 Oct/19
Sep/19 Nov/19
Oct/19 Dec/19
Nov/19 Jan/20
Dec/19 Feb/20
Jan/20 Mar/20
Feb/20 Apr/20
Mar/20 May/20
Apr/20 Jun/20
May/20
Jun/20
•Gold VIX has initiated traction along with CBOE VIX.

10
20
30
40
50
60
70
80
90

-
50

-
100
150
200
250
300
350

Jan/15
Feb/15
Mar/15 Jan/15
Apr/15 Feb/15
May/15 Mar/15
Jun/15 Apr/15
Jul/15 May/15
Aug/15 Jun/15
Sep/15 Jul/15
Oct/15 Aug/15
Nov/15 Sep/15
Dec/15 Oct/15
Jan/16 Nov/15
Feb/16 Dec/15
Mar/16 Jan/16
Apr/16 Feb/16
May/16 Mar/16
Jun/16 Apr/16
Jul/16 May/16
Aug/16 Jun/16
Sep/16 Jul/16
Oct/16 Aug/16
Nov/16 Sep/16
Dec/16 Oct/16
Jan/17 Nov/16
Feb/17 Dec/16
Mar/17 Jan/17
Apr/17 Feb/17
May/17 Mar/17
Jun/17 Apr/17
Jul/17 May/17
Aug/17 Jun/17
Sep/17 Jul/17
Oct/17 Aug/17
US VIX

Nov/17 Sep/17
Dec/17 Oct/17
OIL VIX

Jan/18 Nov/17
Feb/18 Dec/17
Mar/18 Jan/18
Apr/18 Feb/18
May/18 Mar/18
Jun/18 Apr/18
Jul/18 May/18
Aug/18 Jun/18
Sep/18 Jul/18
Oct/18 Aug/18
Nov/18 Sep/18
Dec/18 Oct/18
Jan/19 Nov/18
Feb/19 Dec/18
Mar/19 Jan/19
Apr/19 Feb/19
May/19 Mar/19
Jun/19 Apr/19
Jul/19 May/19
Aug/19 Jun/19
Sep/19 Jul/19
Oct/19 Aug/19
Nov/19 Sep/19
Dec/19 Oct/19
Jan/20 Nov/19
Feb/20 Dec/19
Mar/20
• Other VIX indicators have cooled off from the highs-they were at –however continue to remain above 30% mark- which is concerning.

Apr/20 Jan/20
•CBOE Volatility Index also known as the “fear gauge,” spiked 47% last fortnight , as US markets reported the worst week since March.

May/20 Feb/20
Jun/20 Mar/20
Apr/20
May/20
Jun/20
GLOBE TROTTING
18
 Global Fundamental Indicators

Index PE Ratio (x) PBV Ratio (x) ROE (%) Div Yield (%)
2020E 2021E 2020E 2021E 2020E 2021E 2020E 2021E
DOW JONES INDUS. AVG 23.2 17.3 3.6 3.4 20.5 32.8 2.5 2.6
NASDAQ COMPOSITE INDEX 35.4 25.7 5.2 4.5 31.8 34.2 0.9 1.0
S&P 500 INDEX 24.0 18.6 3.3 3.1 14.5 18.8 2.0 2.1
RUSSELL 2000 INDEX 85.6 28.8 1.8 1.7 240.3 5.1 1.2 1.2
NIKKEI 225 20.2 16.2 1.6 1.5 7.7 8.8 2.0 2.2
DAX INDEX 19.8 13.6 1.4 1.3 6.4 8.6 3.0 3.4
FTSE 100 INDEX 18.5 13.3 1.4 1.4 3.4 6.4 4.0 4.6
CAC 40 INDEX 21.2 15.0 1.4 1.3 5.2 7.2 3.1 3.6
FTSE MIB INDEX 21.4 13.0 1.0 0.9 5.5 6.7 3.9 4.5
S&P/TSX COMPOSITE INDEX 25.2 15.7 1.5 1.4 6.9 9.5 3.5 3.5
ALL ORDINARIES INDX 20.0 18.0 1.8 1.7 9.5 9.4 3.3 3.7
SWISS MARKET INDEX 18.8 15.8 2.3 2.2 13.1 13.1 3.3 3.5

CSI 300 INDEX 12.9 11.2 1.6 1.5 10.9 11.0 2.4 2.7
Nifty 50 18.7 13.9 2.1 1.9 11.4 13.6 1.8 2.1
BRAZIL IBOVESPA INDEX 24.0 11.9 1.4 1.3 7.3 12.3 3.1 4.1
KOSPI INDEX 14.4 10.1 0.8 0.8 5.2 11.8 2.2 2.5
S&P/BMV IPC 20.4 11.8 1.0 0.9 12.4 19.6 3.0 4.1
JAKARTA COMPOSITE INDEX 15.5 12.5 1.7 1.6 13.3 15.5 2.7 2.6
TAIWAN TAIEX INDEX 17.4 15.2 1.8 1.7 12.7 13.3 3.6 4.0
HANG SENG INDEX 11.1 9.4 0.9 0.9 10.4 10.4 3.6 4.4
FTSE BURSA MALAYSIA EMAS 20.0 16.2 1.3 1.3 6.2 7.4 3.0 3.4
HO CHI MINH STOCK INDEX 14.4 11.5 2.0 1.8 15.5 16.6 1.8 2.1

GLOBE TROTTING
19
 •After a huge fall in US 10year yields- they have moved up by 12bps in last 1month (0.68/0.70%, low was 0.48)

Liquidity & Valuation • On the contrarian- India yields ( as we roll over to new series in June), has slipped 25bps to 5.75 from 6.04% on june
1st.
•The current spread differential between India GSEC and USTs stands at 500bps v/s 550bps last fortnight.
Indicators

8.5 10 Year Yields - India Vs US 3.5

8.0 3.0 The spread

Difference between
7.5 2.5 India 10year and US
10year has
7.0 2.0 contracted from the
highs of 550bps to
6.5 1.5 500bps. Last year
6.0 1.0 the average range
was 470-480bps.
5.5 0.5

5.0 -
Apr/16

Apr/17

Apr/18

Apr/19

Apr/20
Dec/15

Dec/16

Dec/17

Dec/18

Dec/19
Aug/15

Aug/17

Aug/19
Aug/16

Aug/18
India 10 Yr (%) US 10 Yr (%) (RHS)

NIFTY - Volatility & Valuation

13,000 75 India VIX continues
to be a volatile zone,
12,000 65 It continues to
11,000 remain in between
55
30-33%. Number
10,000
45 above 25% is
9,000 concerning.
35
8,000
25
7,000

6,000 15

5,000 5
Apr/15

Apr/16

Apr/17

Apr/18

Apr/19

Apr/20
Oct/15

Oct/16

Oct/17

Oct/18

Oct/19
Dec/15

Dec/16

Dec/17

Dec/18

Dec/19
Aug/15

Aug/18
Aug/16

Aug/17

Aug/19
Jun/15

Jun/16

Jun/17

Jun/18

Jun/19

Jun/20
Feb/16

Feb/17

Feb/18

Feb/19

Feb/20
NIFTY VIX P/E (RHS) AVERAGE PE

GLOBE TROTTING
20
 Back

Institutional Equities
 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20
Currency in circulation (% YoY) 17.0 14.5 14.2 12.7 13.0 12.9 13.6 15.1 12.8 11.9 11.9 11.5 14.5 15.7 18.4
M3 (% YoY) 10.5 10.0 10.3 10.1 10.6 9.8 9.6 10.6 9.8 10.4 11.2 10.2 8.9 10.7 11.5
Rural wage (% YoY) 5.7 5.2 5.1 4.4 5.0 3.5 3.5 2.8 2.6 3.3 4.5
Consumer durable production (% YoY) (3.1) 2.2 0.3 (10.2) (2.7) (9.1) (9.9) (18.8) (1.6) (5.4) (3.8) (6.4) (36.5) (95.7)
Consumer non-durable production (% YoY) 1.0 5.9 8.1 7.1 8.4 3.1 (0.4) (1.8) 1.5 (3.9) (0.3) 0.0 (20.2) (36.1)
Motorvehicle sales (% YoY) (14.2) (15.9) (8.6) (12.3) (18.7) (23.5) (22.4) (12.8) (12.1) (13.1) (13.8) (19.1) (45.0) (98.0)
Passenger vehicle (% YoY) (3.0) (17.1) (20.5) (17.5) (31.0) (31.6) (23.7) 0.3 (0.8) (1.2) (6.2) (7.6) (51.0) (100.0)
Heat Map – India At A Glance

Commercial vehicle (% YoY) 0.3 (6.0) (10.0) (12.3) (25.7) (38.7) (39.1) (23.3) (15.0) (12.3) (14.0) (32.9) (88.1) (97.8)
Two wheeler (% YoY) (17.3) (16.4) (6.7) (11.7) (16.8) (22.2) (22.1) (14.4) (14.3) (16.6) (16.1) (19.8) (39.8) (96.2)
Tractor sales (15.0) (13.2) (15.7) (13.6) (13.1) (16.5) (4.7) (5.0) (13.2) 2.4 4.8 21.3 (49.9) (79.4) (54.7)
Petrol consumption (% YoY) 7.2 7.6 11.3 10.8 8.8 8.9 6.2 8.9 9.3 3.2 3.5 11.3 (16.4) (60.4) (35.3)
Diesel consumption (% YoY) 1.4 2.2 3.1 1.7 3.3 (0.9) (3.3) (7.0) 9.1 (0.1) (1.8) 6.6 (24.2) (55.6) (29.4)
Cement production (% YoY) 15.8 2.3 2.8 (1.9) 7.7 (5.1) (1.9) (7.7) 4.3 5.4 5.1 7.8 (24.7) (86.0)
Steel production (% YoY) 6.7 13.25 13.31 10.78 8.13 3.81 (1.5) (1.9) (0.1) 4.3 (1.4) 6.3 (13.1) (84.0)
IIP (% YoY) 0.4 4.3 4.6 1.2 4.3 (1.4) (4.3) (4.0) 1.8 0.1 2.1 4.5 (16.7) (55.5)
Mining (% YoY) 0.8 5.1 2.4 1.5 4.9 0.0 (8.5) (8.0) 1.8 5.7 4.3 10.0 0.0 (27.4)
Manufacturing (% YoY) 0.1 4.0 4.5 0.2 4.2 (1.6) (3.9) (2.3) 2.7 (0.7) 1.6 3.2 (20.6) (64.3)
Electricity (% YoY) 2.2 6.0 7.4 8.2 4.8 (0.9) (2.6) (12.2) (5.0) (0.1) 3.1 8.1 (6.8) (22.6)
Capital goods production (% YoY) (8.4) (1.4) (2.1) (6.9) (7.0) (20.9) (20.3) (22.0) (8.6) (18.0) (4.3) (9.7) (38.3) (92.0)
Capital goods imports (% YoY) 2.5 6.6 2.9 (6.4) 1.9 (9.3) 13.1 (0.8) (4.1) (5.2) 9.1 8.3 (36.3) (55.4) (33.9)
PMI Manufacturing Index 52.6 51.8 52.7 52.1 52.5 51.4 51.4 50.6 51.2 52.7 55.3 54.5 51.8 27.4 30.8
PMI Services Index 52.0 51.0 50.2 49.6 53.8 52.4 48.7 49.2 52.7 53.3 55.5 57.5 49.3 5.4 12.6
PMI Composite Index 52.7 51.7 51.7 50.8 53.9 52.6 49.8 49.6 52.7 53.7 56.3 57.6 50.6 7.2 14.8
Rail freight traffic (% YoY) 6.6 3.2 2.9 2.0 1.6 (6.1) (6.6) (8.1) 0.9 4.3 3.0 6.5 (13.9) (35.3) (21.3)
Air traffic (% YoY) 0.1 (4.2) 2.8 6.2 1.8 3.9 1.5 4.3 11.5 2.6 2.5 9.0 (32.8) (100.0) (97.7)
Major port tarffic (% YoY) 4.0 5.7 (0.5) (0.5) 3.5 1.2 (0.5) (5.4) (0.3) 6.1 2.5 4.5 (5.1) (21.1) (23.3)
Foreign tourist arrivals (% YoY) (4.8) 3.5 0.7 5.4 1.4 1.6 4.3 6.1 7.8 2.8 1.3 (6.6) (66.4) (100.0) (100.0)
Export growth (% YoY) 11.0 0.3 3.4 (7.8) 1.7 (6.2) (6.3) (0.6) (0.5) (1.6) (1.7) 2.9 (34.6) (60.3) (36.5)
Import growth (% YoY) 1.4 6.0 6.2 (8.4) (10.3) (13.4) (12.8) (16.3) (12.7) (8.8) (0.8) 2.5 (28.7) (58.6) (51.0)
Bank non-food credit growth (% YoY) 13.3 13.1 13.3 11.9 12.1 10.1 8.6 8.8 6.9 6.7 8.0 6.9 6.1 6.7 5.5
Personal credit (% YoY) 16.4 15.7 16.9 16.6 17.0 15.6 16.6 17.2 16.4 15.9 16.9 17.0 15.0 12.1
Credit to industry (% YoY) 6.9 6.9 6.4 6.4 6.1 3.9 2.7 3.4 2.4 1.6 2.5 0.7 0.7 1.7
Credit to services (% YoY) 17.8 16.8 14.8 13.0 15.2 13.3 7.3 6.5 4.8 6.2 8.9 6.9 7.4 11.2
Deposit growth (% YoY) 10.0 9.7 11.1 10.0 10.6 9.7 9.4 10.3 8.3 9.1 11.1 10.2 7.9 9.9 9.7
Commercial Paper issuance (% YoY) 29.7 21.3 18.2 2.5 (20.3) (21.4) (17.3) (21.3) (18.2) (16.8) (20.2) (23.2) (28.7) (23.1) (22.9)
Central Government expenditure (% YoY) (14.1) 14.0 3.5 (11.1) 23.9 25.9 34.3 9.1 5.5 32.3 (6.4) 5.2 75.0 20.6
Indirect tax (% YoY) 11.9 14.2 0.5 (0.5) (2.3) 10.1 (3.3) (18.7) 6.5 4.2 14.2 13.1 3.8 (74.9)
CPI (% YoY) 2.9 2.9 3.0 3.2 3.1 3.3 4.0 4.62 5.5 7.4 7.6 6.6 5.9
Core CPI (% YoY) 5.0 4.5 4.3 4.1 4.3 4.3 4.0 3.5 3.5 3.7 4.2 4.1 4.1
WPI (% YoY) 3.2 3.2 2.5 2.0 1.1 1.1 0.3 0.2 0.6 2.59 3.1 2.3 1.0 (3.2)
10 year G-Sec yields (% ) 7.35 7.41 7.03 6.88 6.37 6.56 6.70 6.45 6.47 6.55 6.60 6.4 6.1 6.1 5.8
Positiv e Credit to deposit ratio (% ) 77.7 77.07 76.82 77.25 76.34 75.75 75.67 75.81 76.09 76.47 75.82 75.80 76.43 74.9 73.9
Weighted average deposit rate of banks (% ) 6.89 6.89 6.89 6.89 6.85 6.87 6.84 6.75 6.68 6.55 6.52 6.45 6.38 6.07
Neutral
Weighted average lending rate of banks (% ) 10.25 10.31 10.31 10.31 10.31 10.32 10.29 10.29 10.27 10.14 10.15 10.11 10.00 9.89
Median MCLR (% ) 8.75 8.74 8.75 8.70 8.60 8.50 8.45 8.35 8.31 8.30 8.25 8.21 8.20 8.00 7.85
Watch
Negative (Red+ Amber) 19 13 18 20
2216 22 30 29 22 21 14 13 30 29 14
Negativ e Positive (Green + Blue) 26 32 27 25 29 23 15 16 23 24 31 31 14 12 6
 • India Readings of few high-frequency economic indicators are showing implied positive trend.

Domestic Macro •Google mobility data shows more and more people outside their homes.
•Daily average eway bills +71% in the 1st week of June.
•Non-Oil Exports jump 2x m-m in recent reportings.
Indicators • Other lag indicators like IIP, WPI , Core WPI continue to disappoint- reporting sharp declines.

GDP (%) IIP (%)

9.0 8.57.37.56.9 8.4
7.2 6.07.38.0
10
4.0 5.2 4.54.05.04.25.1 3.5 4.43.22.9 4.84.1 5.34.53.87.06.54.84.6 4.5 4.9 4.6
2.2 0.83.1 2.4 1.2 1.0 1.8 2.5 2.73.2 1.3 2.10.42.2
0.2 1.60.2
12.0 0
9.7 -0.3 -1.4
10.0 8.7 9.1 8.7 -6.6
-4.6
8.6 8.2 -10
7.5 7.3
8.0 7.6 8.0 7.2 7.6
8.0 7.1 6.3 7.1
6.5 6.5 5.9 6.5
5.8 6.2 -20
5.4 5.3 5.6 5.7 5.2 -18.3
6.0
4.3 4.4 4.1
-30
4.0 3.1
-40
2.0

- -50
Sep/12

Sep/13

Sep/14

Sep/15

Sep/16

Sep/17

Sep/18

Sep/19
Dec/12

Dec/13

Dec/14

Dec/18

Dec/19
Dec/15

Dec/16

Dec/17
Jun/13

Jun/14

Jun/19
Mar/13

Mar/14

Mar/15
Jun/15

Mar/16
Jun/16

Mar/17
Jun/17

Mar/18
Jun/18

Mar/19

Mar/20
-60 -55.5

Nov/15

Nov/16

Nov/17

Nov/18

Nov/19
Sep/15

Sep/16
May/16

May/17

Sep/17

May/18

Sep/18

May/19

Sep/19
Jul/16

Jul/17

Jul/18

Jul/19
Jan/16

Jan/17

Jan/18

Jan/19

Jan/20
Mar/16

Mar/17

Mar/18

Mar/19

Mar/20
Quarterly GDP (%) Average (%)

CPI (%) WPI (%) 5.7

6.0 5.5
5.1 5.3 5.25.5
4.8 4.6
4.3 4.5
8.0 7.6 3.9 4.0
7.4 3.7 3.6 3.6 3.5 3.5
4.0 3.23.1 3.1
3.02.72.7 2.9 3.22.8 2.8
2.8
7.0 6.6 2.3 2.3
1.82.1 1.9 2.0
6.1 2.0 1.11.41.3 1.21.2
5.85.8 5.8 0.6 0.9
6.0 5.65.7 5.5 5.5 0.3 0.6 0.4
5.4 5.3 0.0
5.1 5.25.1
5.0 4.8 4.9 4.94.9 -
5.0 4.6
4.4 4.4 4.44.34.6 -0.1
4.2 4.2 -0.9
3.9 4.0 -1.1
4.0 3.6 3.7 3.73.7 -2.0
3.4 3.6 -2.0
3.33.3 3.4 3.3 -2.3
3.2 3.0 3.23.2 -2.4
-2.5
3.0
3.0 2.9 3.1 -4.0 -3.21
2.6 -3.7
2.4 2.3
2.2 2.12.0
2.0 -4.8
1.5 -6.0 -5.6
1.0
-8.0
Nov/15

Nov/16

Nov/17

Nov/18

Nov/19
Sep/15

May/16
Jul/16
Sep/16

May/17
Jul/17

May/18
Jul/18
Sep/18

May/19
Jul/19

May/20
Sep/17

Sep/19
Jan/16

Jan/17

Jan/18

Jan/19

Jan/20
Mar/16

Mar/17

Mar/18

Mar/19

Mar/20
-
Dec/15

Dec/16

Dec/17

Dec/18

Dec/19
Sep/15

Sep/16

Sep/17

Sep/18

Sep/19
Jun/16

Jun/17

Jun/18

Jun/19
Mar/16

Mar/17

Mar/18

Mar/19

Mar/20

DOMESTIC INDICATORS
23
 • CPI data was not available for the second straight month as the lockdown affected data collection.

Domestic Macro •As per some reporting food inflation eased against our expectation of a flat reading. CPI food and beverage inflation eased
to 7.4% in May’20 from 8.6% MoM. This was on account of a 10.7% MoM decline in prices of vegetables
•Prices of meat & fish rose significantly more than our estimate. At the same time, inflation was below our estimate in
Indicators categories such as milk, pulses and sugar.
•On the core side, healthcare inflation was higher than our estimate. Overall, CPI inflation is likely to have been lower than our
estimate of 5.97%.

160 CPI Components

155

150

145

140

135

130

125

120

115
Oct/16

Apr/17

Oct/17

Apr/18

Oct/18

Apr/19

Oct/19

Apr/20
May/17

May/18

May/19
Sep/16

Nov/16

Sep/17

Nov/17

Sep/18

Nov/18

Sep/19

Nov/19
Dec/16

Aug/17

Dec/17

Aug/18

Dec/18

Aug/19

Dec/19
Feb/17

Feb/18

Feb/19

Feb/20
Mar/17

Mar/18

Mar/19

Mar/20
Jan/17

Jan/18

Jan/19

Jan/20
Jun/17

Jun/18

Jun/19
Jul/17

Jul/18

Jul/19
Food & Beverages Clothing & Footwear Housing
Misc: Education Misc: Health Misc: Household Goods and Services

DOMESTIC INDICATORS
24
 10.0
30.0
50.0

-70.0
-50.0
-30.0
-10.0
Aug/16 -13.8
-0.6
Oct/16 10.7
11.9
Dec/16 1.5
12.4
Feb/17 24.9
46.3
Apr/17 49.1
33.1
Jun/17 19.0
15.4
Aug/17 23.1
19.2
Oct/17 8.7
23.7
Indicators

Dec/17 21.5
27.4
Feb/18 11.9
7.2
Apr/18 4.6
14.9

88
90
92
94
96
98
100
102
104
106
Jun/18 21.3
Jun/16 30.58
Business Confidence

Aug/18 26.78
Aug/16 12.79
Oct/18 19.14
5.47
Oct/16 Dec/18 0.76
0.91
Dec/16 Feb/19 -4.55
2.09
Feb/17 Apr/19 4.48
4.31
Apr/17 Jun/19 -9.06
-10.43
Aug/19 -13.45
Jun/17 -13.85
Oct/19 -16.3
Aug/17 -12.71
Dec/19 -8.83
Oct/17 -0.7
Feb/20 2.48
India Merchandise Imports (YoY%)

-28.72
Dec/17
Apr/20 -58.65
-51.05
import items, all posted declines

Feb/18

Apr/18

Jun/18

Aug/18
-
20.0
40.0

-80.0
-60.0
-40.0
-20.0

Oct/18
Aug/16 0.1
4.1
Dec/18
India Real Effective Exchange Rate (%)

Oct/16 8.9
2.6
Feb/19 Dec/16 6.5
6.1
Apr/19 Feb/17 18.6
27.9
Apr/17 19.8
Jun/19
8.3
Jun/17 4.4
Aug/19 3.9
Aug/17 8.1
Oct/19 25.5
Oct/17 -2.0
India Merchandise Exports (YoY%)

Dec/19 31.0
Dec/17 15.7
13.7
Feb/20 Feb/18 5.3
0.1
Apr/20 Apr/18 5.2
20.2
Jun/18 17.6
14.24
Aug/18 19.07
-2.45
Oct/18 16.54
-0.84
Dec/18 0.09
• As per RBI index, the rupee was still 'over-valued' by almost 16% in April among 36 currencies

3.94
Feb/19 3.2
11.6
Apr/19 0.64
• India Trade data: Merchandise exports contract by 60%, imports plunge 58% in April amid shutdown.

3.93
Jun/19 -9.71
2.25
Aug/19 -6.05
• REER continues to stay at 111.6 (last 10years avg is 119). Rupee fall doesn’t suffice to allay exporters’ woes

-6.57
Oct/19 -1.1
• The sharp 59.3% decline in non-oil exports was driven by engineering goods, gems and jewellery, and textiles.

-0.34
Dec/19 -1.8
-1.7
Feb/20 2.91
-34.57
Apr/20 -60.28
-36.47
DOMESTIC INDICATORS
• Out of 30 major exporting items, only iron ore (17.5%) and pharmaceuticals (0.25%) recorded growth, while among top

25
 • The India Manufacturing Purchasing Managers’ Index, stood at 30.8 in May compared with 27.4 in April on a
Business Confidence seasonally-adjusted basis
• New orders placed with goods producers continued to fall after April’s record contraction. The rate of decline
decelerated but was still the second-fastest since the series’ inception in March 2005. Firms cut staff at the
Indicators quickest pace since data collection began over 15 years ago.

Manufacturing PMI Services PMI

60.0 54.7 55.3 54.5
54.3 70.0
52.4 52.1 51.0 51.6 51.2 53.1 52.3 51.7 52.2 53.1 54.0 53.2 53.9 51.8 52.7 52.1 52.5 51.4 51.4 51.2 52.7 51.8
52.6 50.6
50.0 60.0 55.5 57.5
52.6 54.2 51.5 50.9 52.2 53.7 53.2 52.2 52.5 52.0 51.0 53.8 52.4 52.7 53.3
49.6 50.2 49.6 48.7 49.2 49.3
50.0
40.0
30.8 40.0
30.0 27.4
30.0
20.0
20.0
12.6
10.0 10.0 5.4

- -

Apr/19

Apr/20
Oct/18

Oct/19
Nov/18

Dec/18

Nov/19

Dec/19
Aug/18

Sep/18

Aug/19

Sep/19
Jul/18
May/18

May/19

Jul/19

May/20
Jun/18

Jan/19

Jun/19

Jan/20
Mar/19

Mar/20
Feb/19

Feb/20
Apr/18

Apr/19

Apr/20
Oct/19
Oct/18
Dec/17

Nov/18
Dec/18

Nov/19
Dec/19
May/18

Aug/18
Sep/18
Jul/18

May/19

Jul/19
Aug/19
Sep/19

May/20
Jan/18

Jun/18

Jan/19

Jun/19

Jan/20
Feb/18

Feb/19

Feb/20
Mar/19
Mar/18

Mar/20
Composite PMI
70.0

60.0 56.3 57.6

53.3 54.1 51.9 51.6 53.0 54.5 53.6 53.6 53.8 52.7 51.7 51.7 53.9 52.6 52.7 53.7
50.4 50.8 49.8 49.6 50.6
50.0

40.0

30.0

20.0 14.8

10.0 7.2

-
Oct/18

Oct/19

Apr/20
Apr/19
Aug/18

Sep/18

Aug/19

Sep/19
Nov/18

Dec/18

Nov/19

Dec/19
May/18

Jul/18

May/19

Jul/19

May/20
Mar/19

Mar/20
Jan/19

Jun/19

Jan/20
Jun/18

Feb/19

Feb/20

DOMESTIC INDICATORS
26
 • Output of eight infrastructure sectors contracts by 38.1% in April.
Domestic • Cement and Steel output shrank 86% and 83.9% respectively, while electricity and coal output fell 22.8% and 15.5%
respectively.
• During 2019-20, core industries recorded 0.6% growth against 4.4% in 2018-19.
Industrial Indicators
100 25
35
Cement Production 40 Coal Production
90 20
30 20
80 15

25 0 70 10

60 5
20 -20
50 0

15 -40
40 -5

30 -10
10 -60

20 -15
5 -80
10 -20

0 -100 0 -25

Oct 14
Oct 14

Jun-15

Jun-16

Jun-17

Jun-18

Jun-19
Jun-15

Jun-16

Jun-17

Jun-18

Jun-19
Feb-15

Feb-16

Feb-17

Feb-18

Feb-19

Feb-20

Feb-15

Feb-16

Feb-17

Feb-18

Feb-19

Feb-20
Apr-15

Apr-16

Apr-17

Apr-18

Apr-19

Apr-20
Oct-15

Oct-16

Oct-17

Oct-18

Oct-19
Apr-15

Oct-15

Apr-16

Oct-16

Apr-17

Oct-17

Apr-18

Oct-18

Apr-19

Oct-19

Apr-20
Dec-14

Dec-15

Dec-16

Dec-17

Dec-18

Dec-19

Aug-15

Aug-16

Aug-17

Aug-18

Aug-19
Aug-19
Aug-15

Aug-16

Aug-17

Aug-18

Dec-14

Dec-16

Dec-18
Dec-15

Dec-17

Dec-19
Cement Production (Mn Tonnes) Growth (% YoY)
Coal Production (Mn Tonnes) Growth (% YoY)

140,000 Electricity Generation 25

20
120,000
15

100,000 10

5
80,000
0
60,000
-5

40,000 -10

-15
20,000
-20

0 -25
Oct 14

Jun-15

Jun-17

Jun-19
Jun-16

Jun-18
Feb-15

Feb-16

Feb-17

Feb-18

Feb-19

Feb-20
Apr-15

Apr-16

Apr-17

Apr-18

Apr-19

Apr-20
Oct-15

Oct-16

Oct-17

Oct-18

Oct-19
Aug-15

Aug-16

Aug-17

Aug-18

Aug-19
Dec-15

Dec-18
Dec-14

Dec-16

Dec-17

Dec-19
Electricity Generation (Mn KWH) Growth (% YoY)

DOMESTIC INDICATORS
27
 Auto Sales
•Automotive retail sales in India is down 89% inMay 2020
•Two-wheeler registered a drop of ~89%
•Passenger vehicles saw -87%.

YoY Growth
•FADA estimates by end-May, out of 26,500 outlets about 60 percent showrooms and 80 percent workshops were
operational across the country.

(% ) (% )
50 60
40
40
30
20
20
0
10
-20
0
-10 -40
-20 -60
-30 -80
-40 -100
Mar-19

Mar-20
Feb-19

Feb-20
Jul-18

Jul-19
Oct-18

Apr-19

Oct-19
Aug-18
Sep-18

Aug-19
Sep-19
Nov-18
Dec-18

Nov-19
Dec-19
Jan-19

Jun-19

Jan-20
May-19

Mar-19

Mar-20
Jul-18

Jul-19
Feb-19

Feb-20
Oct-18

Oct-19
Apr-19
Aug-18
Sep-18

Aug-19
Sep-19
Nov-18
Dec-18

Nov-19
Dec-19
Jun-18

Jun-19

Jan-20
Jan-19

May-19
Passenger vehicles Sales Two-wheelers M&HCV Goods LCVs Goods

Retail Sales (Units)

Category
May-20 May-19 YoY (%)
2W 1,59,039 14,19,842 (88.8)
3W 1,881 51,430 (96.3)
CV 2,711 80,392 (96.6)
PV 30,749 2,35,933 (87.0)
Tractors 8,317 34,053 (75.6)
Total 2,02,697 18,21,650 (88.9)

28
 •Bank credit and deposits grew 6.25% and 10.64% ,respectively, in the fortnight ended May 22.

Fortnightly Credit •On a fortnightly basis, bank advances de-grew by 0.3% .Deposits’ growth remained stable on a fortnight basis.
•On a YoY basis, non-food credit growth decelerated to 7.3% in April 2020 from 11.9%
•In April 2019 YoY- (i)Loan growth to agriculture and allied activities decelerated to 3.9% in April 2020, (ii)Growth in advances
Deposit Growth to the services sector decelerated to 11.2% from 16.8% (iii)Personal loans growth decelerated to 12.1 % compared with
15.7%..

System Credit Growth (All Scheduled Banks %) 18

17 System Deposit Growth (All Scheduled Banks %)
15 15

13 12

11
9
9
6
7
3
5

3 0

Sep/16

Sep/17

Sep/18

Sep/19
Nov/16

Nov/18
Nov/17

Nov/19
Jul/16
May/16

Jul/17

Jul/18
May/18

Jul/19

May/20
May/17

May/19
Jan/18
Jan/17

Mar/17

Mar/18

Jan/19

Mar/19

Jan/20

Mar/20
Nov/16

Nov/17

Nov/18

Nov/19
May/16

May/17

May/18

Sep/18

May/19

May/20
Sep/16

Sep/17

Sep/19
Jul/16

Jul/17

Jul/18

Jul/19
Jan/17

Jan/18

Jan/19

Jan/20
Mar/17

Mar/18

Mar/19

Mar/20
Credit Growth - YoY (%)

35

30

25

20

15

10

(5)

(10)
Apr/16

Apr/17

Apr/18

Apr/19

Apr/20
Oct/15

Oct/16

Oct/17

Oct/18

Oct/19
Aug/15

Aug/16

Aug/17

Aug/18

Aug/19
Dec/16

Dec/17
Dec/15

Dec/18

Dec/19
Jun/16

Jun/17

Jun/18

Jun/19
Feb/16

Feb/17

Feb/18

Feb/19

Feb/20
Personal Agri Industry Services Personal

DOMESTIC INDICATORS
29
 •The banking system liquidity continued to remain in a surplus position during the fortnight with the outstanding liquidity surplus reducing

Domestic to Rs 3.75 lakh crs , same as the previous fortnight.

•CP markets in India are seeing active participation from 1st timers and AAA.
•The weighted average call rate stood at 2.94% as 15th June . For the first 4 days of the month , the average call money rate stood at 3.66%,
Liquidity but declined significantly by more than 1% by 5th June as new series was introduced in 10year tenure.

CP
1,200 1,000
7.0 120
1,000 800
100
800 600 6.0

600 400 5.0

80

400 200 60
4.0
200 - 40

- (200) 3.0
20

(200) (400) 2.0

-
(400) (600)
1.0
Nov/1 5

Nov/1 6

Nov/1 7

Nov/1 8

Nov/1 9
Sep/1 5

Sep/1 6

Sep/1 7

Sep/1 8

Sep/1 9
May/16

May/17

May/18

May/19

May/20
Ja n/17

Ja n/18

Ja n/19

Ja n/20
Ja n/16

Mar/19

Mar/20
Mar/16

Mar/17

Mar/18
Ju l/17

Ju l/18

Ju l/19
Ju l/16

(20)

- (40)

Jul/16

Nov/16

Jul/17

Nov/17

Jul/18

Nov/18

Jul/19

Nov/19
Mar/16

Mar/17

Mar/18

Mar/19

Mar/20
Rs Bn. OMO - Sale OMO - Purchase Net OMO (RHS)
Commercial Paper OS (Rs. Tn) % YoY (RHS)

India Banking Liquidity Index

3,000

1,000

-1,000

-3,000

-5,000

-7,000

-9,000
Oct/15

Apr/16

Oct/16

Apr/17

Oct/17

Apr/19
Apr/18

Oct/18

Oct/19

Apr/20
Dec/15

Dec/16

Dec/17

Dec/18

Dec/19
Aug/16

Aug/18
Aug/17

Aug/19
Feb/16

Jun/16

Feb/17

Jun/17

Feb/18

Jun/18

Feb/19

Jun/19

Feb/20

Jun/20
DOMESTIC INDICATORS
30
 • Banks have reduced their FD interest rates in tandem with the RBI’s decision to cut the repo rates, low credit growth and

Money Supply & higher deposit growth

•SBI, HDFC Bank and ICICI Bank — have reduced the FD interest rates so much in recent months that in many cases they
appear to be at par with the savings account interest rates offered by many banks.
MCLR Rate •A majority of banks are currently offering interest rates between 4% and 6% on their FDs depending on the investment tenure
and the investor’s age.

50 9.6
Money Supply MCLR Rate (%)
40 9.4
9.2
30
9.0
20 8.8
10 8.6
8.4
-
8.2
(10)
8.0
(20) 7.8

(30) 7.6

Apr/17

Apr/18

Apr/19

Apr/20
Oct/17

Oct/19
Oct/16

Oct/18
Dec/16

Dec/17

Dec/18

Dec/19
Aug/17

Aug/19
Aug/16

Aug/18
Jun/16

Jun/17

Jun/18

Jun/19
Feb/17

Feb/18

Feb/19

Feb/20
Sep/15

Sep/16

Sep/17

Sep/18

Sep/19
Dec/15

Dec/16

Dec/18

Dec/19
Dec/17
Jun/15

Mar/16

Jun/17
Jun/16

Mar/17

Mar/18
Jun/18

Jun/19
Mar/19

Mar/20
M1 M3

10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
Jun-16

Jun-17

Jun-18

Jun-19
Feb-16

Feb-17

Feb-18

Feb-19

Feb-20
Apr-16

Apr-17

Apr-18

Apr-19

Apr-20
Oct-15

Oct-16

Oct-17

Oct-18

Oct-19
Dec-15

Dec-16

Dec-17

Dec-18

Dec-19
Aug-15

Aug-16

Aug-17

Aug-18

Aug-19
10Y Rates (%) 2Y Rates (%) Repo Rate (%) CPI (%)

DOMESTIC INDICATORS
31
 • The Indian bond market is inching toward a curious limbo and even a quickening pace of sovereign debt sales is failing to stir it up.
Bond •The yield on the AAA bond saw daily average moves nosedive to 2 basis points in June,the lowest since 2016.
•The moves in the AAA tapered after there was a paper floated by IRDA urging debt investment platforms to invest more in GSECs

Yields
rather than Corporate debt paper.

Bond Yields - AAA (%) Bond Yields - AA (%)

10.0 10.0
9.5
9.0 9.0
8.5
8.0 8.0
7.5
7.0
7.0
6.5
6.0
6.0
5.0 5.5
5.0

Sep/17

Sep/18

Sep/19
Nov/16

Nov/17

Nov/18

Nov/19
Jul/17

Jul/18
May/17

May/18

May/19
Jul/19

May/20
Mar/17

Mar/18

Mar/19

Mar/20
Jan/17

Jan/18

Jan/19

Jan/20
4.0
Nov/16

Nov/17

Nov/18

Nov/19
Sep/17

Sep/18

Sep/19
Jul/17

Jul/18

Jul/19
May/17

May/18

May/19

May/20
Jan/17

Jan/18

Jan/19

Jan/20
Mar/17

Mar/18

Mar/19

Bond Yields - A (%) Mar/20 Bond Yields - BBB (%)

11.5 13.0
11.0 12.5
10.5 12.0
10.0 11.5
9.5 11.0
9.0 10.5
8.5
8.0 10.0
7.5 9.5
7.0 9.0
6.5 8.5
6.0 8.0
5.5 7.5
Sep/17

Sep/18

Sep/19

Sep/17

Sep/18

Sep/19
Nov/16

Nov/17

Nov/18

Nov/19

Nov/16

Nov/17

Nov/18

Nov/19
Jul/17

Jul/18

Jul/19

Jul/17

Jul/18

Jul/19
May/17

May/18

May/19

May/20

May/17

May/18

May/19

May/20
Mar/17

Mar/18

Mar/19

Mar/20

Mar/17

Mar/18

Mar/19

Mar/20
Jan/17

Jan/18

Jan/19

Jan/20

Jan/17

Jan/18

Jan/19

Jan/20
DOMESTIC INDICATORS
32
 4.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5

4.5
5.0
Jan/15
Mar/15
May/15
Jul/15
Sep/15

 we
Nov/15
Jan/16
Mar/16
May/16
Jul/16
Sep/16
Nov/16
Indicators

Jan/17
India Yields

Mar/17
May/17
Jul/17
Sep/17
2020.

Nov/17
Jan/18
2Y Rates (%)

3.0
4.0
5.0
6.0
9.0

7.0
8.0
Mar/18
Dec/14 May/18
Feb/15 Jul/18
Apr/15 Sep/18
Jun/15 Nov/18
Aug/15 Jan/19
Oct/15 Mar/19
Dec/15 May/19
Feb/16 Jul/19
Apr/16 Sep/19
Jun/16 Nov/19
Aug/16 Jan/20
Oct/16 Mar/20
Dec/16 May/20
Feb/17
Apr/17
Jun/17
Aug/17
Oct/17
Dec/17
6.5
7.0
7.5
8.0
8.5

5.5
6.0

Repo Rate (%)

Feb/18
Apr/18 Jan/15
Jun/18 Mar/15
Aug/18 May/15
Oct/18 Jul/15
Dec/18 Sep/15
Feb/19 Nov/15
Apr/19 Jan/16
Jun/19 Mar/16
Aug/19 May/16
Oct/19 Jul/16
Sep/16
• The weighted average call money rate in India stood at 2.94 % as of June 15th.

Dec/19
Feb/20 Nov/16
Apr/20 Jan/17
Mar/17
May/17
Jul/17
Sep/17
Nov/17
Jan/18
10Y Rates (%)

Mar/18
May/18
Jul/18
Sep/18
Nov/18
Jan/19
Mar/19
May/19
Jul/19
•As 10year paper rolled over to new series in June, the 10year yields fell from 6.04% on June 1st to 5.78% by June 15th.

Sep/19
Nov/19
Jan/20
Mar/20
May/20
DOMESTIC INDICATORS
•The spread differential between the short term paper and long term paper has contracted now to 278bps from 350bps it was in May

33
 • The EM currencies have been able to remain in a stable range despite the COVID pandamic increase seen highest in

India Currency Asia in last 1month.

•This is more to do with the fact 1) FED keeping loose policy commitment till 2022 2)Imports declining sharply 3) Oil
prices remain low.

Indicators •INR has been one of the worst performing currency in last 1month despite the FX of country reaching all time high to
$500bn. We believe that RBI is using this current flow of FX through QIPs to shore up their reserves for times
unknown ahead.

%change
Currency (wrt USD)
1M YTD CY20 CY19
Rupee -0.21 -6.27 -2.26
Euro 4.18 0.53 -2.22
Chinese Yuan 0.16 -1.79 -1.22
British Pound 3.53 -5.38 3.94
Japanese Yen -0.25 1.22 0.90
Indonesian Rupaiah 4.42 -2.85 4.13
Philippines Peso 0.62 0.67 3.42
South Korean Won 1.71 -4.64 -3.60
Thai Baht 3.27 -4.29 8.73
Vietnamese Dong 0.59 -0.20 0.13

DOMESTIC INDICATORS
34
 • Net inflows into equity mutual funds decline 12% in May.

MF Corner vs •Redemptions from equity schemes eased to Rs7,283.23 crore in May from Rs8,104.46 crore in April, and Rs14,237.25
crore in May 2019.
•Inflows through SIP, saw a marginal dip to Rs8,123,03 crore in May from Rs8,376.11 crore in April.

Index •Outflow from credit risk funds decreased to Rs5,173.04 crore in May from Rs 19,507.05 crore in April. Redemptions in
credit risk funds were at Rs5,264.76 crore in May, down from a massive Rs19,238.98 crore in April. Overall, debt funds saw
an inflow of Rs63,665.54 crore in May

(Rs) (RSbn) (Rs) (Rsbn)

350 13000 100.0
12500 300 90.0
12000
11500 250 80.0
200 11000 70.0
10500 150 60.0
10000
100 50.0
9500 9000
50 40.0
8500 0 8000 30.0
-50 20.0
7500 7000
-100 10.0
6500 -150 6000 0.0

Feb-1 9

Feb-2 0
Mar-1 7

Mar-1 8

Feb-1 7

Feb-1 8
Mar-1 5

Mar-1 6

Mar-1 9

Mar-2 0
Ju l-15

Ju l-16

Ju l-17

Ju l-18

Ju l-19

Apr-17

Oct-17

Apr-18

Oct-18

Apr-19
Apr-16

Oct-16

Oct-19

Apr-20
Nov-15

Sep-16
Nov-16

Sep-17
Nov-17

Sep-18
Nov-18

Nov-19

Aug-16

Dec-16

Dec-17

Aug-18

Dec-18

Aug-19

Dec-19
Sep-15

Sep-19

Aug-17
Ja n-17

Ja n-18

Ju n-16

Ju n-17
Ja n-16

Ja n-19

Ja n-20

Ju n-18

Ju n-19
May-17

May-18

May-20
May-15

May-16

May-19

MF Net Inflow Nifty SIP Flow Nifty

35
 • The recent rise in the market has once again move the Pivotal Fundamental indicators pass their vital levels- where
the markets had earlier been compromised and moved in a sideway directions.
India Fundamental •The earnings de growth in India is still evolving as the annual GDP number has moved from 0.5% growth to now -5/-
6%.
Indicators •Given the uncertainity factor being the highest ever now- the indicators showing a sharp rise is perturbing our 6th
sense.

17 3.5
ROE (%) & P/BV (x) 14 EV/EBITDA (%)
13
16
13
3.0
15 12
12
14 11
2.5
13 11
10
12 10
2.0
9
11
9
10 1.5 8

Nov/15

Nov/16

Nov/17

Nov/18

Nov/19
Sep/15

Sep/16

Sep/17

Sep/18

Sep/19
Jul/15

Jul/16

Jul/17

Jul/18

Jul/19
May/15

May/16

May/17

May/18

May/19

May/20
Jan/15

Jan/16

Jan/17

Jan/18

Jan/19

Jan/20
Mar/16

Mar/17

Mar/19
Mar/15

Mar/18

Mar/20
Sep/15

Sep/16

Sep/17

Sep/18

Sep/19
Nov/15

Nov/16

Nov/17

Nov/18

Nov/19
May/15
Jul/15

May/16
Jul/16

May/17
Jul/17

May/18
Jul/18

May/19
Jul/19

May/20
Mar/15

Mar/16

Mar/17

Mar/18

Mar/19

Mar/20
Jan/19

Jan/20
Jan/15

Jan/16

Jan/17

Jan/18

ROE (%) P/BV (x) (RHS)

Dividend Yield (%) EPS(Rs) & P/E (x)

500 475.78 28.0
2.2
462.2 26.0
2.1
450 23.5 25.6
2.0 22.5 24.0
447.99
1.9 400 427.8 20.7 24.2 22.0
20.4 22.8
1.8 401.7
20.0 389.2 20.0
1.7 350 383.3
366.2 19.4 18.0
1.6
1.5 300 17.5 335.4 16.0
11.4
1.4 307.3 16.1 16.2 14.0
1.3 250 272.7 13.8 12.0
1.2 226.4 260.0 221.2
1.1 200 10.0
Jan/06

Jan/07

Jan/08

Jan/09

Jan/10

Jan/11

Jan/12

Jan/13

Jan/14

Jan/15

Jan/16

Jan/17

Jan/18

Jan/19
Sep/15

Sep/16

Sep/17

Sep/18

Sep/19
Nov/15

Nov/18

Nov/19
Nov/16

Nov/17
Jul/15

Jul/16

Jul/19
May/15

May/16

May/17
Jul/17

May/18
Jul/18

May/20
May/19
Jan/15

Jan/16

Jan/17

Jan/18

Jan/19

Jan/20
Mar/15

Mar/16

Mar/17

Mar/18

Mar/19

Mar/20

Nifty EPS Nifty PE (RHS)

DOMESTIC INDICATORS
36
 Back

Institutional Equities
 • May vibes move to June as Nifty moves pass 10,000 mark in the 1st week of June and corrects thereon to 9900.

Nifty Sector
•The returns for the fortnight on Nifty was 1.29%.
• Baring 2sectors – FMCG (-2%) and Commodities (-0.1%), all sectors have reported Positive returns.
• The leader of this rally was mostly lead by Reliance Industries (+6%), followed by M&M (+10%), Bajaj Fin (+9%), IndusInd Bank (+17%).

Indices
Fortnightly Sector Performance (%)
P/E (x) ROE (%) ROA (%) EV/EBITDA (x)
Nifty Sectoral Indices 12.0
2020E 2021E 2020E 2021E 2020E 2021E 2020E 2021E 10.2
10.0
Autos 24.2 15.9 1.0 9.1 1.6 3.5 9.1 7.5
8.0
Banking 12.9 9.7 8.2 10.8 0.7 0.9 - - 5.8
6.0
Realty 20.9 18.0 4.9 5.2 2.0 2.1 13.1 11.5 3.6
4.0 2.8 3.2 2.8 2.6 2.3
Commodities 33.0 25.4 15.9 18.4 - - 16.5 13.7 1.5
2.0
FMCG 31.5 27.5 - - 21.7 23.0 23.1 20.1
-
IT 17.4 15.3 21.4 22.0 14.7 15.8 11.6 10.3
-0.1
-2.0
Metal & Steel 12.9 7.2 10.0 13.2 4.3 5.5 4.9 3.7 -2.0
-4.0
Oil & Gas 10.5 8.4 9.5 11.2 5.0 5.9 7.5 6.5

Commodities
Banking

Pharma

BSE TECK Index

Autos

FMCG
Metal & Steel
Oil & Gas

Power & Infra

Realty
IT
Pharma 24.5 20.5 11.0 11.9 8.2 9.0 15.2 13.1
Power & Infra 16.5 12.8 9.3 11.2 4.6 5.5 9.6 8.2
BSE TECK Index 23.5 18.8 -1.8 30.0 0.4 3.9 10.9 9.4

Nifty Sectoral Indices Sep/19 Oct/19 Nov/19 Dec/19 Jan/20 Feb/20 Mar/20 Apr/20 May/20 Jun/20
IT -2.9 0.1 -3.6 4.4 3.1 -5.8 -16.1 10.5 -0.7 2.8
Autos 6.9 12.8 -4.3 2.0 -2.0 -14.6 -31.5 24.7 5.4 3.6
Oil & Gas 7.8 6.4 -1.5 -2.0 -6.7 -8.0 -18.5 18.3 -0.7 5.8
Banking 6.1 3.3 6.3 0.7 -4.1 -5.5 -34.3 12.5 -10.4 3.2
Pow er & Infra 6.9 3.6 0.0 -2.0 -0.1 -7.4 -21.6 16.6 3.3 2.8
Commodities 6.1 4.3 -3.4 -0.8 2.1 -3.9 -16.3 10.6 2.3 -0.1
Metal & Steel 6.5 2.5 5.0 6.7 -8.3 -12.6 -29.4 17.3 1.1 2.6
FMCG 6.4 3.8 -4.2 -2.8 2.2 -4.8 -6.8 4.9 2.2 -2.0
Realty -3.2 4.0 4.9 5.9 10.9 -15.3 -37.4 6.7 -3.8 10.2
Pharma -6.5 4.4 4.0 -1.8 1.2 -6.9 -5.3 30.0 4.7 2.3
BSE TECK Index -2.5 -2.5 -0.0 3.4 2.5 -4.8 -15.0 11.7 1.0 1.5

*June20 reflects prices as on 15 June 2020, fortnightly basis.

MARKET INDICATORS
38
 • Auto Index:Looking at major level resistance being crossed and we can now see more buyers ready to step in whenever price trading near this

Relative Sector major key level, with current strength in the Index. Its a big move Index in near term.
•Realty: The Index last fortnight has moved above its immediate resistance curve and with strength-however we think its more to do with short
covering. The sector situation is evolving right, but on medium term, it will again slide to a new low as markets wobble in months ahead.

Performance •Banking: The Banking Index is not able to breakout from its aversion level despite such a big rally the index showed in last 30days. There is a
possibility that in coming fortnight-it will reach out to break this aversion level, but it will be a false .The structure is not viable as yet.
•Commodities: As we have stated earlier that the mix of commodity Index is very fluid, with cement, OMC, Oil related Industries. Its difficult to give
direction to same.

1.30 AUTOS 0.039

REALTY
1.20
1.10 0.034

1.00
0.029
0.90
0.80 0.024
0.70
0.019
0.60
0.50 0.014
Nov/17

Nov/18
Nov/16

Nov/19
May/16

Sep/16

May/18

May/19
May/17

Sep/19

May/20
Sep/17

Sep/18
Mar/17

Mar/19

Mar/20
Jan/17

Jan/18
Mar/18

Jan/19

Jan/20
Jul/16

Jul/17

Jul/18

Jul/19

May/16

Nov/16
Sep/16

May/18

Nov/18

May/19

Nov/19
May/17

Nov/17

Sep/18

Sep/19

May/20
Sep/17

Mar/18

Mar/19
Jan/17
Mar/17

Jan/20
Mar/20
Jan/18

Jan/19
Jul/16

Jul/17

Jul/18

Jul/19
2.80 BANKING COMMODITIES
2.70 0.41
2.60 0.39
2.50
0.37
2.40
0.35
2.30
2.20 0.33
2.10 0.31
2.00 0.29
1.90
0.27
1.80
0.25
Nov/17

Nov/18
Nov/16

Nov/19
May/18
May/16

Sep/16

May/17

Sep/18

May/19

Sep/19

May/20
Sep/17
Mar/17

Mar/19

Mar/20
Jan/17

Jan/18
Mar/18

Jan/19

Jan/20
Jul/16

Jul/17

Jul/18

Jul/19

Nov/16

Nov/17

Nov/19
Nov/18
May/16

Sep/16

May/17

Sep/17

May/19
May/18

Sep/19

May/20
Sep/18

Mar/19
Jan/17
Mar/17

Jan/18
Mar/18

Mar/20
Jan/19

Jan/20
Jul/16

Jul/17

Jul/18

Jul/19
50 DMA

MARKET INDICATORS
39
 • FMCG Index:The worst structure has been constructed in the FMCG Index. It’s a little eerie structure and there is a short and medium term pain falls
indicated in the index. Avoid . No Buy on dips too.
•Metal & Steel : As expected the Index has broken out from its short term halts, although progress is slow. We would have liked if the flow of the index
Relative Sector - higher was with strength. The Index constitution remains positive for short to medium term.
•IT: The Index is making an Head & Shoulder pattern printed below the support levels (major key level), if aggressive supply errupts here it will open to
Performance potential downside move in the near term. Short term Sell
•O&G: The move in the Index is wholly and solely driven by Reliance Industries which is ~35% of the Index-rest all participants are -3/-8% in fortnight . Sell
the others O&G companies.

3.40 0.45
FMCG METAL & STEEL
3.20 0.40

3.00 0.35

2.80 0.30

2.60 0.25

2.40 0.20

2.20 0.15
May/16

Nov/16

Nov/18

May/19

Nov/19

May/20
May/17

Nov/17

May/18
Sep/16

Sep/18
Sep/17

Sep/19
Mar/17

Mar/18

Mar/19

Mar/20
Jan/17

Jan/18

Jan/19

Jan/20
Jul/16

Jul/17

Jul/18

Jul/19

Nov/16

Nov/17

Nov/18

Nov/19
May/16

Sep/16

May/17

May/18

May/19

May/20
Sep/17

Sep/18

Sep/19
Mar/17

Mar/18

Mar/19

Mar/20
Jan/17

Jan/18

Jan/19

Jan/20
Jul/16

Jul/17

Jul/18

Jul/19
1.50 OIL & GAS
1.60 IT
1.50 1.40
1.40 1.30
1.30
1.20
1.20
1.10 1.10
1.00 1.00
0.90
0.90
0.80

Nov/16

Nov/17

Nov/18

Nov/19
May/16

Sep/16

May/17

May/18

May/19

May/20
Sep/17

Sep/18

Sep/19
Mar/17

Mar/18

Mar/19

Mar/20
Jan/17

Jan/18

Jan/19

Jan/20
Jul/16

Jul/17

Jul/18

Jul/19
Nov/16

Nov/18

Nov/19
Nov/17
May/16

Sep/16

May/20
May/17

May/18

Sep/18

May/19
Sep/17

Sep/19
Mar/18

Mar/19

Mar/20
Jan/17
Mar/17

Jan/18

Jan/19

Jan/20
Jul/16

Jul/17

Jul/18

Jul/19

50 DMA

MARKET INDICATORS
40
 • Pharma Index:The Index is forming a hump at the highs- which means it flip flops in range of +2/-1% at the highs. Its entering a

Relative Sector
consolidation stage. Expect the Index to underperform if the Nifty rallies from current levels. Short term – Neutral.
•Power & Infra: Solid Bullish structure combine with the break out of the recent resistance area give us a solid confluence for another
upside push. Buy.
Performance •Defty: The Index is still in the range with more odds of it falling further. The risk is on the Index and the currency. Sell.

1.80 PHARMA 0.37 POWER & INFRA

1.60 0.35

1.40 0.33

1.20 0.31

1.00 0.29

0.80 0.27

0.60 0.25
Nov/18

Nov/19

Nov/18

Nov/19
Nov/16

Nov/17

Nov/16

Nov/17
May/16

Sep/16

May/19

May/20

May/16

May/19

May/20
May/17

Sep/17

May/18

Sep/16

May/17

Sep/17

May/18
Sep/18

Sep/19

Sep/18

Sep/19
Mar/17

Mar/18

Mar/18
Jan/17

Jan/18

Jan/19
Mar/19

Mar/20

Mar/17
Jan/20

Jan/17

Jan/18

Jan/19
Mar/19

Mar/20
Jan/20
Jul/16

Jul/17

Jul/18

Jul/19

Jul/16

Jul/17

Jul/18

Jul/19
0.56 DEFTY
0.54
0.52
0.50
0.48
0.46
0.44
0.42
0.40
Nov/16

Nov/17

Nov/18

Nov/19
May/16

May/17

May/18

May/19

Sep/19

May/20
Sep/16

Sep/17

Sep/18
Mar/18

Mar/19
Jan/17
Mar/17

Jan/18

Jan/19

Mar/20
Jan/20
Jul/16

Jul/17

Jul/18

Jul/19
50 DMA

MARKET INDICATORS
41
 60
80
100
120
140
160
180
200

0.2
0.4
0.6
0.8
1.2
1.4
1.6
1.8

0
1
2
Dec/15 Apr/15
Dec/15 May/15
Jan/16
Feb/16 Jun/15
Mar/16 Jul/15
Mar/16
Apr/16 Aug/15
May/16 Sep/15
May/16
Jun/16 Nov/15
Jul /16 Dec/15
Aug/16
Aug/16 Jan/16
Sep/16 Feb/16
Oct/16
Oct/16
Mar/16
Nov/16 May/16
Data
Dec/16
Jan/17
Jun/16
Jan/17 Jul/16

NIFTY
Feb/17 Aug/16
Mar/17
Apr/17 Sep/16
Apr/17 Oct/16
May/17
Jun/17 Dec/16
Key Market

Jun/17 Jan/17
Jul /17
Aug/17 Feb/17
Sep/17 Mar/17
Sep/17
Oct/17 Apr/17
Nov/17 Jun/17
Nov/17
Dec/17 Jul/17
Jan/18 Aug/17
Feb/18
Feb/18 Sep/17

NIFTY MIDCAP
Mar/18 Oct/17
Apr/18
May/18
Nov/17
May/18 Jan/18
Jun/18
Jul /18
Feb/18

TOTAL VOLUME NSE & BSE (Rs Bn)

Jul /18 Mar/18
NIFTY - MIDCAP - SMALLCAP

Aug/18
Sep/18
Apr/18
Oct/18 May/18
Oct/18 Jul/18
Nov/18
Dec/18 Aug/18
Dec/18 Sep/18
Jan/19
Feb/19 Oct/18
Mar/19 Nov/18
Mar/19
Apr/19 Dec/18
May/19 NIFTY SMALLCAP Feb/19
Jun/19
Jun/19 Mar/19
Jul /19 Apr/19
Aug/19
Aug/19 May/19
Sep/19 Jun/19
Oct/19
Nov/19 Aug/19
Nov/19 Sep/19
Dec/19
Jan/20
Oct/19
Jan/20 Nov/19
Feb/20
Mar/20
Dec/19
Apr/20 Jan/20
Apr/20 Mar/20
May/20
Jun/20 Apr/20
May/20
-
30
40
50
60

10
20

(20)
(10)

-3,000
-2,000
-1,000
1,000
2,000
3,000

Aug/17 IDEA
Sep/17
PNB
Oct/17
IBULHSGFIN
Dec/17
Jan/18
INDUSINDBK
Mar/18 BANDHANBK
Apr/18 ASHOKLEY
Advance Decline Ratio

Jun/18
•In last fortnight the Small cap Index was +5.59%, Midcap +2.83% and Nifty was 0.89%.

ADANITRANS
Jul/18 BAJFINANCE
Nifty 100 Top Gainers & Losers (%)

Sep/18 BANKBARODA
Oct/18
SRTRANSFIN
Dec/18
Jan/19
ZEEL
Mar/19
Apr/19 COALINDIA
Jun/19 NESTLEINDIA
•The advance decline was 0.91 average through the fortnight with lower volume participation in the broad Index.

Jul/19 PAGEIND
Sep/19 ITC
Oct/19 NTPC
• last fortnight the side markets took a grip and outperformed the lead Index sharply. This has been the trend since May.

Dec/19
HDFCLIFE
Jan/20
COLPAL
Mar/20
ULTRACEMCO
Apr/20
Jun/20 MOTHERSUMI
AD Line

MARKET INDICATORS
42
 • FIIs have remained positive for the June fortnight as multiple Qips and block deal participation kept them active.

Institutional •For June FIIs are Rs 77bn and DIIs are +2bn.
•Post May, June is proving to be a month where both major participants have remained positive in the Equity markets.

Ownership Vs Index

45,000

500
40,000

300 35,000

30,000
100
25,000

-100 20,000

15,000
-300

10,000
-500
5,000

-700 -
Jan-13

Jan-14

Jan-15

Jan-16

Jan-17

Jan-18

Jan-19

Jan-20
Mar-16

Mar-17

Mar-18

Mar-19

Mar-20
Mar-13

Mar-14

Mar-15
Nov-12

Nov-13

Nov-14

Nov-15

Nov-16

Nov-17

Nov-18

Nov-19
Sep-16

Sep-17

Sep-18

Sep-19
Sep-12

Sep-13

Sep-14

Sep-15
Jul-12

Jul-13

Jul-14

Jul-15

Jul-16

Jul-17

Jul-18
May-13

May-14

May-15

May-16

May-17

May-18

May-19
Jul-19

May-20
FII (Rs Bn) DII (Rs Bn)

MARKET INDICATORS
43
 Back

Institutional Equities

Mohit Khanchandani – mohit.khanchandani@nirmalbang.com

Direct Line: 022-6273-8041
 NIFTY: Witnessing Some Consolidation
Nifty Index – Daily Chart CMP: 9921

Resistance at 100 DMA

Witnessing consolidation

Support at key
retracement levels

TECHNICAL CHARTS
 Volatility Index: Holding Supports
India VIX - Weekly Chart CMP: 33.4

Important supports
near the 28.5 mark

Index held
supports

TECHNICAL CHARTS
 IT: Trading Near Resistance Levels
Nifty IT Index - Weekly Chart CMP: 14473
Index trading near key retracement,
50 WMA & price congestion

Sharp recovery seen over

the past 2 months

TECHNICAL CHARTS
 USD/INR: Gaining Upside Momentum
USD/INR - Weekly Chart CMP: 76.4

Resistance at 77.3 mark

After holding support, currency

cross is gaining upside momentum

TECHNICAL CHARTS
 Back
NBIE TOP PICKS
Auto Construction
Bajaj Auto KNR Construction
Eicher Motors PNC Infratech
A
Hero MotoCorp
Chemicals
Banks and Financials and Insurance UPL
Can Fin Homes
HDFC Bank FMCG
HDFC Ltd Britannia Industries
HDFC Life Insurance Dabur India
ICICI Bank Hindustan Unilever
Kotak Mahindra Bank Marico
Muthoot Finance Nestle India
SBI Life Insurance United Spirits
State Bank of India Westlife Development

Capital Goods and Consumer Electricals Media

Crompton Greaves Consumer Electricals Inox Leisure
KEC International
Power Mech Projects Oil & Gas
Solar Industries BPCL
Triveni Turbine HPCL
Voltas Gujarat State Petronet
Whirlpool of India Petronet LNG

Cements Real Estate

Birla Corp Nesco
JK Cements
Sagar Cements Retail
Shree Cements Bata India
UltraTech Cement V-Mart

Pharmaceuticals
Lupin
Natco
Sun Pharma

49
 DISCLAIMER

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The views expressed are based solely on information available publicly and believed to be true. Investors are advised to independently evaluate the market
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50