May 2023
Volume 5, Issue 4
Market Pulse
A monthly review of Indian economy and markets
Market Pulse
A Monthly Review
May 2023 | Vol. 5, Issue 4
Indian
Economy and
Markets
Volume 5, Issue 4
This monthly publication is a review of
major developments in the economy and
financial markets during the month.
Online: www.nseindia.com
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Market Pulse
May 2023 | Vol. 5, Issue 4
Market Pulse
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Market Pulse
May 2023 | Vol. 5, Issue 4
Table of Contents
Executive Summary ........................................................................................................................ 2
Chart of the month.......................................................................................................................... 4
Economic recovery post pandemic: Resilient yet divergent ........................................................................................... 4
Macroeconomy ............................................................................................................................. 13
Macro round-up ............................................................................................................................................................. 13
IIP growth at three-month high in February 2023 ........................................................................................................ 15
Trade deficit widened in March on higher non-oil imports............................................................................................ 20
MPC minutes: A unanimous “wait-and-watch” pause .................................................................................................. 24
Headline inflation moderated on higher base; WPI inflation at 28-month low ............................................................ 32
GST collections touched fresh record high levels in April ............................................................................................. 38
Global macro snippets: Growth forecasts slashed; rate hike continued ...................................................................... 41
Insights ....................................................................................................................................... 42
How Does Response Inhibition Influence Decision-Making When Gambling? ............................................................. 42
Overconfidence and (Over)Trading: The Effect of Feedback on Trading Behaviour ..................................................... 46
Is Loss-Aversion Magnitude-Dependent? Measuring Prospective Affective Judgments Regarding Gains and Losses
....................................................................................................................................................................................... 49
Market performance ..................................................................................................................... 52
Market round-up ............................................................................................................................................................ 52
Market performance across asset classes .................................................................................................................... 56
Institutional flows across market segments in India .................................................................................................... 91
Fund mobilisation through NSE ..................................................................................................... 93
Market Statistics: Primary market ................................................................................................................................. 93
New listings in the month .............................................................................................................................................. 94
Trends in NSE’s turnover across different segments ....................................................................... 95
Institutional investments through NSE platform........................................................................................................... 95
Retail investments through NSE platform ..................................................................................................................... 97
Total turnover in capital markets and derivatives segments of NSE........................................................................... 100
Average daily turnover (ADT) in capital markets and derivatives segment of NSE ..................................................... 101
Turnover of top traded symbols over the month ......................................................................................................... 104
Client category-wise participation in total turnover .................................................................................................... 106
Asset category-wise open interest (average daily volume) ........................................................................................ 115
Internet-based trading ................................................................................................................................................ 116
Record statistics .......................................................................................................................................................... 117
Spatial distribution of trading activities ........................................................................................ 118
Region-wise distribution of new investor registrations ............................................................................................... 118
Region-wise distribution of individual investor turnover in the cash market.............................................................. 121
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May 2023 | Vol. 5, Issue 4
Investment through mutual funds in India .................................................................................... 124
Policy developments.................................................................................................................... 130
Comparison of trading activities across major exchanges globally .................................................. 133
Annual macro snapshot ............................................................................................................... 137
Market Pulse
May 2023 | Vol. 5, Issue 4
List of Figures
Figure 1: Movement in sector-wise indicators since pandemic .......................................................................................... 6
Figure 2: Movement in select sector-wise indices since pandemic .................................................................................... 6
Figure 3: Movement in rural and urban consumption demand indicators .......................................................................... 7
Figure 4: India industrial production (3MMA) ................................................................................................................... 16
Figure 5: Long-term industrial production trend (12MMA) ............................................................................................... 17
Figure 6: India industrial production use-based goods (3MMA) ....................................................................................... 18
Figure 7: Eight core industries growth trend (% YoY) ....................................................................................................... 18
Figure 8: India’s Manufacturing and Services PMI trend .................................................................................................. 19
Figure 9: India monthly trade balance trend ..................................................................................................................... 21
Figure 10: Non-oil, non-gold imports moderating............................................................................................................. 22
Figure 11: Oil imports trend............................................................................................................................................... 22
Figure 12: Oil imports vs. Brent crude oil prices trend...................................................................................................... 22
Figure 13: Forex reserves and import cover (months) ...................................................................................................... 22
Figure 14: INR vs. other key Asian market currencies (As on May 5th, 2023)................................................................... 23
Figure 15: Policy transmission in credit markets .............................................................................................................. 25
Figure 16: Sector-wise policy transmission in credit markets .......................................................................................... 25
Figure 17: Word cloud for the minutes of February 2023 and April 2023 MPC review meetings .................................... 26
Figure 18: Word cloud for each of the MPC members (April 2023) .................................................................................. 27
Figure 19: Headline CPI inflation trend ............................................................................................................................. 33
Figure 20:Break-up of core inflation ................................................................................................................................. 34
Figure 21: Category-wise contribution to India consumer price inflation (CPI) ............................................................... 34
Figure 22: Category-wise contribution to India Food and Beverages inflation (CPI) ....................................................... 35
Figure 23: CPI projections vs actual .................................................................................................................................. 35
Figure 24: Category-wise contribution to India wholesale price index (WPI) .................................................................. 36
Figure 25: India wholesale price inflation (WPI) ............................................................................................................... 37
Figure 26: Gap between wholesale and retail inflation ..................................................................................................... 37
Figure 27: Annual trend of average monthly GST collections ........................................................................................... 38
Figure 28: Year-wise monthly GST collections trend ........................................................................................................ 39
Figure 29: GST E-way bills generation .............................................................................................................................. 39
Figure 30: State-wise GST collections for Apr’23 ............................................................................................................. 40
Figure 31: YoY change in GST for Apr’23 .......................................................................................................................... 40
Figure 32: Trial types ......................................................................................................................................................... 43
Figure 33: Percentage of participants ratings gain>loss, gain=loss and loss>gain in Experiment 1 ................................ 50
Figure 34: Percentage of participants ratings gain>loss, gain=loss and loss>gain in Experiment 2 ................................ 50
Figure 35: Percentage of participants ratings gain>loss, gain=loss and loss>gain in Experiment 3a .............................. 50
Figure 36: Proportion of participants choosing each of the 5 options in Experiment 3b ................................................. 50
Figure 37: NIFTY sector performance in April 2023 ......................................................................................................... 60
Figure 38: NIFTY sector performance during Jan-April 2023 .......................................................................................... 61
Figure 39: Sector-wise contribution to Nifty 50 price return in April 2023 ...................................................................... 62
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May 2023 | Vol. 5, Issue 4
Figure 40: Sector-wise contribution to absolute Nifty 50 Index change (points) in March 2023 .................................... 63
Figure 41: Sector-wise contribution to Nifty 50 price return in last one year (May’22-Apr’23) ....................................... 63
Figure 42: Sector-wise contribution to Nifty 50 Index change (points) in last one year (May’22-Apr’23) ...................... 63
Figure 43: Sector-wise contribution to Nifty 50 price return in 2023 thus far (Jan’23-Apr’23) ...................................... 64
Figure 44: Sector-wise contribution to Nifty 50 Index change (points) in 2023 thus far (Jan’23-Apr’23) ...................... 64
Figure 45: Nifty 50 Index monthly movement across sectors over last 12 months ......................................................... 64
Figure 46: Nifty 50 Index monthly return across sectors over last 12 months ................................................................ 65
Figure 47: Nifty 50 sector weightage (April 2022) ............................................................................................................ 65
Figure 48: Nifty 50 sector weightage (April 2023) ............................................................................................................ 65
Figure 49: Sector-wise revision in FY23 earnings estimates for top 200 companies in 2023 thus far ............................ 67
Figure 50: Sector-wise revision in FY24 earnings estimates for top 200 companies in 2023 thus far ............................ 68
Figure 51: Sector-wise share in earnings .......................................................................................................................... 68
Figure 52: Nifty 50 NTM P/E trend for last 15 years ......................................................................................................... 69
Figure 53: Nifty 50 NTM P/B trend for last 15 years ......................................................................................................... 69
Figure 54: Nifty 50 NTM P/E (Last three-year trend) ........................................................................................................ 69
Figure 55: Nifty 50 NTM P/B (Last three-year trend) ........................................................................................................ 69
Figure 56: Five-year trend of Nifty 50 values at different 12-month forward P/E bands ................................................. 70
Figure 57: NTM P/E of MSCI India vs. MSCI EM (15-year trend) ...................................................................................... 70
Figure 58: NTM P/B of MSCI India vs. MSCI EM (15-year trend) ...................................................................................... 70
Figure 59: NTM P/E of MSCI India vs. MSCI EM (Last three-year trend) .......................................................................... 71
Figure 60: NTM P/B of MSCI India vs. MSCI EM (Last three-year trend) .......................................................................... 71
Figure 61: Nifty 50 forward earnings yield* vs. 10-year G-sec yield ................................................................................ 71
Figure 62: 12-month forward P/E for MSCI India sector indices (Three-year trend) ....................................................... 72
Figure 63: 12-month forward P/E for MSCI India sector indices (Long-term trend) ........................................................ 73
Figure 64: 12-month forward P/B for MSCI India sector indices (Three-year trend) ....................................................... 75
Figure 65: 12-month forward P/B for MSCI India sector indices (Long-term trend) ........................................................ 77
Figure 66: India 10Y G-sec yield—long-term trend........................................................................................................... 80
Figure 67: India 10Y G-sec yield—last one-year trend ..................................................................................................... 80
Figure 68: India sovereign yield curve .............................................................................................................................. 80
Figure 69: Change in sovereign yields across the curve in 2023 thus far (As on May 4th, 2023) ..................................... 80
Figure 70: India sovereign bonds term premia ................................................................................................................. 81
Figure 71: Inflation, yields and spreads in India vs. US .................................................................................................... 81
Figure 72: Spreads between 10-year SDL and G-sec yields ............................................................................................. 82
Figure 73: Spreads for one-year AAA-rated corporate bonds across segments .............................................................. 82
Figure 74: Spreads for three-year AAA-rated corporate bonds across segments............................................................ 83
Figure 75: Spreads for five-year AAA-rated corporate bonds across segments .............................................................. 83
Figure 76: Spreads for 10-year AAA-rated corporate bonds across segments ................................................................ 83
Figure 77: AAA-rated corporate bond yield curve ............................................................................................................. 84
Figure 78: AA+ rated corporate bond yield curve ............................................................................................................. 84
Figure 79: Change in AAA corporate bond and G-sec yields since March 2022 ............................................................... 84
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May 2023 | Vol. 5, Issue 4
Figure 80: Change in AA+ corporate bond and G-sec bond yields since March 2022 ...................................................... 84
Figure 81: Corporate bond term premia between 10-year and 1-year yields .................................................................. 84
Figure 82: Movement in key commodity indices ............................................................................................................... 85
Figure 83: Movement in key commodity indices since 2020 ............................................................................................ 86
Figure 84: Returns of key hard commodities in 2021, 2022 and 2023 till date ............................................................... 87
Figure 85: Returns of key agricultural commodities in 2021, 2022 and 2023 till date .................................................... 88
Figure 86: Returns of key energy commodities in 2021, 2022 and 2023 till date ........................................................... 89
Figure 87: Net inflows by FIIs in Indian equity and debt markets .................................................................................... 91
Figure 88: Net inflows by DIIs in Indian equity markets .................................................................................................. 92
Figure 89: Overall net inflows of retail investors in India in last eight fiscal years. .......................................................... 98
Figure 90: Retail trading activity in cash and equity derivative segments of NSE (Jan’17-) ............................................ 99
Figure 91: Trends in share of client participation in Capital Market at NSE (%) ............................................................. 107
Figure 92: Trends in share of client participation in Equity derivatives (Notional Turnover) at NSE (%) ....................... 108
Figure 93: Trends in share of client participation in Index Futures at NSE (%) .............................................................. 109
Figure 94: Trends in share of client participation in Stock Futures at NSE (%) .............................................................. 110
Figure 95: Trends in share of client participation in Index Options (premium turnover) at NSE (%) ............................. 111
Figure 96: Trends in share of client participation in Stock Options (Premium Turnover) at NSE (%) ............................ 112
Figure 97: Region-wise distribution of new investors registered ................................................................................... 118
Figure 98: State-wise distribution of new investor registrations in Apr’22 and Apr’23 ................................................. 119
Figure 99: Number of new investors registered in top 10 districts (in ‘000) .................................................................. 120
Figure 100: Region-wise distribution of monthly individual investors’ turnover ............................................................ 121
Figure 101: Region-wise share of individual investors’ turnover in cash market (%) .................................................... 122
Figure 102: Region-wise share of individual investors traded in cash market (%) ........................................................ 122
Figure 103: Region-wise distribution of individual investors traded .............................................................................. 122
Figure 104: Top 10 districts based on Cash turnover of individual investors ................................................................. 123
Figure 105: Top 10 districts based on individual investors traded ................................................................................. 123
Figure 106: Monthly trend of total MF schemes and average AUM ................................................................................ 124
Figure 107: Monthly trend of total investment through mutual funds ............................................................................ 125
Figure 108: Monthly trend of total investment through new schemes ........................................................................... 125
Figure 109: Share of overall mutual fund AUM across asset classes ............................................................................. 126
Figure 110: Category-wise AUM split .............................................................................................................................. 126
Figure 111: Category-wise share in MF AUM .................................................................................................................. 127
Figure 112: State-wise distribution of Equity schemes AUM in Mar’22 and Mar’23 ...................................................... 127
Figure 113: Investor category-wise share in MF AUM .................................................................................................... 128
Figure 114: Fund-wise share of MF AUM ........................................................................................................................ 128
Figure 115: Monthly SIP inflows into mutual funds ........................................................................................................ 129
Figure 116: Domestic market cap of top ranked exchanges** ...................................................................................... 135
Figure 117: Number of trades in Cash market of top eight exchanges** ....................................................................... 135
Market Pulse
May 2023 | Vol. 5, Issue 4
List of Tables
Table 1: Comparison of high-frequency consumption and external sector indicators with the pre-pandemic levels....... 8
Table 2: Comparison of high-frequency investment indicators with the pre-pandemic levels .......................................... 9
Table 3: Comparison of high-frequency financial market indicators with the pre-pandemic levels ................................ 10
Table 4: Growth/change (YoY) in high-frequency macro/market indicators .................................................................... 11
Table 5: India industrial production for February 2023 (%YoY) ....................................................................................... 16
Table 6: India monthly trade balance for March 2023...................................................................................................... 21
Table 7: Views of MPC members during last six MPC review meetings ............................................................................ 27
Table 8: Consumer price inflation in March 2023 (%YoY) ................................................................................................ 33
Table 9: Wholesale price inflation for March 2023 (%YoY) .............................................................................................. 36
Table 10: Performance across equity, fixed income, currency, and commodity markets (As on April 30th, 2023) ......... 56
Table 11: Performance across global asset classes (As on May 5th, 2022) ...................................................................... 57
Table 12: Performance across NSE equity indices (As on April 30th, 2023) ..................................................................... 58
Table 13: Performance across NSE sector indices based on Price Return Index (As on April 30th, 2023) ...................... 60
Table 14: Top five Nifty 50 Index gainers in April 2023.................................................................................................... 65
Table 15: Top five Nifty 50 Index losers in April 2023...................................................................................................... 66
Table 16: Earnings growth and forward-looking multiples for Nifty 50 Index ................................................................. 67
Table 17: Performance of key Nifty debt indices (As of April 30th, 2023)......................................................................... 79
Table 18: Annual performance across commodities ........................................................................................................ 90
Table 19: Funds mobilised through NSE platform ........................................................................................................... 93
Table 20: Companies listed on NSE in April 2023 ............................................................................................................. 94
Table 21: FII and DII flows (Rs bn) in secondary markets in April 2022, March 2023, and April 2023 .......................... 95
Table 22: Foreign and domestic institutional flows (Rs bn) in secondary markets during FY23 and CY23 ..................... 96
Table 23: Retail investors’ flows in secondary markets during April 2023, March 2023 and April 2022 ........................ 97
Table 24: Retail investors’ flows in secondary markets during FY23 and CY23TD (Jan-Apr’23) .................................... 97
Table 25: Total turnover across segments (Jan 2023 – Apr 2023) ................................................................................ 100
Table 26: Average daily turnover in NSE Capital Market Segment ................................................................................. 101
Table 27: Average daily turnover in Equity derivatives ................................................................................................... 101
Table 28: Average daily turnover in Currency derivatives ............................................................................................... 102
Table 29: Average daily turnover in Interest rate derivatives (Rsm) .............................................................................. 102
Table 30: Average daily turnover in commodities derivatives (Rsm) .............................................................................. 103
Table 31: Top 10 symbols based on total turnover of Cash market (Rsm) in April 2023 ............................................... 104
Table 32: Top 10 symbols based on total turnover of Stock futures (Rsm) in April-2023 ............................................. 104
Table 33: Top 10 symbols based on total turnover of Stock futures (Rsm) in April-2023 ............................................. 105
Table 34: Share of client participation in Capital Market segment of NSE (%) ............................................................... 106
Table 35: Share of client participation in Equity Derivatives segment of NSE ................................................................ 107
Table 36: Share of client participation in Index Futures of NSE (%)............................................................................... 108
Table 37 Share of client participation in Stock Futures of NSE (%) ................................................................................ 109
Table 38: Share of client participation in Index Options of NSE (%) .............................................................................. 110
Table 39: Share of client participation in Stock Options of NSE (%) ............................................................................... 111
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May 2023 | Vol. 5, Issue 4
Table 40: Share of client participation in Currency Derivatives segment of NSE (%) ..................................................... 112
Table 41: Share of client participation in Currency Futures of NSE (%) ......................................................................... 113
Table 42: Share of client participation in Currency Options of NSE (%) ......................................................................... 113
Table 43: Share of client participation in Interest Rate Futures of NSE (%)................................................................... 113
Table 44: Share of client participation in Commodity derivatives segment of NSE (%) ................................................. 114
Table 45: Average daily volume of open interest in Equity derivatives (million contracts) ............................................ 115
Table 46: Average daily volume of open interest in Currency derivatives (no of contracts) .......................................... 115
Table 47: Average daily volume of open interest in Interest rate derivatives (no of contracts)..................................... 115
Table 48: Average daily volume of open interest in Commodities derivatives (no of contracts) ................................... 116
Table 49: Average daily volume of open interest in Commodities derivatives (no of contracts): Average daily gross
turnover through internet-based trading (Rsm) .............................................................................................................. 116
Table 51: Number of contracts traded (m) traded in Stock futures of top-ranked exchanges** ................................... 135
Table 52: Number of contracts traded (m) traded in Stock options of top-ranked exchanges** ................................... 135
Table 53: Number of contracts traded (m) in Index futures of top ranked exchanges** ............................................... 136
Table 54: Number of contracts traded (m) in Index options of top ranked exchanges** ............................................... 136
Table 55: Number of contracts traded (m) in Currency futures of top ranked exchanges** .......................................... 136
Table 56: Number of contracts traded (m) in Currency options of top ranked exchanges** ......................................... 136
Market Pulse
May 2023 | Vol. 5, Issue 4
Executive Summary
US inflation below 5%, relieved markets, and a fresh look at India’s financial system
US consumer inflation is probably the world’s most observed economic indicator. Its relentless rise over the past three
years has either been the driver, or signal for macro policy globally, with the policy response from central banks
differing in degree not direction. While the sub-5% print might lead to hopes of a pause in the current cycle by the Fed,
the US debt ceiling looms (again), with the pall of a default. That said, inflation across the world has shown welcome
signs of easing over the past two months.
Beyond macro, the G20 meetings through the year have helped us understand the role and importance of diplomacy
in what seems to be an increasingly fragmented world. The forthcoming G7 meetings face the same headwinds.
Geopolitics remains front and center in the mid-term global macroeconomic outlook.
Global markets took comfort from macro tailwinds and on reduced contagion risks from US regional banks but eased
after the strong gains of March. While we remember Silicon Valley Bank and lately First Republic, there are over 4000
commercial banks in the States, over 2100 of them with assets of US$300m, so no (further) news is good news for
now, in this context.
Developed equities (MSCI World Index) rose by 1.6% in April (YTD: +8.4%; As on May 5th, 2023), while Emerging
market equities (MSCI EM Index) ended the month 1.3% lower (YTD: +2.6%), with the latter weighed down by huge
sell-off in Chinese equities. Indian equities outshined developed and emerging market counterparts in April. Resilient
economic performance, an unexpected pause by the central bank for the first time since the commencement of rate
hiking cycle last year, and a good start to the fourth quarter earnings season helped investor sentiments. Incrementally,
attractive valuations brought back foreign investors. The Nifty50 Index ended the month 4.1% higher, with mid and
small caps outperforming by a wide margin.
Global debt showed a mixed performance in the month gone by. The US sovereign yield curve inverted further as
elevated core inflation and a resilient job market kept short-end under pressure, while the long-end eased off
marginally amid strengthening recession worries. Indian debt rallied further in April, as an unexpected policy pause,
easing inflation and an anticipated moderation in global monetary policy tightening aided investor sentiments. India’s
benchmark 10-year G-sec yield fell by 20bps in April on top of a 14bps decline in the previous month. Rising growth
concerns have continued to weigh on the greenback, with the dollar index falling by another 0.9% in April (6M: -8.9%),
thereby providing support to EM currencies including the INR (+1.1% against USD in 2023 till date). Precious
commodities continued to rise on global financial contagion fears, while prices of agriculture, industrial and energy
commodities remained under pressure.
In the Insights section this month we have three papers, all from the Center for Behavioural Sciences at IIM
Ahmedabad. The first paper uses an interesting technique called concurrent loading in cognitive science to see how
executive control modifications influence monetary judgements while gambling. This is particularly relevant from
results in the literature using Stroop tests to find that concurrent working memories reduce distraction! The second
paper sets up a link between overconfidence and trading behaviour and then finds how relevant feedback can minimize
the consequences of overconfidence. The last paper in the series asks if loss-aversion (in the Prospect Theory context)
is dependent on magnitude of the value function, through three interesting experiments. The score of journal articles
and working papers in Behavioural Sciences over the past year introduces this most interesting and new area of finance
and (we hope) provides a perspective away from expected utility theory-based traditional finance.
At the end, a word about the recent NSE-IMF seminar following the book ‘India’s Financial System—Building the
Foundation for Strong and Sustainable Growth’ by the IMF’s Asia-Pacific Research Department. From the macro
underpinnings of our financial system and the linkages to growth to regulation of banks, NBFCs to the corporate bond
market, the book touches upon several very relevant points. The rising importance of ESG and the advent of
digitalisation of the economy and its impact on the economy are covered too. India’s success in this area is by now
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well-known but amazes anew when seen in a holistic manner as in the book. If the 20s would be India’s decade, then
its digital transformation must surely be in the vanguard. On that promise of near unlimited possibility, we bring you
the April edition of the Market Pulse. As always, we welcome your comments and suggestions.
Tirthankar Patnaik
Chief Economist
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Chart of the month
Economic recovery post pandemic: Resilient yet divergent
India is set to become the most populous country of the world in 2023. The IMF outlook released in April stated that
India is set to contribute 15% (PPP terms) to the global growth in 2023 and revised the growth rate for Asia-pacific
region upwards by 30 bps to 4.6% for 2023, attributed to China’s economic recovery and India’s “resilient” growth.
High frequency indicators for FY23 are a tell-tale of India’s economic recovery post-pandemic. As the globe saw
unprecedented inflation levels in FY23, central banks resorted to aggressive monetary tightening. Notwithstanding
unfavorable global backdrop, India is projected to be one of the fastest growing economies in FY23 supported by pentup demand in contact intensive services, robust growth in services exports, and Government’s thrust on capital
expenditure. That said, the indicators suggest divergent and uneven recovery across different segments. The urbanrural dichotomy reflected in laggard rural consumption indicators remains a worry for India’s overall consumption
story. Industrial and business activity gained momentum towards the latter half of the last fiscal owing to easing
commodity prices. All sub-components of the industrial production have surpassed the pre-pandemic level except
consumer durables, confirming demand.
External situation remained in check thanks to robust services exports. The fourth quarter of FY23 is expected to
witness a sharp contraction in the current account deficit. In fact, we don’t rule out a surplus—the first time in seven
quarters. Financial markets did well despite FII outflows, thanks to downside support from the increased participation
of retails investors (refer to our note: Retail interest in the Indian stock markets: Here to stay). Credit off-take has been
robust in the last one year (+15% YoY) despite consecutive rate hikes. This, along with healthy banks and corporate
balance sheets, hints towards private capex cycle revival. Notwithstanding a credible recovery, visible moderation in
rural demand does not bode well for economic growth, particularly in the light of weakening external demand.
• K-shaped recovery as rural consumption struggles…: Even as we have seen a
robust recovery post the pandemic and resilience amidst the ongoing RussiaUkraine war, it has been uneven. Elevated inflation levels and consequent interest
rate hikes had a bearing on domestic demand as evident in the moderation in
Private Fixed Capital Expenditure (+2.1% YoY in Q3FY23 vs. +9.7% in Q2FY23).
Lagging rural demand as witnessed from high-frequency indicators and resilient
urban demand substantiates the hypothesis of a K-shaped recovery. While normal
monsoon last year and strong harvest supported rural demand in the first half (H1
FY23) as reflected from strong agri GVA growth and steady increase in rural wages,
rising cost pressures weighed in the second half. This is reflected in two-wheeler
sales that contracted by 4.2% YoY in Q4 FY23. Urban demand, on the other hand,
has remained resilient, and notably so for luxury goods. For instance, luxury cars
sales are expected to touch record high in 2023 (sales of Audi in India grew by 28%
YoY in 2022). On the positive side, agri exports were robust through the year and
demand for MGNREGA work has been normalizing from the post-pandemic surge,
indicating reducing rural distress. That said, the Rural Consumption Index has now
dipped below the pre-pandemic level.
• …while urban demand was supported by contact-intensive services: Urban
consumption was largely supported by the pent-up demand of contact intensive
services that continued to remain robust throughout the year. Within services,
Trade, Hotel & Transport and Financial Services & Real estate sustained the growth
momentum. Non-oil non-gold imports although have revived to pre-pandemic level
witnessed a moderation in growth in the last quarter of FY23 (-4.4% YoY in Q4 vs
+6.1% in Q3). Gold and silver imports have dipped below the pre-pandemic level
since Dec’22 reflecting weakness in discretionary spending. While EPFO payroll
additions have been expanding, petrol consumption and passenger car sales saw
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some weakness in Jan-Feb indicating divergence in recovery even within urban
areas.
• Business activity gained momentum in the second half: Business and industrial
activity is coming back on track post the pandemic. The momentum picked up in
the second half of FY23 amid easing input cost pressures, thanks to declining
commodity prices. All components of the industrial production have recovered to
the pre-pandemic level sans consumer durables that has remained weak,
reflecting slow consumption demand. IIP growth touched a three-month high of
5.6% YoY in Feb while IHS’ PMI composite index stood at 61.6 in Mar’23—the
highest since July’10, with both manufacturing and services sector PMIs remaining
well above the 50-mark. Business activity has meaningfully expanded in the last
quarter of FY23, reflected in all time high e-ways bills in Mar’23 and record high
GST collections at Rs 1.87trn in Apr’23. This has been accompanied by an
improvement in sentiments, with the RBI’s Business Expectations Index (BEI)
remaining in the expansionary zone for the quarter-ahead period.
• External position in check: India’s merchandise trade deficit has been steadily
declining from an all-time high level of US$28bn in Sep’22 to an 18-month low of
US$16.2 bn in February thanks to easing crude prices and moderation in imports.
The fourth quarter of FY23 is expected to witness a sharp contraction in the
current account deficit. In fact, we don’t rule out a surplus—the first time in seven
quarters. This is primarily on the back of i) surging service exports (+28.8% YoY
jump in Apr-Feb’23), ii) softening global commodity prices (fall in crude from
$82/bbl in Dec’22 to $76/bbl in March’23), iii) narrowing trade deficit (-13.1%
YoY). The rupee depreciated by 8.5% against the USD in FY23, thanks to a strong
dollar and foreign capital outflows. Capital flows are likely to remain volatile in
FY24 given heightened financial markets volatility, even as adequate forex
reserves should provide requisite support to the INR.
• Revival in credit growth despite tight financial conditions: In line with global
central banks, the RBI’s MPC also resorted to aggressive monetary tightening to
curb inflationary pressures, taking the repo rate higher by 250bps in a year to 6.5%.
Despite the resultant surge in cost of funds, the credit off-take has been quite
strong, with outstanding credit rising by 15% in FY23, led by a broad-based
improvement. Well capitalised banks, coupled with improved asset quality (NPAs
declined from 5.9% in FY22 to 5% as of Sep’22) and de-leveraged corporate
sector, has helped revive the credit cycle, in turn providing a conducive
environment for a credible private capex recovery. Tight financial conditions have
had a bearing on capital markets as well. That said, strong retail participation has
provided a strong cushion and supported markets amidst huge FII selling.
• Looking ahead: Global economy has faced several shocks in the last few years,
destabilising the economic cycles. Indian economy with its strong fundamentals
withered through these external shocks and displayed a stronger post-pandemic
recovery. However, the recovery remains divergent and uneven across sectors and
regions. Although, good rabi harvest and normal monsoon (as predicted by IMD)
bode well for rural sentiments and the overall demand, the lagged effect of rate
hikes and higher-than-expected El-nino affect pose downside risks, further
impacted by weakening global demand.
5/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 1: Movement in sector-wise indicators since pandemic
(100= average of Apr’19-Feb’20)
Index
200
Consumption demand index
Investment index
External positon index
Financial markets index
180
160
140
120
100
80
60
40
20
Feb-20
May-20
Aug-20
Nov-20
Feb-21
May-21
Aug-21
Nov-21
Feb-22
May-22
Aug-22
Nov-22
Feb-23
Source: CMIE Economic Outlook, RBI, SEBI, AMFI, Refinitiv Datastream, MGNREGA website, NSE.
Note: Data has been extracted on 27th April 2023. The indices are constructed using 55 sub indicators.
Figure 2: Movement in select sector-wise indices since pandemic
(100= average of Apr’19-Feb’20)
Index
200
Consumption demand index
Business/Inv. activity index
External positon index
Financial markets index
180
160
140
120
100
80
60
40
20
Mar-20
Jun-20
Sep-20
Dec-20
Mar-21
Jun-21
Sep-21
Dec-21
Mar-22
Jun-22
Source: CMIE Economic Outlook, RBI, SEBI, AMFI, Refinitiv Datastream, MGNREGA website, NSE.
Note: Data has been extracted on April 27th, 2023; Data for 32 out of 55 sub-indicators have been considered for March 2023.
6/140
Sep-22
Dec-22
Mar-23
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 3: Movement in rural and urban consumption demand indicators
Index
Rural Consumption index
Urban consumption index
The lag in rural high
frequency indicators
relative to a better
performance of the urban
indicators substantiates
the hypothesis of a Kshaped recovery.
140
130
120
110
100
90
80
70
60
50
40
Feb-20
Jun-20
Oct-20
Feb-21
Jun-21
Oct-21
Feb-22
Jun-22
Source: CMIE Economic Outlook, RBI, SEBI, AMFI, Refinitiv Datastream, MGNREGA website, NSE.
Note: Data has been extracted on April 27th, 2023.
7/140
Oct-22
Feb-23
Market Pulse
May 2023 | Vol. 5, Issue 4
Table 1: Comparison of high-frequency consumption and external sector indicators with the pre-pandemic levels
(Average of Apr’19-Feb’20 = 100, unless specified otherwise)
Indicators
Consumption demand
Apr’22
May’22 Jun’22
Jul’22
Aug’22 Sep’22
Oct’22 Nov’22 Dec’22
Jan’23
Feb’23
96.4
103.1
112.5
103.3
84.4
95.6
184.4
195.3
114.8
63.3
64.8
58.8
68.6
Mar’23
73.0
77.8
75.6
85.1
97.7
108.3
102.8
136.6
76.5
73.1
73.1
76.5
Rural
2-wheeler sales
86.1
88.7
93.3
Tractor sales
147.4
137.9
158.3
MGNREGA daily work demand
102.2
131.5
132.4
Average rural wage rates*
113.6
3-wheeler sales
Fertilizer sales
MGNREGA daily work provided
Rural unemployment
57.5
92.6
98.3
103.4
56.8
103.9
134.2
113.9
95.4
59.7
112.1
137.7
70.4
98.9
121.9
82.9
85.7
83.7
121.2
65.4
84.4
109.8
66.6
89.6
114.7
60.8
77.6
132.3
70.2
114.4
115.2
115.6
116.1
117.0
117.8
116.2
88.8
110.6
83.9
117.9
109.6
65.8
124.0
79.9
118.1
107.1
73.0
119.8
70.6
71.0
94.6
69.4
118.5
119.1
97.6
101.4
133.4
126.2
93.3
104.1
74.7
76.9
107.5
Urban
Passenger car sales
80.5
88.4
94.4
102.3
95.2
101.8
100.5
92.8
Non-oil, non-gold, silver imports 144.9
142.8
157.2
156.8
151.1
153.5
139.9
139.8
Broadband subscriber base
125.5
126.4
127.4
128.4
129.5
129.8
130.7
131.3
132.4
133.5
Naukri Jobspeak Index
124.3
134.8
125.4
119.9
Domestic air passenger traffic
Gold & silver imports
Petrol consumption
Urban unemployment
EPFO net payroll additions
88.3
68.1
110.6
105.1
96.4
240.3
119.3
124.3
93.9
88.4
130.8
117.4
124.9
83.4
81.7
128.1
111.0
137.6
93.7
181.7
162.7
189.7
203.1
Rural Cons. Sentiment Index
65.4
64.2
64.4
Urban Cons. Sentiments Index
57.8
62.3
63.7
Perceptions
Rural Cons. Expectations Index
Urban Cons. Expectations Index
External Sector
64.4
57.9
63.6
61.7
63.1
63.0
85.2
159.2
118.9
122.7
109.1
86.8
182.1
111.8
134.7
87.9
96.1
159.0
118.5
106.5
83.7
181.1
181.0
126.7
69.1
69.1
73.3
76.8
66.6
65.7
72.4
77.6
67.2
65.9
68.3
64.1
71.6
71.2
75.2
76.0
98.9
125.4
113.1
101.7
176.0
74.6
107.5
152.1
50.0
118.0
115.0
105.7
30.1
87.1
101.9
108.9
98.2
98.2
144.9
111.8
109.8
122.9
97.4
90.4
97.0
130.5
169.2
196.2
210.8
210.8
76.2
75.1
78.5
82.6
82.4
76.1
74.8
77.6
82.5
85.9
75.5
75.5
74.4
74.9
77.1
76.8
81.8
83.4
82.1
86.6
Merchandise imports
144.1
151.7
159.9
158.3
153.6
157.3
143.6
145.6
152.2
129.8
132.1
144.2
Merchandise exports
149.7
147.0
159.4
144.5
139.5
133.4
119.0
131.5
143.5
134.8
139.4
144.6
Oil imports
Agri exports
Services imports
Services exports
USDINR (eop)
161.0
168.0
119.3
122.7
108.1
151.7
161.5
129.0
128.2
109.9
173.6
165.1
133.9
137.3
111.7
169.4
140.1
118.3
126.3
112.4
158.2
140.9
128.1
138.0
112.8
Source: CMIE Economic Outlook, RBI, SEBI, AMFI, Refinitiv Datastream, MGNREGA website, NSE.
Note: Data has been extracted on April 27th, 2023.
8/140
160.3
125.9
136.9
152.2
115.4
149.1
116.3
114.6
137.8
116.6
164.8
136.5
130.5
146.7
115.5
177.5
159.8
134.1
169.9
117.1
145.7
148.3
120.8
152.2
115.7
154.8
156.5
147.1
122.0
138.2
117.0
116.3
149.0
165.5
Market Pulse
May 2023 | Vol. 5, Issue 4
Table 2: Comparison of high-frequency investment indicators with the pre-pandemic levels
(Average of Apr’19-Feb’20 = 100, unless specified otherwise)
Indicators
Investment
Industrial Production
IIP
IIP: Manufacturing
IIP: Capital Goods
Apr’22
May’22
Jun’22
Jul’22
Aug’22
Sep’22
Oct’22
Nov’22
Dec’22
Jan’23
Feb’23
103.4
105.9
106.3
103.3
101.1
102.9
99.5
105.8
111.7
112.9
106.6
99.7
109.7
102.0
99.8
109.2
91.6
104.1
105.2
110.4
109.7
100.3
93.0
102.6
IIP: Const. & Infra. Goods
108.2
110.8
Eight-core sector prod.
110.0
113.8
Steel consumption
106.4
111.2
IIP: Cons. Durables Goods
Steel production
Coal production
Cement production
Electricity production
Commercial Vehicle sales*
Activity
90.6
106.2
116.6
116.1
122.0
93.2
111.4
123.4
112.4
125.4
104.2
109.0
102.9
109.4
110.5
109.5
107.4
106.4
101.4
105.9
109.6
102.5
102.5
116.8
120.6
123.5
152.7
99.3
108.0
104.7
105.6
118.5
Diesel consumption
102.9
104.2
109.7
94.83
Domestic air cargo
92.18
100.8
98.97
101.8
Rail freight traffic
International air cargo
Port cargo
Daily E-way bills
GST collections
New orders (machinery)
New orders (Ind/Infra/Const)
Perceptions
Business Assessment
Index*
Business Expectations
Index (for qtr ahead)*
Manufacturing PMI
Services PMI
121.4
96.89
111.3
143.9
163.9
38.0
38.9
104.4
111.0
130.8
92.13
112.9
140.8
137.8
299.1
93.8
104.2
112.9
100.1
124.7
93.07
112.8
142.4
141.5
36.3
305.3
121.3
95.1
110.4
100.6
103.3
120.0
90.68
102.6
97.9
105.6
106.1
115.3
120.0
110.6
110.2
117.8
112.0
127.2
128.5
121.5
111.9
100.6
107.9
117.6
157.6
89.4
114.8
115.1
105.5
106.2
43.3
24.3
57.2
105.9
147
144.5
148.4
38.6
52.8
70.6
20.3
122.3
88.07
103.7
129.8
90.54
6.6
52.3
58.6
124.8
123.4
113.5
106.4
109.6
Source: CMIE Economic Outlook, RBI, SEBI, AMFI, Refinitiv Datastream, MGNREGA website, NSE.
Note: Data has been extracted on April 27th, 2023
9/140
104.1
105.6
105.6
106.3
108.1
108.6
100
110.3
112.1
189.9
111.4
133.2
123.2
82.4
83.8
102.9
156.5
173.8
88.7
146.3
127.6
105.2
122.3
152.5
111.6
107.3
149.4
146.2
109.7
107.7
114.3
112.1
160.9
78.3
88.7
120.1
154.3
142.7
118.6
119
113.2
102.9
117.1
86.19
149.6
58.9
154.5
125.5
92.71
144.5
160.7
112.6
90.77
87.13
140.5
125.6
95.35
94.95
145.7
104.6
156.5
102.6
90.36
105.6
111.7
145.5
125.3
111.3
93.83
107.1
132.2
116.9
89.0
111.0
118.2
108.6
113.7
89.2
99.9
114.9
98.61
91.6
126.2
104.2
105.5
86.8
121.5
110.3
112.9
101.3
116.9
109.8
113.4
118.6
95
104.8
Mar’23
157.6
137.8
64.9
143.6
93.3
156.6
183.8 1286.1
124.3
283.6
115.3
105.8
109.6
105.6
113.9
107.7
110.8
Market Pulse
May 2023 | Vol. 5, Issue 4
Table 3: Comparison of high-frequency financial market indicators with the pre-pandemic levels
(Average of Apr’19-Feb’20 = 100, unless specified otherwise)
Indicators
Apr’22
May’22
Jun’22
Jul’22
Aug’22
Sep’22
Oct’22
Nov’22
Dec’22
Jan’23
Feb’23
Mar’23
85.5
86.2
87.4
88.0
89.4
90.4
91.7
92.3
93.3
93.9
94.8
95.3
83.4
104.2
107.6
110.0
109.9
116.1
118.1
117.1
116.9
117.3
126.5
123.7
28.4
222.4
5.8
27.5
34.4
32.9
18.1
60.4
39.3
13.7
85.6
44.4
129.7
130.2
131.7
134.2
135.2
137.0
139.5
143.7
145.3
128.2
129.2
130.4
134.7
134.3
136.8
141.0
147.7
149.6
Financial markets
Cost of credit
WALR on new loans
WALR on O/S loans
1-year T-bill
10-year G-sec yield
78.8
106.7
82.4
110.9
83.0
111.4
85.8
109.4
87.4
107.5
90.1
110.6
91.2
111.3
92.9
108.8
93.1
109.5
94.4
109.8
96.9
111.5
97.8
109.4
Access to capital
Equity issuances
Debt issuances
Agri credit (O/S)
Industry credit (O/S)
Services credit (O/S)
Cons. durable loans (O/S)
Credit card loans (O/S)
Vehicle loans (O/S)
Housing loans (O/S)
Digital retail payments
36.4
112.8
393.4
149.9
176.8
136.3
426.8
45.5
113.2
402.9
150.4
178.8
136.5
432.2
91.9
116.1
113.3
113.8
414.7
149.2
182.8
139.1
442.3
438.0
158.8
187.7
141.3
439.0
81.0
145.8
114.3
115.9
448.2
163.4
190.1
142.7
437.8
456.2
163.1
192.2
144.3
470.7
56.0
219.5
214.0
120.9
117.7
117.8
117.7
117.6
472.8
174.8
197.2
145.9
463.0
140.0
140.8
485.5
169.2
200.1
147.3
461.0
143.1
148.8
498.8
175.7
207.2
151.7
500.4
502.5
182.2
212.3
150.8
479.6
82.1
180.3
117.7
119.4
503.9
182.3
212.0
152.6
469.4
148.0
153.2
508.1
189.6
214.9
154.7
591.8
Participation
Investor acc. (NSDL + CDSL)
SIP inflows
Market cap of listed
companies
Trading volumes on NSE
228.5
235.0
240.4
244.9
250.6
255.8
260.1
264.4
269.8
275.2
280.6
285.3
181.8
175.7
166.3
181.9
191.2
122.0
190.9
196.8
192.5
184.2
175.8
176.1
121.1
193.8
83.5
109.3
117.7
102.4
88.6
164.9
76.9
120.0
119.6
97.3
147.3
141.6
140.1
143.1
149.8
151.1
149.7
153.4
154.4
154.6
154.1
151.7
139.4
144.3
144.2
142.6
149.1
152.4
153.2
156.3
159.4
162.8
160.8
167.7
Share of wallet
MF average net AUM
Aggregate deposits (O/S)
130.1
128.7
128.6
131.6
131.7
136.0
Source: CMIE Economic Outlook, RBI, SEBI, AMFI, Refinitiv Datastream, MGNREGA website, NSE.
Note: Data has been extracted on 27th April 2023.
Worst ------------------------------------------
133.9
134.3
137.5
137.3
138.5
------------------------------------- Best
10/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Table 4: Growth/change (YoY) in high-frequency macro/market indicators
Apr’22
May’22
Jun’22
Jul’22
Aug’22
Sep’22
Oct’22
Indicators
Δ
Nov’22
Dec’22
Jan’23
Feb’23
Mar’23
-4.6
-7.3
-4.3
-0.9
Consumption demand
Rural
2-wheeler sales
%
3-wheeler sales
%
-5.9
22.6
Tractor sales
%
38.1
47.7
Fertilizer sales
%
61.1
23.3
-4.0
3.2
18.4
7.0
18.5
19.9
13.8
18.0
9.9
MGNREGA work demand
%
-28.0
-5.6
-28.1
-49.5
-51.0
-50.2
-45.2
-34.6
-35.4
-34.5
-33.8
-29.6
MGNREGA work provided
%
-28.9
-4.0
-27.8
-49.2
-50.7
-50.6
-44.3
-34.2
-36.7
-38.4
-38.2
-28.9
Average rural wage rates
%
4.4
4.5
4.8
4.9
5.0
5.0
5.8
6.4
6.3
6.4
5.9
bps
5
-392
-68
-17
4
-21
28
120
16
65
-114
23
Passenger car sales
%
-20.1
198.7
9.0
10.3
23.0
122.2
35.7
29.0
-7.3
8.1
6.5
-11.5
Dom. air passenger traffic
%
87.8
474.7
247.9
97.9
54.9
49.0
30.4
12.6
14.6
96.8
57.4
21.6
Rural unemployment
9.0
124.3
20.2
6.2
8.8
7.1
-3.2
7.4
5.5
9.9
36.4
23.0
18.7
17.8
-8.7
13.7
11.0
4.3
-10.9
-12.2
-1.0
18.9
3.6
4.4
19.2
16.0
11.8
10.1
Urban
Non-oil, non-gold/silver imports
%
33.0
32.7
37.6
41.5
39.2
20.9
5.4
8.6
4.3
-4.4
-3.6
-5.3
Gold & silver imports
%
-70.7
833.9
259.4
-18.1
-36.2
-13.6
-28.6
-24.4
-73.0
-73.1
-49.7
188.8
Broadband subscriber base
%
0.8
1.8
1.0
-0.1
0.1
2.7
2.8
3.0
5.1
7.1
Petrol consumption
%
17.2
51.5
23.2
6.8
11.7
8.8
8.9
8.2
6.0
14.3
8.9
6.8
Naukri Jobspeak Index
%
38.2
39.9
22.0
20.8
5.8
12.7
-2.7
42.9
50.9
1.7
-2.2
5.2
bps
-56
-648
-276
-10
-21
-93
-3
72
79
41
36
23
%
72.2
143.9
48.3
28.8
12.6
4.1
-1.4
19.7
6.2
0.9
8.7
Rural Cons. Sentiment Index
%
19.8
41.6
41.5
37.1
31.8
29.5
35.3
28.8
33.1
34.3
33.9
29.4
Rural Cons. Exp. Index
%
15.3
34.3
30.9
27.8
24.6
22.6
28.8
23.4
27.4
29.6
33.2
29.0
Urban Cons. Sentiments Index
%
30.4
38.1
48.1
38.3
39.1
46.9
47.7
49.5
54.3
50.0
55.8
53.3
Urban Cons. Exp. Index
%
26.7
30.3
35.4
29.2
28.2
39.6
38.8
43.4
50.0
47.5
55.4
54.5
IIP
%
6.7
19.7
12.6
2.2
-0.7
3.3
-4.1
7.6
4.7
5.5
5.6
IIP: Manufacturing
%
5.6
20.7
12.9
3.1
-0.5
2.0
-5.8
6.7
3.1
4.0
5.3
IIP: Capital Goods
%
12.0
53.3
28.6
5.1
4.3
11.4
-2.9
20.7
7.8
10.7
10.5
IIP: Const. & Infra. Goods
%
4.0
18.4
9.4
4.8
3.0
8.2
1.7
14.3
9.1
9.8
7.9
IIP: Cons. Durables Goods
%
7.2
59.1
25.2
2.3
-4.4
-5.5
-18.1
5.0
-11.0
-8.2
-4.0
Eight-core sector production
%
9.5
19.3
13.1
4.8
4.2
8.3
0.7
5.8
7.0
8.9
6.1
Steel production
%
2.5
15.1
3.3
7.5
5.8
7.7
5.8
11.5
6.2
10.8
7.0
Steel consumption
%
1.8
21.3
6.4
13.0
14.3
11.7
11.0
12.8
15.9
7.7
14.6
Coal production
%
30.1
33.5
32.0
11.3
7.7
12.0
3.8
12.3
12.2
13.4
8.5
Cement production
%
7.5
26.2
19.7
0.7
2.2
12.5
-4.1
29.1
9.5
4.6
7.3
Electricity production
%
11.8
23.5
16.4
2.3
1.4
11.6
1.2
12.7
10.4
12.7
7.6
Commercial Vehicle sales
%
Urban unemployment
EPFO net payroll additions
Perceptions
Investment
Industrial Production
112.2
39.4
16.6
15.0
11.7
Activity
Diesel consumption
%
7.8
31.7
23.9
8.1
13.2
13.4
5.6
19.3
6.6
12.8
7.5
1.2
Rail freight traffic
%
9.4
14.6
11.3
8.3
7.9
9.1
1.4
5.2
3.0
3.8
3.6
3.8
Domestic air cargo
%
7.9
54.6
40.4
18.7
4.8
6.7
-8.3
3.7
-3.6
2.4
8.1
-2.8
International air cargo
%
-0.8
-4.6
0.6
-1.5
-5.0
-4.9
-19.5
-6.0
-7.5
-7.5
-1.7
0.3
Port cargo
%
5.5
10.2
12.2
15.1
8.6
14.9
3.1
1.8
10.3
12.2
11.8
E-way bills
%
28.0
84.1
36.2
17.8
18.7
23.7
4.6
32.0
17.5
19.7
18.4
16.3
GST Collections
%
18.5
37.2
55.8
28.0
28.2
26.2
16.6
10.9
15.2
12.7
12.4
12.7
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Market Pulse
May 2023 | Vol. 5, Issue 4
Indicators
Δ
Apr’22
May’22
Jun’22
Jul’22
Aug’22
Sep’22
Oct’22
Nov’22
Dec’22
Jan’23
Feb’23
Mar’23
New orders (Machinery)
%
2392.0
226.5
-28.0
-72.4
16.7
260.1
-74.0
-71.8
-77.8
7.0
85.5
284.5
New orders (Ind./ Infra/Const.)
%
-19.8
177.2
51.7
-3.4
67.0
-86.5
0.4
39.5
-86.9
-18.4
10.3
-45.4
Perceptions
Business Assessment Index
%
23.3
-10.6
-5.6
Business Expectations Index
%
7.4
-3.5
-3.6
0.6
Manufacturing PMI
+/- 50
4.7
4.6
3.9
6.4
6.2
5.1
5.3
5.7
7.8
5.4
5.3
6.4
Services PMI
+/- 50
7.9
8.9
9.2
5.5
7.2
4.3
5.1
6.4
8.5
7.2
9.4
7.8
Merchandise imports
%
26.1
57.4
53.1
38.2
37.2
12.6
7.9
10.7
1.6
-0.5
-4.8
-7.9
Oil imports
%
63.8
75.5
78.1
49.6
83.5
4.6
33.1
26.8
17.9
29.2
7.6
-23.8
Merchandise exports
%
29.2
20.8
30.1
8.0
10.9
4.7
-11.6
9.8
-3.1
1.6
-0.4
-13.9
Agri exports
%
17.4
25.1
25.4
14.5
15.4
0.0
-13.6
-1.7
-6.3
-7.9
2.5
Services imports
%
46.1
52.7
45.5
26.0
30.9
32.0
16.3
22.1
6.0
7.6
10.9
6.2
Services exports
%
25.1
32.2
24.6
25.6
29.8
35.5
27.9
34.2
23.6
30.0
29.1
13.4
USDINR (eop)
%
3.2
7.1
6.2
6.8
9.0
9.8
10.2
8.7
11.4
9.0
9.5
8.5
External
Financial markets
Cost of credit (Chg. since Jan’22 beginning)
WALR on new loans
bps
-14
-7
6
12
26
36
49
56
66
72
81
86
WALR on O/S loans
bps
-21
14
19
46
61
87
97
114
116
128
152
160
1-year T-bill
bps
45
165
184
198
198
233
245
239
238
240
293
277
10-year G-sec yield
bps
69
96
100
87
73
94
99
83
87
89
100
86
Access to capital
Equity issuances
%
-38.3
160.6
-94.5
-68.3
-72.2
-37.2
-85.0
-68.1
-67.9
74.4
61.4
-37.8
Debt issuances
%
-46.9
-34.1
25.8
92.6
-9.9
-19.3
-16.7
126.4
70.7
182.6
-16.0
49.1
Agri credit (O/S)
%
10.6
11.8
13.0
13.2
13.4
13.4
13.6
13.8
11.5
14.4
14.9
15.4
Industry credit (O/S)
%
8.1
8.7
9.5
10.5
11.4
12.6
13.6
13.1
8.7
8.7
7.0
5.7
Services credit (O/S)
%
11.1
12.9
12.8
16.5
17.2
20.0
22.5
21.3
19.6
21.5
20.7
19.8
Consumer durable loans (O/S)
%
64.9
72.4
77.3
69.8
65.2
60.7
57.1
51.2
46.0
43.6
39.4
35.1
Credit card outstanding (O/S)
%
20.0
30.1
30.7
28.3
27.3
27.2
28.4
25.0
27.0
29.6
29.2
30.9
Vehicle loans (O/S)
%
11.5
14.1
17.7
19.2
19.5
19.9
22.1
22.5
24.7
25.5
23.4
24.9
Housing loans (O/S)
%
13.7
13.7
15.1
16.2
16.4
16.0
16.2
16.2
16.1
15.4
15.0
15.0
Digital retail payments
%
35.0
56.7
39.3
28.5
26.5
28.1
17.6
24.2
17.6
21.6
17.8
14.8
Investor acc. (NSDL + CDSL)
%
60.9
58.0
55.1
51.5
49.2
46.0
41.4
37.4
34.3
31.5
29.6
27.6
SIP inflows
%
38.0
39.3
34.1
26.3
27.9
25.4
24.0
20.9
20.1
20.3
19.7
15.8
Market cap of NSE listed cos
%
28.7
15.4
6.1
13.3
12.0
-31.2
7.9
12.2
6.1
2.2
2.1
-2.1
Daily trading volumes on NSE
%
-13.8
53.4
-18.2
-18.5
-18.7
-19.6
-35.1
-18.8
-1.1
13.7
-1.3
-16.7
MF average net AUM
%
19.9
13.3
8.4
7.5
9.5
6.6
3.4
5.3
7.5
4.9
5.5
6.2
Aggregate deposits (O/S)
%
10.0
8.8
8.6
9.2
9.5
12.5
8.9
9.8
9.2
10.5
10.1
Participation
Share of wallet
Source: CMIE Economic Outlook, RBI, SEBI, AMFI, Refinitiv Datastream, MGNREGA website, NSE.
Note: Data has been extracted on April 27th, 2023.
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Market Pulse
May 2023 | Vol. 5, Issue 4
Macroeconomy
Macro round-up
Domestic resilience amidst an inimical global environment
The new fiscal year FY24 started on a positive note, with high frequency indicators (HFIs) reflecting resilient economic
recovery and easing inflationary pressures. Industrial production recorded a three-month high growth of 5.6% YoY in
February, beating market expectations (consensus 5.1% YoY), led by expansion across the board-based expansion.
The PMI composite index at 61.6 in April was the highest since July 2010, with both manufacturing and services
expanding substantially, signaling robust economic activity. GST collections also touched an all-time high of Rs 1.9trn
in April 2023, surpassing the previous record (April 2022) by 12%. This was also reflective of strong domestic demand
and improved compliance—evident by the record high E-way bills in March 2023. With core inflation finally coming off
to 6% in Mar’23 after six months and headline coming within the RBI’s tolerance band, the MPC’s April policy decision
of a pause seems to be well-timed. The minutes of the April MPC meeting point to converging views on both the policy
action and stance, with all the members unanimously voting to keep the policy rate unchanged at 6.5% barring Prof. J
R Varma who has repeatedly expressed his reservation against “withdrawal of accommodation”.
Notwithstanding a positive start, the new fiscal remains clouded with uncertainty. Global growth projections have been
pared down by the IMF citing tightened global financial conditions and persistent geopolitical tensions. India has been
no different, with the impact of past rate hikes, possibility of El-Nino and heightened uncertainty in global financial
markets likely to weigh on growth trajectory going forward. That said, the encouraging HFIs do indicate resilience of
the domestic economy to vanquish the uncertainties.
• IIP rose to a three-month high, PMI highest since 2010: Industrial activity
witnessed continued traction and grew at a three-month high of 5.6% YoY in
February, beating market expectations (Consensus: +5.1% YoY). This was led by
expansion across the board barring Consumer Durables and Intermediate Goods.
The Use-based classification saw a sustained recovery in investment activity—
evident from growth in Infrastructure/Construction and Capital Goods production,
while Consumer Durables continued to remain a laggard. However, the core sector
output for March showed a moderation and recorded a 5-month low of 3.5%YoY
led by contraction in electricity, crude oil, and cement. Business sentiments, on
the other hand, remained strong as reflected from strong Services (62) as well as
Manufacturing PMIs (57.2).
• Trade deficit widened but expected to remain under control: After declining
steadily over the previous five months from an all-time high of US$28bn in Sep’22,
India’s merchandise trade deficit widened to a three-month high of US$18.6bn in
March on account of a sequentially higher expansion in imports (+13% MoM) as
compared to exports (+12% MoM), even as both contracted on a YoY basis. Going
forward, deterioration in external demand is likely to continue to weigh on exports.
Growth momentum in imports may also see some moderation, thanks to weaker
domestic demand and lower commodity prices. That said, increased bilateral
arrangements in the form of rising FTA negotiations, production linked incentives,
and the New Foreign Trade Policy 2023 (Aims to achieve US$2trn worth of exports
by 2030) should provide impetus to exports in the medium-term.
• Headline inflation came within RBI’s band, MPC’s pause seems well-timed:
Headline CPI inflation eased to a 16-month low of 5.7% YoY in March, albeit off a
high base (+7.0% in Mar’22) marginally undershooting market expectations. The
YoY moderation was broad-based, led by food & beverages. Core inflation also
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Market Pulse
May 2023 | Vol. 5, Issue 4
eased off to an 18-month low of 6% YoY in March. Also benefitting from high base,
WPI inflation further eased to 1.3% YoY in Mar’23 (vs. 3.9% YoY in Feb’23)—the
lowest since Nov’19. As the favourable base effect kicks in–the MPC’s hawkish
“pause” as opposed to an expected dovish hike of 25 bps seems well-timed. The
minutes of the April meeting showed that all the MPC members maintained that it’s
a “wait-and-watch” pause and not a signal of an end to the rate hike cycle. That
said, the modest downgrade in RBI’s inflation forecasts and relatively sanguine
growth outlook seem to be hinting towards an extended pause for now.
• GST collections at an-all time high: GST collections touched an all-time high of
Rs 1.87trn in April 2023, crossing the previous record of Rs 1.67trn seen a year
ago, implying a growth of 18% YoY. While a part of this is attributed to seasonal
factors and improved compliance, it also points to continued improvement in
economic activity, as evident by the record high E-way bills in March 2023 at 90.9
million. The state-wise GST collections, however, highlight the inter-state
divergence, with six states accounting for over 60% of the overall collections and
Maharashtra being a clear outlier contributing 22% to the overall pool.
• Global macro landscape: The US Fed hiked the interest rate again by 25 bps to
5.0-5.25%, even as it indicated the rates might be nearing a peak as the Committee
evaluates the effect of lagged transmission of past rate hikes. Even as labour
market has remained resilient and inflation is hovering at much above target levels,
markets are pricing in a 50bps cut by the end of this year. The ECB also increased
the policy rate by 25bps early this month. However, contrary to Fed, it maintained
the need for further rate hikes citing persistence of core inflation at elevated levels.
As interest rates continue to rise, the IMF revised the global growth rates
downwards by 20 bps to 2.8% for 2023, citing tightened financial conditions and
persistent conflict between Russian and Ukraine. India’s growth forecast for 2023
was also slashed by 20bps to 5.9%, weighed down by external factors, while it was
raised for the broader Asia-pacific region, reflecting upward revisions for China.
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Market Pulse
May 2023 | Vol. 5, Issue 4
IIP growth at three-month high in February 2023
Industrial activity witnessed continued traction and grew at a three-month high of 5.6% YoY in February, beating
market expectations (Consensus: +5.1% YoY). This was led by expansion across the board barring Consumer Durables
and Intermediate Goods. On a sequential basis (MoM), IIP contracted by 5.6%—a tad higher than average seasonal
contraction for the month of February since the commencement of the series. The Use-based classification saw a
sustained recovery in investment activity—evident from growth in Infrastructure/Construction and Capital Goods
production, while Consumer Durables continued to remain a laggard, reflecting slowing consumption demand. Going
forward, deteriorating external demand, and waning domestic pent-up demand pose downside risks to the industrial
activity. That said, strong capex push by the Government, coupled with improving capacity utilization, strong credit
offtake and easing commodity prices, should support manufacturing and investment activity.
•
IIP grew at a three-month high at 5.6% YoY in Feb’23: Industrial activity
continued to gain traction, with IIP growing at a three-month high of 5.6% YoY in
February vs. 5.5% growth in the previous month, beating market expectations
(Consensus: +5.1%, Source: Reuters). The YoY surge was primarily led by a pickup in Manufacturing (+5.3% YoY—three-month high), partly offset by some
moderation in YoY growth momentum for Electricity (+8.2% YoY vs. previous 3M
average of 11.9%), and Mining (+4.6% YoY vs. previous 3M average of 9.5%)
production. On a sequential basis (MoM), IIP contracted by 5.6%—a tad higher
than average seasonal contraction for the month of February since the
commencement of the series (-4.1% MoM). This is primarily attributed to a
steeper-than-seasonal sequential drop in Mining and Manufacturing, even as
MoM decline in Electricity production was in-line with the historical trend. During
Apr-Feb’23, IIP grew at an average of 5.7% YoY.
•
Investment activity stayed strong…: The use-based classification points to a
continued recovery in investments, aided by strong government spending and a
steady pick-up in private investments. This is visible in (i) a strong growth in
infrastructure goods production of 7.9%YoY and a robust growth rate of 8.1%
during Apr-Feb’23, and (ii) a sustained growth in Capital Goods production—a
proxy for investment activity in the economy, that recorded a robust expansion
over 10.5%+ for two consecutive months and an average growth rate of 14.9%
during Apr-Feb’23.
•
…While Discretionary consumption remained a laggard: Consumer Goods
production—a proxy for consumption activity—grew by 5.6% YoY, albeit off a
favourable base (-8%YoY Feb’22) but contracted by 4% on a sequential basis
(MoM). This was primarily led by lacklustre Consumer Durables production, that
witnessed decline for the third month in a row—both on a YoY and MoM basis,
reflecting subdued discretionary spending on the back of tapering pent-up
demand. Consumer Non-durables, however, grew by a strong 12.1% YoY, partly
attributed to a supportive base (-6.8% Feb’22). Going forward, deteriorating
external demand, and waning domestic pent-up demand pose downside risks to
the industrial activity.
•
Core sector growth for March point to moderation in industrial activity: The
core sector output growth continued to moderate, expanding at a five-month low
pace of 3.5%YoY in March. The moderation was led by contraction in electricity,
crude oil, and cement. As regards investment, while cement production fell by
0.8% YoY, steel production grew by a strong 8.8% YoY. Likewise, even as
electricity generation dipped (-1.8% YoY), coal—a key input for thermal power
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Market Pulse
May 2023 | Vol. 5, Issue 4
generation— recorded a strong 12.2% YoY growth. Among other energy sources,
crude oil production contracted (-2.9% YoY), while natural gas (+2.8%YoY) and
refinery products output (+1.5% YoY) rose.
•
Strong manufacturing and services PMI reading: The PMI composite index
recorded a strong reading of 61.6 in Apr’23—the highest since July 2010. This
was supported by strong expansion in activity in both manufacturing and services
sectors. Services PMI rose to record high of 62, signalling the fastest pace of
expansion in output since mid-2010s. Manufacturing PMI also remained in the
expansion zone for the 22nd consecutive month, recording a four-month high print
of 57.2 in April.
Table 5: India industrial production for February 2023 (%YoY)
%YoY
Weight (%)
IIP
Sectorbased
indices
Mining
Jan-23
Feb-22
FY23TD
FY22TD
5.6
5.5
1.2
5.7
19.4
5.3
4.0
0.2
5.2
24.9
14.4
Manufacturing
4.6
77.6
Electricity
8.0
Primary Goods
12.7
8.2
10.5
10.7
12.3
7.9
9.8
Intermediate Goods
17.2
Consumer Goods
28.2
Infra/Construction Goods
Consumer Durables
6.8
Consumer Non-durables
9.6
-0.3
0.5
5.6
12.8
-4.0
15.3
Source: CSO, NSE EPR.
8.8
8.2
34
Capital Goods
Use-based
Goods
Feb-23
5.5
10.2
1.3
14.9
107.3
8.6
8.1
67.0
4.6
7.9
4.1
-8.0
6.3
-6.8
3.9
1.6
-9.7
4.4
0.7
Figure 4: India industrial production (3MMA)
Industrial production (3MMA, %YoY)
60
60
40
40
40
20
20
60
5.6
0
-20
-20
-40
-40
-20
-60
-40
-60
2018
60
2019
2020
2021
2022
4.6
0
2018
2019
60
Manufacturing (3MMA, %YoY)
40
2020
2021
2022
Electricity (3MMA, %YoY)
40
20
5.3
0
-20
20
8.2
0
-40
-20
-60
-80
Mining (3MMA, %YoY)
20
0
2018
2019
2020
2021
2022
-40
2018
Source: Refinitiv DataStream, NSE EPR.
16/140
2019
2020
14.7
4.5
0.7
-8.2
12.1
4.6
2021
2022
Source: Refinitiv Datastream
8.7
10.9
30.7
19.7
172.2
8.1
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 5: Long-term industrial production trend (12MMA)
Industrial Production trend
30
30
IIP %YoY 12mma
Eight core growth 12mma
IIP Manufacturing 12mma
20
20
10
10
0
0
-10
-10
2008
2010
2012
2014
2016
2018
2020
2022
Source: Refinitiv Datastream
Source: Refinitiv Datastream, NSE EPR.
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Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 6: India industrial production use-based goods (3MMA)
Primary goods (3MMA, %YoY)
100
100
80
80
60
60
40
40
20
0
20
6.8
0
-20
-20
2018
2019
2020
2021
2022
Capital goods (3MMA, %YoY)
100
50
10.5
0
-50
2018
100
100
2019
2020
2021
2022
Infrastructure/Construction goods (3MMA, %YoY)
Intermediate goods (3MMA, %YoY)
50
50
-50
7.9
0
-0.4
0
-50
2018
2019
2020
2021
2022
2018
100
2019
2020
2021
2022
100
Consumer durable (3MMA, %YoY)
80
50
Consumer non-durable (3MMA, %YoY)
60
40
0
-4.0
20
12.1
0
-50
-20
2018
2019
2020
2021
2022
2018
2019
2020
2021
2022
Source: Refinitiv Datastream
Source: Refinitiv DataStream, NSE EPR.
Figure 7: Eight core industries growth trend (% YoY)
Eight-core industries growth
IIP growth
150
100
50
5.6
3.6
0
-50
-100
Aug
2019
Dec
Apr
Aug
2020
Dec
Apr
Aug
Dec
Apr
2021
Aug
2022
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Dec
Apr
2023
Source: Refinitiv Datastream
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 8: India’s Manufacturing and Services PMI trend
IHS Markit Purchasing Managers' Index for Manufacturing
IHS Markit Purchasing Managers' Index for Services
70
62
60
57.2
50
40
30
20
10
Source: CMIE Economic Outlook, NSE EPR.
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Apr-23
Jan-23
Oct-22
Jul-22
Apr-22
Jan-22
Oct-21
Jul-21
Apr-21
Jan-21
Oct-20
Jul-20
Apr-20
Jan-20
Oct-19
Jul-19
Apr-19
Jan-19
Oct-18
Jul-18
Apr-18
Jan-18
Oct-17
Jul-17
Apr-17
0
Market Pulse
May 2023 | Vol. 5, Issue 4
Trade deficit widened in March on higher non-oil imports
After declining steadily over the previous five months from an all-time high of US$28bn in Sep’22, India’s merchandise
trade deficit widened to a three-month high of US$18.6bn in March. This was on account of a sequentially higher
expansion in imports (+13% MoM) as compared to exports (+12% MoM), even as both contracted on a YoY basis by
4.9% and 7.2% respectively. The YoY contraction in exports was primarily led by petroleum products, gems & jewelry,
and engineering goods, more than offsetting the continued traction in electronic goods and agri exports. On imports,
the decline was primarily led by oil imports even as non-oil import bill remained broadly steady on a YoY basis—
reversing the contracting trend seen over the previous three months. This, however, was partly attributed to strong
gold imports, while non-oil non-gold imports continued to contract. The services trade surplus improved to US$14.2bn
in March—the second highest ever, translating into the overall trade deficit widening to US$4.4bn, even as it was much
lower than the average monthly deficit of US$10.6bn for FY23.
The merchandise trade deficit for FY23 widened by 39% YoY to US$266bn, led by a 16.8% YoY growth in imports,
even as exports grew by a much lower 6.7%. The services trade surplus, however, expanded by 33% YoY to US$138bn,
translating into the overall trade deficit at US$127.5bn for the year (-US$86.8bn in FY22). Going forward, deterioration
in external demand is likely to continue to weigh on exports. Growth momentum in imports may also see some
moderation, thanks to weaker domestic demand and lower commodity prices. That said, increased bilateral
arrangements in the form of rising FTA negotiations, production linked incentives, and the New Foreign Trade Policy
2023 (Aims to achieve US$2trn worth of exports by 2030) should provide impetus to exports in the medium-term.
• Trade deficit widened in Mar’23…: After declining steadily from an all-time high
of US$28bn in Sep’22, merchandise trade deficit saw a reversal of this trend and
expanded to a three-month high of US$18.6bn in Mar’23, broadly meeting market
expectations. This was on account of a sequentially higher expansion in imports
(+13% MoM) as compared to exports (+12% MoM), even as both contracted on a
YoY basis by 4.9% and 7.2% respectively.
• …led by non-oil imports and declining exports of major products: On the exports
front, robust growth in electronic goods (57.3% YoY in March, +49.2% in FY23)
and continued traction in agri commodities, was more than offset by a significant
drop in exports of major items during the month including petroleum & crude
products (-15.3% YoY), gems and jewellery (-27.4% YoY;), engineering goods (8% YoY) and ready-made textiles (-16.8% YoY), reflecting the impact of worsening
demand slowdown. Consequently, the share of these five major exports items in
India’s overall export bill as a % share of total exports dipped by 1.4 percentage
points on a MoM basis to an 11-month low of 60.8%. On the imports front, while
oil imports fell by 14.8% YoY (+31% in FY23 to US$ 211bn), thanks to lower prices,
gold imports surged by a steep 216% YoY, albeit off a very favourable base (-87.7%
YoY in Mar’22), partly also attributed to steep jump in gold prices over the last few
months (+18% in H2 FY23). Non-oil, non-gold import bill, however, contracted on
a YoY basis for the third month in a row, even as it expanded by a strong 16.9% in
FY23 to US$470bn.
• Services balance continued to remain in strong surplus: Net services balance
remained in surplus, rising from US$11.6 bn in Mar’22 to US$14.2bn in Mar’23 (up
by 23%YoY). This was primarily led by 13.4% YoY growth in service receipts to
US$30.4bn in March, even as the pace of growth has moderated to 20-month lows.
Services payments growth also moderated to 6.2%--the second weakest pace of
YoY expansion in the last 22 months. The overall trade deficit–-merchandise plus
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Market Pulse
May 2023 | Vol. 5, Issue 4
services—widened from US$3.2bn in Feb’23 to US$4.4bn in Mar’23, however,
much lower than the monthly average of $10.6bn during FY23.
• Exports to remain under pressure in FY24: Strengthening expectations of a
recession later this year is likely to continue to put pressure on exports. The impact
of tightening financial conditions is slowly getting reflected in moderating pace of
services exports as well. Imports are also likely to witness a reduced growth
momentum, thanks to weakening domestic consumption and lower commodity
prices. That said, increased bilateral arrangements in the form of rising FTA
negotiations, production linked incentives, and the New Foreign Trade Policy 2023
(Aims to achieve US$2trn worth of exports by 2030) should provide impetus to
exports in the medium-term.
Table 6: India monthly trade balance for March 2023
Exports
Oil
imports
(US$ bn)
Non-oil
imports
(US$ bn)
%YoY
42.0
0.1
7.6
36.3
105.9
41.9
US$ bn
%YoY
Total
(US$ bn)
%YoY
Mar-23
41.4
-7.2
60.0
-4.9
Feb-23
37.0
-0.4
53.2
-4.8
17.0
Mar-22
FY22
44.6
422.0
26.4
44.6
63.1
613.0
29.0
55.4
21.1
161.8
95.7
451.2
FY23
450.4
6.7
716.1
16.8
211.5
30.7
504.6
18.0
Source: Ministry of Commerce, CMIE Economic Outlook. NSE EPR.
%YoY
-14.8
Gold
Import
(US$ bn)
%YoY
US$ bn
3.3
216.7
-18.6
-9.6
2.6
-44.9
-16.2
8.6
44.7
1.0
46.2
-87.7
33.4
-18.5
-191.0
11.8
35.0
-24.2
-265.7
Figure 9: India monthly trade balance trend
Exports (%YoY)
150
Trade balance (US$bn, RHS)
Imports (%YoY)
100
-10
-15
-4.9
-20
-7.2
-18.6
-25
0
-50
-30
2018
2019
2020
2021
Trade balance (US$bn, RHS)
85
2022
USDINR
5
82.3
0
80
-5
75
-10
-15
70
-18.6
-20
65
60
0
-5
50
-100
Trade
balance
Imports
-25
-30
2018
2019
2020
2021
2022
Source: Refinitiv Datastream
Source: Refinitiv Datastream. NSE EPR.
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Market Pulse
May 2023 | Vol. 5, Issue 4
10
(10)
0
(60)
Mar-23
Sep-22
Mar-22
Sep-21
Mar-21
Sep-20
Mar-20
Sep-19
Mar-19
Sep-18
Mar-18
Sep-17
Mar-17
5
50
9
0
6
3
(50)
0
(100)
Mar-23
40
15
100
12
Sep-22
20
150
15
Mar-22
25
200
18
Sep-21
90
250
21
Mar-21
30
% YoY (R)
Sep-20
140
35
%
Oil Imports
24
Mar-20
190
Sep-19
40
% YoY (R)
Mar-19
Non-oil non-gold imports
Sep-18
45
Mar-18
Non-oil non-gold imports moderating
Sep-17
US$bn
Figure 11: Oil imports trend
US$bn
%
Oil imports trend
Mar-17
Figure 10: Non-oil, non-gold imports moderating
Source: Ministry of Commerce, CMIE Economic Outlook. NSE EPR.
Figure 12: Oil imports vs. Brent crude oil prices trend
US$bn
Oil Imports (LHS)
25.0
US$/bbl
Brent Crude (RHS)
160
140
20.0
120
100
15.0
80
10.0
60
40
5.0
0.0
Mar-13
20
Mar-14
Mar-15
Mar-16
Mar-17
Source: Refinitiv DataStream. CMIE Economic Outlook, NSE EPR.
Mar-18
Mar-19
Mar-20
Mar-21
Mar-22
0
Mar-23
Figure 13: Forex reserves and import cover (months)
# of months
Forex reserves and import cover (months)
US$ bn
700
FX reserves (US$mn)
650
20
Import cover ratio (months, RHS)
18
600
16
550
500
14
450
12
400
350
10
300
8
250
200
Apr-15
Apr-16
Source: Refinitiv DataStream, NSE EPR.
Apr-17
Apr-18
Apr-19
22/140
Apr-20
Apr-21
Apr-22
6
Apr-23
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 14: INR vs. other key Asian market currencies (As on May 5th, 2023)
INR & key Asian currencies vs. the USD (1M, 3M and 12M)
-15%
-10%
-5%
0%
0.5%
1.4%
-3.1%
Thailand Baht
HK Dollar
0.0%
1M
3M
12M
ndonesian Rupiah
5%
0.0%
0.0%
1.5%
1.4%
-1.2%
Vietnamese Dong
0.0%
-2.1%
-1.1%
-2.2%
-4.4%
alaysian Ringgit
0.1%
-1.6%
-2.1%
-2.9%
Japanese Yen
-0.7%
-3.1%
-3.7%
aiwanese Dollar
-0.5%
-7.1%
South Korean Won
Chinese Yuan
-4.3%
-2.5%
-4.8%
Philippine Peso
-5.2%
Indian Rupee
-3.1%
-10%
-1.6%
0.6%
0.1%
-6.6%
-15%
-0.5%
-5%
0%
5%
Source: Refinitiv Datastream
Source: Refinitiv DataStream, NSE EPR.
23/140
Market Pulse
May 2023 | Vol. 5, Issue 4
MPC minutes: A unanimous “wait-and-watch” pause
The minutes of the April MPC meeting point to converging views on both the policy action and stance, with all the
members unanimously voting to keep the policy rate unchanged at 6.5% barring Prof. J R Varma who has repeatedly
expressed his reservation against “withdrawal of accommodation”. Further, all the MPC members maintained that it’s
a “wait-and-watch” pause and not a signal of an end to the rate hike cycle. The headline inflation was revised
downwards to 5.2% for FY24, a tad lower than 5.3% estimated in February, with estimate for FY25 pegged at 4.5%.
Heightened global financial market volatility, uncertain crude oil price outlook, adverse climate conditions and lagged
pass-through of input costs are likely to impart upside pressures on prices, with downside support provided by record
rabi foodgrains production and easing commodity prices. Growth outlook remains resilient; estimate for FY24/25 is
pegged at 6.5% each (SPF’s FY24 est.: 6%), aided by strong urban demand, and reviving investment activity. Muted
external demand, protracted geopolitical tensions, tight financial conditions and rising market volatility pose risks to
the outlook.
• MPC unanimously voted for a pause…: The MPC members unanimously decided
to keep the repo rate unchanged at 6.5% in the April policy review as against the
divergence observed in the previous meeting. On the policy stance, the members
voted, with a 5:1 majority, in favor of keeping the stance of “withdrawal of
accommodation” except Prof. J Varma who has repeatedly expressed his
reservations over the stance for the fifth MPC meeting in a row. Dr Goyal maintained
that “there is no logic for overshooting policy rates and then cutting in a country
like India where the largest impact of the interest rate is on growth” and cautioned
that a further rise in real interest rate must be avoided as it can trigger a non-linear
switch to low growth. Further, Prof. J R Varma also cautioned against overshooting
the terminal policy rate and slowing the economy than what is needed to glide
inflation back to the target.
• ...to assess the impact of past rate hikes: All the MPC members maintained that
it’s a “wait and watch” pause, and not a signal of an end to the rate hike cycle. Dr
M. Patra emphasized that “the MPC must remain on high alert and be ready to act
pre-emptively if risks intensify to both sides of its commitment: price stability and
growth.” Governor Das highlighted that “it’s a tactical pause and not a pivot or a
change in policy direction”. On the inflation front, Governor Das expects inflation
for 2023-24 to soften primarily on account of i) record rabi foodgrains production,
ii) softening edible oil prices, and iii) easing global commodity prices. That said, the
disinflation trend is likely to be slow and protracted, highlighting that the overall
situation continues to remain dynamic and fast-evolving and requires close
monitoring and clarity on monsoon, milk prices and international crude oil prices.
Further, he signaled that the fight against inflation is far from over. The RBI has
upgraded the growth forecast for FY24 by 10bps to 6.5% and trimmed the inflation
projection by an equal magnitude to 5.2% for FY24.
• Extended pause likely: The April policy outcome saw a hawkish pause as opposed
to the expectation of a dovish 25 bps hike. Modest downgrade in RBI’s inflation
forecasts and relatively sanguine growth outlook, coupled with easing inflation
trajectory supported by easing global commodity prices and favourable base, seem
to be hinting towards an extended pause. Liquidity management as a monetary
policy tool is likely to take the centerstage now.
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Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 15: Policy transmission in credit markets
Source: CMIE Economic Outlook, Refinitiv Datastream, NSE EPR.
Figure 16: Sector-wise policy transmission in credit markets
Fresh floating rate rupee loans linked to EBLR have seen strong pass-through of rate hikes, particularly in public sector
banks. Loans issued in sectors like trade and rupee export credit have already observed around 90% transmission.
Education
MSME Loans
Source: CMIE Economic Outlook, NSE EPR.
25/140
99
40
85
45
128
125
62
96
98
53
Rupee export credit
Vehicle
111
97
155
223
Professional services
-53
Housing
115
184
160
Trade
0
0
-100
177
29
50
50
-50
139
Infrastructure
150
178
100
101
100
200
Industry (large)
165173
Agriculture
138
198
240
MSMEs
166
Outstanding rupee loans
250
Other personal loans
182
basis points
150
163
216
Fresh rupee loans
300
Education
200
220
218
Domestic banks
Vehicle
250
Private sector banks
Housing
Public sector banks
Transmission to WALR on loans
basis points
Transmission to WALR on Fresh Floating Rate
Rupee Loans Mandatorily linked to EBLR
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 17: Word cloud for the minutes of February 2023 and April 2023 MPC review meetings
We have compared the word cloud for the minutes of February 2023 and April 2023. The April meeting has witnessed
the mention of growth and demand increasing as compared to the Feb meeting, with inflation appearing the highest
number of times. Interestingly, the mention of financial conditions gained prominence, and understandably so given
the recent global events related to the banking sector.
February 2023
April 2023
Source: RBI, NSE EPR
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Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 18: Word cloud for each of the MPC members (April 2023)
Dr. Shashanka Bhide
Dr. Ashima Goyal
Dr.Rajiv Ranjan
Dr. Michael Debabrata Patra
Prof. Jayanth R. Verma
Shri Shaktikanta Das
Source: RBI, NSE EPR.
Table 7: Views of MPC members during last six MPC review meetings
Members
June 2022
Dr. Shashanka Bhide
Growth
Inflation
Recent data on the
economy remains
positive overall,
with broad based
indicators such as
non-food bank
credit, GST
collections
showing significant
growth. These
suggest that
demand conditions
are supportive of
economic growth in
the face of the cost
push inflationary
pressures.
The inflationary
pressures have
increased
significantly since
the MPC meetings
of April 2022 and
August 2022
September 2022
Recent data on eway bills and nonfood credit indicate
sustained
momentum of
economic
activities. Global
economic
conditions turned
unfavourable which
can impact exports
going forward.
The global
macroeconomic
conditions have
become adverse
for growth due to
global monetary
policy tightening to
contain the rising
inflation. The
adverse impact can
be insulated by
seasonal factors
such as the festival
season demand
and Kharif crop
harvest.
The economic
indicators provide
a mixed outlook for
domestic growth
on back of
deteriorating global
growth outlook. All
of this, fueled by
the risk of high
energy and food
prices in case of
supply chain
disruption remains
a concern
The present
trajectory is
holding on to the
growth momentum
projected for FY23.
Domestic growth
impulses are
necessary for
sustaining
aggregate demand
on the back of
weaking external
demand.
There have been
positive
developments as
far as inflation
scenario is
concerned
Persistent high rate
of price rises due to
spill-over effects of
high international
market prices.
However, there are
Though on a YoY
basis the CPI has
moderated.
However, the MoM
momentum of
prices continues to
The decline in
headline inflation
pressures in Nov
and Dec has been
mainly on account
of declining
27/140
December 2022
February 2023
April 2023
The business
outlook sentiment
gives a mixed
picture, however,
one-year ahead
situation appears
substantially
superior. The HFI
points to
continuation of
present growth
momentum. Weak
external demand
and adverse
weather conditions
pose downside
risks.
The MoM
momentum of
inflation
decelerated in
Feb’23. However,
one needs to be
Market Pulse
May 2023 | Vol. 5, Issue 4
Policy
action
May 2022. The
broadening of the
inflationary
pressure is also
seen in the rising
rates of the three
major components
of CPI- food, fuel
and miscellaneous.
however,
uncertainties
persist. The impact
of recent changes
in GST and uneven
distribution of
rainfall can put
upward pressure
on prices.
indications of
decline in the
momentum of price
rise that is
expected to
decrease in the
second half of the
current financial
year
50 bps rate hike;
Stance: Withdrawal
of accommodation
50 bps rate hike;
Stance: Withdrawal
of accommodation
50 bps rate hike;
Stance: Withdrawal
of accommodation
Dr. Ashima Goyal
Growth
There is reasonable
recovery in growth.
Both central and
state government
taxes are buoyant
and likely to
exceed any rise in
subsidy costs of
the Ukraine crisis,
giving them space
to cut taxes on
fuels.
Inflation
Inflation is a
concern now as it
has overshot
official and private
predictions due to
prolonged Ukraine
war which is
keeping
international crude
and food prices
high.
Policy
action
40bps rate hike;
stance:
accommodative
Prof. Jayanth R Varma
Growth
While the inflation
shock is more
clearly and
immediately
visible, the growth
shock cannot be
ignored. There is
anecdotal evidence
that businesses are
reluctant to pass
on rising input cost
to customers amid
concerns of
demand slowdown.
Indian growth
seems quite
resilient to the
global shocks yet.
The digital boom
and supply chain
diversification led
export demand
may outlast
softening of global
growth. There is
pent-up demand
for services,
despite Covid-19
resurfacing, but it
may not sustain.
Inflation in India
differs from US.
Second round
effects require
wages to rise and
since in India the
majority still lives
in rural areas, rural
wages must rise. In
India they are
especially sensitive
to food inflation.
But the
continuation of the
free food program
blunts this link.
50 bps rate hike;
Stance: Withdrawal
of accommodation
Growth shock
appears to be less
severe as
estimates suggest
that the economy is
coping reasonably
well with the
geopolitical
tensions and the
Chinese lockdown.
vegetable prices- a
seasonal feature.
Several other
commodities have
shown a sharp rise
that remains a
concern from a
price stability
perspective.
watchful of the
seasonal patterns
that may begin to
reverse the trend.
25 bps rate hike,
Stance: Withdrawal
of accommodation
No rate hike,
Stance: Withdrawal
of accommodation
Indian growth is
sustaining despite
continuous global
shocks. Domestic
demand can
moderate a global
slowdown.
Household SIPs in
stock markets have
compensated for
FPI outflows.
Robust remittances
and software
exports along with
progress in
transitioning to a
green economy
bodes well for the
Indian economy.
However, there is a
need to provide a
push to small
investors to
reverse the
investment
slowdown of the
last decade.
Indian exports
show signs of
strain reflected by
falling PMI new
export order index
and softening PMI
manufacturing and
services. Though
private investment
show early signs of
revival, it is yet to
come out of the
decade long
slowdown.
Although the
growth is resilient,
there are signs of
slowdown
reflected by the
HFI. Softening nonoil non-gold
imports points to
weakness in
demand. Also,
external demand
slowdown affects
exports, that is
further affecting
the manufacturing.
Inflation has
moderated
domestically but
remains above the
tolerance band
which can be
destabilizing for
inflation
expectations. Rise
in GST tax, energy
costs and rupee
depreciation are
short term risks for
inflation.
A sharp fall in WPI
because of falling
index for Indian
supply chain
pressure reflects a
bright picture. In
addition, the fall in
WPI without a
substantial pass
through to CPI
reflects that the
cost shocks are
perceived to be
temporary
Long-run inflation
expectations
largely remain
anchored on the
back of easing
global inflationary
pressures. There
are little signs of
wage or demand
led second round
effects on inflation,
however, core may
soften over the
years.
50 bps rate hike;
Stance: Withdrawal
of accommodation
35 bps rate hike;
Neutral stance
No rate hike,
Neutral stance
No rate hike,
Withdrawal of
accommodation
Economic growth
has proved
resilient in the face
of an adverse
global
environment.
The Indian
economy has
shown resilience
thanks to robust
exports and Govt.
spending—both of
which now stands
troubled due to
global slowdown
and fiscal
constraints. Private
consumption
stands buoyant but
how much it is due
to the pent-up
The growth
concerns continue
to remain
heightened.
Early warning signs
of a possible
slowdown are
visible to a greater
extent than in
February. In the
current situation of
high inflation, MP
does not have the
luxury of
responding to
these growth
headwinds.
28/140
remain high across
all major
components. The
fall in WPI to a
single digit after a
long run-in double
digit provides a
relief but sticky
core CPI remains a
concern.
35 bps rate hike;
Stance: Withdrawal
of accommodation
Inflation is
expected to come
down partly on
account of base
effect. However,
the momentum
also expected to
slow down as
already reflected in
some consumer
goods.
Market Pulse
May 2023 | Vol. 5, Issue 4
Inflation
Inflation has
become more
pronounced both in
terms of magnitude
and persistence
since April.
MPC members to
start moving
towards providing
projections of the
future path of the
policy rate. This
would help
stabilize long term
bond markets and
anchor inflation
expectations.
Policy
action
40bps rate hike;
stance:
accommodative
50 bps rate hike;
Stance: Withdrawal
of accommodation
Dr. Rajiv Ranjan
Growth
Inflation
Policy
action
The economic
recovery is better
entrenched than
before.
Amidst geopolitical
turmoil, escalation
in cost-push
pressures is
leading to a
generalized
upsurge in
inflation. Even as
the current price
rise is largely
supply-led,
spillover effects
and persistence
may unhinge
inflation
expectations.
40bps rate hike;
stance:
accommodative
Dr. Michael D Patra
Recent incoming
data suggest that
India’s macroGrowth
fundamentals,
barring imported
food and fuel
inflation, are still
Inflation is at
unacceptably high
levels and is
projected to remain
above the target
during the entire
forecast horizon.
50 bps rate hike;
Stance: expressed
reservations on the
“withdrawal of
accommodation”.
demand (that could
dissipate in the
coming months)
remains to be seen
Both on the global
and domestic front
there is strong
evidence of easing
inflationary
pressure as also
reflected in the
falling inflation
expectations of
both households
and businesses.
The inflationary
expectations seem
to have diminished
The two major
inflationary risks
arise from i)
structural change
in the geopolitical
alignment of the
major oil producing
country, and ii)
probability of a
deficit monsoon
No rate hike,
Stance: Against
withdrawal of
accommodation
No rate hike,
Against withdrawal
of accommodation
No rate hike,
Reservations on
the withdrawal of
accommodation
Positive
momentum in
private
consumption and
investment as
against negative
pre pandemic
average
momentum. Along
with strong rebound in contact
intensive services,
are strong positives
for the Indian
growth.
The Indian
economy shows
strength as
reflected in i) high
frequency
indicators ii)
resilient domestic
demand iii) focus
on capex iv)
healthy balance
sheets of
corporates and
banking sector v)
improving external
demand indicators
and vi) depth of
financial markets
Growth outlook
improved on
account of
entrenched
investment revival
along with lesser
drag from external
demand. Further,
govt's sustained
focus on
infrastructure
spending is likely
to crowd in private
investment.
Declining
international food
prices, and
correction prices of
global metal and
industrial
commodities lend
optimism to future
inflation outlook.
Economic activity
is progressing on
the expected
trajectory in 202223 so far as evident
from the available
high frequency
indicators. Notably,
51/70 HFIs (both
from demand and
supply side) have
crossed their prepandemic levels.
Deft
macroeconomic
management has
insulated the
Indian economy
from several
shocks lately
thereby ensuring
that recovery
remains on a firm
footing.
The surge in
inflation by 84bps
in April to 7.8%
was broad-based.
Reflecting these,
all core inflation
measures
exceeded 6% in
April and were in
the range of 6.4 %
to 7.5%.
Domestic inflation
tapering off but
remain high.
Inflation
expectation of
Indian household
also moderated in
July but remain
elevated.
Considerable
uncertainty
remains on the
progression of
monsoon and INR
depreciation.
Persistent price
pressures as
observed from
continuing
generalisation of
price pressures
and sticky core
inflation remains a
matter of concern
A dive into CPI
inflation indicates
little evidence of a
decisive and
durable disinflation
process with the
recent fall in
inflation being led
by intermittent
inflation. Further,
the sticky core
inflation points to
the persistence in "
steady inflation"
50 bps rate hike;
Stance: Withdrawal
of accommodation
50 bps rate hike;
Stance: Withdrawal
of accommodation
35 bps rate hike;
Stance: Withdrawal
of accommodation
25 bps rate hike,
Stance: Withdrawal
of accommodation
No rate hike,
Withdrawal of
accommodation
Bringing down
inflation into
tolerance band will
minimize the loss
of output. If real
GDP growth
averages between
The Indian
economy is running
positive growth
differential vis-àvis the rest of the
world. Momentum
in HFIs is positive
GDP Projections
indicate a positive
momentum for the
rest of the year on
the back of robust
domestic drivers.
However, the
Combined with
slowing global
activity reflected by
falling exports and
the expected fiscal
consolidation, the
FY24 growth
Inflation ruling over
6%, as the case in
FY23, proves
harmful for growth
as reflected by
decelerating
private
29/140
Market Pulse
May 2023 | Vol. 5, Issue 4
intact and in sync
with the ongoing
recovery. Yet, the
momentum of the
recovery is still
below full strength,
warranting policy
support.
Inflation
Geopolitical
spillovers have
thrust upon us a
surge in the
momentum of
inflation we can ill
afford and can
persist as the
geopolitical crisis
and retaliatory
actions
persist. This can
un-anchor
expectations about
its future path
40bps rate hike;
stance:
accommodative
Shri Shaktikanta
Das
Policy
action
6-7% of GDP in
FY23/24, the
recovery that is
increasingly
solidifying gets a
fair chance of
reaching the
sunlight.
which is in sharp
contrast to the rest
of the world. Real
GDP is in line with
RBI’s projections.
strength of the
momentum
depends on the
extent of drag from
net exports on
account of global
growth slowdown,
muted domestic
private investment
and tightening
financial
conditions.
India is being
impacted by the
global inflation
crisis. Broadening
inflation indicates
that there is some
demand that is
able to afford these
high prices. Core
core inflation and
the weighted
median are both
showing
generalisation and
momentum.
Inflation is still
unconscionably
high. Risks around
currency
depreciation,
seasonal pressure
and monsoon's
uneven progress
could upend the
recent moderation
in momentum.
Inflation remains
elevated,
persistent and
generalised. MP
actions supported
by improvements
in supply
responses is
expected to ease
the headline
inflation, at best, in
the range of 5-6%
over the year
ahead.
50 bps rate hike;
Stance: Withdrawal
of accommodation
50 bps rate hike;
Stance: Withdrawal
of accommodation
35 bps rate hike;
Stance: Withdrawal
of accommodation
Growth
Rebound in
domestic economic
activity is getting
generalized.
Exports remain
resilient while
persisting high
import growth
suggests a revival
in domestic
demand. Higher
global commodity
prices pose
downside risks to
domestic economic
activity.
Growth impulses
are broadly
evolving in line with
expectations. The
forecast of a
normal southwest
monsoon, the
improvement in
employment
conditions, steady
rise in capacity
utilisation and
improving non-food
credit growth augur
well for the growth
outlook.
Global growth has
further slowed
down. Domestic
growth remains
resilient and
provides space to
act. HFIs for
Q1FY23 and
thereafter are
evolving on the
expected
trajectory. Pickup
in SW monsoon
bodes well for rural
demand.
Amidst rising
recession fears
across the global
economy, India is
expected to remain
the largest growing
major economy.
However, slowing
global demand
pose a downside
risk
Inflation
Headline CPI
inflation for March,
increased beyond
expectations to
7%, with almost all
measures of core
inflation registering
Adverse spill overs
from high global
commodity prices
continue to
impinge on
domestic prices.
Domestic factors
Globally inflation
has hardened.
Domestically, even
as inflation has
moderated, it
remains
uncomfortable
Though the worst
of inflation is
behind us, the
battle against
inflation is not
over. The
uncertainties
30/140
prospects hinges
around price
stability, anchored
inflation
expectations, and
improving supply
responses across
agriculture,
industry and
services
Barring the
pronounced winter
easing of vegetable
prices, almost
every other CPI
component shows
hardened price
pressure. And with
the onset of
summer, the
vegetable prices
are expected to
give in and
increase. Further,
the statistical and
exclusion-based
measures of
underlying inflation
show an uptick.
Although the
inflation seems to
have peaked, it
remains high
25 bps rate hike,
Stance: Withdrawal
of accommodation
The sustained
buoyancy in
domestic demand
is driving growth.
While weak
external demand is
a drag on
merchandise
export, the growth
in remittances,
recovery in contact
intensive services,
good prospects of
rabi production and
govt's enhanced
thrust on capex
provide the
required support to
the economy
CPI has moderated
on account of lower
vegetable prices,
though the CPI
excluding
vegetables has
moved higher. The
consumption
spending and
moderation of
sales growth in
corporate sector
hindering new
investment.
Inflation remains
elevated and
generalised and
remains the
biggest risk to the
economic outlook.
The future path of
inflation is
vulnerable to
several supply
shocks.
No rate hike,
Stance: Withdrawal
of accommodation
The growth
impulses remain
buoyant in Q4FY23
supported by
continued thrust on
infrastructure by
the govt and
moderating drag
from the net
external demand.
The inflation
projection for FY24
is expected to
soften, but the
disinflation
towards the target
is likely to be slow
Market Pulse
May 2023 | Vol. 5, Issue 4
Policy
action
a sharp pick-up.
The attendant
consequences of
war-led supply
chains woes are
expected to last
much longer than
earlier anticipated.
also played a role,
with a strong heat
wave and
consequent loss of
production
resulting in a
significant pick-up
in food prices.
high. Uncertainties
on account of
geopolitical tension
and commodity
prices remain.
surrounding the
inflation trajectory
remains sizeable.
40bps rate hike;
stance:
accommodative
50 bps rate hike;
Stance: Withdrawal
of accommodation
50 bps rate hike;
Stance: Withdrawal
of accommodation
35 bps rate hike;
Stance: Withdrawal
of accommodation
Source: RBI, NSE EPR.
31/140
durability of
disinflation cannot
solely rely on food
inflation, given its
uncertainty and
susceptibility to
weather events.
There continues to
remain uncertainty
on the evolving
inflation trajectory
25 bps rate hike,
Stance: Withdrawal
of accommodation
and protracted.
Thus, the overall
situation remains
dynamic and fast
evolving. The fight
against inflation is
far from over.
No rate hike,
Stance: Withdrawal
of accommodation
Market Pulse
May 2023 | Vol. 5, Issue 4
Headline inflation moderated on higher base; WPI inflation at 28-month low
Headline CPI inflation eased to a 16-month low of 5.7% YoY in March, albeit off a high base (+7.0% in Mar’22)
marginally undershooting market expectations (Consensus: 5.8% YoY). With this, the headline inflation for the quarter
Q4FY23 stands at 6.2%, 50 bps higher than RBI’s estimate of 5.7%. On a sequential basis, however, prices continued
to rise for the third consecutive month, with all broad categories, barring clothing & footwear and fuel & light,
witnessing an increase. The YoY moderation was broad-based, led by food & beverages. Core inflation—that remained
sticky at 6.3%YoY since Sep’22—finally witnessed some softening to an 18-month low of 6% YoY (vs. 6.5% in Mar’22),
with all sub-categories barring health and housing witnessing a drop in YoY price momentum. WPI inflation continued
to ease to 1.3% YoY in Mar’23 (vs. 3.9% YoY in Feb’23)—the lowest since Nov’19, benefiting from a high base. The
moderation was largely due to lower prices of non-food primary articles, crude petroleum & natural gas, and
manufactured products—all of which entered into the deflationary zone for the first time in more than two years.
Even as the IMD has predicted a normal monsoon for this year, the uncertainty around the plausible effect of El-Nino
(current probability: 50%), and weather-related disruptions may impart upward pressures to food prices over the
coming months, partly offset by record rabi foodgrains production. This, along with uncertain crude oil price outlook
after the OPEC+ production and rising global financial market volatility, may pose risks to future inflation trajectory. On
the positive side, easing input cost conditions, along with a favorable base, should keep inflation within the RBI’s target
range in Q1FY24.
• Headline inflation eased to 5.7% in Mar’23…: After breaching the RBI’s upper
tolerance band for two months in a row, headline retail inflation eased to a 16month low of 5.7% YoY in March’23. With this the average inflation for Q4FY24
stood at 6.2% YoY, 50bps higher than RBI’s estimate of 5.7%. For the full year, CPI
inflation averaged at 6.65% vs. 5.5% in FY22, nearly 15bps higher than the RBI’s
estimate. On a sequential (MoM) basis, however, prices continued to rise for the
third consecutive month, with all broad categories, barring clothing & footwear and
fuel & light, witnessing an increase.
• …led by a broad-based moderation…: The moderation in YoY price momentum
was broad-based. The food & beverages inflation dropped to 5.1% in March after
recording a 6%+ reading over the previous two months, even as average for the
year was much higher at 6.7% vs. 4.3% in the previous year. This was led by
deflation in meat & fish (-1.4% YoY—the first deflation in the latest series), oils &
fats (-7.9% YoY—the steepest YoY drop in the new series), and vegetables (-8.5%—
the fifth consecutive YoY drop in a row). Excluding these three items, food inflation
remained elevated at 10%+ for the third month in a row. On a sequential basis
(MoM), food prices rose by 0.2%, primarily led by continued rise in fruits, milk and
pulses prices and pickup in vegetable prices, partly offset by sustained deflation in
eggs, oils & fats, sugar and sequential drop in cereal prices for the first time 19
months.
• …with core inflation finally witnessing some softening: Core inflation (Headline
CPI ex food & beverages and fuel & light) eased to 6.0% in Mar (vs. 6.5% in Mar’22)
after remaining sticky at 6.3%YoY since Sep’22. All sub-categories barring health
and housing witnessed a drop in YoY price momentum, led by personal care &
effects, transportation & communication, recreation & amusement, and household
goods & services. The sequential price momentum also came off from 0.5% MoM
in Feb to 0.3% in March. For FY23, core inflation averaged at 6.3% vs. 6.1% in the
previous year.
32/140
Market Pulse
May 2023 | Vol. 5, Issue 4
• WPI further eased to 1.3% in Mar’23: Continuing the easing trend, the WPI
inflation fell further to a 28-month low of 1.3% in Mar’23 vs. 3.9% YoY in Feb, albeit
off a high base (+14.6% in Mar’22), even as it rose by 0.2% MoM. The moderation
was largely due to a meaningful drop in inflation in primary articles and
manufactured goods. Primary articles inflation dropped to 2.4% from 3.3% in the
previous month, led by contraction in prices of non-food articles (-4.6% YoY) as
prices of crude, petroleum & natural gas saw a sharp decline to -1.2% in Mar vs.
14.5% in Feb’23. This was partly offset by surge in prices of food articles. Prices of
manufactured products also witnessed a negative growth of 0.8% YoY—the lowest
since Nov’19, thanks to cooling commodity prices, with both food and non-food
manufactured inflation contracting. With this, the gap between retail and wholesale
inflation trajectory has moved deeper in the positive territory at 4.6% in Mar’23 vs.
2.6% in the previous month.
• Infaltion to remain in check in Q1FY24: Even as the IMD has predicted a normal
monsoon for this year, the uncertainty around the plausible effect of El-Nino, and
weather-related disruptions may impart upward pressures to food prices over the
coming months, partly offset by record rabi foodgrains production. This, along with
uncertain crude oil price outlook after the OPEC+ production and rising global
financial market volatility, may pose risks to future inflation trajectory. On the
positive side, easing input cost conditions, along with a favorable base, should keep
inflation within the RBI’s target range in Q1FY24.
Table 8: Consumer price inflation in March 2023 (%YoY)
%YoY
CPI
Weight (%)
Mar-23
Feb-23
Mar-22
FY23
FY22
45.9
5.1
6.2
7.5
6.7
4.2
Food & Beverages
Pan, Tobacco & Intoxicants
5.7
2.4
Clothing & Footwear2
3.0
6.5
Housing
5.0
6.8
Miscellaneous
28.3
Core CPI inflation1
6.0
6.3
%
15
CPI
13
7.2
4.3
3.7
7.5
10.4
11.3
6.5
6.3
6.1
7.0
6.3
Source: CSO, NSE EPR. NA = Not Available. Note: 1 Headline inflation excluding food & beverages, pan, tobacco & intoxicants and fuel & light.
Figure 19: Headline CPI inflation trend
4.5
9.5
3.4
6.2
5.5
2.2
9.4
4.6
10.8
6.7
3.0
9.1
8.9
5.8
44.9
7.0
3.1
8.2
10.1
Fuel & Light
6.5
6.7
Headline and core inflation eased in Mar'23
Food & Beverages
Fuel & Light
Core inflation
11
9
6.0
7
5
3
1
(1)
(3)
(5)
Mar-16
Sep-16
Mar-17
Sep-17
Source: CMIE Economic Outlook, NSE EPR.
Mar-18
Sep-18
Mar-19
Sep-19
33/140
Mar-20
Sep-20
Mar-21
Sep-21
Mar-22
Sep-22
Mar-23
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 20:Break-up of core inflation
Core inflation
9
(%)
Services
Core ex-services
8
7
6
5
4
Feb-23
Dec-22
Oct-22
Aug-22
Apr-22
Jun-22
Feb-22
Dec-21
Oct-21
Aug-21
Jun-21
Apr-21
Feb-21
Dec-20
Oct-20
Aug-20
Jun-20
Apr-20
Feb-20
Dec-19
Oct-19
Aug-19
Jun-19
2
Apr-19
3
Source: Refinitiv DataStream, NSE EPR Note: Services considered from Misc. category, and it constitutes 28.9% of the core inflation
Figure 21: Category-wise contribution to India consumer price inflation (CPI)
India Consumer Inflation and Components (Mar 23)
8
CPI Inflation
Tobacco
Clothing & Footwear
Miscellaneous
7
8
Food & Bev.
Fuel & Light
Housing
Core Inflation
7
6
6
6.0
5.7
5
5
4
4
3
3
2
2
1
1
0
0
2019
2020
2021
2022
2023
Source: Refinitiv Datastream
Source: Refinitiv DataStream, NSE EPR
34/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 22: Category-wise contribution to India Food and Beverages inflation (CPI)
India Food Inflation and Components
12
10
12
Cereal and Products
Vegetables
Meat and Fish
Oils and Fats
Spices
Sugar and Confectionary
Food & Beverages
Milks and Products
Prepared Meals, Snacks, Sweets
Egg
Fruits
Pulses and Products
Non-alcoholic Beverages
10
8
8
6
6
4
4
2
2
0
0
-2
-2
-4
-4
2020
2021
2022
2023
Source: Refinitiv Datastream
Source: Refinitiv DataStream, NSE EPR.
Figure 23: CPI projections vs actual
%
India average annual consumer inflation trajectory
CPI inflation
11.0
Core CPI Inflation
RBI projections (Feb'23)
RBI projections (Apr'23)
10.0
9.0
8.0
7.0
6.5
6.0
5.7
5.0
5.4
5
4.0
5.6
5.4
6.1
5.3
Source: CMIE Economic Outlook, RBI, NSE EPR.
35/140
FY25E
FY24E
Q4FY24E
Q3FY24E
Q2FY24E
Q1FY24E
FY23
Q4FY23
Q3FY23
Q2FY23
Q1FY23
FY22
FY21
FY20
FY19
FY18
FY17
FY16
FY15
FY14
2.0
FY13
3.0
Market Pulse
May 2023 | Vol. 5, Issue 4
Table 9: Wholesale price inflation for March 2023 (%YoY)
Weight (%)
WPI
Primary articles
Mar-23
Feb-23
Mar-22
1.3
3.9
13.4
5.5
3.8
22.6
Food articles
2.4
15.3
Non-food articles
4.1
Minerals
0.8
Crude petroleum & natural gas
Source: CSO, CMIE Economic Outlook. NSE EPR.
14.8
30.8
28.2
32.5
6.0
15.8
49.9
37.0
59.3
(0.8)
1.9
10.2
5.6
11.1
22.7
64.2
Food group
21.2
9.0
3.1
Manufactured products
8.8
3.4
8.0
Electricity
24.2
2.1
Mineral oils
24.4
2.3
8.2
(10.6)
14.5
22.1
46.1
3.4
3.2
19.7
12.1
2.8
8.7
Figure 24: Category-wise contribution to India wholesale price index (WPI)
India WPI Inflation and Components
20%
20%
Primary Articles
Manufactured Products
WPI Inflation
Fuel & Power
15%
15%
10%
10%
5%
5%
1.3
0%
-5%
0%
2019
2020
2021
13.0
0.1
(5.0)
(1.2)
13.2
Coal
9.4
10.0
2.4
Fuel & power
FY22
13.9
(4.6)
3.3
FY23
2022
2023
-5%
Source: Refinitiv Datastream
Source: Refinitiv Datastream, NSE EPR.
36/140
7.2
2.2
43.7
3.4
22.6
6.3
10.2
4.1
19.6
56.5
1.9
7.1
6.8
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 25: India wholesale price inflation (WPI)
Manufactured products (%YoY)
Primary articles (%YoY)
20
20
14
12
15
15
10
10
10
8
6
5
5
3.3
0
0
4
2
1.9
0
-5
2018
2019
2020
2021
-5
2022
Fuel & Power (%YoY)
50
-2
10
30
8
20
10
2
-10
0
-20
-2
2020
2021
2021
2022
Food products (%YoY)
4
0
2019
2020
6
14.8
2018
2019
12
40
-30
2018
-4
2022
2.8
2018
2019
2020
2021
2022
Source: Refinitiv Datastream
Source: Refinitiv Datastream, NSE EPR.
Figure 26: Gap between wholesale and retail inflation
percentage points
Gap between CPI and WPI inflation
15.0
10.0
4.3
5.0
0.0
Source: CMIE Economic Outlook. NSE EPR.
37/140
Mar-23
Sep-22
Mar-22
Sep-21
Mar-21
Sep-20
Mar-20
Sep-19
Mar-19
Sep-18
Mar-18
Sep-17
Mar-17
Sep-16
Mar-16
Sep-15
Mar-15
Sep-14
Mar-14
Sep-13
-10.0
Mar-13
-5.0
Market Pulse
May 2023 | Vol. 5, Issue 4
GST collections touched fresh record high levels in April
GST collections touched an all-time high of Rs 1.87trn in April, surpassing the previous record of Rs 1.67trn in April last
year. While a part of this is attributed to seasonal factors and improved compliance, it also points to continued
improvement in economic activity, as evident by the record high E-way bills in March 2023 at 90.9 million. Even as GST
collections breached the Rs 1.75trn mark, the interstate divergences on both value and growth hint towards
asymmetric recovery across the country. Extrapolating the Q4FY23 growth of 12% to FY24 translates into average
monthly GST collections of Rs1.65trn, implying a growth of 9%. While this looks achievable, further worsening of
external demand, coupled with sharper-than-expected lagged effects of past rate hikes, may pose downside risks.
• GST collections remain strong: In April 2023, GST collections recorded an alltime high at Rs 1.9trn, surpassing the previous record of Rs 1.67trn in April last
year, marking a growth of 12% YoY. The momentum was healthy all through FY23
as the average collections stood at Rs 1.5trn vs. Rs 1.2trn in FY22—a jump of
21.4%. The surge in economic activity in the last month of FY23 reflected in the
record high GSTN numbers along with anti-evasion measures by government drove
the collection higher. The state-wise GST collections, however, highlight the interstate divergence with six states accounting for over 60% of the overall collections
and Maharashtra being a clear outlier contributing 22% to the overall pool.
• E-way bills at a record high at 90.9m in Mar’23: E-way bills—electronic permits
raised by businesses to move goods within and across states—hit a record high of
90.9m in Mar’23, surging 16.3% YoY/11.1% MoM. This surge in economic activity
in the final month of FY23—partly seasonal—is reflective of the resilience in
economic recovery post pandemic. Of these, e-way bills generated for intra-state
shipments accounted for about 64% (57.8 m) of the total e-way bills generated.
• Downside risks ahead: GST collections for the first time crossed the level of Rs
1.75trn on a monthly basis aided by the factors aforementioned. Extrapolating the
growth seen in Q4FY23 (12.6%) to the current fiscal would imply average monthly
GST collections of Rs1.65trn+, implying a growth of 9% over FY23, a tad higher
than the budgeted growth of 12%. While this looks achievable, further worsening
of external demand, coupled with sharper-than-expected lagged effects of past
rate hikes, may pose downside risks.
Figure 27: Annual trend of average monthly GST collections
Year-wise average monthly collections (Rs billion)
2,000
1,870
1,800
1,505
1,600
1,400
1,200
1,000
1,239
899
981
1,018
FY19
FY20
947
800
600
400
200
0
FY18
FY21
FY22
Source: CMIE Economic Outlook, CGA, NSE EPR.
38/140
FY23
Apr'2023
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 28: Year-wise monthly GST collections trend
Rsbn
Monthly GST collections
2017
2000
2018
2020
2021
2022
2023
GST collections at all-time high
1,870
1800
2019
1600
1400
1200
1000
800
600
400
200
0
Apr
May
Jun
Jul
Source: CMIE Economic Outlook, CGA, NSE EPR.
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Figure 29: GST E-way bills generation
mn
Inter state
100.0
Intra state
Total GST E-way bills
90.9
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
Source: CMIE Economic Outlook, CGA, NSE.
39/140
Feb-23
Dec-22
Oct-22
Aug-22
Jun-22
Apr-22
Feb-22
Dec-21
Oct-21
Aug-21
Jun-21
Apr-21
Feb-21
Dec-20
Oct-20
Aug-20
Jun-20
Apr-20
Feb-20
Dec-19
Oct-19
Aug-19
Jun-19
Apr-19
Feb-19
Dec-18
Oct-18
Aug-18
Jun-18
-
Apr-18
10.0
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 30: State-wise GST collections for Apr’23
Figure 31: YoY change in GST for Apr’23
Source: CMIE SOI, NSE.
40/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Global macro snippets: Growth forecasts slashed; rate hikes continued
Continuing the hiking cycle, the US Fed hiked the Fed Funds rate again by 25 bps to 5.0-5.25%, even as it indicated
that the rates might be nearing a peak as the Committee evaluates the effect of lagged transmission of past rate hikes.
At the current juncture, labour market continues to remain resilient in US and inflation level elevated. Nevertheless,
markets are pricing in a 50bps cut in rates by the end of this year. The ECB also increased the policy rate by 25bps
early this month. However, contrary to Fed, it maintained the need for further rate hikes citing persistence of inflation
at elevated levels. As interest rates continue to rise, the IMF revised the global growth rates downwards by 20 bps to
2.8% for 2023 considering the fallout of tightened financial conditions globally along with persistent conflict between
Russian and Ukraine. India’s growth forecast for 2023 was also slashed by 20bps to 5.9%, weighed down by external
factors, while it was raised for the broader Asia-pacific region, reflecting upward revisions for China.
• Fed fund rate increased by 25bps, hinting at peaking..: Following a dovish
commentary in the previous hike, the US Fed expectedly hiked the policy rate by a
reduced pace of 25 bps in the May policy. With this, the Fed has cumulatively hiked
the interest rate by 500bps since March 2022 taking the Fed funds target range to
5.00-5.25%–the highest since August 2007. The FOMC also hinted towards a
“pause” in the current cycle of rate hikes as the Committee evaluates the lagged
effect of past rate hikes. The Chair Jerome Powell highlighted that future decision
will be taken on a “meeting-by-meeting” level. The labour market in the US
continues to remain tight, as indicated by a dip in unemployment rate to 3.4% in
April, beating the market ecpactation of 3.6%. Even as inflation in the US has
eased, it remained elevated at 5% in Mar’23, highlighting the fight against inflation
is far from over. In contrast, markets expect a minimum of 50 bps cut in the rates
by Dec’23 with a 95% probability, up from 85% a month ago 1.
• ..While the ECB maintained the need to raise further: Continuing its effort to curb
inflation, the ECB raised interest rates by another 25 bps on May 4th Policy meeting,
bringing the key interest rate for eurozone to 3.25%. While the pace came off from
the usual 50bps over the past few policies, the ECB indicated that the future action
will be data dependent. In fact, unlike Fed, it maintained the need to hike policy
rates citing persistence of inflation at elevated levels (7% vs. target of 2%).
• IMF revised global growth forecasts: The IMF, in the April edition of the World
Economic Outlook report, revised the global growth rates downwards by 20bps to
2.8% for 2023 owing to tightened global financial conditions and the on-going
conflict between Russia and Ukraine. Advanced economies are expected to
experience a particularly pronounced slowdown, with growth for 2023 pegged at
1.3%, down from 2.7% in 2022. For the Emerging Market Economies, the IMF is
optimistic and has projected a growth of 3.9% for 2023, a mere 10bps lower than
the previous year, which is expected to improve to 4.2% in 2024. Even as growth
rate for India has been revised downwards by 20bps to 5.9% for 2023, the forecast
for the Asia-Pacific region has been revised up by 30bps to 4.6%, highlighting
China’s recovery and India’s “resilient” growth. As per the outlook report, India and
China are set to contribute around 50% to the global growth in 2023. Global
headline inflation in the baseline is set to tumble from 8.7% in 2022 to 7.0% in
2023 on the back of lower commodity prices. Interestingly, in most cases, inflation
will not return to its target level before 2025.
1 https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
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Insights
Highly cited research paper 1 in the field of Behavioural Science
How Does Response Inhibition Influence Decision-Making When Gambling? 2
Tobias Stevens 3
Ian P. L. McLaren 7
Damien Brevers 4
Myriam Mertens 8
Christopher D. Chambers 5
Xavier Noël 9
Aureliu Lavric 6
Frederick Verbruggen 10
Research Paper summary prepared by Muskan Jindal and Varuna Joshi 11
1. Introduction
According to the literature, decision-making involves an interplay between automatic and control processes.
Automatic processes are said to be quick, associative, effortless, and easily activated by environmental input. Topdown executive control procedures, on the other hand, are thought to be slower, more effortful, and goal-dependent.
Executive processes organize, monitor, bias, and change the settings of lower-level cognitive processes such as input
detection, response selection, and motor programming. Automatic processes are assumed to guide behavior when the
executive control system is otherwise engaged or incapacitated. For instance, patients with frontal brain lesions, which
are crucial for executive control functions, frequently become impulsive, take greater risks, struggle to fight
temptations, fail to repair errors, and exhibit habitual behavior when it is contextually inappropriate.
This current study used a concurrent load technique to investigate how executive control modifications influence
monetary judgments when gambling. The concurrent load technique is frequently employed to assess the relative
contributions of automatic and executive control processes in an activity. The basic assumption is that jobs requiring
control processes tend to compete with one another, resulting in a reduction in performance. In contrast, automatic
processes are assumed to occur in parallel, so concurrent load influences them less. In the previous clinical literature,
it has been shown that patients with frontal brain lesions, which are crucial for executive control functions, frequently
become impulsive, take greater risks, struggle to fight temptations, fail to repair errors, and exhibit habitual behavior
that is unsuitable for the setting. In this study, the author has used load modification to assess decision-making under
uncertainty in a unique gambling assignment. The current study is focusing on the specific cognitive processes that
regulate choice and high-level decision-making.
2. Hypothesis
This study includes a series of experiments that examined how the introduction of stop signals influenced gambling.
Experiment 1 tested whether stopping influenced decision-making directly, by changing information sampling styles,
or indirectly, by changing arousal levels. Experiments 2a and 2b further explored the cautiousness transfer hypothesis
by manipulating cautiousness in an unrelated secondary task. Experiment 3 examined whether the effect of stopping
was a result of the requirement not to gamble on a proportion of the trials. In Experiment 4, it is explored whether the
transfer effect was also observed in gamblers (with and without gambling problems); in addition, two other analyses
Stevens, T. et al. (2015), “How does response inhibition influence decision-making when gambling?” Journal of Experimental Psychology: Applied, 21(1), pp. 15–36.
Available at: https://doi.org/10.1037/xap0000039
3
University of Exeter
4
Université Libre de Bruxelles
5
Cardiff University
6
University of Exeter
7
University of Exeter
8
University of Exeter
9
Université Libre de Bruxelles
10
University of Exeter
11
Research Associates from Indian Institute of Management, Ahmedabad
2
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combined the data of all experiments using the bar task. Finally, in Experiment 5, different gambling paradigms were
tested, and the exact probabilities of winning and losing were shown on each trial.
3. Experimental Design
Six adjacent bars served as the options that subjects could select from during each trial of the prescribed load
manipulation task. Each option (or bar) was paired with a certain amount that subjects might win; however, they were
told that the larger the amount, the less likely a win. Thus, bigger quantities denoted "risky bets," whereas lower
amounts represented "safe bets." After 3.5 seconds, the bars started rising, and subjects had to respond when the
bars reached the top line.
For this paradigm, in some blocks (load blocks), subjects also had to perform a secondary task. The nature of this task
depended on the group to which the subjects were assigned.
In the first group (the double-response group), the secondary task required subjects to execute an additional response
when the top of the bars turned black (the double-response signal). In the second group (the stop group), subjects had
to stop the planned choice response when the top of the bars turned black (the stop signal). The signals occurred on
one-third of the trials of the load blocks. Monitoring for occasional signals, keeping extra task rules in working memory,
and preparing to change action plans (i.e., adding an extra response or withholding the planned response) increase
cognitive load.
The given diagrams show two trial types in the bar task. The top panel shows the sequence of events on trials without
signals. The bottom panel shows the sequence of events on a signal trial. The trial started with six potential bets.
Underneath the betting options, letters were displayed that referred to the response keys on the keyboard.
Figure 32: Trial types
4. Data and Methodology
In Experiment 1, sixty-four volunteers (45 females, mean age 21 years) from the University of Exeter and the
community participated in monetary compensation (approximately $9). Referring to the above-mentioned trail
structure, this particular study examined whether stop signals induced more elaborate processing of stimuli and choice
options in the gambling task. Previous work suggests that changes in processing styles occur when subjects expect a
stop signal in a standard stop-signal task. This change in processing results in longer reaction times (RTs) but fewer
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choice errors. To assess the decision for this experiment, only RTs are unreliable for predicting when a decision is
made. Because the initial 3,500-ms period during which the bars did not rise allowed subjects to select an amount well
before their choice response was implemented, eye movement recording has been utilized to assess the temporal
dynamics of decision-making. Further in this experiment, it has also been analyzed that decision-making under
uncertainty and gambling, in particular, suggests that cognitive decision-making and emotional processes may
interact.
In Experiment 2, sixty-four new volunteers were recruited (Experiment 2a: 32 subjects, 18 females, mean age 20
years; Experiment 2b: 32 subjects, 22 females, mean age 21 years).
The motor cautiousness hypothesis is considered, which states that strategic control adjustments in the stop-signal
task influence gambling, leading to a preference for lower amounts with a higher probability of winning.
In Experiment 2a, we examined whether manipulating the speed-accuracy tradeoff modulated gambling. Subjects
continuously alternated between gambling tasks (without stop signals) and an unrelated perceptual decision-making
task (also without stop signals). In Experiment 2b, there were two conditions: no-signal (go) blocks and stop-signal
blocks. In the no-signal blocks, no stop signals could occur in the secondary task. On each trial, two gray rectangles
were presented in the secondary task. One rectangle was darker (RGB: 117, 117, 117) than the other (RGB: 137, 137,
137), and subjects responded to the location of the brighter rectangle by pressing the s (for left) or l (for right) key with
the little finger of the left or right hand, respectively.
In Experiment 3, we further tested the specificity of the stop-signal manipulation. This particular study examined
whether the inclusion of trials in which subjects could not gamble was sufficient to produce an overall decrease in
gambling. The bar task is described in Experiment 1. The only distinction was the absence of load blocks in favor of norise blocks. On one-third of the trials in the no-rise blocks, the bars would not start rising after 3,500 ms. The trial was
automatically aborted when a normal trial would have ended.
In the previous three studies, the above-mentioned bar task was used to examine the effects of a stop load on gambling
in a university population. Before drawing any theoretical conclusions, it is important to demonstrate that the load
effect is not population- or task-specific. In Experiment 4, the same load effect is examined in gamblers (lowproblematic gamblers and high-problematic gamblers) using the bar task. The procedure was the same as in the stop
group in Experiment 1. The double-response group was not included because of the potential vulnerability of this
population to an increase in gambling behavior.
In Experiment 5, to prove that the effect of stopping on decision-making generalizes to other tasks Stop-signal
manipulation has been combined with a task that measures decision-making under risk. On each trial, subjects chose
between two options of equal expected value framed in terms of “wins” or “losses.” In the win domain, subjects could
win points (e.g., 80% chance of winning £0.75 vs. 20% chance of winning $3.00), whereas they could lose points in
the loss domain (e.g., 80% chance of losing $0.75 vs. 20% chance of losing $3.00).
5. Key Results
The results of Experiment 1 contradicted the processing and arousal accounts. The patterns of eye fixations and SCRs
were identical in the stop and double-response groups, which was unexpected given that stop signals elicited a more
sophisticated processing style.
Experiment 2a failed to support the general motor caution explanation. It has been discovered that a speed-accuracy
tradeoff in a secondary choice-reaction task without stop signals did not alter gambling preferences (although it did
influence gambling latencies). The lack of a transfer effect could not be attributed to the task-switching design because
switching between a secondary stop-signal task and the gambling task (without stop signals) modulated gambling
(Experiment 2b). Experiment 3 showed that occasionally not being able to make a bet (instead of encountering a stop
signal) did not influence decision-making either.
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The fourth study shows that high-problem gamblers took more risks in the bar task than control subjects (who did not
gamble), which confirms the construct validity of our paradigm. The low-problem gamblers showed a reliable reduction
in betting scores in blocks in which stop signals could occur (load blocks) versus blocks in which they could always
respond (no-load blocks). The final study suggested that the carryover effect is not unique to the bar task. It was
observed that reduced risk-taking occurred when stop signals could occur in the win domain but not in the loss domain.
6. Practical Implications and Limitations
The study indicates that stopping motor responses can encourage people to select lower bets with a higher probability
of winning. Training response inhibition may, in fact, be useful for the treatment of various clinical populations.
Response inhibition deficits have been observed in impulsivity disorders, such as attention-deficit/hyperactivity
disorder, and in compulsivity disorders, such as obsessive-compulsive disorder. The small size of the effect
complicates further investigation of the underlying mechanisms and makes possible applications in the clinical domain
more questionable.
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Highly cited research paper 2 in the field of Behavioural Science
Overconfidence and (Over)Trading: The Effect of Feedback on Trading Behaviour 12
Klajdi Bregu 13
Research Paper summary prepared by Veda Poduval and Varuna Joshi 14
1. Introduction
Overconfidence is a behavioural bias that has been well-established in previous studies. Several studies have used
theoretical and empirical models to understand the relationship between overconfidence and asset trading activity in
terms of volume, utility, and profits. Most models concluded a link between overconfidence and higher trading volume
and lower profits, that is, aggressive trading led to lower levels of profits and returns. A past study has proven that
investors who are confident about their investment skills or past performance tend to trade more and that past portfolio
returns are positively correlated with trading volume. This was claimed to be a self-attribution bias in which investors
feel overconfident after their portfolio or market performs well. However, the literature does not identify the
mechanism through which overconfidence affects asset markets. It may be important to explore the causal link
between overconfidence and trading behaviour, the establishment of which may require the researchers to manipulate
the participants’ overconfidence in experimental settings which is difficult to achieve. As per previous findings, this
manipulation could be carried out on the information that the subjects have about the accuracy of their information.
Giving feedback on one's information accuracy may help to block the channel through which overconfidence influences
trading behaviour. Studies argue that the quicker and cleaner the feedback, the fastest the process of learning.
However, they also find that feedbacks in asset markets are often slow and noisy which explains why people are not
well-calibrated.
Motivated by this literature, the author explores overconfidence and trading in a laboratory setting (a control group,
and two treatment groups) to discover whether overconfidence in the accuracy of one's information is one of the drivers
of overtrading and lower profits. The study uses feedback as a natural tool to eliminate the possibility of traders being
overconfident about the accuracy of their information.
This paper uses an experimental design to first establish the link between overconfidence and trading behaviour and
then investigate how feedback can minimize the consequences of overconfidence on asset markets. The environment
in the control group is such that being overconfident in one’s accuracy of information creates an incentive to overtrade.
The treatment groups are designed to eliminate the possibility of being overconfident. In one group, the participants
receive feedback about the accuracy of their own information only (known as ‘own accuracy’ treatment), while in the
other they receive feedback about the accuracy of their own as well as the other players (known as ‘full accuracy’
treatment).
2. Hypothesis
Backed by the evidence from the literature, the author expects to find a positive relationship between overconfidence
and trading volumes and a negative relationship between overconfidence and profits.
Hypothesis 1: Overestimation 15 increases trading volume and decreases profits in the control group, but the effect
disappears in the own accuracy treatment and the full accuracy treatment in which participants receive feedback on the
accuracy of their information.
Overconfidence and (Over)Trading: The Effect of Feedback on Trading Behaviour; Journal of Behavioural and Experimental Economics 88 (2020) 101598
Judd Leighton School of Economics, Indiana University South Bend
14
Research Associates from Indian Institute of Management, Ahmedabad
15
overestimation is when people think they are better at something than they actually are
12
13
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Hypothesis 2: Overplacement 16 increases trading volume and decreases profits in the control group and own accuracy
treatment, but the effect disappears in the full accuracy treatment in which participants receive feedback on the signal
accuracy of all traders.
3. Experimental Design
The experiment was conducted using z-Tree at the Behavioural Business Research Lab at the University of Arkansas.
The study has two treatment groups and a control group. There were 90 participants in total, split randomly into groups
of 5 who interacted only during the trading stage.
In the first stage, participants complete a counting assessment that serves to elicit overestimation or overplacement.
Participants are required to count the number of red rectangles within seven seconds from a matrix of 100 rectangles
coloured differently. They are then required to answer how close they were to guess the right count and what they think
about how close their group members were to taking the right guess. This task was repeated at the beginning of each
round. These questions were incentivized and added to the final payoffs.
In the second stage, participants trade in a double auction market for 10 rounds of 120 seconds each. At the beginning
of each round, every participant is given three assets and 300 tokens with a value of either 0 or 100, with equal
probability. Participants are aware that the value of the asset is the same for every player in the group and that these
tokens are convertible at $1 for every 20 tokens although the asset values are unknown to the players. For the entire
duration of the trading period, participants receive news (a signal) on their screens. They are made aware that the
accuracy of this news depends on their performance in the counting tasks. Participants received feedback at the end of
each trading session.
In the final stage, after the signal is received, each participant can evaluate the expected value of their asset depending
on their assumption about the accuracy of the signal.
After completion, the participants had to complete a Cognitive Reflection Test comprising seven questions as studies
suggest that to be able to infer others’ information on the basis of asset prices, one may need higher cognitive reflection
skills. These were also incentivized for every correct answer.
4. Results
The paper observed some weak evidence (statistically significant at a 10 per cent level) that overestimation is negatively
correlated with profits and found no relationship (not statistically significant) between overplacement and profits. Their
results also support that overconfidence about the accuracy of information serves as a mediator for the influence of
overconfidence on trading markets. The regression controlled for personal attributes such as age, gender, and cognitive
reflection skill, but only signal accuracy had a statistically significant effect on profits.
The two key findings of this study were:
•
•
16
Over-estimation increases trading volume and weakly decreases profits in the control group, but the effect
disappears in the own accuracy treatment and the full accuracy treatment, in which participants receive
feedback on the accuracy of their information.
Over-placement does not affect the trading volume or profits differently in the control group and the two
treatments; thus, hypothesis 2 does not hold true.
Over-placement occurs when people think they are better than others when they are not.
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5. Conclusion
Previous studies have shown that overconfidence leads to excess market entry, and overinvestment in capital, and thus
affects the financial markets. Overconfidence leads to people overestimating their expertise regarding the financial
market and ignoring data and professional advice. This may lead to ill-advised attempts to time the market or establish
concentrations in risky investments they believe are safe. It is often difficult for experimenters to manipulate
overconfidence. The author of this paper uses a feedback mechanism to assess the effects of overconfidence on asset
markets. The results from this study further contribute to the literature by providing evidence that overconfidence
regarding one’s accuracy of the information has an impact on trading behaviour. The author suggests that future
research should find ways to manipulate overconfidence and help establish a causal relationship between trading
behaviour and overconfidence.
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Highly cited research paper 3 in the field of Behavioural Science
Is Loss-Aversion Magnitude-Dependent? Measuring Prospective Affective Judgments
Regarding Gains and Losses 17
Sumitava Mukherjee 18
Arvind Sahay 19
V. S. Chandrasekhar Pammi 20
Narayanan Srinivasan 21
Research Paper summary prepared by Dhruvisha Dave and Varuna Joshi 22
1. Introduction
How much of an improvement in your mood would you expect to experience if you gained $500 versus if you lost $500?
Now, let that sink in. What kind of an impact do you think obtaining fifty cents would have on your mood in comparison
to losing fifty cents? The study that led to the awarding of the Nobel Prize in economics for work done on the valuation
of gains and losses in Prospect Theory for both hazardous and riskless options, as well as the substantial research that
followed, have revealed a value function in which, psychologically, losses loom larger than wins due to a phenomenon
known as loss-aversion. This article discusses the controversy surrounding loss aversion (in the sense of prospect
theory) and judgements about the intensity of gains and losses.
2. Hypothesis
The possibility that the value function could be magnitude dependent has not been fully explored by studies. Thus, the
question remained: Is reversed loss-aversion or null findings about the asymmetry connected to gains and losses for
small amounts in affective judgements a measuring effect due to response scales and between-subject designs, or is
it a true psychological finding? To explain this gap, the current study conducted four tests in which participants judged
gains and losses concurrently from a shared reference point and were asked how they felt about the magnitude of each.
3. Data, Setting and Methodology
Experiment 1 examines the use of a unipolar scale to evaluate the likelihood of minor gains and losses in gambling
situations. Participants were asked to make affective decisions about potential benefits and losses that ranged from 5
to 500 Indian rupees. The imaginary game, in which players might either win or lose money, was explained to the
participants. They were instructed to see themselves participating in a multi-round version of this game. Depending on
the outcome of a coin toss, each round would have a 50% chance of winning a pre-determined amount of money and
a 50% risk of losing the same amount of money. As a result, probability was not altered, and all of these bets had a
zero anticipated value (only magnitude was altered). As a result, participants had to evaluate how each amount would
have made them feel.
In Experiment 2, the authors conducted a comparative evaluation of judging criteria for gambling outcomes. Similar
instructions were given to participants and were asked to rate how they felt after each round of the game. Only the way
the answers were given was different. They chose which of the following best described how they would feel if they
won or lost the same amount of money: (a) gaining would have more effect, (b) losing or gaining would have the same
effect and (c) losing would have more effect.
Experiment 3a is about judging price changes on a comparison scale. Participants in the study were asked to rate how
much getting or losing a certain amount of money would change the way they bought things. We told them that in
Mukherjee, S., Sahay, A., Pammi, V. C., & Srinivasan, N. (2017). Is loss-aversion magnitude-dependent? Measuring prospective affective judgments regarding gains and
losses. Judgment and Decision making, 12(1), 81-89
18
Amrut Mody School of Management, Ahmedabad University, Ahmedabad, India
19
Department of Marketing, Indian Institute of Management, Ahmedabad
20
Centre of Behavioural and Cognitive Sciences, University of Allahabad, India
21
Centre of Behavioural and Cognitive Sciences, University of Allahabad, India
22
Research Associates from Indian Institute of Management, Ahmedabad
17
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everyday life, people often buy things where the price goes down (gain) or up (loss). They were told to imagine going
to buy a product whose price was Rs 5,100 (as a reference point). They weren't told what the product was, so that they
wouldn't be influenced by what they already knew.
Experiment 3b focuses on evaluating price changes on an extended comparative scale. The experimental design was
identical to that of Experiment 3a, with the exception of a minor change in the instructions and the response format.
In order to reduce any potential hesitance about purchasing at the slightly higher price, the following instruction was
provided: "Imagine you were about to purchase a product for INR 5100. You have already decided to make the
purchase, regardless of the price." Participants were required to rank the impact of a gain or loss on a comparative
scale with five alternatives.
4. Summary of Results
Figure 33: Percentage of participants ratings
gain>loss, gain=loss and loss>gain in Experiment 1
Figure 34: Percentage of participants ratings
gain>loss, gain=loss and loss>gain in Experiment 2
Figure 35: Percentage of participants ratings
gain>loss, gain=loss and loss>gain in Experiment 3a
Figure 36: Proportion of participants choosing
each of the 5 options in Experiment 3b
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64.40% indicated gaining or losing 5 INR had no effect in the first experiment. 61.01% of participants felt gaining or
losing would have the same effect for 500 INR, while more thought losing would be more influential. Gains had more
impact for smaller amounts and losses for larger quantities (Figure 33). Comparative scales increased loss-aversion.
For 5 INR, 78.33% of participants believed gaining and losing would have the same effect, while the rest said gains
would be more effective. 10% of 500 INR participants thought gaining or losing would have the same effect, whereas
a much higher number said losses would be more impactful. Therefore, the second experiment demonstrated lossaversion only for greater magnitudes, while a majority saw gains and losses similarly (and a few showed a gain
prominence) for smaller magnitudes.
In experiment 3a, like Experiment 2, the gain is equal to the loss proportion decreases with the amount, indicating
that profits and losses are valued differently as magnitude grows. Unlike Experiment 2, when a large reference anchor
(5100 INR) was used, loss-aversion was absent for both low and high quantities, demonstrating its magnitude-relative
character.
Further, Figure 37 shows experiment 3b's proportions. Both 3-point and 5-point scales captured comparable
responses: 91.52% for 5 INR and 6.77% for 500 INR said profits and losses would have the same effect
(‘gains=losses’). Like Experiment 3a, as magnitude increased, fewer people said gains = losses. A big reference point
eliminates loss aversion at both low and high magnitudes.
5. Conclusion
The current results resolve the empirical discrepancy for affective valuation and indicate that for low magnitudes,
intensity for anticipated gains or losses is equivalent, while at higher magnitudes people may weigh losses more than
gains. A large reference anchor also eliminates loss-aversion. These findings imply that when stakes are high (for
higher sums), the pain of a negative event is greater than the pleasure of a similar event, but when stakes are low, the
pleasure of a positive event is greater or equal to the pain of a comparable negative event. A high reference anchor
eliminated loss-aversion at all magnitudes. These indicate magnitude-dependent loss-aversion. Evidence is mounting
that the value function of prospect theory has to be adjusted to account for disparities in both small and large
magnitudes, despite the fact that it is likely to remain one of the most influential theories in decision making.
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Market performance
Market round-up
Indian equities outshined, reflecting economic resilience
Global equities took a breather in April after generating strong gains in the previous month, as investors’ fears of
banking sector stress spreading and spilling over to the broader economy gained strength. The collapse of the First
Republic Bank in the US—the fourth this year after the Silvergate Bank, Signature Bank and Silicon Valley Bank and the
second largest bank to fail in the history of America—has uncovered the vulnerability of many regional banks, thereby
adding to already tight credit conditions. Developed equities (MSCI World Index) rose by 1.6% in April (YTD: +8.4%;
As on May 5th, 2023), while Emerging market equities (MSCI EM Index) ended the month 1.3% lower (YTD: +2.6%),
with the latter weighed down by huge sell-off in Chinese equities. Indian equities outshined its developed and emerging
market counterparts in April. Resilient economic performance, an unexpected pause by the central bank for the first
time since the commencement of rate hiking cycle last year, and a good start to Q4 corporate earnings season provided
a boost to investor sentiments. This, along with attractive market valuations after the recent correction, translated into
a revival in FII buying, that more than made up for some moderation in domestic participation in the month gone by.
The Nifty50 Index ended the month 4.1% higher, with mid and small caps outperforming by a wide margin.
Global debt showed a mixed performance in the month gone by. The US sovereign yield curve inverted further as
elevated core inflation and a resilient job market kept short-end under pressure, while the long-end eased off
marginally amid strengthening recession worries. Bond yields in the UK, however, hardened further, thanks to
persistence of inflation at 10%+ levels, hinting at sustenance of rate hiking cycle beyond May, while that of Germany
remained broadly steady. Indian debt rallied further in April, as an unexpected pause by the RBI’s MPC early last
month, easing inflation and an anticipated moderation in global monetary policy tightening aided investor sentiments.
The decline in yields was broad-based across the curve. India’s benchmark 10-year G-sec yield fell by 20bps in April
on top of a 14bps decline in the previous month. Rising growth concerns have continued to weigh on the greenback,
with the dollar index falling by another 0.9% in April (6M: -8.9%), thereby providing support to EM currencies including
the INR (+1.1% against USD in 2023 till date). Precious commodities continued to rise on global financial contagion
fears, while prices of agriculture, industrial and energy commodities remained under pressure.
• Indian equities rebounded in April: After a weak run during the first quarter of this
year, Indian equities started the new fiscal year on a positive note, outperforming
EM as well as DM counterparts in April. Resilient economic performance, an
unexpected pause by the central bank for the first time since the commencement
of rate hiking cycle last year, and a good start to Q4 corporate earnings season
(barring IT) provided a boost to investor sentiments. This, along with attractive
market valuations after the recent correction, translated into a revival in FII buying,
that more than made up for some moderation in domestic participation in the
month gone by. While the Nifty 50 Index ended the month with a 4.1% gain (YTD:
-0.2%), Nifty Mid-cap 50 (YTD: +3.3% as on May 5th, 2023) and Small-cap Indices
(YTD: -0.02%) outperformed with tad higher gains of 5.9% and 7.5% respectively.
Sector wise, barring Information Technology, all major sectors ended in green last
month, led by Real Estate (+14.9%), Autos (+7.7%), and Banks (+6.5%).
Average daily turnover (ADT) in NSE’s cash market rose by 5.6% MoM in Apr’23 to
a four-month high of Rs 517bn, even as total turnover dipped by 14.5% MoM,
thanks to fewer trading days in April (17 vs. 21 in the previous month). Average
daily equity derivatives, however, fell by 10.2% MoM in April—the first sequential
drop in five months, and is 4% lower than average daily turnover in FY23.
• Indian debt rallied for second month in a row: Global bond markets displayed a
mixed performance in the month gone by. Notwithstanding worsening banking
52/140
With a strong gain of 4.1%
in April (Nifty 50), Indian
equities outperformed the
broader DM pack for the
first time in four months.
Market Pulse
May 2023 | Vol. 5, Issue 4
sector stress, expectations of further rate hike by the US Fed in May amidst a
resilient job market and elevated core inflation prints, led to yields rising further at
the short-end of the US sovereign curve (One-year and below duration). The long
end, however, came off marginally amid strengthening recession worries, thereby
deepening the yield curve inversion. Bond yields in the UK, however, hardened
further, thanks to persistence of inflation at 10%+ levels, hinting at sustenance of
rate hiking cycle beyond May, while that of Germany remained broadly steady.
The rally in domestic bond markets continued in April, as an unexpected pause by
the RBI’s MPC early last month and anticipated moderation in global monetary
policy tightening aided investor sentiments. Additionally, the easing of headline
inflation to 15-month lows translated into expectations of an extended pause from
current levels, thereby providing further support to the rally. The decline in yields
was broad-based across the curve. India’s benchmark 10-year G-sec yield fell by
20bps in April on top of a 14bps decline in the previous month. Domestic growthinflation dynamics, supply of Government’s paper, movement in crude oil prices,
progress of the Southwest monsoon and global yield trajectory are likely to dictate
domestic bond markets over the coming months.
• FII buying strengthened in April while that of DIIs moderated: After remaining
sellers of Indian equities during Jan-Feb 2023, FIIs resumed buying in March
2023, with net inflows of US$ 967m during the month. It strengthened further in
April with net FII inflows of US$1.4bn, as narrowing valuation premium post the
recent correction and resilient economic performance made Indian equities more
desirable. DIIs, on the other hand, trimmed their purchases in April, with net
inflows of Rs 22bn during the month—nearly one-tenth of average monthly DII
inflows over the whole of last fiscal year. In fact, they were net sellers of Indian
equities during the first week of May, with net outflows already surpassing overall
inflows seen last month.
• Global equities took a breather in April amid rising recession worries: Global
equities had a robust first quarter, as improving Chinese demand and rising
expectations of policy pivot kept investor sentiments buoyant, notwithstanding the
deepening stress in the global banking sector. The rally, however, took a breather
in April, amid fears of banking sector stress spreading and spilling over to the
broader economy. The collapse of the First Republic Bank in the US—the fourth this
year after the Silvergate Bank, Signature Bank and Silicon Valley Bank and the
second largest bank to fail in the history of America—has uncovered the
vulnerability of many regional banks, thereby adding to already tight credit
conditions. Developed equities (MSCI World Index) rose by 1.6% in April (YTD:
+8.4%; As on May 5th, 2023), while Emerging market equities (MSCI EM Index)
ended the month 1.3% lower (YTD: +2.6%), with the latter weighed down by huge
sell-off in Chinese equities.
According to Institute of International Finance (IIF), FPIs remained buyers of EM
equities for the seventh month in a row in March, albeit at a much-reduced pace,
with net inflows at US$2.1bn in April—the lowest in six months. This translated into
total FPI inflows of US$37.3bn during the first four months of the year, nearly
double of that seen in the whole of 2022. Flows to China and India were ~2.5x of
the total FPI inflows into EM equities in the month gone by, indicating FII selling
from other emerging markets. FPI buying into EM debt picked up in April, with net
inflows of US$7.7bn in April and US$70.4bn during the first four months.
53/140
Developed equities (MSCI
World Index) rose by a
modest 1.6% in April (YTD:
+8.4%); EM equities (MSCI
EM Index) underperformed
and ended the month 1.3%
lower (YTD: +2.6%).
Market Pulse
May 2023 | Vol. 5, Issue 4
US: Gains in the US equities moderated in April as uncertainty regarding the
banking sector and its contagion effect on the broader economy, coupled with
Fed’s remarks on rising risks to economic growth, weighed on investor sentiments.
The FOMC minutes for March indicated policymakers expect the US economy to fall
into recession in the second half of this year. The US flagship indices, viz., S&P 500
and Dow Jones Index rose by 1.5% and 2.5% in April, translating into YTD gains of
7.7% and 1.6% respectively.
On the macro front, recent economic data releases remained encouraging. The S&P
Global US Manufacturing PMI moved into the expansion zone for the first time in
six months to 50.2 in April 2023, a tad lower than the preliminary estimate.
Services PMI at 53.6 in April pointed to the biggest expansion in the sector in a year.
The demand environment, however, has started to get weighed down by rising
interest costs, with retail sales in the US falling by 0.6% MoM in March on top of a
0.7% MoM decline in the previous month. On the positive side, headline inflation
slowed for the ninth consecutive month to a 19-month low of 5.0% in Feb’23,
surprising market expectations. The labour market has also remained strong, with
non-farm payrolls rising by 253k in April, beating market expectations, and the
unemployment rate edging lower to 3.4%—the lowest in last 50 years. On the policy
front, the US Fed hiked the policy repo rate by 25bps in early May, even as Fed
Funds Futures point to more than 70% probability of at least 75bps hike by this
year end, primarily reflecting strengthening expectations of a recession.
Europe: European equities outperformed the broader development market pack
and moved higher, aided by strong economic activity and healthy corporate
earnings. On the negative side, this hinted at continuation of rate hikes by the ECB
over the next few months. Among key market indices, Germany’s DAX and France’s
CAC 40 reported gains of 1.9% and 2.3% respectively in April, translating into YTD
gains of 14.6% and 14.8% respectively (As on May 5th, 2023). The UK equities
followed suit, with the FTSE 100 Index rising by 3.1% in April (YTD: +4.4%).
On the macro front, high frequency indicators continued to stay resilient. The
Composite PMI reading inched up for the sixth consecutive month to an 11-month
high of 54.1 in April, primarily led by continued rebound in the services sector (56.2
vs. 55 in March), more than offsetting contraction in Manufacturing PMI for the 10th
consecutive month. Consumer inflation inched up marginally from a 13-month low
of 6.9% in March to 7% in April, primarily led by higher energy prices and cost of
services. This implied a continued sequential jump in prices for the third month in
a row. This, along with persistence of core inflation at near all-time high levels and
upside surprises on the growth front, led to the ECB raising the refinancing rate for
the seventh time in a row, albeit at a slower pace of 25bps to 3.75%--the highest
since July 2008, translating into cumulative hike of 375bps in this cycle thus far.
The UK economy also witnessed moderation in the manufacturing sector, as
witnessed from sub-50 Manufacturing PMI for the ninth consecutive month.
Services PMI, on the other hand, inched up further deep into the expansion zone to
a 12-month high of 55.9. Industrial production dropped by 0.2% MoM—the second
consecutive drop, missing market expectations. Meanwhile, inflationary pressures
remained high, with headline consumer inflation easing only marginally to 10.1%
in April, overshooting market expectations. This marked the seventh consecutive
month of a 10%+ print. An elevated inflation trajectory, coupled with strong wage
growth (+6.6% YoY in February), is likely to further hike policy rates in the
54/140
Market Pulse
May 2023 | Vol. 5, Issue 4
upcoming policy review (+400bps in the current cycle). On the positive side,
consumer confidence inched higher to a 14-month high of -30 in April.
Asia: Asian equities recorded losses in the month gone by, led by China, Taiwan,
and Thailand, that more than offset gains reported by India and Indonesia. While
renewed US-China tensions weighed on market sentiments in China in April (S&P
China 500: -3.6%), notwithstanding a faster-than-expected economic growth,
Taiwan’s markets suffered from weakening external demand for semiconductors
(TAIEX: -1.8%). Among other key Asian markets, India recorded a gain of 4.1%
(Nifty50), followed by Indonesia (IDX Composite: +1.6%) and Korea (Kospi: +1%),
while Thailand equities ended in red (Bangkok SET: -5%).
On the macro front, Indian economy displayed continued resilience. Industrial
production grew 5.6% YoY in February, up from an upwardly revised 5.5% YoY in
the previous month, beating market expectations. The S&P Manufacturing PMI also
surprised positively and rose to a four-month high of 57.2 in April, thanks to strong
growth in new orders as well as output. CPI inflation eased to a 15-month low of
5.7% in March, with core inflation easing to an eight-month low of 6%. On the
negative side, trade deficit widened on a sequential basis following a steady drop
over the previous five months. On the policy front, the RBI’s MPC unexpectedly
kept policy rates unchanged in the April review meeting but expressed its
commitment to hike as needed.
• Commodities continued to trend lower: The S&P GSCI Index, a composite
commodity index, fell by a further 1.6% in April, translating into a 25% dip over the
last 12 months. Strong gains in precious metals were more than offset by the
decline in prices of select industrial metals and agricultural commodities during the
month. Over the last one-year period, barring precious metals, all major energy,
industrial metals, and agricultural commodities fell sharply, reflecting the impact
of strengthening global growth concerns. Within energy, while brent crude oil
prices remained steady in April at $80/bbl levels, they have dipped by 26% over
the last 12 months. Industrial metals displayed mixed performance, with prices of
Lead, Nickel and Tin rising modestly, while that of Aluminum and Zinc falling.
Among precious metals, gold was up by a modest 0.7% in April and 21.5% over the
last six months, while Silver and Platinum ended the month with relatively higher
gains of 4% and 9.5% respectively. Within agriculture, Wheat and Cotton prices fell
by 10% and 3% respectively in April, translating into a steep 40%+ drop over the
last 12 months, while sugar ended the month with a strong 21% gain (+40% YTD).
• Dollar weakness continued in April: Rising expectations of pause henceforth
followed by a cut later in the year in the light of strengthening recession worries
and worsening banking sector stress has continued to put pressure on the
greenback. The US Dollar Index fell by another 0.9% in April, translating into a total
decline of 8.9% over the last six months. This led to a broad-based strengthening
of emerging market currencies against the USD during this period. The Indian
Rupee was no different, gaining 0.4% against the USD in April 2023 and 1.1% over
the last six months, even as it is still down 7% over a 12-month period.
55/140
S&P GSCI Index, a
composite commodity
index, fell by 1.6% in April,
translating into a total dip
of ~25% over the last 12
months.
Market Pulse
May 2023 | Vol. 5, Issue 4
Market performance across asset classes
Table 10: Performance across equity, fixed income, currency, and commodity markets (As on April 30th, 2023)
Indicator Name
Apr-23
1M ago
3M ago
12M ago
1M (%)
3M (%)
6M (%)
NIFTY 50
18,065
17,360
17,662
17,103
4.1
2.3
0.3
5.6
-0.2
1,991
1,920
1,985
2,017
3.7
0.3
-4.5
-1.3
-3.8
Equity Indices
NIFTY 500
MSCI INDIA
India Volatility Index (%)
MSCI WORLD
S&P 500 COMPOSITE
DOW JONES INDUSTRIALS
HANG SENG
FTSE 100
NIKKEI 225
15,220
11
14,558
13
14,936
17
14,783
-43.6
-26.4
4,132
1.5
2.3
7.7
0.9
8.6
34,098
33,274
34,086
32,977
7,871
7,632
7,772
7,545
20,400
21,842
1.6
2.5
1.8
0.0
-5.7
2.9
5.6
4.6
7.5
10.6
-2bps
-21bps
9bps
209bps
16bps
-65bps
54bps
India 10YR Govt Yield (%)
7.12
7.32
7.34
7.14
-20bps
-23bps
India 1YR Govt Yield (%)
6.91
7.14
6.77
4.81
-23bps
13bps
India 3Month T-Bill Yield (%)
US 10YR Govt Yield (%)
Germany 10YR Govt Yield (%)
7.05
3.43
2.32
7.23
3.48
2.31
7.22
6.64
3.53
2.28
2.9
35.5
1.3
26,848
7.17
3.4
9.0
-8.9
3.1
27,327
7.03
4.2
1.4
-2.5
28,041
India 5YR Govt Yield (%)
11.3
21,089
28,856
Fixed Income
-1.5
-30.7
2,796
19,895
3.0
-35.1
2,785
4,077
-1.3
-15.4
2,791
4,109
1.9
YTD (%)
19
2,836
4,169
4.6
12M (%)
6.68
4.09
2.89
0.94
-14bps
-17bps
-5bps
1bps
-18bps
41bps
-10bps
4bps
10.9
-33bps
-35bps
45bps
16bps
4.3
35bps
296bps
138bps
0.6
5.6
-20bps
56bps
-40bps
-24bps
China 10YR Govt Yield (%)
2.79
2.86
2.93
2.84
-8bps
-14bps
14bps
-6bps
-10bps
Japan 10YR Govt Yield (%)
0.38
0.35
0.49
0.22
2bps
-11bps
14bps
16bps
-04bps
USD/INR
81.8
82.2
81.9
76.4
-0.4
-0.1
-1.1
7.1
-1.1
GBP/USD
1.26
1.24
1.2
1.3
1.7
2.1
9.2
0.1
4.5
Currency
EUR/USD
1.10
1.09
1.1
1.1
USD/YEN
136.2
133.1
130.0
129.6
USD/CNY
6.9
6.9
6.8
6.6
USD/CHF
Commodities
Brent Crude Oil (US$/bbl)
1.1
79.5
1.1
79.8
1.1
SHC Iron Ore Spot (US$/MT)
2.4
-19.7
11.5
-23.7
-19.0
-22.5
-3.1
-36.2
-11.8
4.3
9.6
31,722
2,651
2,947
3,419
4,151
-10.1
0.7
29,431
129
40,674
142
1,990
1,977
1,928
1,908
Platinum Spot Price (US$/ounce)
1,074
981
1,004
932
15
15
Palladium Spot Price (US$/ounce)
Soyabeans (US$/bushel)
Corn (c/lb)
Wheat (US$/bushel)
Cotton (US$/lb)
Raw Sugar (c/lb)
Source: Refinitiv Datastream, NSE EPR.
24
1,497
1,490
635
659
14
6
1
26
7
1
22
-6.4
-12.2
2.4
30,153
25
-0.3
14.0
Gold Spot Price (US$/troy ounce)
Silver Spot Price (US$/troy ounce)
5.2
-6.8
2,259
-0.4
23,651
127
3.9
-4.7
3,033
24,211
105
3.2
9,771
2,129
LME Zinc (US$/MT)
-5.1
9.1
9,200
2,123
25,925
2.5
5.1
-26.3
2,174
26,398
12.4
-17.0
LME Lead (US$/MT)
LME Tin (US$/MT)
-8.4
3.2
3.4
-6.5
2,613
LME Nickel (US$/MT)
0.8
4.7
4.6
-0.3
2,377
9,004
2.6
11.7
107.8
2,368
8,577
2.3
1.7
85.1
LME Aluminium (US$/MT)
LME Copper (US$/MT)
1.0
1.6
24
23
1,618
2,312
679
818
8
1
21
56/140
1.8
-17.3
4.0
9.5
0.5
-9.4
2.1
-10.3
6.8
9.9
49.5
5.6
30.8
10.1
-18.6
-35.3
-7.8
-22.4
7.0
-7.5
-6.2
21.5
14.9
11
-10.4
-19.8
-22.5
19
21.1
28.5
55.1
-3.0
-35.1
28.1
3.2
-5.1
1
-3.8
-18.6
17
-3.6
-21.9
-6.6
-7.2
4.3
7.5
-26.1
15.2
-15.7
0.8
2.5
-7.0
6.6
-10.6
4.5
4.2
-15.7
-5.1
-6.5
-41.6
-20.4
37.4
39.9
-45.0
-5.7
Market Pulse
May 2023 | Vol. 5, Issue 4
Table 11: Performance across global asset classes (As on May 5th, 2022)
Asset performance (Ranked by % change each year)
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023TD
Bitcoin
SSE Comp
Bitcoin
Bitcoin
Bitcoin
Nifty 50
Bitcoin
Bitcoin
Bitcoin
WTI Crude
Bitcoin
5,428.7
52.9
34.2
122.7
1,394.5
4.6
94.1
304.5
59.4
6.7
78.0
Nasdaq 100
Nifty 500
STOXX 600
WTI Crude
MSCI EM $ Nasdaq 100
Nasdaq 100
Nasdaq 100
WTI Crude
Nifty 50
Nasdaq 100
36.9
39.3
10.2
45.0
37.8
0.0
39.5
48.9
55.8
5.7
21.5
Russell 1000
Nifty 50
Nasdaq 100
FTSE100
Nifty 500
Gold
WTI Crude
Gold
Nifty 500
FTSE100
STOXX 600
33.1
32.9
9.8
19.1
37.7
-1.7
35.3
24.8
31.6
4.7
11.3
S&P500
Nasdaq 100
SSE Comp
DJIA
Nasdaq 100
Nifty 500
S&P500
Russell 1000
S&P500
Nifty 500
Gold
32.4
19.4
9.4
16.5
33.0
-2.1
31.5
21.0
28.7
4.3
10.8
DJIA
S&P500
S&P500
Russell 1000
Nifty 50
DJIA
Russell 1000
MSCI EM $ Nasdaq 100
Gold
MSCI World
29.7
13.7
1.4
12.1
30.3
-3.5
31.4
18.7
27.5
-0.4
9.4
MSCI World Russell 1000 Russell 1000
S&P500
DJIA
S&P500
MSCI World
S&P500
Russell 1000
DJIA
S&P500
27.4
13.2
0.9
12.0
28.1
-4.4
28.4
18.4
26.5
-6.9
8.3
STOXX 600
DJIA
Nifty 500
MSCI EM $ MSCI World Russell 1000
STOXX 600
Nifty 500
Nifty 50
STOXX 600 Russell 1000
21.5
10.0
0.2
11.6
23.1
-4.8
27.6
17.9
25.6
-10.1
8.0
FTSE100
STOXX 600
DJIA
Gold
S&P500
MSCI World
DJIA
MSCI World
STOXX 600
SSE Comp
SSE Comp
18.7
7.8
0.2
9.0
21.8
-8.2
25.3
16.5
25.5
-15.1
7.9
Nifty 50
MSCI World
MSCI World
MSCI World Russell 1000
FTSE100
SSE Comp
Nifty 50
MSCI World
MSCI World
FTSE100
8.1
5.5
-0.3
8.2
21.7
-8.7
22.3
16.1
22.4
-17.7
6.0
WTI Crude
FTSE100
FTSE100
Nasdaq 100
Gold
STOXX 600
MSCI EM $
SSE Comp
DJIA
S&P500
MSCI EM $
7.2
0.7
-1.3
7.3
12.6
-10.2
18.9
13.9
21.0
-18.1
3.4
Nifty 500
Gold
Nifty 50
Nifty 500
WTI Crude
MSCI EM $
Gold
DJIA
FTSE100 Russell 1000
DJIA
4.8
-1.8
-3.0
5.1
12.5
-14.2
18.7
9.7
18.4
-19.1
2.3
MSCI EM $
MSCI EM $
Gold
Nifty 50
FTSE100
SSE Comp
FTSE100
STOXX 600
SSE Comp
MSCI EM $
Nifty 50
-2.3
-1.8
-10.5
4.4
12.0
-24.6
17.3
-1.5
4.8
-19.7
-0.1
SSE Comp
WTI Crude
MSCI EM $ STOXX 600
STOXX 600
WTI Crude
Nifty 50
FTSE100
MSCI EM $ Nasdaq 100
Nifty 500
-6.8
-45.9
-14.6
2.4
11.2
-25.3
13.5
-11.6
-2.2
-32.4
-1.0
Gold
Bitcoin
WTI Crude
SSE Comp
SSE Comp
Bitcoin
Nifty 500
WTI Crude
Gold
Bitcoin
WTI Crude
-27.3
-56.2
-30.5
-12.3
6.6
-74.2
9.0
-21.0
-4.0
-64.1
-14.6
Source: Refinitiv Datastream
Source: Refinitiv Datastream, NSE EPR. Note: Returns for equity indices are based on total return index values except for Shanghai SE Composite Index.
57/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Equity market performance and valuations
Table 12: Performance across NSE equity indices (As on April 30th, 2023)
April-23
PR Index Returns (%)
Index Name
1M
Nifty 50
4.1
2.3
Nifty 100
4.2
1.7
Broad Market Indices
Nifty Next 50
Nifty 200
Nifty 500
Nifty Midcap 50
Nifty Midcap 100
Nifty Midcap 150
Nifty Midcap Select
Nifty Smallcap 50
Nifty Smallcap 100
Nifty Smallcap 250
Nifty LargeMidcap 250
Nifty MidSmallcap 400
Nifty500 Multicap 50:25:25
Nifty Microcap 250
Nifty Total Market
Thematic Indices
4.5
4.4
4.6
5.9
5.9
5.2
6.1
8.3
7.5
6.9
4.7
5.8
5.1
9.6
4.7
3M
3.8
3.7
3.0
Nifty Services Sector
Nifty Commodities
Nifty CPSE
Nifty PSE
Nifty Energy
Nifty MNC
Nifty India Digital
Nifty India Defence
Nifty Mobility
Nifty100 Liquid 15
Nifty Midcap Liquid 15
Nifty Aditya Birla Group
Nifty Mahindra Group
Nifty Tata Group
Nifty Tata Group 25% Cap
Nifty Shariah 25
3.0
4.1
4.7
4.7
4.0
3.5
2.6
7.9
8.0
5.3
5.4
4.1
9.9
4.2
1.8
3.0
9.7
6.4
6.6
-5.7
1.4
2.4
2.5
2.0
3.3
1.9
-6.0
-1.1
4.6
4.2
2.7
5.3
3.0
4.5
2.1
-6.9
8.6
15.5
0.1
-17.0
1.2
-11.8
1.0
10.1
6.4
2.3
5.8
2.6
3.0
2.8
10.6
7.3
47.0
0.8
4.9
1.7
0.9
-5.0
-1.1
1.7
-1.9
1.4
-2.3
4.0
4.0
3.0
-5.6
-5.1
-3.3
-7.5
-3.3
-1.7
39.7
0.2
-3.1
0.2
0.2
-3.1
0.0
58/140
5.2
9.9
9.9
34.0
10.4
32.4
11.0
32.1
0.7
33.0
29.6
33.4
37.5
9.4
8.3
2.9
7.0
26.9
10.6
28.1
9.6
33.9
52.1
24.3
18.2
3.4
1.4
23.8
4.9
0.7
0.3
22.8
18.5
-2.6
5.8
17.9
5.8
2.1
4.8
3.0
11.3
Nifty100 ESG Sector Leaders
21.4
11.0
Nifty SME EMERGE
Nifty100 Enhanced ESG
2.6
-4.2
-1.1
Nifty100 ESG
2.4
2.4
Nifty50 Shariah
Nifty500 Shariah
4.1
1.8
3.2
5.0
5.2
11.0
-0.1
4.1
Nifty Infrastructure
22.4
4.3
Nifty Non-Cyclical Consumer
4.9
5.6
3.1
2.1
Nifty India Manufacturing
1M
2.0
4.8
1.9
5Y
-7.1
Nifty India Consumption
Nifty Mid-Small India Consumption
3Y
0.8
1.9
TR Index Returns (%)
1Y
9.7
8.8
9.9
8.9
29.0
4.9
8.6
4.0
21.7
11.5
25.5
7.0
6.1
60.9
18.0
23.2
1.3
5.2
33.9
11.2
37.8
6.2
5.7
27.7
14.6
14.2
7.4
38.6
16.1
6.1
8.3
7.6
6.9
4.7
5.8
5.1
9.6
4.7
14.3
1.9
5.0
5.2
3.1
4.1
4.7
4.7
4.0
3.8
2.7
7.9
8.1
5.4
5.4
4.1
11.1
10.8
3.1
7.4
3.8
4.4
7.3
0.6
3.4
-5.1
1.6
-0.1
2.0
2.5
2.6
2.1
3.4
2.1
-4.8
5.6
5.1
3.7
6.1
4.1
5.3
3.2
-5.7
8.8
17.5
0.1
-16.3
1.3
-10.6
1.1
11.2
6.6
2.6
6.4
2.7
3.1
2.8
-1.1
1.9
-1.7
1.5
-2.1
10.2
4.1
4.1
3.0
-5.5
12.6
8.6
48.9
1.9
6.1
2.3
-4.0
-1.9
-6.0
-2.1
-1.7
39.8
0.3
-1.9
0.4
0.3
34.2
33.5
30.6
33.3
34.6
38.6
-2.0
1.1
6.2
11.2
11.6
10.4
12.0
9.3
1.7
4.0
8.1
28.1
11.7
29.4
10.8
35.0
53.2
25.6
19.5
4.5
1.4
35.4
6.1
0.8
0.3
24.0
19.9
-2.1
5.9
18.9
7.2
2.3
-3.7
20.5
10.1
25.1
4.0
0.9
11.3
18.9
11.2
4.8
3.0
31.4
10.5
22.7
13.4
83.9
20.4
3.7
-4.2
-1.0
9.8
12.3
2.4
8.7
21.4
23.7
3.9
5.4
10.6
36.3
5.2
2.0
4.2
20.9
29.4
5.9
6.9
4.2
10.6
8.2
16.5
5.9
5Y
2.1
2.4
28.4
24.3
4.6
3Y
-6.4
4.8
10.2
29.2
4.4
1Y
1.0
8.1
25.4
24.8
4.5
3M
26.3
29.7
10.7
9.8
11.1
9.4
11.1
11.7
9.6
26.5
10.7
31.3
10.6
22.1
34.0
28.8
24.5
18.2
27.2
63.4
30.6
24.4
11.8
8.7
7.8
14.1
7.6
8.6
19.9
6.5
2.3
35.3
12.4
40.4
8.2
36.9
6.2
29.1
16.3
16.0
9.2
40.2
15.7
18.1
10.7
84.4
31.8
23.1
21.8
21.9
20.2
11.4
11.8
11.5
11.5
Market Pulse
May 2023 | Vol. 5, Issue 4
April-23
Index Name
PR Index Returns (%)
TR Index Returns (%)
1M
3M
1Y
3Y
5Y
1M
3M
1Y
3Y
5Y
Nifty Alpha 50
6.4
1.1
-19.4
33.1
14.4
6.5
1.3
-18.8
34.0
15.3
Nifty100 Alpha 30
5.8
-3.4
-15.8
15.3
9.4
5.9
-3.0
-14.8
16.4
10.6
Nifty Alpha Quality Low-Volatility 30
4.7
4.5
2.8
17.4
8.9
4.8
4.9
4.5
19.2
10.6
Nifty200 Alpha 30
6.8
5.4
1.0
24.8
11.7
6.9
5.8
2.1
26.0
12.8
Strategy Indices
Nifty Alpha Low-Volatility 30
Nifty Alpha Quality Value Low-Volatility 30
4.7
4.6
4.7
5.6
11.6
20.8
10.6
4.7
6.0
13.6
23.2
12.8
18.0
9.7
4.0
2.7
5.7
19.9
11.4
Nifty100 Low Volatility 30
3.7
5.4
19.1
18.9
9.5
8.5
3.8
3.6
2.9
2.8
6.6
7.1
21.3
20.7
11.5
4.1
2.5
5.0
Nifty Quality Low-Volatility 30
3.5
2.7
10.2
Nifty200 Quality 30
4.2
3.4
2.5
17.6
27.6
9.0
10.3
4.3
3.8
4.4
19.7
10.9
Nifty100 Equal Weight
5.4
2.0
-0.9
23.0
7.4
5.4
2.2
0.1
24.5
8.8
Nifty500 Value 50
6.3
40.3
7.1
6.3
43.9
Nifty100 Quality 30
Nifty50 Equal Weight
Nifty50 Value 20
5.4
2.5
2.2
7.2
4.1
6.2
1.0
-0.5
2.9
14.1
Nifty200 Momentum 30
4.7
5.8
0.6
Nifty Midcap150 Momentum 50
4.7
Nifty Midcap150 Quality 50
17.5
0.8
8.6
24.6
14.0
-3.4
19.6
4.4
5.2
7.7
-1.0
19.1
30.7
26.2
11.1
6.2
5.6
19.4
23.1
8.4
6.1
5.9
15.2
21.9
12.4
3.8
6.1
37.7
-0.7
9.3
4.2
5.5
0.3
3.3
2.8
2.3
15.0
8.3
5.8
7.5
1.1
-0.1
3.0
16.3
22.4
7.9
12.0
4.7
0.7
35.2
15.7
4.7
2.6
22.3
39.0
19.4
29.4
10.8
6.9
1.7
10.3
12.0
27.4
16.7
-2.5
20.9
23.6
9.1
13.1
4.5
5.9
36.1
16.5
7.7
-1.0
20.2
31.9
26.6
11.6
6.2
5.6
20.2
23.5
8.9
6.1
5.9
16.1
22.6
13.0
5.8
4.1
8.4
25.8
10.3
4.3
3.3
2.6
11.2
19.4
2.5
5.5
2.2
6.8
3.9
20.6
2.2
5.1
9.3
Nifty Low Volatility 50
13.1
7.8
4.9
Nifty High Beta 50
-0.3
22.6
8.9
2.0
2.4
8.6
17.9
Nifty Dividend Opportunities 50
Nifty Growth Sectors 15
1.9
5.5
0.4
9.7
Sector Indices
Nifty Auto
Nifty Bank
Nifty Private Bank
Nifty PSU Bank
Nifty Financial Services
6.5
12.2
Nifty Financial Services Ex-Bank
7.1
Nifty MidSmall Financial Services
7.7
Nifty Financial Services 25/50
Nifty FMCG
Nifty IT
6.3
4.2
-3.5
6.3
4.0
3.4
5.1
2.1
7.6
-6.8
51.1
4.1
11.5
9.9
46.5
19.4
21.7
23.9
25.2
18.6
-12.4
25.2
7.8
5.1
9.9
-1.6
10.7
6.5
12.2
7.1
6.3
7.7
4.3
14.7
-3.3
6.3
4.0
3.4
5.2
2.2
8.3
-6.7
54.6
5.0
12.5
11.1
47.8
20.4
22.6
25.2
27.8
21.0
-10.5
27.6
3.8
8.4
6.0
10.6
-0.6
12.7
17.0
6.6
0.9
-9.7
-20.2
-5.2
49.9
13.9
-12.6
18.7
6.6
0.9
-9.6
-19.7
-4.1
51.7
14.6
-11.8
Nifty Metal
5.5
-10.3
-8.3
46.1
9.0
5.5
-10.3
-6.4
49.0
11.1
Nifty Realty
14.9
8.2
6.7
14.9
8.2
7.1
19.2
9.8
4.8
-1.2
-11.3
33.8
-8.6
0.6
0.6
-1.3
-11.8
33.5
4.8
0.5
0.3
-7.6
21.6
Nifty MidSmall Healthcare
5.1
5.6
2.2
Nifty Transportation & Logistics
7.8
0.7
Nifty Pharma
Nifty Consumer Durables
Nifty Oil & Gas
Nifty Healthcare Index
Nifty Housing
5.0
1.0
5.0
2.1
6.6
1.8
-6.3
10.6
6.8
5.0
2.4
22.2
11.6
-4.7
12.9
12.9
8.8
11.7
5.1
2.5
13.7
32.9
4.9
7.8
0.8
-6.0
-0.6
26.8
10.3
1.0
5.5
20.8
Nifty MidSmall IT & Telecom
Nifty Media
5.4
19.8
5.6
5.0
Source: NSE Indices, NSE EPR.
Note: Returns for the period up to one year are absolute returns. Returns for period greater than one year are CAGR returns.
59/140
6.7
1.8
-5.5
11.3
20.3
7.7
22.7
12.2
-4.0
13.7
13.7
9.7
12.5
14.7
33.9
6.1
-5.4
0.5
28.2
12.2
11.6
Market Pulse
May 2023 | Vol. 5, Issue 4
Table 13: Performance across NSE sector indices based on Price Return Index (As on April 30th, 2023)
Indicator Name
Apr-23
1M ago
3M ago
12M ago
1M (%)
3M (%)
6M (%)
12M (%)
YTD (%)
Auto
13,189
12,244
13,324
11,078
7.7
-1.0
-1.4
19.1
4.6
Bank
43,234
40,609
40,655
36,088
6.5
6.3
4.7
19.8
0.6
Energy
23,735
22,814
23,714
28,594
4.0
0.1
-11.0
-17.0
-8.3
Sector indices
FMCG
47,814
45,905
44,457
38,204
4.2
7.6
7.9
25.2
8.3
IT
27,708
28,699
29,740
31,622
-3.5
-6.8
-3.6
-12.4
-3.2
Infrastructure
5,356
5,091
5,061
5,128
5.2
5.8
2.3
4.5
2.0
Media
1,715
1,700
1,899
2,150
0.9
-9.7
-16.9
-20.2
-13.9
Metals
5,799
5,497
6,468
6,327
5.5
-10.3
-1.6
-8.3
-13.7
Pharma
12,614
12,017
12,360
13,463
5.0
2.1
-4.5
-6.3
0.1
445
387
412
444
14.9
8.2
1.5
0.3
3.1
CNX PSE
4,683
4,474
4,400
4,234
4.7
6.4
9.5
10.6
7.2
CNX Consumption
7,502
7,162
7,350
7,089
4.8
2.1
-5.8
5.8
-0.7
23,734
23,037
23,671
23,237
3.0
0.3
-4.0
2.1
-4.5
Auto
Nifty 50
Real Estate
Thematic Indices
CNX Services
Source: Refinitiv Datastream, NSE EPR.
Figure 37: NIFTY sector performance in April 2023 (rebased to 0)
15
Bank
15
Nifty 50
10
10
5
5
0
0
-5
-5
-10
3
15
10
17
Apr 2023
Pharma
10
24
-10
5
0
-5
-5
-10
-10
15
17
Apr 2023
Media
24
10
5
5
0
0
-5
-5
3
10
15
17
Apr 2023
Metal
24
-10
10
5
5
0
0
-5
-5
3
10
17
Apr 2023
3
24
Nifty 50
10
24
-10
Source: Refinitiv Datastream, NSE EPR.
60/140
17
Apr 2023
FMCG
3
15
Nifty 50
10
-10
IT
15
Nifty 50
10
-10
17
Apr 2023
10
0
10
10
15
Nifty 50
5
3
3
10
10
Nifty 50
17
Apr 2023
Real Estate
3
24
17
Apr 2023
24
Nifty 50
24
Source: Refinitiv Datastream
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 38: NIFTY sector performance during Jan-April 2023 (rebased to 0)
10
Bank
5
10
Nifty 50
0
Nifty 50
0
-5
-5
-10
-10
-15
-15
-20
Auto
5
Jan 2023
10
5
Feb 2023
Mar 2023
Pharma
Nifty 50
Apr 2023
-20
10
0
0
-5
-10
-10
-15
-15
-20
-20
10
5
Feb 2023
Mar 2023
Media
Nifty 50
Apr 2023
0
-5
-10
-10
-15
-15
-20
-20
10
Metal
5
Mar 2023
Apr 2023
0
-5
-10
-10
-15
-15
-20
-20
Feb 2023
Mar 2023
Jan 2023
Apr 2023
Feb 2023
Real Estate
5
0
Feb 2023
FMCG
10
Nifty 50
-5
Jan 2023
Jan 2023
5
0
Feb 2023
IT
10
-5
Jan 2023
Feb 2023
Mar 2023
Apr 2023
Nifty 50
5
-5
Jan 2023
Jan 2023
Jan 2023
Feb 2023
Mar 2023
Apr 2023
Nifty 50
Mar 2023
Apr 2023
Nifty 50
Mar 2023
Apr 2023
Source: Refinitiv Datastream
Source: Refinitiv Datastream, NSE EPR.
61/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Nifty 50 performance attribution analysis
Financials drove markets higher in April: After a lackluster performance over the
previous four months, Indian equities generated strong gains in April, outperforming its
EM as well as DM counterparts. Strengthened FII buying in April more than made up for
moderation in domestic investments during the month. This, coupled with resilient
economic performance and a strong start to the Q4 earnings season, aided investor
sentiments. Net FII inflows in FY24 thus far (As on May 5th, 2023) stood at US$2.7bn vs.
net outflows of US$5.1bn in the last financial year. DII inflows at Rs 22bn in the month of
April, however, was far lower than the average monthly run-rate of Rs 268bn over the
previous four months, and the third lowest in last 23 months.
The Nifty 50 Index ended the month 4.1% higher, almost entirely reversing the loss seen
over the previous three months. Barring Information Technology, all other sectors ended
in green in the month gone by, with the gain in the Nifty50 Index primarily led by
Financials, Consumer Staples, Consumer Discretionary and Energy. These four sectors
pulled the Index higher by 3.8%—nearly 97% of the gain seen last month. In fact,
Financials alone accounted for 57% of the gain in the Nifty 50 Index in April. Looking at
the performance attribution for one-year period, strong returns generated by Financials,
Consumer Staples, Industrials and Consumer Discretionary were partly offset by sell-off
in Information Technology, Energy and Materials, reflecting the impact of weakening
global demand.
Figure 39: Sector-wise contribution to Nifty 50 price return in April 2023
Source: Refinitiv Datastream, CMIE Prowess, NSE EPR.
62/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 40: Sector-wise contribution to absolute Nifty 50 Index change (points) in April 2023
Source: Refinitiv Datastream, CMIE Prowess, NSE EPR.
Figure 41: Sector-wise contribution to Nifty 50 price return in last one year (May’22-Apr’23)
Source: Refinitiv Datastream, CMIE Prowess, NSE EPR.
Figure 42: Sector-wise contribution to Nifty 50 Index change (points) in last one year (May’22-Apr’23)
Source: Refinitiv Datastream, CMIE Prowess, NSE EPR.
63/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 43: Sector-wise contribution to Nifty 50 price return in 2023 thus far (Jan’23-Apr’23)
Source: Refinitiv Datastream, CMIE Prowess, NSE EPR.
Figure 44: Sector-wise contribution to Nifty 50 Index change (points) in 2023 thus far (Jan’23-Apr’23)
Source: Refinitiv Datastream, CMIE Prowess, NSE EPR.
Figure 45: Nifty 50 Index monthly movement across sectors over last 12 months
Index points
NIFTY 50 index movement across sectors (May'22-Apr'23)
Comm.
Industrials
2,000
Cons. Disc
Cons. Stap
IT
Materials
Energy
Financials
Utilities
Change
Health
1,500
1,000
500
0
-500
-1,000
-1,500
May-22
Jun-22
Jul-22
Aug-22
Source: Refinitiv Datastream, CMIE Prowess, NSE EPR.
Sep-22
Oct-22
64/140
Nov-22
Dec-22
Jan-23
Feb-23
Mar-23
Apr-23
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 46: Nifty 50 Index monthly return across sectors over last 12 months
Comm.
10%
NIFTY 50 index (%) returns across sectors (May'22-Apr'23)
Cons. Disc
Industrials
Cons. Stap
IT
Energy
Materials
Financials
Utilities
Health
Change
8%
6%
4%
2%
0%
-2%
-4%
-6%
May-22
Jun-22
Jul-22
Aug-22
Sep-22
Source: Refinitiv Datastream, CMIE Prowess, NSE EPR.
Oct-22
Nov-22
Dec-22
Jan-23
Feb-23
Mar-23
Apr-23
Relative outperformance of Financials and Consumer Staples over the last one-year
period led to the respective sector’s weight in the Nifty50 Index rising by a strong 365bps
and 198bps to a 26-month and 33-month high of 38.5% and 9.7%. This was at the
expense of a steep drop in weights of Information Technology, Energy and Materials
during this period.
Figure 47: Nifty 50 sector weightage (April 2022)
Utilities, 2.0
Materials, 8.1
Figure 48: Nifty 50 sector weightage (April 2023)
Utilities, 2.1
Comm., 2.3
Cons. Disc, 6.5
Materials,
6.8
Cons. Stap, 7.8
Comm., 2.5
Cons. Disc, 6.9
Cons. Stap, 9.7
IT, 12.7
IT, 16.2
Industrials, 4.9
Energy, 14.6
Industrials, 3.6
Energy, 12.2
Health, 3.8
Health, 4.1
Financials, 34.8
Financials, 38.5
Source: Refinitiv Datastream, CMIE Prowess, NSE EPR.
Table 14: Top five Nifty 50 Index gainers in April 2023
Return (%)
Index % return
contribution (%)
Index change
contribution (points)
ITC
11.0
0.5
82
KOTAKBANK
11.8
0.4
68
Security name
Security symbol
I T C Ltd.
Kotak Mahindra Bank Ltd.
H D F C Bank Ltd.
Reliance Industries Ltd.
I C I C I Bank Ltd.
Total
Nifty 50 Index
Source: Refinitiv Datastream, CMIE Prowess, NSE EPR.
HDFCBANK
RELIANCE
ICICIBANK
4.8
3.8
4.6
NIFTY 50
3.9
65/140
0.4
0.4
0.4
75
66
62
2.0
353
3.9
675
Market Pulse
May 2023 | Vol. 5, Issue 4
Table 15: Top five Nifty 50 Index losers in April 2023
Security name
Security symbol
Infosys Ltd.
INFY
Tech Mahindra Ltd.
TECHM
Hindustan Unilever Ltd.
H C L Technologies Ltd.
N T P C Ltd.
Total
Nifty 50 Index
Source: Refinitiv Datastream, CMIE Prowess, NSE EPR.
HINDUNILVR
HCLTECH
Return (%)
-12.3
Index % return
contribution (%)
Index change
contribution (points)
-0.1
-21
-4.0
-7.1
-1.9
NTPC
-1.8
NIFTY 50
3.9
-0.8
-0.1
0.0
0.0
-1.1
3.9
-144
-12
-6
-3
-187
675
Earnings and valuation analysis
Consensus earnings CAGR for the period 2022-24 pegged at 16.2%: After modest
upgrades over the previous three months, consensus earnings estimates were marginally
downgraded in the month of April, partly attributed to worsening global backdrop. The
Nifty50 earnings estimate (Source: Refinitiv Datastream) for 2023 has been downgraded
by 1.4% over the last three months and is now 2.2% lower than that estimated one year
ago. This translates into an expected earnings growth of 18.9% as on April 30th, 2023, vs.
19.0 in the previous month. For 2024, consensus Nifty 50 earnings estimate was
downgraded by a tad lower 1.3% during this period and is now expected to grow at
13.6%. This translates into consensus earnings CAGR of 16.2% vs. 15.0% as on
December-end.
Our analysis of earnings estimates of top 200 companies by market cap 23, however,
paints a slightly different picture. The aggregate consensus earnings estimate for this
universe for FY24 saw downgrades for the sixth consecutive month in April by a total of
1.3% during this period. This is, however, much lower than downgrades seen in the initial
half of the fiscal. The downgrades were primarily led by Materials, Energy and
Communication Services, excluding which aggregate profits were actually revised
upwards by 0.4% since Oct-end, thanks to robust upgrades seen in Financials.
Interestingly, Materials sector share in earnings of top 200 companies is expected to fall
from 21.5% in FY22 to 11.8% in FY23, rising only modestly to 12.9% in FY24, indicating
a prolonged global slowdown. This share has been primarily taken up by Financials (32%
in FY24 vs. 26% in FY22) and Consumer Discretionary (6.6% in FY24 vs. 2% in FY25).
The lagged effect of tight financial conditions, global growth slowdown and falling
commodity prices may weigh on topline performance over the coming quarters. On the
positive side, falling commodity prices should ease input cost pressures. This, along with
strong capex push by the Government and recovering private investment cycle, should
provide support to earnings trajectory going forward.
23
The sample set consists of top 200 companies by one-year average market cap ending June 30th, 2022 covered by at least five or more analysts during the previous
12 months using IBES estimates from Refinitiv Datastream.
66/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Table 16: Earnings growth and forward-looking multiples for Nifty 50 Index
Metric
As on
Periods
EPS (Rs)
Price to
earnings
(P/E) (x)
Price to Book
value
(P/B) (x)
Change (%/bps)
30-Apr-23
1M
3M
6M
YTD
1Y
12-month forward
956.7
-0.3%
3.3%
7.2%
4.7%
10.4%
2022
795.6
-1.3%
-1.8%
-2.9%
-1.4%
-7.2%
% YoY
8.9%
-145bps
-196bps
-406bps
-198bps
-1066bps
2023
945.9
-1.4%
-0.3%
0.2%
-0.3%
-2.2%
% YoY
18.9%
-11bps
174bps
370bps
129bps
602bps
2024
1074.3
-1.3%
0.1%
-0.7%
0.7%
10.7%
% YoY
13.6%
14bps
45bps
-102bps
119bps
1332bps
12-month forward
18.6
5.1%
-5.1%
-6.1%
-6.2%
-6.4%
2023
18.8
6.3%
-1.6%
0.5%
-1.6%
5.7%
2024
16.5
6.2%
-2.0%
1.4%
-2.7%
-6.7%
12-month forward
2.9
3.7%
-4.0%
-5.3%
-5.0%
-9.8%
2023
2.9
4.7%
-1.5%
0.0%
-0.8%
1.0%
2024
2.6
4.7%
-1.8%
0.7%
-3.7%
-15.9%
Source: Refinitiv Datastream, NSE EPR. NTM = Next Twelve Months.
Figure 49: Sector-wise revision in FY23 earnings estimates for top 200 companies in 2023 thus far
%
Sector-wise revision in FY23 earnings estimates this year
70.0
Share in aggregate profit downgrades since Dec-end
64.1
60.0
Profit change since Dec-end
47.3
50.0
40.0
30.0
20.0
7.0
10.0
0.0
10.0
20.0
30.0
(16.0)
Materials
(7.9)
5.5
(2.0)
1.9
(4.5)
0.9 -
0.1
(0.0)
(7.2)
(0.0)
5.1
1.1
0.0
(1.7)
2.0
(6.4)
(18.6)
Energy
IT
Health Care Real Estate
Comm.
Svcs.
Industrials
Utilities
Cons.
Staples
Cons. Disc. Financials
Source: Refinitiv Datastream, NSE EPR.
Note: Based on IBES earnings estimates of top 200 companies by one-year average market cap ending June 30th, 2022, covered by at least five analysts at any given
point of time over the last one year. Data is as on May 1st, 2023.
67/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 50: Sector-wise revision in FY24 earnings estimates for top 200 companies in 2023 thus far
%
Sector-wise revision in FY24 earnings estimates this year
Share in aggregate profit downgrade since Dec-end
60.0
40.0
Profit change since Dec-end
34.3
25.5
20.0
0.0
20.0
(4.0)
21.8
15.0
(4.4)
11.5
4.2
(2.3)
(7.8)
3.0
(1.5)
1.3
(1.4)
3.5
0.4
(3.2)
(0.9)
0.6
(7.7)
(7.9)
40.0
60.0
80.0
100.0
(85.9)
Energy
Materials
Comm.
Svcs.
Health Care
IT
Cons. Disc. Industrials Real Estate
Cons.
Staples
Utilities
Financials
Source: Refinitiv Datastream, NSE EPR.
Note: Based on IBES earnings estimates of top 200 companies by one-year average market cap ending June 30th, 2022, covered by at least five analysts at any given
point of time over the last one year. Data is as May 1st, 2023.
Figure 51: Sector-wise share in earnings
%
35.0
33.1
Sector-wise share in earnings
31.7
FY22
30.0
FY23E
FY24E
FY25E
25.0
19.2
20.0
17.3
15.0
11.7
12.9
11.9
10.0
10.7
5.7
5.0
4.8
5.6
5.2
4.0
4.1
4.6
6.6
4.9
0.8
0.0
-5.0
4.2
1.0
0.9
-0.9
Financials
Energy
Materials
IT
Utilities
Cons.
Staples
Health Care Cons. Disc. Industrials Real Estate
Comm.
Svcs.
Source: Refinitiv Datastream, NSE EPR.
Note: Based on IBES earnings estimates of top 200 companies by one-year average market cap ending June 30th, 2022, covered by at least five analysts at any given
point of time over the last one year. Data is as May 1st, 2023.
Strong rally in April provides a fillip to market valuations…: Following a significant
derating in the last quarter of the fiscal year gone by (FY23), Indian equities saw modest
valuation rerating in April 2023 as resilient domestic macroeconomic performance and
renewed foreign capital inflows drove markets higher. The Nifty50 Index currently trades
at a 12-month forward multiple of 18.6x, only slightly lower than one standard deviation
below the long-term average multiple (15.4x), even as it is still 9% below the recent peak
levels (~20.5x in December 2022). As such, the valuation premium to long-term mean
has come off from 50% nearly more than two years back to 20% now.
68/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Valuations have improved on price-to-book (P/B) basis as well, with Nifty50 currently
trading at a 12-month forward P/B of 2.85x—implying a premium of ~21% to the average
P/B of 2.4x over the last 15-year period.
…accompanied with increase in valuation premium to EM equities: Relative
outperformance of Indian equities in April for the first time in last four months, has led to
India’s valuation gap to MSCI EM rising 60% a month back to 68% now. On 12-month
forward P/B, MSCI India is trading at a much higher premium of 117% vs. last 15-year
average premium of 70%.
Figure 52: Nifty 50 NTM P/E trend for last 15 years
Figure 53: Nifty 50 NTM P/B trend for last 15 years
Nifty 50 12-month forward P/E
Nifty 50 12-month forward P/B
25
20
3.5
3.0
+1 Std Dev: 19.0
2.5
Mean: 15.4
15
-1 Std Dev: 11.9
Mean: 2.4
2.0
10
5
+1 Std Dev: 2.8
-1 Std Dev: 1.9
1.5
10
12
14
16
18
20
1.0
22
10
12
14
16
18
20
22
Source: Refinitiv Datastream
Source: Refinitiv Datastream
Source: Refinitiv Datastream, NSE EPR.
Figure 54: Nifty 50 NTM P/E (Last three-year trend)
Figure 55: Nifty 50 NTM P/B (Last three-year trend)
Nifty 50 12-month forward P/E
Nifty 50 12-month forward P/B
24
4.0
22
3.5
20
+1 Std Dev: 18.9
18.6
18
15-year mean: 15.4
16
14
12
10
2020
Dec
Apr
+1 Std Dev: 2.8
-1 Std Dev: 1.9
2.0
Aug
2021
Dec
Apr
Aug
2022
Dec
1.5
Apr
2023
Source: Refinitiv Datastream
Source: Refinitiv Datastream, NSE EPR.
69/140
2.7
15-year mean: 2.4
2.5
-1 Std Dev: 11.9
Aug
3.0
Aug
2020
Dec
Apr
Aug
2021
Dec
Apr
Aug
2022
Dec
Apr
2023
Source: Refinitiv Datastre
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 56: Five-year trend of Nifty 50 values at different 12-month forward P/E bands
Nifty 50 PE bands
x 1,000
25
NIFTY 50
P/E: 10x
P/E: 12x
P/E: 15x
x 1,000
25
P/E: 20x
P/E: 25x
20
20
15
15
10
10
5
5
2018
2019
2020
2021
2022
2023
Source: Refinitiv Datastream
Source: Refinitiv Datastream, NSE EPR.
Figure 57: NTM P/E of MSCI India vs. MSCI EM (15-year
trend)
MSCI India currently trades at a premium of 68% to MSCI
EM on 21-month forward P/E vs. recent peak of 110%.
12-months forward P/E (Relative premium)
Figure 58: NTM P/B of MSCI India vs. MSCI EM (15-year
trend)
On 12m forward P/B as well, India’s valuation premium
to MSCI EM is much higher at 117%.
12-month forward P/B (Relative Premium)
IBES MSCI India vs MSCI Emerging Markets
2.2
IBES MSCI India vs MSCI Emerging Markets
MSCI India NTM PE premium (1.7)
2.0
1.8
Mean:1.5
1.4
2.0
2.4
1.4
-1 Std Dev: 1.3
1.2
1.0
2.6
1.8
1.7
1.6
+1 Std Dev: 1.6
1.6
2.2
10
12
14
16
1.2
18
20
22
1.0
2.2
2.0
MSCI India NTM PB premium (2.17)
2.4
2.2
2.2
+1 Std Dev: 2.0
2.0
Mean:1.7
1.8
1.8
1.6
1.6
-1 Std Dev: 1.5
1.4
1.2
Source: Refinitiv Datastream
Source: Refinitiv Datastream, NSE EPR.
70/140
2.6
10
12
14
16
1.4
18
20
22
1.2
Source: Refinitiv Datastream
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 59: NTM P/E of MSCI India vs. MSCI EM (Last
three-year trend)
12-months forward P/E (Relative premium)
Figure 60: NTM P/B of MSCI India vs. MSCI EM (Last
three-year trend)
12-months forward P/B (Relative premium)
IBES MSCI India vs MSCI Emerging Markets
IBES MSCI India vs MSCI Emerging Markets
2.2
2.6
2.0
2.4
1.8
2.2
+1 Std. Dev. : 1.6
1.6
15-year mean: 1.5
1.4
1.2
1.7
Dec
Apr
2020
Aug
Dec
15-year mean: 1.7
1.8
-1 Std. Dev. : 1.3
Aug
2.0
1.6
Apr
2021
2.2
+1 Std. Dev. : 2.0
Aug
2022
Dec
1.4
Apr
2023
Source: Refinitiv Datastream
-1 Std. Dev. : 1.5
Aug
2020
Dec
Apr
Aug
Dec
2021
Apr
Aug
2022
Dec
Apr
2023
Source: Refinitiv Datastream
Source: Refinitiv Datastream, NSE EPR.
Figure 61: Nifty 50 forward earnings yield* vs. 10-year G-sec yield
Spread between Nifty 50 forward earnings yields and 10-year G-sec yield
11
300
Nifty 50 forward earnings yield (%)
10-year G-sec yield (%)
Gap between Nifty50 forward earnings yield and 10Y G-sec yield (RHS)
Average spread = -113 bps
10
200
9
100
8
0
7
-100
6
Average spread = -113 bps
-200
5
4
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
-300
Source: Refinitiv Datastream
Source: Refinitiv Datastream, NSE EPR. * Forward earnings yield for Nifty 50 is calculated as (1/12-month forward PE).
Valuations have corrected across sectors: We have also looked at long-term trends of
12-month forward P/E and P/B multiples across MSCI India sector indices. Following
valuation rerating during Oct-Nov 2022, all sectors have seen their valuations coming off
meaningfully over the subsequent four months, thanks to a broad-based market sell-off
during this period, while earnings estimates have remained broadly steady. The month of
71/140
Market Pulse
May 2023 | Vol. 5, Issue 4
April, however, saw valuations rising for most sectors barring Information Technology and
Utilities. That said, barring Consumer Staples that is trading at a premium, all others are
trading at par or at a reasonable discount to one standard deviation (std. dev.) above the
mean. Nevertheless, all of them still trade well above their respective long-term average
levels.
Figure 62: 12-month forward P/E for MSCI India sector indices (Three-year trend)
Utilities: 12-month forward PE
12M fwd. PE
Avg.
22
20
15-year mean: 12.4
11.8
-1 Std Dev: 9.7
10
Aug
Dec
Apr
Aug
Dec
Apr
2021
Aug
Dec
2022
20
Apr
2023
Consumer Discretionary: 12-month forward PE
12M fwd. PE
40
Avg.
24.7
15-year mean: 17.5
Aug
Dec
Apr
2021
Aug
Dec
Apr
2022
2023
Source: Refinitiv Datastrea
Energy: 12-month forward PE
12M fwd. PE
16
Avg.
-1 Std Dev: 10.9
12
10
Aug
Dec
Apr
2020
Aug
Dec
Apr
2021
Aug
Dec
2022
Apr
2023
26
-1 Std Dev: 10.1
Apr
2020
Source: Refinitiv Datastream
30
14.1
15-year mean: 12.3
Aug Dec
Financials: 12-month forward PE
Avg.
12M fwd. PE
28
+1 Std Dev: 14.5
14
10
Aug
Dec
Apr
2021
Aug
2022
Dec
Apr
2023
Source: Refinitiv Datastream
Healthcare: 12-month forward PE
12M fwd. PE
Avg.
28
24
22
26
+1 Std Dev: 20.7
20
+1 Std Dev: 25.0
24.5
24
15-year mean: 17.3
18
12
Apr
18
+1 Std Dev: 24.1
15
14
Dec
20
20
16
Aug
22
35
5
-1 Std Dev: 24.7
2020
Source: Refinitiv Datastre
42.5
15-year mean: 32.5
25
2020
25
35
30
8
30
Avg.
+1 Std Dev: 40.3
40
12
45
12M fwd. PE
45
+1 Std Dev: 15.2
16
6
Consumer Staples: 12-month forward PE
50
18
14
55
18.2
-1 Std Dev: 13.8
Aug
2020
Dec
15-year mean: 21.6
22
20
Apr
Aug
2021
Dec
Apr
Aug
2022
Dec
Apr
2023
-1 Std Dev: 18.1
18
Aug Dec
Source: Refinitiv Datastream
72/140
2020
Apr
Aug
2021
Dec
Apr
Aug
2022
Dec
Apr
2023
Source: Refinitiv Datastre
Market Pulse
May 2023 | Vol. 5, Issue 4
Industrials: 12-month forward PE
35
12M fwd. PE
35
Avg.
Information Technology: 12-month forward PE
Avg.
12M fwd. PE
30
30
27.3
+1 Std Dev: 26.9
25
20
Dec
Apr
2020
Aug
Dec
Apr
2021
Aug
Dec
-1 Std Dev: 14.3
2022
10
Apr
2023
20.0
15-year mean: 18.2
15
-1 Std Dev: 15.1
Aug
+1 Std Dev: 22.2
20
15-year mean: 21.0
15
25
Aug Dec
Apr
2020
Source: Refinitiv Datastream
Aug
Dec
Apr
2021
Aug
2022
Dec
Apr
2023
Source: Refinitiv Datastre
Materials: 12-month forward PE
30
Avg.
12M fwd. PE
25
20
+1 Std Dev: 16.7
17.0
15
15-year mean: 13.0
10
-1 Std Dev: 9.3
5
Aug Dec
Apr
2020
Aug
Dec
2021
Apr
Aug
Dec
2022
Apr
2023
Source: Refinitiv Datastream
Source: Refinitiv Datastream, NSE EPR.
Figure 63: 12-month forward P/E for MSCI India sector indices (Long-term trend)
Consumer Staples: 12-month forward P/E
Utilities: 12-month forward P/E
30
30
Avg.
12M fwd. PE
25
25
20
20
+1 Std Dev: 15.9
15
10
-1 Std Dev: 9.5
5
0
08
10
12
14
16
18
20
12M fwd. PE
22
60
Avg.
50
50
+1 Std Dev: 40.2
40
40
Mean: 32.3
15
Mean: 12.7
10
60
30
30
5
20
0
10
Source: Refinitiv Datastream
73/140
-1 Std Dev: 24.4
08
10
12
14
16
18
20
20
22
10
Source: Refinitiv Datastrea
Market Pulse
May 2023 | Vol. 5, Issue 4
50
Consumer Discretionary: 12-month forward PE
12M fwd. PE
Avg.
10
0
08
10
16
20
12
14
16
18
20
22
16
+1 Std Dev: 14.9
14
Mean: 12.4
12
12
10
10
-1 Std Dev: 10.8
20
18
14
Mean: 17.4
22
Avg.
18
30
+1 Std Dev: 23.9
20
12M fwd. PE
20
40
40
30
Energy: 12-month forward P/E
22
50
8
6
0
10
-1 Std Dev: 10.0
08
10
12
14
16
18
8
20
22
6
Source: Refinitiv Datastream
Source: Refinitiv Datastream
Financials: 12-month forward P/E
30
30
Avg.
12M fwd. PE
25
25
20
20
-1 Std Dev: 18.1
-1 Std Dev: 13.8
10
15
10
10
12
25
Mean: 21.5
15
08
30
Avg.
+1 Std Dev: 25.0
20
Mean: 17.4
15
5
12M fwd. PE
25
+1 Std Dev: 20.9
20
Healthcare: 12-month forward P/E
30
14
16
18
20
22
5
10
15
08
10
12
14
16
18
20
22
Source: Refinitiv Datastream
Source: Refinitiv Datastream
Industrials: 12-month forward P/E
35
Avg.
12M fwd. PE
30
+1 Std Dev: 27.0
25
Mean: 21.1
20
15
-1 Std Dev: 15.2
10
5
08
10
12
14
16
18
20
22
35
35
30
30
25
25
20
20
15
15
10
10
5
10
5
Source: Refinitiv Datastream
74/140
Information Technology: 12-month forward P/E
12M fwd. PE
35
Avg.
30
25
+1 Std Dev: 22.1
Mean: 18.2
20
15
-1 Std Dev: 14.3
10
08
10
12
14
16
18
20
22
5
Source: Refinitiv Datastream
Market Pulse
May 2023 | Vol. 5, Issue 4
Materials: 12-month forward P/E
30
30
Avg.
12M fwd. PE
25
25
20
20
+1 Std Dev: 16.6
Mean: 12.9
15
15
-1 Std Dev: 9.2
10
10
5
0
5
08
10
12
14
16
18
20
0
22
Source: Refinitiv Datastream
Source: Refinitiv Datastream, NSE EPR.
Figure 64: 12-month forward P/B for MSCI India sector indices (Three-year trend)
Utilities: 12-month forward PB
Avg.
12M fwd. PB
2.4
2.2
13
12
2.0
+1 Std Dev: 1.8
1.8
1.5
15-year mean: 1.5
0.8
Dec
Apr
2020
5.0
Aug
Dec
Apr
2021
Aug
Dec
2022
7
Apr
2023
12M fwd. PB
Aug Dec
Avg.
4.3
15-year mean: 3.1
3.0
1.2
2020
Apr
Aug
2021
Dec
Apr
Aug
2022
Apr
Aug
2022
Dec
Apr
2023
Source: Refinitiv Datastre
12M fwd. PB
Avg.
2.2
+1 Std Dev: 1.9
15-year mean = 1.6
Dec
Apr
Aug
2020
2023
Source: Refinitiv Datastream
75/140
1.5
-1 Std Dev: 1.3
1.4
Dec
Dec
2021
1.6
2.0
Aug
Aug
1.8
-1 Std Dev: 2.5
2.5
Apr
Energy: 12-month forward PB
2.0
3.5
1.5
-1 Std Dev: 7.3
2.4
+1 Std Dev: 3.8
4.0
15-year mean: 9.4
2020
Source: Refinitiv Datastre
Consumer Discretionary: 12-month forward PB
4.5
10.2
10
8
-1 Std Dev: 1.1
Aug
Avg.
+1 Std Dev: 11.5
9
1.2
1.0
12M fwd. PB
11
1.6
1.4
Consumer Staples: 12-month forward PB
Dec
Apr
Aug
2021
Dec
Apr
Aug
2022
Dec
Apr
2023
Source: Refinitiv Datastr
Market Pulse
May 2023 | Vol. 5, Issue 4
Financials: 12-month forward PB
Avg.
12M fwd. PB
4.0
4.5
3.5
3.0
1.5
2.8
15-year mean: 2.4
Aug
Dec
Apr
2020
Aug
Dec
Apr
2021
2.5
Aug
2022
Dec
2.0
Apr
9
4.4
+1 Std Dev: 3.8
3.5
2.5
Apr
2020
Aug
Dec
Apr
2021
Aug
Dec
2022
12M fwd. PB
Apr
2023
Source: Refinitiv Datastream
Avg.
+1 Std Dev: 2.1
2.2
2.0
15-year mean: 1.7
1.0
-1 Std Dev: 1.2
Aug
2020
Dec
Apr
Aug
Dec
Apr
2023
Source: Refinitiv Datast
Avg.
Aug
2021
+1 Std Dev: 5.9
Dec
Apr
Aug
2022
Dec
Apr
2023
Source: Refinitiv Datastream
Source: Refinitiv Datastream, NSE EPR.
76/140
5.9
15-year mean: 4.6
-1 Std Dev: 3.4
Aug
2020
2.5
1.5
Apr
2022
12M fwd. PB
4
Materials: 12-month forward PB
3.0
Dec
8
3
Dec
Aug
2021
5
-1 Std Dev: 2.2
Aug
Apr
Information Technology: 12-month forward PB
6
2.0
1.5
Dec
7
15-year mean: 3.0
3.0
Aug
Source: Refinitiv Datastream
4.5
4.0
-1 Std Dev: 2.6
2020
2023
3.5
15-year mean: 3.4
3.0
Industrials: 12-month forward PB
Avg.
12M fwd. PB
5.0
Avg.
+1 Std Dev: 4.2
3.5
-1 Std Dev: 2.0
2.0
12M fwd. PB
4.0
+1 Std Dev: 2.8
2.5
Healthcare: 12-month forward PB
5.0
Dec
Apr
Aug
2021
Dec
Apr
Aug
2022
Dec
Apr
2023
Source: Refinitiv Datastre
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 65: 12-month forward P/B for MSCI India sector indices (Long-term trend)
Utilities: 12-month forward P/B
Consumer Staples: 12-month forward P/B
14
4.0
14
3.5
3.5
12+1 Std Dev: 11.4
12
3.0
3.0
Mean: 9.3
10
2.5
2.5
4.0
12M fwd. PB
+1 Std Dev: 1.9
2.0
1.0
1.0
08
10
12
14
16
18
20
22
Avg.
8
8
-1 Std Dev: 7.2
6
1.5
-1 Std Dev: 1.0
12M fwd. PB
10
2.0
Mean: 1.5
1.5
0.5
Avg.
6
4
4
2
0.5
08
10
12
14
16
18
20
22
Source: Refinitiv Datastrea
Source: Refinitiv Datastream
Consumer Discretionary: 12-month forward P/B
5.0
12M fwd. PB
Avg.
4.5
+1 Std Dev: 3.8
4.0
3.0
4.0
4.5
3.5
4.0
3.0
3.0
Mean: 3.1
2.5
2.5
-1 Std Dev: 2.5
2.0
2.0
1.5
1.0
5.0
3.5
3.5
08
10
12
14
16
18
20
22
Energy: 12-month forward P/B
12M fwd. PB
4.0
Avg.
3.5
3.0
2.5
2.5
+1 Std Dev: 2.1
2.0
2.0
Mean: 1.7
1.5
1.5
1.5
1.0
1.0
0.5
-1 Std Dev: 1.3
08
10
12
14
16
18
20
1.0
22
Source: Refinitiv Datastream
Financials: 12-month forward P/B
4.5
12M fwd. PB
4.0
4.5
Avg.
4.0
3.5
3.5
+1 Std Dev: 2.9
3.0
2.5
2.5
2.0
08
10
12
14
16
18
1.5
20
22
1.0
0.5
Source: Refinitiv Datastre
Healthcare: 12-month forward P/B
6
12M fwd. PB
5
6
Avg.
5
+1 Std Dev: 4.2
4
4
Mean: 3.4
3
3
2.0
-1 Std Dev: 2.0
1.5
1.0
3.0
Mean: 2.4
2
-1 Std Dev: 2.7
2
1
Source: Refinitiv Datastream
77/140
08
10
12
14
16
2
18
20
22
1
Source: Refinitiv Datastream
Market Pulse
May 2023 | Vol. 5, Issue 4
Industrials: 12-month forward P/B
8
9
7
7
8
6
6
7
8
Avg.
12M fwd. PB
5
5
+1 Std Dev: 4.0
4
4
Mean: 3.0
3
3
2
2
-1 Std Dev: 2.1
1
0
1
08
10
12
14
16
18
20
22
0
2.5
2.0
2
1.5
1.5
-1 Std Dev: 1.2
1.0
0.5
1.0
08
10
12
14
16
18
20
22
6
Mean: 4.6
5
4
3
-1 Std Dev: 3.4
08
10
12
14
16
18
20
22
2
Source: Refinitiv Datastre
2.0
Mean: 1.7
7
3
2.5
+1 Std Dev: 2.1
8
4
3.0
Avg.
9
Avg.
+1 Std Dev: 5.9
5
Materials: 12-month forward P/B
12M fwd. PB
12M fwd. PB
6
Source: Refinitiv Datastream
3.0
Information Technology: 12-month forward P/B
0.5
Source: Refinitiv Datastream
Source: Refinitiv Datastream, NSE EPR.
78/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Fixed income market performance
Table 17: Performance of key Nifty debt indices (As of April 30th, 2023)
Category
G-sec
SDL
Index name
3M
6M
1Y
YTD
7.0
3.8
1.2
2.6
5.0
6.2
Nifty Composite G-sec Index
1.6
3.1
5.7
7.3
Nifty 10 year Benchmark G-Sec
NIFTY 10 Year SDL Index
NIFTY AAA Ultra Short Duration Bond Index
NIFTY AAA Low Duration Bond Index
NIFTY AAA Medium Duration Bond Index
NIFTY AAA Medium to Long Duration Bond Index
NIFTY AAA Long duration Bond Index
NIFTY Liquid Index
NIFTY Money Market Index
NIFTY Ultra Short Duration Debt Index
NIFTY Short Duration Debt Index
Composite
Absolute returns (%)
Nifty 5yr Benchmark G-sec Index
NIFTY AAA Short Duration Bond Index
AAA credit
1M
NIFTY Low Duration Debt Index
NIFTY Medium Duration Debt Index
NIFTY Medium to Long Duration Debt Index
NIFTY Long Duration Debt Index
NIFTY Composite Debt Index
NIFTY Corporate Bond Index
Source: NSE Indices, NSE EPR.
1.9
1.9
0.7
1.0
0.8
1.3
1.6
2.0
0.6
0.7
0.7
0.9
0.8
1.3
1.6
1.8
1.4
1.1
3.4
3.3
1.9
2.1
2.0
2.3
2.5
3.1
1.7
1.9
1.9
2.1
2.0
2.4
2.8
3.2
2.7
2.2
5.9
6.0
3.7
3.7
3.7
3.9
4.4
5.2
3.4
3.6
3.8
3.8
3.8
4.3
5.0
5.6
4.8
4.0
6.7
6.3
4.7
5.5
4.2
4.9
5.4
6.1
6.0
6.4
5.3
5.9
5.2
6.2
7.2
6.1
5.2
Unexpected pause and easing inflation aided domestic fixed income markets: Global
bond markets displayed a mixed performance in the month gone by. Notwithstanding
worsening banking sector stress, expectations of further rate hike by the US Fed in May
amidst a resilient job market and elevated core inflation prints led to yields rising further
at the short-end of the US sovereign curve (One-year and below duration). The long end,
however, came off marginally amid strengthening recession worries, thereby deepening
the yield curve inversion. The FOMC minutes for March indicated policymakers expect the
US economy to fall into recession in the second half of this year. The US 3-month T-bill
was up 44bps in April (+101bps in last six months; +426bps in last one year), the US 10year yield fell by 5bps in April and 65bps in last six months. Bond yields in the UK,
however, hardened further, thanks to persistence of inflation at 10%+ levels, hinting at
sustenance of rate hiking cycle beyond May. The 10-year German Bund remained broadly
steady in April but has surged by 16bps over the last six months.
Rally in domestic bond markets continued in April, as an unexpected pause by the RBI’s
MPC early last month and anticipated moderation in global monetary policy tightening
aided investor sentiments. Additionally, easing of headline inflation to 15-month lows
translated into expectations of an extended pause from current levels, thereby providing
further support to the rally. The decline in yields was broad-based across the curve.
India’s benchmark 10-year G-sec yield fell by 20bps in April on top of a 14bps decline in
the previous month. Domestic growth-inflation dynamics, supply of Government’s paper,
movement in crude oil prices, progress of the Southwest monsoon and global yield
trajectory are likely to dictate domestic bond markets over the coming months.
79/140
CAGR returns (%)
2Y
3Y
5Y
3.2
4.1
4.8
7.9
3.6
4.2
4.6
7.7
3.4
2.4
2.5
2.5
2.4
2.7
3.4
2.3
2.4
2.5
2.6
2.6
2.7
3.1
3.5
3.1
2.6
2.4
4.8
5.2
4.2
4.6
4.0
4.3
3.7
4.9
4.9
5.2
4.6
4.9
4.5
4.7
4.7
4.7
4.8
2.9
5.7
5.0
6.0
5.3
6.3
5.9
5.5
4.5
4.7
5.1
5.9
5.3
6.2
6.0
5.6
6.0
6.7
6.3
8.5
6.3
7.1
6.4
7.4
7.2
7.6
5.3
5.6
6.1
6.9
6.2
7.5
7.7
8.1
7.7
7.4
Market Pulse
May 2023 | Vol. 5, Issue 4
%
May-23
Apr-23
Mar-23
Feb-23
Jan-23
Dec-22
Nov-22
Oct-22
Sep-22
May-23
May-22
May-21
May-20
May-19
May-18
May-17
May-16
May-15
6.6
May-14
4
May-13
6.8
May-12
5
May-11
7.0
May-10
6
May-09
7.2
May-08
7
May-07
7.4
May-06
8
May-05
7.6
May-04
9
May-03
India 10-year benchmark g-sec yield movement over
last 12 months
7.8
Aug-22
10
Jul-22
India 10-year benchmark g-sec yield-long-term trend
May-22
%
Figure 67: India 10Y G-sec yield—last one-year trend
Jun-22
Figure 66: India 10Y G-sec yield—long-term trend
Source: Refinitiv Datastream, NSE EPR.
Figure 68: India sovereign yield curve
India sovereign yield curve
%
31-Mar-22
8.40
31-Mar-23
4-May-23
7.60
7.4
7.3
7.2
7.0
6.80 6.9
6.00
5.20
4.40
3.8
3.60
2.80
2.00
3M
6M
1Y
2Y
Source: Refinitiv Datastream, NSE EPR.
3Y
4Y
5Y
6Y
7Y
8Y
9Y
10Y
11Y
12Y
13Y
14Y
15Y
19Y
24Y
30Y
Figure 69: Change in sovereign yields across the curve in 2023 thus far (As on May 4th, 2023)
Change in yields across the curve in 2023 thus far
bps
60
54
50
40
30
23
20
17
10
0
-10
-7
-20
-21
-30
-40
-50
3M
6M
1Y
2Y
Source: Refinitiv Datastream, NSE EPR.
3Y
-23
4Y
-27
5Y
-31
-29
6Y
7Y
-23
8Y
-30
-31
9Y
10Y
80/140
-26
11Y
-24
12Y
-27
13Y
-33
14Y
-36
15Y
-27
-28
-29
19Y
24Y
30Y
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 70: India sovereign bonds term premia
bps
Sovereign bond spreads
300
10Y-2Y
250
10Y-3Y
200
150
100
50
0
-50
Source: Refinitiv Datastream, NSE EPR.
Figure 71: Inflation, yields and spreads in India vs. US
10
India - CPI (% YOY) (5.67%)
Fed funds rate (%) - R (5.25%)
10
RBI repo rate (%) - R (6.5%)
8
8
6
6
4
4
2
2
0
9
18
19
India - 3m yield (7.06%)
20
India - 2y yield (6.89%)
21
22
23
India - 10y yield (7.01%)
0
9
8
8
7
7
6
6
5
5
4
4
3
3
18
6
19
India-US 3m G-Sec spread (1.81%)
India-US 10y G-Sec spread (3.65%)
20
21
22
India-US 2y G-Sec spread (3.12%)
23
6
5
5
4
4
3
3
2
2
1
18
19
20
21
22
23
1
Source: Refinitiv Datastream
Source: Refinitiv Datastream, NSE EPR.
81/140
Apr-23
Aug-22
Jan-22
May-21
Oct-20
Feb-20
Jun-19
Nov-18
Mar-18
Aug-17
Dec-16
Apr-16
Sep-15
Jan-15
Jun-14
Oct-13
Mar-13
Jul-12
Nov-11
Apr-11
Aug-10
-150
Jan-10
-100
Market Pulse
May 2023 | Vol. 5, Issue 4
SDL spreads eased marginally in April: After normalising over the previous three
months, thanks to heavy SDL supply in Q4 FY23 (+74% in March 2023), SDL spreads to
similar tenor G-secs came off marginally in April. This is partly attributed to lower-thanbudgeted borrowings by states during the month amid availability of interest-free loans
from the Centre. Borrowing by states through dated securities in the month of April at Rs
223bn was mere 38% of the budgeted amount (Rs 582bn) for the month. This, along with
an unexpected pause by the RBI’s MPC and lower-than-expected inflation reading,
provided support to the SDL market in the month gone by.
Figure 72: Spreads between 10-year SDL and G-sec yields
%
bps
10-year SDL vs. G-sec yield
9.0
10-year SDL yield
10-year G-sec yield
120
Spread (bps)
8.5
100
8.0
80
7.5
7.0
60
6.5
40
6.0
20
Apr-23
Dec-22
Sep-22
Jun-22
Feb-22
Nov-21
Jul-21
Apr-21
Dec-20
Sep-20
Jun-20
Feb-20
Nov-19
Jul-19
Jan-19
5.0
Apr-19
5.5
0
Source: NSE Data and Analytics (NDAL), Refinitiv Datastream, CCIL, NSE EPR.
Corporate bond market performance
Corporate bond spreads with their G-sec counterparts continued to widen, across mid
and long tenors, reflecting the impact of decent supply of corporate papers in an
otherwise lull month. The month of April is usually calm as far corporate fund raising is
concerned. According to Prime Database, companies raised Rs 570bn through corporate
bonds in Apr’23, nearly 2.5 times more than the supply during the same month last year.
Figure 73: Spreads for one-year AAA-rated corporate bonds across segments
bps
Spreads for 1-year corporate bonds across segments
1Y Corp (-) 1Y G-sec
450
1Y NBFC (-) 1Y G-sec
1Y PSU (-) 1Y G-sec
1Y HFC (-) 1Y G-sec
400
350
300
250
200
150
100
50
0
-50
-100
Jan-19
Jun-19
Nov-19
Mar-20
Aug-20
Source: NSE Data and Analytics (NDAL), Refinitiv Datastream, NSE EPR.
Dec-20
May-21
82/140
Oct-21
Feb-22
Jul-22
Dec-22
Apr-23
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 74: Spreads for three-year AAA-rated corporate bonds across segments
bps
Spreads for 3-year corporate bonds across segments
3Y Corp (-) 1Y G-sec
360
3Y NBFC (-) 1Y G-sec
3Y PSU (-) 1Y G-sec
3Y HFC (-) 1Y G-sec
320
280
240
200
160
120
80
40
0
-40
-80
Jan-19
Jun-19
Nov-19
Mar-20
Aug-20
Source: NSE Data and Analytics (NDAL), Refinitiv Datastream, NSE EPR.
Dec-20
May-21
Oct-21
Feb-22
Jul-22
Dec-22
Apr-23
Figure 75: Spreads for five-year AAA-rated corporate bonds across segments
bps
Spreads for 5-year corporate bonds across segments
5Y Corp (-) 1Y G-sec
320
5Y NBFC (-) 1Y G-sec
5Y PSU (-) 1Y G-sec
5Y HFC (-) 1Y G-sec
280
240
200
160
120
80
40
0
-40
Jan-19
Jun-19
Nov-19
Mar-20
Aug-20
Source: NSE Data and Analytics (NDAL), Refinitiv Datastream, NSE EPR.
Dec-20
May-21
Oct-21
Feb-22
Jul-22
Dec-22
Apr-23
Figure 76: Spreads for 10-year AAA-rated corporate bonds across segments
bps
Spreads for 10-year corporate bonds across segments
10Y Corp (-) 1Y G-sec
320
10Y NBFC (-) 1Y G-sec
10Y PSU (-) 1Y G-sec
10Y HFC (-) 1Y G-sec
280
240
200
160
120
80
40
0
Jan-19
Jun-19
Nov-19
Mar-20
Aug-20
Source: NSE Data and Analytics (NDAL), Refinitiv Datastream, NSE EPR.
Dec-20
May-21
83/140
Oct-21
Feb-22
Jul-22
Dec-22
Apr-23
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 77: AAA-rated corporate bond yield curve
%
Figure 78: AA+ rated corporate bond yield curve
%
AAA PSU yield curve
31-Mar-22
8.5
31-Dec-22
30-Apr-23
7.5
8.5
6.5
7.5
5.5
6.5
4.5
5.5
3.5
1Y
2Y
Source: NSE Data and Analytics (NDAL).
3Y
5Y
4.5
10Y
Figure 79: Change in AAA corporate bond and G-sec
yields since March 2022
bps
300
250
Change in AAA vs. G-sec yields since March 2022
AAA PSUs
AAA NBFCs
G-Secs
200
150
129
100
200
42
1Y
2Y
3Y
3Y
AA+ PSUs
258
234
202
192
176
163
150
105110
93
50
0
2Y
5Y
Source: NSE Data and Analytics (NDAL), Refinitiv Datastream, NSE EPR.
AAA-PSU
AA+ NBFCs
10Y
G-secs
143
135
129
77
67
93
50
27
0
10Y
28
1Y
2Y
Figure 81: Corporate bond term premia between 10-year and 1-year yields
bps
Corporate bond term premia
400
5Y
100
67
30-Apr-23
Change in AA+ vs. G-sec yields since March
2022
bps
250
166163
1Y
31-Dec-22
Figure 80: Change in AA+ corporate bond and G-sec
bond yields since March 2022
300
266
252 258
210
192192
AA+ PSU yield curve
31-Mar-22
9.5
AAA-HFCs
AAA-NBFCs
3Y
5Y
58
27
10Y
AAA-Corp
350
300
250
200
150
100
50
0
Source: NSE Data and Analytics (NDAL), Refinitiv Datastream, NSE EPR.
84/140
Apr-23
Jan-23
Oct-22
Jul-22
Apr-22
Jan-22
Oct-21
Jul-21
Apr-21
Jan-21
Oct-20
Jul-20
Apr-20
Jan-20
Oct-19
Jul-19
Apr-19
-100
Jan-19
-50
Market Pulse
May 2023 | Vol. 5, Issue 4
Commodity market performance
Commodities continued to trend lower: The S&P GSCI Index, a composite commodity
index, fell by a further 1.6% in April, translating into a total decline of ~25% over the last
12 months. Strong gains in precious metals were more than offset by the decline in prices
of select industrial metals and agricultural commodities during the month. Over the last
one-year period, barring precious metals, all major energy, industrial metals, and
agricultural commodities fell sharply, reflecting the impact of strengthening global growth
concerns. Within energy, while brent crude oil prices remained steady in April at $80/bbl
levels, they have dipped by 26% over the last 12 months. Industrial metals displayed
mixed performance, with prices of Lead, Nickel and Tin rising modestly, while that of
Aluminum and Zinc falling. Among precious metals, gold was up by a modest 0.7% in April
and 21.5% over the last six months, while Silver and Platinum ended the month with
relatively higher gains of 4% and 9.5% respectively. Within agriculture, Wheat and Cotton
prices fell by 10% and 3% respectively in April, translating into a steep 40%+ drop over
the last 12 months, while sugar ended the month with a strong 21% gain (+40% YTD).
Figure 82: Movement in key commodity indices
(As on May 4th, 2023)
S&P GSCI Comm
Baltic Dry
900
LME Index
CRB Index
6000
800
700
5000
4000
600
500
3000
2000
400
300
1000
200
May 11
May 12
May 13
May 14
May 15
May 16
May 17
May 18
May 19
May 20
May 21
May 22
May 23
May 12
May 13
May 14
May 15
May 16
May 17
May 18
May 19
May 20
May 21
May 22
May 23
5500
5000
4500
4000
3500
3000
2500
2000
May 11
May 23
May 22
May 21
May 20
May 19
May 18
May 17
May 16
May 15
May 14
May 13
May 12
May 11
0
400
350
300
250
200
150
May 23
May 22
May 21
May 20
May 19
May 18
May 17
May 16
May 15
May 14
May 13
May 12
May 11
100
Source: Refinitiv Datastream
Source: Refinitiv Datastream, NSE EPR.
85/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 83: Movement in key commodity indices since 2020
Rebased to 100 on March 31st, 2020 (As on May 4th, 2023)
Key commodity indices
Rebased to 100 on March 31st, 2020
350
S&P GSCI
Rogers Intl Comm TR
Bloomberg- Comm TR
MLCX TR
CRB TR
LME Index
300
250
200
150
100
M
ar
23
22
D
ec
22
S
ep
22
n
Ju
M
ar
22
21
D
ec
21
S
ep
21
n
Ju
M
ar
21
20
D
ec
20
S
ep
20
n
Ju
M
ar
20
50
Source: Refinitiv Datastream
Source: Refinitiv Datastream, NSE EPR.
86/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 84: Returns of key hard commodities in 2021, 2022 and 2023 till date
(As on May 4th, 2023)
Returns of key hard commodities
100
80
60
Aluminium
2021: 42.18%
2022: -16.27%
2023TD: -3.03%
100
100
80
80
Copper
Copper 2021: 25.70%
2022: -14.13%
2023TD: 1.31%
100
80
60
60
40
40
40
40
20
20
20
20
0
0
0
60
0
-20
-20
-20
-20
-40
-40
-40
-40
-60
-60
100
100
80
80
-60
100
80
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Lead
Lead 2021: 18.32%
2022: -0.05%
2023TD: -10.64%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Nickel
Nickel 2021: 26.14%
2022: 43.13%
2023TD: -19.82%
-60
100
80
60
60
40
40
40
40
20
20
20
20
60
0
0
60
0
0
-20
-20
-20
-20
-40
-40
-40
-40
-60
-60
100
100
80
80
-60
100
80
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Tin
Tin 2021: 91.65%
2022: -37.13%
2023TD: 4.57%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Zinc
Zinc 2021: 31.53%
2022: -16.34%
2023TD: -12.94%
-60
100
80
60
60
40
40
40
40
20
20
20
20
60
0
0
0
60
0
-20
-20
-20
-20
-40
-40
-40
-40
-60
-60
100
100
80
80
-60
100
80
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Gold
Gold 2021: -3.97%
2022: -0.37%
2023TD: 12.74%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Silver
Silver 2021: -11.77%
2022: 2.93%
2023TD: 8.82%
-60
100
80
60
60
40
40
40
40
20
20
20
20
60
0
0
0
60
0
-20
-20
-20
-20
-40
-40
-40
-40
-60
-60
-60
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
-60
Source: Refinitiv Datastream
Source: Refinitiv Datastream, NSE EPR.
87/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 85: Returns of key agricultural commodities in 2021, 2022 and 2023 till date
(As on May 4th, 2023)
Returns of key agri commodities
100
Soybean
Corn
100
100
80
80
60
60
40
40
40
40
20
20
20
20
80
60
2021: 0.34%
2022: 14.66%
2023TD: -5.06%
0
-20
0
2021: 22.54%
2022: 13.99%
2023TD: -4.53%
0
100
80
60
0
-20
-20
100
100
80
80
60
60
40
40
40
40
20
20
20
20
100
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Wheat
2021: -3.86%
2022: 20.09%
2023TD: -17.63%
80
60
0
-20
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Cotton
2021: 49.56%
2022: -24.90%
2023TD: -4.58%
-20
100
80
60
0
0
-20
-20
100
100
80
80
60
60
40
40
40
40
20
20
20
20
100
80
60
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Cocoa
2021: 0.62%
2022: 3.13%
2023TD: 10.94%
0
-20
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Sugar
2021: 25.90%
2022: 1.56%
2023TD: 31.31%
0
-20
-20
-20
100
80
60
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
-20
Source: Refinitiv Datastream
Source: Refinitiv Datastream, NSE EPR.
88/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 86: Returns of key energy commodities in 2021, 2022 and 2023 till date
(As on May 4th, 2023)
Returns of key energy commodities
Brent Crude
WTI Crude
120
120
100
100
80
80
60
60
60
60
40
40
40
40
20
20
20
20
120
2021: 51.09%
2022: 8.32%
2023TD: -14.60%
100
80
0
2021: 55.80%
2022: 6.41%
2023TD: -14.52%
0
0
120
100
80
0
-20
-20
120
120
100
100
80
80
80
60
60
60
60
40
40
40
40
20
20
20
20
-20
120
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Gasoline
2021: 58.81%
2022: 23.46%
2023TD: -7.03%
100
80
0
-20
Kerosene
2021: 56.97%
2022: 35.61%
2023TD: -27.10%
0
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
-20
-20
-20
120
100
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
-20
Source: Refinitiv Datastream
Source: Refinitiv Datastream, NSE EPR.
89/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Table 18: Annual performance across commodities
(As on May 4th, 2023)
Annual performance across commodities (Ranked by % change each year)
2013
WTI
7.2
Palladium
1.7
Brent Crude
0.9
Zinc
0.2
Tin
-4.5
Lead
-5.4
Copper
-6.7
Platinum
-11.1
Aluminium
-14.0
Nickel
-18.6
Gold
-27.3
Silver
-35.9
2014
Palladium
13.3
Nickel
9.0
Zinc
5.6
Aluminium
4.0
Gold
-1.8
Platinum
-11.1
Tin
-13.0
Copper
-13.7
Lead
-15.9
Silver
-19.3
WTI
-45.9
Brent Crude
-49.9
2015
Lead
-2.5
Gold
-10.5
Silver
-11.8
Aluminium
-17.8
Tin
-24.9
Copper
-26.1
Zinc
-26.5
Platinum
-28.0
WTI
-30.5
Palladium
-31.6
Brent Crude
-36.1
Nickel
-41.8
2016
Zinc
60.6
Brent Crude
58.9
Tin
45.3
WTI
45.0
Palladium
20.7
Copper
17.4
Silver
15.1
Aluminium
13.6
Nickel
13.5
Lead
11.3
Gold
9.0
Platinum
3.5
2017
Palladium
57.6
Aluminium
32.4
Copper
30.5
Zinc
30.5
Nickel
27.5
Lead
24.3
Brent Crude
17.5
Gold
12.6
WTI
12.5
Silver
6.4
Platinum
3.2
Tin
-5.2
2018
Palladium
19.6
Gold
-1.7
Tin
-2.9
Silver
-8.6
Platinum
-14.4
Nickel
-16.5
Aluminium
-17.4
Copper
-17.5
Lead
-19.2
Brent Crude
-20.2
Zinc
-24.5
WTI
-25.3
Source: Refinitiv Datastream
Source: Refinitiv DataStream, NSE EPR.
90/140
2019
Palladium
52.0
WTI
35.3
Nickel
31.6
Brent Crude
24.8
Platinum
22.3
Gold
18.7
Silver
15.2
Copper
3.4
Aluminium
-4.4
Lead
-4.7
Zinc
-9.5
Tin
-12.0
2020
Silver
47.8
Copper
26.0
Gold
24.8
Palladium
22.0
Zinc
19.7
Tin
19.6
Nickel
18.7
Aluminium
10.8
Platinum
10.0
Lead
3.3
WTI
-21.0
Brent Crude
-21.8
2021
Tin
91.7
WTI
55.8
Brent Crude
51.1
Aluminium
42.2
Zinc
31.5
Nickel
26.1
Copper
25.7
Lead
18.3
Gold
-4.0
Platinum
-10.2
Palladium
-10.2
Silver
-11.7
2022
Nickel
43.1
Brent Crude
8.3
Platinum
7.5
Palladium
7.5
WTI
6.7
Silver
2.9
Lead
-0.1
Gold
-0.4
Copper
-14.1
Aluminium
-16.3
Zinc
-16.3
Tin
-37.1
2023TD
Gold
12.7
Silver
8.8
Tin
4.6
Platinum
2.1
Palladium
2.1
Copper
1.3
Aluminium
-3.0
Lead
-10.6
Zinc
-12.9
WTI
-14.6
Brent Crude
-14.6
Nickel
-19.8
Market Pulse
May 2023 | Vol. 5, Issue 4
Institutional flows across market segments in India
FII buying in Indian equities across exchanges picked up in April 2023…: The FII
selling spree seen in FY22 (Record high annual outflows of US$18.5bn) continued in the
first quarter of FY23, only to reverse during the following six months as strengthening
growth concerns faded rate hike expectations. FII selling, however, resumed in the new
year, as expensive valuations and improving prospects in China and Taiwan resulted in
FIIs shifting away from Indian equities. The selling spree, however, came to an end in
March, with FIIs turning modest buyers during the month that strengthened further in
April, and May thus far. The recent sell-off resulted in Indian equities regaining its
attractiveness. This, along with an unexpected pause by the RBI in the April meeting and
a strong start to the Q4 earnings season, provided a boost to investor sentiments. Net FII
inflows in April stood at US$ 1.4bn and has already reached US$2.4bn in the first six
trading days of May (As on May 10th, 2023).
…Even as their participation in Indian debt remained muted: FII activity in terms of
inflows and outflows has remained muted over the last two years, evident in tight range
of monthly outflows or inflows during this period (Maximum monthly outflows of
US$715m to maximum inflows of US$509m). During the last fiscal year, FIIs were sellers
in the Indian debt market with net outflow amounting to US$1.1bn—a consequence of
shrinking spreads of Indian bonds vis-à-vis global bonds. The trend has been no different
in FY24, with FII selling a net of US$ 115m in the fiscal thus far (As on May 10th, 2023).
Figure 87: Net inflows by FIIs in Indian equity and debt markets
Cumulative FII net inflows over last eight years (FY)
x 1,000
40
30
20
Equity Inflows (US$mn)
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24TD
x 1,000
25
20
15
10
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24TD
Debt Inflows (US$mn)
10
5
0
0
-10
-20
-5
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
-10
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Source: Refinitiv Datastream
Source: Refinitiv Datastream NSE EPR.
DIIs tuned down buying in April 2023: DIIs have remained strong buyers of Indian
equities since March 2021. They invested Rs876bn and Rs2.7trn in 2021 and 2022
respectively. This has been supported by strong retail inflows via the SIP route. After
being strong buyers over the first three months of 2023 with cumulative net inflows of
Rs832bn during this period, DIIs tuned down buying significantly with net inflows of only
Rs22bn in Apr’23. The buying trend reversed in May, with net DII outflows during the first
six trading days of Rs 29bn already surpassing net inflows seen during the whole of last
month (In magnitude terms).
91/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 88: Net inflows by DIIs in Indian equity markets
Cumulative DII net flows over last eight years (FY)
x 1,000
3,000
Equity Inflows (Rs mn)
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24TD
2,000
1,000
0
-1,000
-2,000
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Source: Refinitiv Datastream
Source: Refinitiv Datastream, NSE EPR.
92/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Fund mobilisation through NSE
Market Statistics: Primary market
Funds raised by corporates moderated further in April: Fund raised by corporates
contracted in the month of April by 40.4% MoM following a decline of 4.1% MoM in the
previous month. The total funds raised by corporates through equity and debt issuances
in the month of April stood at Rs769bn vs Rs1,277bn in the previous month. Debt
issuances comprised 89.7% of the total funds raised by corporates in the month of April
through NSE’s platform. Private placement of NCDs and CPs continued to be the most
preferred avenues for raising debt among corporates. While funds raised through debt
issuances declined 44.8% MoM, funds raised through equity issuances expanded by
98.6% MoM to touch Rs78bn during the month.
In the fiscal gone by (FY23), corporates raised Rs1.5trn through equity and Rs12trn
through debt (incl. reissuances) on NSE’s platform.
Table 19: Funds mobilised through NSE platform
Particulars
No. of
Issues
Equity
IPOs
10
Preferential Allotment
16
Rights issue
QIPs
Total equity raised
GoI dated bonds
State development loans (SDLs)
T-Bills
Sovereign gold bonds (SGBs)
Corporate bonds
Public issue of NCDs
Private placement of NCDs
Private placement of CPs
Total debt raised
Total funds raised
Amount
Raised
(USDm)
10
11,104
135
44
48,350
590
No. of
Issues
87
113
7,170
18,115
220
1
5,000
61
2
April 2023
Amount
Raised
(Rsm)
Amount
Raised
(USDm)
5
Debt
Government securities
March 2023
Amount
Raised
(Rsm)
9,326
39,611
481
300,622
3,653
4
2
9,218
10,005
78,676
112
122
959
103
1,714,107
20,828
12
1,100,000
13,415
1
19,816
241
12
1,621,603
19,776
1,126
14
12
12
59
170
1,667,784
20,265
916
11
20
-
223,000
-
2,720
-
538,267
6,540
11
282,232
3,442
4,939,681
60,020
113
3,627,373
44,236
698,170
4,979,293
8,483
60,502
Source: NSE EPR. Note: In case of debt issuances, the above table reports no. of ISINs instead of issues.
93/140
30
399,413
3,706,049
4,871
45,196
Market Pulse
May 2023 | Vol. 5, Issue 4
New listings in the month
Thirteen new companies were added on NSE in April: Thirteen (13) new companies
debuted on NSE in the month of April. Seven (7) companies got listed through IPOs, of
which, five (5) were on NSE EMERGE platform. Six (6) companies got listed through direct
listing of equity shares and one (1) company migrated from the SME segment to main
board. Ten companies gained on their respective listing dates.
Table 20: Companies listed on NSE in April 2023
Listing
Gain %
Market Cap
(Rsm)
Gross
Turnover
(Rsm)
(14.3)
1,744
76
5.0
1,083
1
Direct listing
Sahyadri Industries Limited
(2.5)
3,953
1
Direct listing
10-Apr-23
Lorenzini Apparels Limited
10.0
1,227
1
Direct listing
13-Apr-23
Sotac Pharmaceuticals Limited
3.6
1,334
96
SME-IPO
17-Apr-23
Infinium Pharmachem Limited
4.8
1,028
115
SME-IPO
18-Apr-23
Avalon Technologies Limited
0.0
25,986
1,968
18-Apr-23
Mos Utility Limited
18.4
2,356
326
SME-IPO
19-Apr-23
BEML Land Assets Limited
(84.4)
11,354
136
Direct listing
21-Apr-23
Pattech Fitwell Tube Components Limited
10.0
448
34
21-Apr-23
Shree Vasu Logistics Limited
4.7
1,655
1
24-Apr-23
A G Universal Limited
0.0
330
28
25-Apr-23
Robust Hotels Limited
(74.6)
1,616
2
Direct listing
26-Apr-23
Kirloskar Pneumatic Company Limited
0.6
39,634
69
Direct listing
Listing Date
Security Name
3-Apr-23
Udayshivakumar Infra Limited
6-Apr-23
AKI India Limited
6-Apr-23
Listing
IPO
IPO
SME-IPO
Migrated from SME to NSE Main Board
SME-IPO
Source: NSE EPR. Note: Figures in brackets indicate negative; Above table includes companies in EQ, BE, SM and ST series.
94/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Trends in NSE’s turnover across different segments
Institutional investments through NSE platform 24
Institutional investors were modest buyers in the month April: After consistent selling
in NSE’s secondary markets for four consecutive months, FPIs turned modest buyers in
the month of April, with net inflows at Rs53bn. Narrowing valuation premium post the
recent correction and resilient economic performance have strengthened inflows in
Indian equities by FPIs. DIIs continued to remain net buyers, albeit lower than the
average monthly inflows witnessed in the last fiscal. As such, institutional investors
invested Rs80bn in the NSE’s capital market (CM) segment during the month. Net inflows
by DIIs in the NSE’s CM segment during the first four months of 2023 at Rs 803bn more
than made up for outflows by FPIs (Rs 628bn). In equity derivatives segment, however,
FPIs were strong buyers to the tune of Rs 192bn in equity futures contracts during the
month.
Table 21: FII and DII flows (Rs bn) in secondary markets in April 2022, March 2023, and April 2023
Category
Buy
Apr-23
Sell
Net
1,086
28
Cash Market
2,368
2,288
FPI
1,254
1,201
DII
1,114
Equity Futures
5,250
5,080
FPI
3,942
3,749
DII
Equity Options
DII
1,308
693
5
508
DII
0.0
Currency Options
FPI
1.2
1.2
(142)
53
1,656
1,711
(54)
1,426
1,872
(445)
1,376
115
1,637
(66)
170
1,418
6,176
6,102
(40)
4,839
4,994
(156)
11
(1)
9
(2)
894
(34)
824
(33)
62
574
(16)
527
(18)
679
682
-
0.0
0.0
0.0
0.8
0.8
0.4
0.4
2.1
2.1
303
4,726
61
741
1,147
6,631
3
10
1,450
6,410
1,198
(1)
4,685
281
74
1,190
192
1,491
1,136
0
47
FPI
3,019
1,210
50
Net
2,877
1,201
DII
Sell
227
(1)
7
Buy
2,847
693
687
Net
3,074
(23)
687
558
Sell
Apr-22
80
1,330
FPI
Currency Futures
Buy
Mar-23
744
(9)
1,571
660
7
660
(8)
653
651
(0)
70
70
(4)
(3)
1.5
0.6
1.5
0.6
0.0
860
791
1.5
-
1.5
1.0
-
1.0
(221)
0
2
(0)
0.5
-
0.5
Interest Rate Futures
0.1
0.1
0.0
0.2
0.1
0.1
3.4
1.5
1.9
FPI
0.1
0.1
0.0
0.2
0.1
0.1
0.2
0.2
0.0
DII
-
-
-
-
-
-
3.3
1.3
1.9
Source: NSE EPR. * DII – Domestic Institutional Investors includes Banks, Insurance companies, Mutual Funds, NBFCs and Domestic Venture Capital Funds, AIFs, PMS
clients; FPI – Foreign Institutional Investors includes Foreign Portfolio Investors, Foreign Direct Investors, Foreign Venture Capital Investors, Foreign Nationals (FN) and
OCBs; Above table reports premium turnover for Options contracts. Figures in brackets indicate negative numbers.
24
The institutional investors turnover is based on the client codes entered by trading members at the time of order entry and corresponding client category classification
provided by trading members as part of the Unique Client Code (UCC) details. This data is provisional and subject to change, inter alia, on account of custodial confirmation
process, modifications etc.
95/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Table 22: Foreign and domestic institutional flows (Rs bn) in secondary markets during FY23 and CY23
FY23
Category
CY23TD
Buy
Sell
Net
Buy
Sell
Net
Cash Market
35,322
35,286
37
11,319
11,144
174
DII
16,457
14,050
2,408
5,359
4,556
803
FPI
18,865
21,236
(2,371)
5,960
6,588
(628)
Equity Futures
74,097
74,203
(106)
23,992
23,829
163
FPI
56,470
56,681
(211)
18,129
18,030
98
DII
17,627
17,522
105
5,863
5,798
65
Equity Options
10,733
10,782
(49)
3,949
3,975
(26)
FPI
10,637
10,667
(30)
3,914
3,934
(20)
DII
Currency Futures
DII
96
115
(19)
35
41
(6)
10,255
10,834
(579)
2,785
2,911
(126)
873
877
(5)
240
240
0
FPI
9,382
9,956
(574)
2,545
2,671
(126)
DII
0.5
22.6
0.0
16.8
0.5
0.0
0.0
0.0
14.5
16.4
(1.9)
0.7
3.3
(2.6)
12.2
14.1
(1.8)
-
2.7
(2.7)
Currency Options
FPI
Interest Rate
Futures
DII
FPI
23.1
2.3
16.8
6.3
5.8
2.3
(0.0)
7.6
7.6
0.7
5.6
5.6
0.6
2.0
1.9
0.1
Source: NSE EPR * DII – Domestic Institutional Investors includes Banks, Insurance companies, Mutual Funds, NBFCs and Domestic Venture Capital Funds, AIFs, PMS
clients; FII – Foreign Institutional Investors includes Foreign Portfolio Investors, Foreign Direct Investors, Foreign Venture Capital Investors, Foreign Nationals (FN) and
OCBs; Above table reports premium turnover for Options contracts. Figures in brackets indicate negative numbers.
96/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Retail investments through NSE platform
Retail outflows continued in April: Retail investors were net sellers in secondary
markets for the second consecutive month in April, with net outflows over the last two
months amounting to Rs 81bn. Direct participation by retail investors has been
moderating since July 2022, while participation through mutual funds has been picking
up, reflected in rising SIP inflows. Despite the recent dip in participation, the number of
retail investors trading in the CM as well as FO segments remain well above pre-pandemic
levels.
Table 23: Retail investors’ flows in secondary markets during April 2023, March 2023 and April 2022
Rs bn
Category
Cash Market
Equity Derivatives
Equity Futures
Equity Options
Currency Derivatives
Currency Futures
Currency Options
Interest Rate Derivatives
Interest Rate Futures
Interest Rate Options
Apr-23
Buy
Sell
Net
Mar-23
Buy
Sell
Net
Apr-22
Buy
Sell
Net
3,017
3,052
(35)
3,386
3,432
(46)
5,173
4,954
219
3,417
3,486
(70)
4,740
4,806
(66)
5,325
5,198
126
6,460
6,499
3,043
(39)
3,012
907
31
872
902
865
5.8
9,227
4,463
4,421
36
1,231
1,229
(0.3)
9.7
36
6.1
9,203
1,222
2,531
31
(38)
9.9
(0.1)
6.7
7.0
(0.3)
1.0
0.1
0.6
0.2
1.1
1.0
-
-
-
-
-
1.1
2,562
158
1,236
(0.2)
(0.2)
7,729
1,198
1.5
1.5
42
7,887
2
1,220
1.2
1.2
(23)
2
1,191
1,229
0.1
0.8
0.6
-
-
-
0.8
(38)
0.2
-
Commodity Derivatives
0.0
0.0
0.0
0.0
0.0
(0.0)
0.0
0.0
(0.0)
Commodity Options
0.0
0.0
0.0
0.0
0.0
(0.0)
0.0
0.0
(0.0)
Commodity Futures
-
-
-
-
-
-
-
-
-
Source: NSE EPR. Note: Retail investors include clients that are individual domestic investors, NRIs, sole proprietorship firms and HUFs; Above table reports premium
turnover for Options contracts. Figures in brackets indicate negative numbers.
Table 24: Retail investors’ flows in secondary markets during FY23 and CY23TD (Jan-Apr’23)
Category
Cash Market
Equity Derivatives
Equity Futures
Equity Futures
Currency Derivatives
Currency Futures
Currency Options
Interest Rate Derivatives
Interest Rate Futures
Interest Rate Options
Buy
48,791
FY23
Sell
10,197
59,816
145
14,336
14,318
41,130
600
454
15,402
15,414
(12)
108.2
107.8
0.4
14.0
-
Sell
10,303
41,585
14.0
CY23TD
492
100,946
15,293
Buy
48,299
101,546
59,961
Net
15,306
(13)
12.2
1.8
-
-
12.2
1.8
26,611
12,275
3,712
3,684
28.5
3.2
3.2
-
26,462
12,144
3,676
3,647
Net
106
149
18
131
36
37
28.7
(0.1)
2.9
0.3
2.9
-
0.3
-
Commodity Derivatives
0.1
0.1
(0.0)
0.0
0.0
(0.0)
Commodity Options
0.1
0.1
(0.0)
0.0
0.0
(0.0)
Commodity Futures
-
-
-
-
-
-
Source: NSE EPR. Note: Retail investors include individual domestic investors, NRIs, sole proprietorship firms and HUFs; Above table reports premium turnover for
Options contracts. Figures in brackets indicate negative numbers.
While retail inflows have been robust in FY21 and FY22…: Direct retail participation in
Indian equities rose meaningfully during the two years following the onset of the
pandemic after a 11-year long hiatus. The post-pandemic liquidity-induced rally and
limited investment avenues amid falling interest rates tempted retail investors to get into
equity markets in a big way. Net retail investments stood at Rs2.3trn during FY21 and
97/140
Market Pulse
May 2023 | Vol. 5, Issue 4
FY22. Strengthened retail participation during this period is also an increase in new
investor registrations and a surge in retail share in the overall cash market turnover. The
momentum, however, moderated in FY23, with net retail investments falling to a mere Rs
492bn. Net retail investments in NSE’s secondary markets during the last three fiscal
years stand at Rs 2.8trn, of which Rs1.6trn was invested in FY22 alone.
…FY23 saw some moderation: Retail participation in the fiscal year gone by has been
significantly lower compared to same period last year. This can be witnessed in the
decline in cumulative net inflows, drop in number of retail investors participating in the
secondary markets and consequently lower turnover share. Despite the recent peaking
of inflows in October 2022, the retail investors’ holding in NSE-listed universe picked up
by 20bps QoQ to 9.4% as on March 31st, 2023.
Figure 89: Overall net inflows of retail investors in India in last eight fiscal years.
Source: NSE EPR. Note: Retail investors include individual domestic investors, NRIs, sole proprietorship firms and HUFs.
98/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Number of active retail investors continue to remain above pre-pandemic levels: The
number of retail investors participating in the NSE’s CM segment rose sharply post the
pandemic from 3m investors in January 2020 to nearly 12m two years later only to fall to
7m by April 2023. This is in-line with the trend in new investor registrations and retail
trading activity witnessed during the period. Despite the drop in 2022 and 2023, number
of active investors trading in secondary markets continued to remain well above the prepandemic level. In the FO segment, the number of retail investors remained consistent at
3m in April 2023, marginally higher than monthly average of 2.8m during FY23.
Figure 90: Retail trading activity in cash and equity derivative segments of NSE (Jan’17-)
12
CM Segment
FO Segment
8
6.7
6
4
3.0
Source: NSE EPR EPR. Note: Retail investors include individual domestic investors, NRIs, sole proprietorship firms and HUFs.
99/140
Jan-23
Nov-22
Mar-23
Jul-22
Sep-22
Mar-22
May-22
Jan-22
Nov-21
Sep-21
Jul-21
May-21
Jan-21
Mar-21
Nov-20
Sep-20
Jul-20
May-20
Jan-20
Mar-20
Nov-19
Sep-19
Jul-19
May-19
Jan-19
Mar-19
Nov-18
Sep-18
Jul-18
May-18
Jan-18
Nov-17
Mar-18
Jul-17
Sep-17
Jan-17
0
May-17
2
Mar-17
Number of investors (in millions)
10
Market Pulse
May 2023 | Vol. 5, Issue 4
Total turnover in capital markets and derivatives segments of NSE
CM turnover was the lowest in last four months…: The aggregate turnover in NSE’s CM
segment declined by 14.5% MoM (-32% YoY) to Rs 8,793bn in the month of April, owing
to fewer trading days, as average daily turnover (ADT) touched a four-month high of Rs
517bn. Resilient economic performance, an unexpected pause by the central bank for the
first time since the commencement of rate hiking cycle last year, and strong corporate
earnings barring the IT sector provided a boost to investor sentiments.
FO turnover registered a decline during the month of April: The total FO turnover
(premium) across instruments fell by 27.3% MoM (-18.7% YoY) to Rs26,526bn in April.
While equity futures turnover registered a decline of 23.7% MoM, equity options premium
turnover declined by -33.5% MoM (+19.8% YoY). The average daily turnover in equity
derivatives segment fell by 10.2% MoM to Rs1,560bn in April.
Currency derivatives turnover and ADT declined in April: Trading activity in currency
derivatives segment remained muted during the month of April as overall turnover and
ADT declined by 30.8% MoM and 18.5% MoM respectively. While turnover in currency
futures declined by 30.7% MoM, currency options turnover fell by an even higher 41.1%
MoM.
Table 25: Total turnover across segments (Jan 2023 – Apr 2023)
Segments (Rs bn)
Jan-23
Feb-23
Mar-23
Apr-23
Cash Market
10,206
10,050
10,286
8,793
Equity futures
23,849
22,944
23,028
17,574
Index futures
7,908
7,762
8,747
4,875
Stock futures
15,941
15,182
14,281
12,699
Equity options
11,797
11,533
13,454
8,952
Index options
11,118
10,653
12,794
8,473
Stock options
679
879
661
479
Currency derivatives
9,311
7,319
7,974
5,521
Currency futures
9,259
7,281
7,929
5,495
Currency options
52
38
45
27
Interest rate derivatives
20
27
29
27
Interest rate futures
20
27
29
27
Interest rate options
0.00
0.00
0.00
0.00
Commodity derivatives
0.10
0.08
0.18
0.12
Commodity futures
0.01
0.01
0.01
0.01
Commodity options
0.09
0.07
0.17
0.11
Source: NSE EPR. Note: Above table reports premium turnover for Options contracts and excludes auction market turnover.
100/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Average daily turnover (ADT) in capital markets and derivatives segment of NSE
While ADT in CM segment touched a four-month high in April…: The ADT in NSE’s CM
segment registered a growth of 5.6% MoM (-23.9% YoY) to a four-month high of Rs517bn
in April. That said, it is a tad lower than ADT of Rs 534 in the fiscal year gone by. Products
in CM segment, besides Main Board equities, that registered a growth in ADT in the month
of April include ETFs (+12.2% MoM) and SME stocks (+34.4% MoM).
Table 26: Average daily turnover in NSE Capital Market Segment
% MoM
change
% YoY
change
509,208
5.5
5,466
6,134
321
333
447
94
(5.9)
InvITs
114
290
REITs
298
0
976
Product (Rs m)
Apr-22
Mar-23
Apr-23
Capital Market
680,128
489,801
517,258
673,938
482,554
4,416
SME Emerge
Equities (Main Board)
Exchange Traded Funds
Sovereign Gold Bonds
64
Mutual Funds (Close Ended)
Others
FY22
FY23
CY23TD
(23.9)
667,993
534,340
497,917
(24.4)
662,007
527,528
490,626
12.2
38.9
3,515
4,865
5,558
34.2
39.0
122
345
408
121
(58.4)
6.0
229
130
167
387
189
(51.1)
(36.5)
402
451
274
1
0
(97.7)
(95.4)
1
0
0
671
1,066
58.9
9.2
1,668
951
794
100
5.6
47.2
48
70
90
Source: NSE EPR. Note: Average daily turnover (ADT) excludes auction market turnover. Equities (Main Board) include stocks in EQ, BE, BL and BZ series. Others include
corporate and government debt instruments (excl. SGBs), preferential shares, partly paid-up shares, warrants etc., among others. Figures in brackets indicate negative
numbers.
…ADT in equity derivatives segment was the lowest in four months: The ADT in equity
derivatives segment remained muted in the month of April has it registered a decline of
10.2% MoM (-9.1% YoY), touching a four-month low of Rs1,560bn vs Rs1,737bn in the
previous month and Rs1,718bn in April 2022. The ADT of single stock derivatives,
however, registered a growth of 8.9% MoM (-17.1% YoY) during the month led by stock
futures. While index futures turnover fell by 31.2% MoM (-33.8% YoY), index options
declined 18.2% MoM (+15.1% YoY). BANKNIFTY contracts continued to lead in terms of
turnover, comprising 47% of index futures and 62% on index options.
Table 27: Average daily turnover in Equity derivatives
Product
(Rsm)
Mar-23
Apr-23
% MoM
change
% YoY
change
FY22
FY23
CY23TD
891,191
680,057
746,984
28,205
9.8
(10.3)
(16.2)
765,956
765,956
735,478
201,579
213,376
139,607
(34.6)
(30.7)
176,172
176,172
187,677
71
1,278
1,385
8.3
1,858.0
400
400
1,091
Apr-22
Single stock derivatives
Stock futures
Stock options
Index futures
BANKNIFTY
NIFTY
FINNIFTY
MIDCPNIFTY
Index options
BANKNIFTY
NIFTY
FINNIFTY
MIDCPNIFTY
Total
44,186
231,253
8
31,453
201,871
0
145,770
0
(27.8)
5.6
(36.2)
(37.0)
NA
37,458
205,783
2
37,458
205,783
2
34,154
182,008
0
222,248
376,556
309,027
(17.9)
39.0
275,161
275,161
340,940
70
53,868
49,318
(8.4)
70,497.6
14,652
14,652
44,080
(10.2)
(9.2)
1,625,753
1,611,100
126,928
0
1,717,532
178,813
0
1,737,271
140,051
0
1,560,346
(21.7)
19.8
10.3
641.2
150,169
0
Source: NSE EPR. Note: Above table reports premium turnover for Options contracts; Figures in brackets indicate negative numbers.
101/140
0
159771
0
1,641,120
Market Pulse
May 2023 | Vol. 5, Issue 4
ADT in currency derivatives declined significantly in April: The ADT in currency
derivatives touched Rs324bn in April, implying a dip of 18.5% MoM (-18.1% YoY) and
21.7% lower than ADT in FY23. While the ADT of currency futures declined by 18.5%
MoM (-18.2% YoY), decline in ADT of currency options premium turnover was much
higher at 30.7% MoM (+6% YoY). The USDINR contracts continued to be the most highly
traded contracts in currency derivatives segment, both in futures as well as options,
accounting for nearly 82% of the overall ADT in April.
Table 28: Average daily turnover in Currency derivatives
Product
(Rsm)
Apr-22
Mar-23
Apr-23
EURINR
20,574
20,481
22,612
GBPINR
23,684
29,822
29,250
JPYINR
8,337
8,044
6,197
(23.0)
24
(78.0)
Futures
EURUSD
GBPUSD
USDINR
113
35
199
63
% MoM
change
10.4
% YoY
change
FY22
FY23
CY23TD
9.9
18,492
24,018
21,856
23.5
32,087
34,507
30,740
(25.7)
4,795
6,593
7,620
83
134.3
(26.9)
75
19.5
(62.4)
(21.6)
(22.5)
235,977
347,193
323,650
(1.9)
126
180
180
284
91
123
341,907
337,890
264,973
EURINR
1.2
0.3
0.2
(33.1)
(83.5)
0.66
0.4
0.2
GBPINR
0.8
0.5
0.2
(66.2)
(80.4)
2.79
0.5
0.3
JPYINR
0.1
0
0
(10.2)
(89.4)
0.03
0
0
0
NA
NA
USDJPY
Options
EURUSD
GBPUSD
USDINR
USDJPY
Total
181
111
0
0
0
0
0
0
1,484
2,272
1,575
396,481
398,719
324,789
0
NA
0
NA
(30.7)
(18.5)
(86.5)
NA
NA
20
0
0
112
0
0
75
0
0
6.1
1,029
1,939
2,077
(18.1)
292,711
414,827
386,232
0
Source: NSE EPR. Note: Above table reports premium turnover for Options contracts. Figures in brackets indicate negative numbers.
0
0
Trading in interest rate futures expanded on MoM basis but dropped on YoY basis:
The average daily turnover in the interest rate futures segment increased by 9.9% MoM
(-18.5% YoY) in the month of April but declined on a YoY basis to Rs 1,613m. even as it
was a tad higher than ADT in FY23. The highly traded contracts during the month were
726GS2032, 741GS2036, 754GS2036 and 726GS2033.
Table 29: Average daily turnover in Interest rate derivatives (Rsm)
Product
Apr-22
Mar-23
Apr-23
Interest rate futures
1,980
1,467
1,613
Total
1,613
1,467
9.9
Interest rate options
0
-
-
% MoM
change
9.9
NA
1,613
% YoY
change
FY22
FY23
CY23TD
-18.5
1,089
1,073
1,332
1,980
(18.5)
1,073
1,332
NA
0.001
Source: NSE EPR. Note: Above table reports premium turnover for Options contracts. Figures in brackets indicate negative numbers.
102/140
0
0
Market Pulse
May 2023 | Vol. 5, Issue 4
Trading in commodity derivatives remained weak in the month of April: While ADT in
commodity futures grew by 1.2% MoM in April, it declined 23.8% MoM in currency
options. As such, ADT for the overall commodities derivatives segment declined by 21.8%
MoM to Rs6.2m but was much lower at Rs4.9m during the entire fiscal year (-94.7%).
Table 30: Average daily turnover in commodities derivatives (Rsm)
Product
% MoM
change
% YoY
change
FY22
FY23
CY23TD
21.8
87.8
0.5
0.6
5.6
(23.8)
16.2
5
4.4
5.2
6.2
(21.8)
16.7
92.8
4.9
5.8
Apr-22
Mar-23
Apr-23
Commodity futures
0.5
0.6
0.6
Commodity options
4.8
7.3
Total
5.3
8
1.2
Source: NSE EPR. Note: Above table reports premium turnover for Options contracts. Figures in brackets indicate negative numbers.
103/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Turnover of top traded symbols over the month
The turnover of top 10 traded stocks declined 5.2% MoM, resulting in a contraction in the
share of these stocks in the overall CM turnover by 264bps MoM to 26.8%. Four of the
top-10 registered an increase in their turnover during the last two months.
Table 31: Top 10 symbols based on total turnover of Cash market (Rsm) in April 2023
Symbol
Apr-23
Mar-23
%Change
HDFCBANK
493,982
445,161
11.0
ADANIENT
427,028
408,655
4.5
RELIANCE
288,557
366,653
(21.3)
ICICIBANK
233,752
300,844
(22.3)
ADANIPORTS
266,705
205,650
29.7
INFY
211,429
203,124
4.1
AXISBANK
179,976
189,228
(4.9)
KOTAKBANK
139,078
184,134
(24.5)
SBIN
117,023
182,569
(35.9)
HDFC
115,732
166,099
(30.3)
Source: NSE EPR.
The turnover of top 10 traded stocks comprised 28.8% (+236bps MoM) of the overall
stock futures turnover and 33.4% (-2371bps MoM) of the overall stock options premium
turnover in April. Total turnover of top 10 traded single stocks futures fell 10.3% MoM in
April, while that in single stock options fell by 41.5% MoM.
Four stocks were among the top-10 traded stocks across all segments during the month.
Table 32: Top 10 symbols based on total turnover of Stock futures (Rsm) in April-2023
Symbol
Apr-23
Mar-23
%Change
HDFCBANK
631,537
712,722
(11.4)
RELIANCE
484,561
685,801
(29.3)
ICICIBANK
450,769
445,645
1.1
INFY
390,407
320,147
21.9
AXISBANK
368,198
350,190
5.1
SBIN
326,374
426,980
(23.6)
KOTAKBANK
304,252
380,027
(19.9)
BAJFINANCE
247,657
245,534
0.9
TCS
242,519
222,930
8.8
HDFC
214,940
291,189
(26.2)
Source: NSE EPR.
104/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Table 33: Top 10 symbols based on total turnover of Stock futures (Rsm) in April-2023
Symbol
Apr-23
Mar-23
%Change
RELIANCE
25,117
37,877
(33.7)
ADANIENT
21,127
129,824
(83.7)
BAJFINANCE
20,180
15,884
27.0
INFY
19,492
10,901
78.8
HDFCBANK
15,988
19,610
(18.5)
SBIN
12,587
20,001
(37.1)
TATAMOTORS
12,277
8,193
49.9
AXISBANK
11,105
11,104
0.0
TCS
11,099
9,536
16.4
ICICIBANK
11,037
10,765
2.5
Source: NSE EPR.
105/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Client category-wise participation in total turnover 25
This section gives a detailed analysis on client-wise participation in total trading activities
across all product segments at NSE. The clients are broadly classified into six categories,
viz. Foreign institutional investors (FIIs), Domestic institutional investors (DIIs),
Corporates, Proprietary traders, Individual investors and Others. The Individual investors
category includes individual domestic investors, NRIs, sole proprietorship firms and
HUFs. The category Others includes Partnership Firms/LLP, Trust / Society, Depository
Receipts, Statutory Bodies, etc. which are not included in any other categories mentioned
above.
Retail turnover share in the CM segment rose sharply in the pandemic year has been
falling since…: The last seven (fiscal) years have witnessed a considerable change in the
distribution of NSE’s total turnover in capital market segment (cash segment) across
different client categories. The market share of individual investors rose markedly by 12
percentage points from 33% in FY16 to 45% in FY21, at the expense of decline in the
share of FIIs, DIIs and public & private corporates during this period.
The significant rise in the share of individual investors in FY21 can be attributed to the
increase in new investor registrations (10.5m). While investor registrations have been
falling since its peak in November 2021, the overall registrations for FY22 stood 19m,
nearly 81% higher than previous fiscal. New investor registrations in FY23, however,
dropped to 13.3m.
While the share of DIIs in the overall turnover was steady during FY16-FY20, it witnessed
a decline in FY21 to 7.5% of the overall market, as they lost market share to individual
investors participating directly in the secondary markets.
…Only to see a rebound in April 2023: Trading activity by retail investors in the NSE’s
CM segment expanded significantly in April. Their share in total CM turnover at 34.5% was
the highest in last five months. The share of DIIs in total CM turnover inched up marginally
to 12.5%. Increase in share of domestic institutional and retail investors came at the
expense of a significant moderation in FPI share during the month. The share of
proprietary traders remained more-or-less unchanged on MoM basis.
Table 34: Share of client participation in Capital Market segment of NSE (%)
Client category
Apr-22
Mar-23
Apr-23
% MoM
Chg. (bps)
Cash Segment
Corporates
% YoY
Chg. (bps)
FY22
FY23
CY23TD
4.5
4.5
5.4
95
89
3.8
4.2
4.6
DII
10.1
12.4
12.5
10
246
9.2
11.5
12.6
FPI
12.8
16.4
14.0
(241)
120
12.3
15.1
15.9
Individual investors
39.2
33.1
34.5
137
(467)
40.7
36.5
33.8
PRO
27.3
27.9
27.9
3
63
27.5
27.2
27.9
6.2
5.7
5.6
(4)
(51)
6.5
5.5
5.2
Others
Source: NSE EPR. Note: DII: Note: DII: Domestic Institutional Investors include Banks, Mutual Funds, Insurance Companies, NBFCs, Domestic VC Funds, AIFs, PMS clients
etc., FPI: Foreign Institutional Investors include FPIs, FDIs, Foreign VC Funds , OCB and Foreign Nationals etc., Prop traders: Proprietary Traders, Individual investors:
individual domestic investors, NRIs, sole proprietorship firms and HUFs, Others: Partnership Firms/LLP, Trust / Society, Depository Receipts and Statutory Bodies, etc.
Figures in brackets indicate negative numbers. Above data represents share in gross turnover i.e., buy-side turnover + sell-side turnover.
25
The institutional investors turnover is based on the client codes entered by trading members at the time of order entry and corresponding client category classification
provided by trading members as part of the Unique Client Code (UCC) details. This data is provisional and subject to change, inter alia, on account of custodial confirmation
process, modifications etc.
106/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 91: Trends in share of client participation in Capital Market at NSE (%)
100%
90%
80%
Others
PRO
4.0
4.0
21.0
17.0
33.0
36.0
Individual investors
6.0
18.0
FPI
DII
Corporates
7.0
7.2
6.3
6.5
5.5
5.6
22.0
22.7
25.1
27.5
27.2
27.9
39.0
38.8
45.0
40.7
36.5
34.5
15.0
15.3
12.3
15.1
14.0
11.0
10.7
11.5
9.2
11.5
12.5
5.3
7.5
4.6
4.2
5.4
FY20
FY21
FY22
FY23
FY24
70%
60%
39.0
50%
40%
30%
20%
10%
0%
23.0
21.0
16.0
10.0
10.0
11.0
10.0
12.0
11.0
FY16
FY17
FY18
6.0
FY19
3.8
Source: NSE EPR. Note: DII: Note: DII: Domestic Institutional Investors include Banks, Mutual Funds, Insurance Companies, NBFCs, Domestic VC Funds, AIFs, PMS
clients etc., FPI: Foreign Institutional Investors include FPIs, FDIs, Foreign VC Funds , OCB and Foreign Nationals etc., Prop traders: Proprietary Traders, Individual
investors: individual domestic investors, NRIs, sole proprietorship firms and HUFs, Others: Partnership Firms/LLP, Trust / Society, Depository Receipts and Statutory
Bodies, etc. Figures in brackets indicate negative numbers. Above data represents share in gross turnover i.e., buy-side turnover + sell-side turnover.
Market share of FPIs in the equity derivatives segment reduced significantly in April:
The share of FPIs in equity derivatives turnover (notional) declined by 82bps MoM in April,
which was primarily taken up by corporates (+57bps MoM to 4.7%) and retail investors
(+24bps MoM to 26.9%) inched up marginally. While retail investors have been active in
index futures and options trading during FY23, their trading activity in single stock
derivatives was limited resulting in contraction of their market share in the segment.
The period from FY16 to FY21 saw the share of individual investors increase in equity
derivatives segment, in-line with the increase in their trading activity in cash segment
during this period. While their share in equity derivatives turnover increased nearly six (6)
percentage points during this period, it fell by 120bps in FY22 and further by 28bps in
FY23. The share of proprietary traders, however, has been consistently rising, comprising
of 55% of the total equity derivatives turnover.
Table 35: Share of client participation in Equity Derivatives segment of NSE
Client category
Apr-22
Mar-23
Apr-23
% MoM
Chg. (bps)
% YoY
Chg. (bps)
FY22
FY23
CY23TD
4.7
57
(35)
6.5
4.7
4.4
Equity Derivatives (Notional Turnover)
Corporates
5.0
4.1
DII
0.2
0.1
0.1
0
(5)
0.2
0.1
0.1
FPI
7.6
7.0
in6.2
(82)
(144)
8.7
7.4
6.8
Individual investors
27.9
26.7
26.9
24
(100)
28
27.7
26.6
PRO
51.3
56.4
56.2
(25)
490
48.8
53.1
56.0
8.0
5.7
5.9
25
(205)
7.8
7
6.1
Others
Source: NSE EPR. Note: DII: Domestic Institutional Investors include Banks, Mutual Funds, Insurance Companies, NBFCs, Domestic VC Funds, AIFs, PMS clients etc., FPI:
Foreign Institutional Investors include FPIs, FDIs, Foreign VC Funds , OCB and Foreign Nationals etc., Prop traders: Proprietary Traders, Individual investors: individual
domestic investors, NRIs, sole proprietorship firms and HUFs, Others: Partnership Firms/LLP, Trust / Society, Depository Receipts and Statutory Bodies, etc. Figures in
brackets indicate negative numbers. Above data represents share in gross turnover i.e., buy-side turnover + sell-side turnover.
107/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 92: Trends in share of client participation in Equity derivatives (Notional Turnover) at NSE (%)
100%
90%
4.0
Corporates
DII
FPI
8.0
8.0
9.0
49.0
42.0
42.0
38.0
23.0
27.0
29.0
8.2
8.9
80%
70%
Individual investors
33.2
42.6
60%
50%
40%
30%
20%
10%
0%
PRO
Others
7.8
7.0
5.9
48.8
53.1
56.2
27.7
26.9
29.1
28.0
29.2
28.0
14.0
19.2
8.0
11.0
9.2
6.6
6.5
7.4
4.7
6.2
4.7
FY18
FY19
FY20
FY21
FY22
FY23
FY24
12.0
14.0
12.0
11.0
8.0
FY16
FY17
13.2
8.7
Source: NSE EPR. Note: DII: Domestic Institutional Investors include Banks, Mutual Funds, Insurance Companies, NBFCs, Domestic VC Funds, AIFs, PMS clients etc.,
FPI: Foreign Institutional Investors include FPIs, FDIs, Foreign VC Funds , OCB and Foreign Nationals etc., Prop traders: Proprietary Traders, Individual investors:
individual domestic investors, NRIs, sole proprietorship firms and HUFs, Others: Partnership Firms/LLP, Trust / Society, Depository Receipts and Statutory Bodies, etc.
Figures in brackets indicate negative numbers. Above data represents share in gross turnover i.e., buy-side turnover + sell-side turnover.
Table 36: Share of client participation in Index Futures of NSE (%)
Client category
Apr-22
Mar-23
Apr-23
% MoM
Chg. (bps)
% YoY Chg.
(bps)
FY22
FY23
CY23TD
Index Futures
Corporates
10.4
10.9
12.1
116
173
11.3
10.0
10.7
DII
2.7
2.7
3.7
94
102
2.4
2.8
3.0
FPI
11.7
13.9
12.8
(105)
112
14.7
11.8
13.3
Individual investors
30.3
30.5
32.5
197
215
29.6
31.7
31.1
PRO
35.0
32.9
30.2
(273)
(477)
32.8
34.0
32.8
Others
10.0
9.0
8.7
(29)
(125)
9.2
9.6
9.1
Source: NSE EPR. Note: DII: Domestic Institutional Investors include Banks, Mutual Funds, Insurance Companies, NBFCs, Domestic VC Funds, AIFs, PMS clients etc., FPI:
Foreign Institutional Investors include FPIs, FDIs, Foreign VC Funds , OCB and Foreign Nationals etc., Prop traders: Proprietary Traders, Individual investors: individual
domestic investors, NRIs, sole proprietorship firms and HUFs, Others: Partnership Firms/LLP, Trust / Society, Depository Receipts and Statutory Bodies, etc. Figures in
brackets indicate negative numbers. Above data represents share in gross turnover i.e., buy-side turnover + sell-side turnover.
108/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 93: Trends in share of client participation in Index Futures at NSE (%)
100%
90%
80%
Corporates
DII
FPI
Individual investors
PRO
Others
6.0
6.0
7.0
7.0
6.8
7.6
31.0
29.0
30.0
26.0
26.6
28.7
32.0
33.0
33.0
34.0
33.1
14.0
16.0
14.0
2.0
2.0
3.0
14.0
14.0
14.0
13.0
12.5
1.3
8.5
2.4
11.3
2.8
10.0
12.1
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24
70%
9.2
9.6
32.8
34.0
8.7
30.2
60%
50%
40%
30%
20%
10%
0%
17.0
39.3
18.2
3.0
29.6
14.7
14.6
2.8
32.5
31.7
12.8
11.8
3.7
Source: NSE EPR. Note: DII: Domestic Institutional Investors include Banks, Mutual Funds, Insurance Companies, NBFCs, Domestic VC Funds, AIFs, PMS clients etc.,
FPI: Foreign Institutional Investors include FPIs, FDIs, Foreign VC Funds , OCB and Foreign Nationals etc., Prop traders: Proprietary Traders, Individual investors:
individual domestic investors, NRIs, sole proprietorship firms and HUFs, Others: Partnership Firms/LLP, Trust / Society, Depository Receipts and Statutory Bodies, etc.
Figures in brackets indicate negative numbers. Above data represents share in gross turnover i.e., buy-side turnover + sell-side turnover.
Table 37: Share of client participation in Stock Futures of NSE (%)
Apr-22
Mar-23
Apr-23
% MoM
Chg. (bps)
% YoY Chg.
(bps)
FY22
FY23
CY23TD
Corporates
7.6
7.4
7.7
27
14
8.1
7.2
7.5
DII
8.9
9.1
9.6
51
70
7.9
8.5
9.2
FPI
23.3
24.4
25.4
91
201
23.5
23.8
24.4
Individual investors
16.3
14.7
14.7
(2)
(163)
18.5
15.6
14.9
PRO
33.1
35.2
33.8
(138)
70
32.5
35.1
34.9
Others
10.8
9.1
8.8
(30)
(193)
9.5
9.8
9.1
Client category
Stock Futures
Source: NSE EPR. Note: DII: Domestic Institutional Investors include Banks, Mutual Funds, Insurance Companies, NBFCs, Domestic VC Funds, AIFs, PMS clients etc.,
FPI: Foreign Institutional Investors include FPIs, FDIs, Foreign VC Funds , OCB and Foreign Nationals etc., Prop traders: Proprietary Traders, Individual investors:
individual domestic investors, NRIs, sole proprietorship firms and HUFs, Others: Partnership Firms/LLP, Trust / Society, Depository Receipts and Statutory Bodies, etc.
Figures in brackets indicate negative numbers. Above data represents share in gross turnover i.e., buy-side turnover + sell-side turnover.
109/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 94: Trends in share of client participation in Stock Futures at NSE (%)
100%
90%
80%
Corporates
7.0
30.0
DII
7.0
6.0
5.0
26.0
25.0
25.0
FPI
Individual investors
7.0
7.0
23.2
50%
26.0
28.0
31.0
30.0
9.8
8.8
32.5
35.1
33.8
18.5
15.6
25.3
23.5
23.8
5.3
7.9
8.5
9.6
29.2
24.7
24.5
40%
30%
20%
10%
0%
17.0
4.0
21.0
3.0
28.0
Others
9.5
70%
60%
PRO
14.7
18.0
24.0
5.0
6.0
13.0
10.5
8.7
8.1
7.2
7.7
FY19
FY20
FY21
FY22
FY23
FY24
16.0
13.0
15.0
FY16
FY17
FY18
6.6
25.4
Source: NSE EPR. Note: DII: Domestic Institutional Investors include Banks, Mutual Funds, Insurance Companies, NBFCs, Domestic VC Funds, AIFs, PMS clients etc.,
FPI: Foreign Institutional Investors include FPIs, FDIs, Foreign VC Funds , OCB and Foreign Nationals etc., Prop traders: Proprietary Traders, Individual investors:
individual domestic investors, NRIs, sole proprietorship firms and HUFs, Others: Partnership Firms/LLP, Trust / Society, Depository Receipts and Statutory Bodies, etc.
Figures in brackets indicate negative numbers. Above data represents share in gross turnover i.e., buy-side turnover + sell-side turnover.
Table 38: Share of client participation in Index Options of NSE (%)
Client category
Apr-22
Mar-23
Apr-23
% MoM
Chg. (bps)
% YoY
Chg. (bps)
FY22
FY23
CY23TD
Index Options (Premium Turnover)
Corporates
3.8
3.1
3.2
15
(52)
6.2
3.3
3.1
DII
0.1
0.1
0.1
(2)
(5)
0.1
0.1
0.1
FPI
9.4
9.1
7.9
(126)
(150)
9.6
9.5
8.9
Individual investors
34.5
33.2
34.0
82
(50)
33.7
35.1
33.5
PRO
44.4
48.8
48.9
17
457
42.9
45.1
48.3
7.9
5.8
5.9
14
(200)
7.5
7.1
6.1
Others
Source: NSE EPR. Note: DII: Domestic Institutional Investors include Banks, Mutual Funds, Insurance Companies, NBFCs, Domestic VC Funds, AIFs, PMS clients etc., FPI:
Foreign Institutional Investors include FPIs, FDIs, Foreign VC Funds, OCB and Foreign Nationals etc., Prop traders: Proprietary Traders, Individual investors: individual
domestic investors, NRIs, sole proprietorship firms and HUFs, Others: Partnership Firms/LLP, Trust / Society, Depository Receipts and Statutory Bodies, etc. Figures in
brackets indicate negative numbers. Above data represents share in gross turnover i.e., buy-side turnover + sell-side turnover.
110/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 95: Trends in share of client participation in Index Options (premium turnover) at NSE (%)
Corporates
100%
DII
3.0
7.0
7.0
53.0
44.0
44.0
90%
FPI
8.0
80%
70%
38.0
Individual investors
8.6
32.7
PRO
Others
7.6
7.5
7.1
5.9
39.3
42.9
45.1
48.9
60%
50%
40%
30%
20%
10%
0%
22.0
25.0
27.0
25.0
28.8
31.5
33.7
15.0
21.1
9.0
11.0
8.7
5.8
6.2
FY18
FY19
FY20
FY21
FY22
11.0
15.0
14.0
11.0
10.0
FY16
FY17
15.6
35.1
9.6
34.0
9.5
7.9
3.2
3.3
FY23
FY24
Source: NSE EPR. Note: DII: Domestic Institutional Investors include Banks, Mutual Funds, Insurance Companies, NBFCs, Domestic VC Funds, AIFs, PMS clients etc.,
FPI: Foreign Institutional Investors include FPIs, FDIs, Foreign VC Funds , OCB and Foreign Nationals etc., Prop traders: Proprietary Traders, Individual investors:
individual domestic investors, NRIs, sole proprietorship firms and HUFs, Others: Partnership Firms/LLP, Trust / Society, Depository Receipts and Statutory Bodies, etc.
Figures in brackets indicate negative numbers. Above data represents share in gross turnover i.e., buy-side turnover + sell-side turnover.
Table 39: Share of client participation in Stock Options of NSE (%)
Client category
Apr-22
Stock Options (Premium Turnover)
Mar-23
Apr-23
% MoM Chg.
(bps)
% YoY Chg.
(bps)
FY22
FY23
CY23TD
Corporates
4.8
3.7
4.0
24
(83)
5.1
4.0
3.9
FPI
3.5
3.7
4.0
32
59
6.8
3.1
3.9
56.0
(179)
DII
Individual investors
PRO
Others
0.2
0.1
0.2
30.9
30.4
31.2
6.3
4.2
4.6
54.4
57.8
6
78
39
(3)
0.1
0.2
0.2
30
33.0
31.2
29.9
(168)
5.2
5.2
4.7
166
49.7
56.2
57.5
Source: NSE EPR. Note: DII: Domestic Institutional Investors include Banks, Mutual Funds, Insurance Companies, NBFCs, Domestic VC Funds, AIFs, PMS clients etc.,
FPI: Foreign Institutional Investors include FPIs, FDIs, Foreign VC Funds , OCB and Foreign Nationals etc., Prop traders: Proprietary Traders, Individual investors:
individual domestic investors, NRIs, sole proprietorship firms and HUFs, Others: Partnership Firms/LLP, Trust / Society, Depository Receipts and Statutory Bodies, etc.
Figures in brackets indicate negative numbers. Above data represents share in gross turnover i.e., buy-side turnover + sell-side turnover.
111/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 96: Trends in share of client participation in Stock Options (Premium Turnover) at NSE (%)
Corporates
100%
7.0
90%
80%
70%
42.0
DII
FPI
6.0
5.0
5.0
40.0
40.0
43.0
Individual investors
9.1
PRO
5.2
9.4
33.4
49.7
47.7
60%
Others
5.2
4.6
56.2
56.0
31.2
31.2
50%
40%
30%
20%
10%
0%
30.0
31.0
31.0
29.2
30.0
32.4
33.0
6.8
19.2
11.0
13.0
13.0
10.0
10.0
12.0
10.0
9.1
5.2
5.3
5.1
3.1
4.0
4.0
4.0
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24
12.0
Source: NSE EPR. Note: DII: Domestic Institutional Investors include Banks, Mutual Funds, Insurance Companies, NBFCs, Domestic VC Funds, AIFs, PMS clients etc.,
FPI: Foreign Institutional Investors include FPIs, FDIs, Foreign VC Funds , OCB and Foreign Nationals etc., Prop traders: Proprietary Traders, Individual investors:
individual domestic investors, NRIs, sole proprietorship firms and HUFs, Others: Partnership Firms/LLP, Trust / Society, Depository Receipts and Statutory Bodies, etc.
Figures in brackets indicate negative numbers. Above data represents share in gross turnover i.e., buy-side turnover + sell-side turnover.
Share of prop. Traders, FPIs and individual investors declined in April: Prop. traders’
share in currency derivatives segment declined meaningfully by 112bps followed by FPIs
(-23bps YoY) and retail investors (-20bps MoM) in the month of April. While prop traders
lost significant share, trading activity by investors and others category gained momentum.
Among the investor categories that witnessed decline in share in FY23, retail investors
were the largest losers who saw their share decline by a massive 345bps YoY. While
banks gained market share in currency futures contracts and lost market share in the
currency options contracts, proprietary traders were gainers in both futures and options
contracts. Retail investors have contracted trading activity across both segments in FY23.
Table 40: Share of client participation in Currency Derivatives segment of NSE (%)
Client category
Apr-22
Currency Derivatives (Notional Turnover)
Mar-23
Apr-23
Corporates
4.1
3.5
4.0
Banks
3.8
2.6
2.6
FPI
DII ex-banks
PRO ex-banks
Individual investors
Others
5.6
0.1
4.1
0.1
% MoM
Chg. (bps)
52
% YoY
Chg. (bps)
FY22
FY23
CY23TD
(10)
4.7
4.2
3.9
(115)
3.4
3.5
2.9
3.9
(23)
(179)
0.1
4
5
4
6.2
0.1
4.9
0.1
4.3
0.1
59.8
59.8
58.7
(112)
(113)
57.8
60.3
60.6
3.1
8.8
9.8
95
662
3
5.5
7.5
23.5
21.1
21.0
(20)
(251)
24.8
21.6
20.7
Source: NSE EPR. Note: DII: Domestic Institutional Investors include Banks, Mutual Funds, Insurance Companies, NBFCs, Domestic VC Funds, AIFs, PMS clients etc.,
FPI: Foreign Institutional Investors include FPIs, FDIs, Foreign VC Funds , OCB and Foreign Nationals etc., Prop traders: Proprietary Traders, Individual investors:
individual domestic investors, NRIs, sole proprietorship firms and HUFs, Others: Partnership Firms/LLP, Trust / Society, Depository Receipts and Statutory Bodies, etc.
Figures in brackets indicate negative numbers. Above data represents share in gross turnover i.e., buy-side turnover + sell-side turnover.
112/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Table 41: Share of client participation in Currency Futures of NSE (%)
Client category
Corporates
Apr-22
Mar-23
Apr-23
% MoM
Chg. (bps)
% YoY
Chg. (bps)
FY22
FY23
CY23TD
5.7
5.6
6.5
76
6.9
5.4
6.1
11.4
8.6
9.4
83
(193)
10.5
9.6
8.7
Banks
9.7
11.1
11.9
77
216
8.4
11.6
11.9
DII ex-banks
0.3
0.5
0.7
20
41
0.4
0.4
0.5
PRO ex-banks
54.3
55.4
51.7
(370)
(259)
54
55.6
54.3
Individual investors
17.0
15.4
16.1
69
(94)
18.2
15.1
15.2
1.6
3.4
3.7
31
213
1.6
2.4
3.2
FPI
Others
90
Source: NSE EPR. Note: DII: Domestic Institutional Investors include Banks, Mutual Funds, Insurance Companies, NBFCs, Domestic VC Funds, AIFs, PMS clients etc.,
FPI: Foreign Institutional Investors include FPIs, FDIs, Foreign VC Funds , OCB and Foreign Nationals etc., Prop traders: Proprietary Traders, Individual investors:
individual domestic investors, NRIs, sole proprietorship firms and HUFs, Others: Partnership Firms/LLP, Trust / Society, Depository Receipts and Statutory Bodies, etc.
Figures in brackets indicate negative numbers. Above data represents share in gross turnover i.e., buy-side turnover + sell-side turnover.
Table 42: Share of client participation in Currency Options of NSE (%)
Client category
Apr-22
Mar-23
Apr-23
% MoM
Chg. (bps)
% YoY
Chg. (bps)
FY22
FY23
CY23TD
Currency Options (Notional Turnover)
Corporates
3.4
3.4
3.4
4
1
4.2
4.2
3.5
FPI
4.6
4.0
3.7
(39)
(98)
5.8
4.1
4.1
Banks
1.8
0.6
0.4
(21)
(139)
1.0
0.6
0.5
DII ex-banks
0.0
0.0
0.0
-
-
0.0
0.0
0.0
PRO ex-banks
63.2
65.5
66.1
67
298
62.5
65.8
66.8
Individual investors
25.5
21.6
22.3
75
(317)
25.4
22.7
21.3
1.5
4.9
4.1
(87)
255
1.2
2.5
3.8
Others
Source: NSE EPR. Note: DII: Domestic Institutional Investors include Banks, Mutual Funds, Insurance Companies, NBFCs, Domestic VC Funds, AIFs, PMS clients etc.,
FPI: Foreign Institutional Investors include FPIs, FDIs, Foreign VC Funds , OCB and Foreign Nationals etc., Prop traders: Proprietary Traders, Individual investors:
individual domestic investors, NRIs, sole proprietorship firms and HUFs, Others: Partnership Firms/LLP, Trust / Society, Depository Receipts and Statutory Bodies, etc.
Figures in brackets indicate negative numbers. Above data represents share in gross turnover i.e., buy-side turnover + sell-side turnover.r.
Banks gained a significant share in IRFs in April: While banks (+1,301bps MoM) and
individual investors (+122bps MoM) gained market share in the Interest Rate Futures
segment in the month of April, that for prop. traders (-745bps MoM) contracted
meaningfully followed by DIIs (-118bps MoM). Share of banks and individual investors
touched the highest level in five (5) and seven (7) months at 34.7% and 4.9%
respectively. Share of corporates has also improved notably from 33.9% last year to
45.1% in April, even as it has dipped on a sequential basis.
Table 43: Share of client participation in Interest Rate Futures of NSE (%)
Apr-22
Mar-23
Apr-23
% MoM
Chg. (bps)
% YoY
Chg. (bps)
FY22
FY23
CY23TD
Corporates
33.9
51.5
45.1
(644)
1,111
27.9
35.9
44.5
Banks
34.4
21.7
34.7
1,301
35
32.4
28.6
29.3
PRO ex-banks
28.0
22.1
14.7
(745)
(1,331)
27.5
25.5
19.4
0.1
0.5
0.3
(18)
25
0.2
0.3
0.5
Client category
Interest Rate Futures
FPI
DII ex-banks
Individual investors
Others
0.0
1.2
2.0
0.0
0.0
3.7
0.0
0.0
4.9
-
122
-
(118)
293
0.0
3.3
7.9
0.0
3.8
5.0
0.0
1.3
4.3
Source: NSE EPR. Note: DII: Domestic Institutional Investors include Banks, Mutual Funds, Insurance Companies, NBFCs, Domestic VC Funds, AIFs, PMS clients etc.,
FPI: Foreign Institutional Investors include FPIs, FDIs, Foreign VC Funds , OCB and Foreign Nationals etc., Prop traders: Proprietary Traders, Individual investors:
individual domestic investors, NRIs, sole proprietorship firms and HUFs, Others: Partnership Firms/LLP, Trust / Society, Depository Receipts and Statutory Bodies, etc.
Figures in brackets indicate negative numbers. Above data represents share in gross turnover i.e., buy-side turnover + sell-side turnover.
113/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Table 44: Share of client participation in Commodity derivatives segment of NSE (%)
Apr-22
Mar-23
Apr-23
% MoM
Chg. (bps)
% YoY Chg.
(bps)
FY22
FY23
CY23TD
Corporates
0.0
38.4
50.0
1,157
5,000
1.7
24.8
22.8
DII
0.0
0.0
0.0
-
-
0.0
0.0
0.0
FPI
0.0
0.0
0.0
-
-
0.0
0.0
0.0
Individual investors
0.0
0.0
0.0
-
-
0.5
0.0
0.0
PRO
50.0
50.0
50.0
-
-
81.2
50.0
50.0
Others
50.0
11.6
0.0
(1,157)
(5,000)
16.6
25.2
27.2
Client category
Commodities futures
Currency Options (Premium Turnover)
Corporates
5.7
10.5
4.5
(600)
(118)
15.7
9.7
9.6
DII
0.0
0.0
0.0
-
-
0.0
0.0
0.0
FPI
0.0
0.0
0.0
-
-
0.0
0.0
0.0
Individual investors
7.0
3.2
3.6
44
(338)
4.8
5.7
3.9
79.0
85.0
91.7
671
1,270
73.8
82.1
85.4
8.3
1.3
0.1
(115)
(814)
5.7
2.5
1.0
PRO
Others
Currency Derivatives (Notional Turnover)
Corporates
7.6
8.5
5.0
(347)
(255)
9.8
9.1
6.4
DII
0.0
0.0
0.0
-
-
0.0
0.0
0.0
FPI
0.0
0.0
0.0
-
-
0.0
0.0
0.0
Individual investors
4.4
3.2
2.3
(92)
(208)
4.6
5.5
3.8
83.7
84.6
92.5
793
880
78.0
83.1
87.7
4.4
3.7
0.2
(354)
(417)
7.6
2.2
2.1
PRO
Others
Source: NSE EPR. Note: DII: Domestic Institutional Investors include Banks, Mutual Funds, Insurance Companies, NBFCs, Domestic VC Funds, AIFs, PMS clients etc.,
FPI: Foreign Institutional Investors include FPIs, FDIs, Foreign VC Funds , OCB and Foreign Nationals etc., Prop traders: Proprietary Traders, Individual investors:
individual domestic investors, NRIs, sole proprietorship firms and HUFs, Others: Partnership Firms/LLP, Trust / Society, Depository Receipts and Statutory Bodies, etc.
Figures in brackets indicate negative numbers. Above data represents share in gross turnover i.e., buy-side turnover + sell-side turnover.
114/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Asset category-wise open interest (average daily volume)
Table 45: Average daily volume of open interest in Equity derivatives (million contracts)
Apr-22
Mar-23
Apr-23
% MoM
change
% YoY
change
FUTSTK
4,984
4,943
4,985
0.8
0
OPTSTK
3,785
3,867
3,456
(10.6)
(8.7)
Segment
Equity Derivatives
FY22
4,887
3,643
Equity Derivatives - Index futures
BANKNIFTY
FY23
CY23TD
4,988
5,015
3,851
3,931
2.7
4.8
2.7
(43.6)
(1.3)
2.4
2.8
3.2
11.8
14.6
11.2
(22.9)
(5.1)
12.5
13
12.6
FINNIFTY
0
0
0
88.9
1668.7
0.0
0
0
MIDCPNIFTY
0
0
0
5829.4
-87.1
0.0
0
0
BANKNIFTY
62.3
104.3
106.4
2
70.9
48.1
80.2
100.6
NIFTY
221
308.4
311.7
1.1
41.1
189.6
260.1
292
0.4
39
48
22.2
12613.2
0.1
12.8
37.4
0
0
0
-1.4
576.8
0.0
0
0
NIFTY
Equity Derivatives - Index options
FINNIFTY
MIDCPNIFTY
Source: NSE EPR. Note: FUTSTK: Stock Futures, OPTSTK: Stock Options; Figures in brackets indicate negative numbers.
Table 46: Average daily volume of open interest in Currency derivatives (no of contracts)
Product
Apr-22
Mar-23
Apr-23
EURINR
199,863
188,880
315,043
GBPINR
204,505
196,285
290,179
JPYINR
190,565
62,578
56,489
Futures
EURUSD
3,937
GBPUSD
USDINR
5,509
4,792
2,776
% MoM
change
% YoY
change
FY22
FY23
CY23TD
57.6
151,106
187,100
239,154
41.9
204,206
178,420
197,588
(9.7)
(70.4)
54,114
79,109
67,369
(40.5)
(64.7)
66.8
25,235
426.6
18,434
564.2
47.8
5,752,978
6,709,559
4,772,469
(28.9)
EURINR
7,436
9,246
2,973
GBPINR
8,016
9,599
JPYINR
1,004
1,863
USDJPY
3,754
Options
EURUSD
0
GBPUSD
USDINR
2,224
0
5,563,068
8,015,273
234.6
5,938
2,821
8,777
8,121
7,425
4,121,236
6,450,352
6,244,581
(67.8)
(60.0)
7,914
4,266
4,002
1,304
(86.4)
(83.7)
16,670
3,825
3,544
31
(98.3)
(96.9)
443
376
489
0
0
3,492
(17.0)
1,324
0
540.9
NA
0
NA
NA
7,740,413
2,494
0
NA
(3.4)
Source: NSE EPR. Note: Figures in brackets indicate negative numbers.
530
0
0
39.1
1,488
0
0
4,570,993
0
7,192,079
7,748,392
Table 47: Average daily volume of open interest in Interest rate derivatives (no of contracts)
Product
Apr-22
Mar-23
Apr-23
Interest rate futures
88,969
69,338
123,495
Interest rate options
-
1
Source: NSE EPR. Note: Figures in brackets indicate negative numbers.
% MoM
change
% YoY
change
(100)
NA
78.1
-
115/140
38.8
FY22
FY23
CY23TD
47,581
66,055
76,491
0
1
1
Market Pulse
May 2023 | Vol. 5, Issue 4
Table 48: Average daily volume of open interest in Commodities derivatives (no of contracts)
Apr-22
Mar-23
Apr-23
% MoM
change
% YoY
change
FY22
FY23
CY23TD
Commodities futures
1
1
1
(6.9)
5.3
59
1
1
Commodities options
4,097
1,289
1,517
17.6
(63.0)
3,327
2,719
1,288
Product
Source: NSE EPR. Note: Figures in brackets indicate negative numbers.
Internet-based trading
Internet trading witnessed a healthy growth in April: After a weak March, the gross
ADT of internet-based trading (IBT) in the CM segment expanded by 18.7% MoM (-32.7%
YoY) to a four-month high of Rs89bn, thanks to improvement in retail participation during
the month. Average internet-based turnover in equity derivatives segment, however,
declined by 14.5% YoY to Rs 281bn. Average daily internet-based trading in currency
derivatives in April also witnessed a decline of 17.4% MoM to Rs 35bn on a gross basis.
The average daily internet-based turnover during the month was lower than the daily
average for the entire FY23 across all segments except equity derivatives.
Table 49: Average daily volume of open interest in Commodities derivatives (no of contracts)50: Average daily
gross turnover through internet-based trading (Rsm)
Segment
% MoM
change
% YoY
change
281,053
83,544
Apr-22
Mar-23
Apr-23
FY22
FY23
CY23TD
Cash Market
132,446
75,041
89,072
(32.7)
155,178
96,392
80,872
Equity Derivatives
314,450
328,547
(14.5)
(10.6)
301,677
311,098
311,934
Index Futures
113,648
115,497
(27.7)
(26.5)
97,232
108,317
104,065
Stock Futures
112,704
74,378
Index Options
80,740
133,684
80,376
8.1
(28.7)
131,482
91,014
80,989
112,461
(15.9)
39.3)
63,892
105,374
121,483
Stock Options
7,357
4,988
4,672
(6.3)
(36.5)
9,071
6,393
5,397
Currency Derivatives
50,745
43,023
35,534
(17.4)
(30.0)
43,001
48,148
40,351
Currency Futures
50,418
42,599
35,233
(17.3)
(30.1)
42,763
47,759
39,976
Currency Options
327
424
301
(29.0)
(8.0)
239
390
375
Interest Rate Derivatives
496
305
602
97.4
21.6
274
317
374
Interest Rate Futures
496
305
602
97.4
21.6
274
317
374
Interest Rate Options
0
0
0
NA
NA
0
0
0
0.8
0.6
0.7
22.4
(16.4)
1.4
0.5
0.5
Commodity derivatives
18.7
Commodity futures
0
0
0
NA
NA
0.9
0
0
Commodity options
0.8
0.6
0.7
22.4
(16.4)
0.4
0.5
0.5
Source: NSE EPR. Note: Average daily trading turnover is the average of daily gross turnover i.e., buy side turnover + sell side turnover. *Premium turnover is considered
in case of options contracts. Cash market turnover excludes auction market turnover.
116/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Record statistics
NSE registered new record in Index Options in February 2023: Index Options premium
turnover touched Rs1,026bn on February 1st, 2023, which is higher compared to daily
average during month at Rs609bn and 40% higher than the previous record turnover
registered on January 30th, 2023. Index futures recorded a new high on February 24th,
2022 when the single day turnover touched Rs969bn.
The previous high was recorded on September 20th, 2019 and November 30th, 2021
respectively. NSE also registered a new record on January 25th, 2022 when single day
turnover in stock futures segment touched Rs1,993bn.
Table 50: Segment-wise record turnover till April 30th, 2023
Segment
Turnover (Rsbn)
Trading Date
1,475
27-Nov-20
Index futures
969
24-Feb-22
Stock futures
1,993
25-Jan-22
Index options (premium)
1,026
01-Feb-23
Stock options (premium)
120
13-Oct-21
Cash market
Source: NSE EPR
117/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Spatial distribution of trading activities
Region-wise distribution of new investor registrations
Investor registrations dropped significantly in April 2023: After declining steadily from
the peak of 2m in October 2021 to around 1m by mid-last year, new investor registrations
on a monthly basis have been hovering around these levels since. The figure, however,
broke the 1m mark in April—the third time in last 28 months and stood at 832k (-—the
lowest monthly registrations since November 2020. The relative underperformance of
Indian equities vis-à-vis its EM and DM counterparts over the previous three months seem
to have impacted new investor registrations. Notwithstanding this drop, the trend still
remains way ahead of the pre-pandemic levels, suggesting that equities remain a
preferred investment avenue for investors with long-term horizons.
The drop in investor registrations in the month gone by was broad-based across regions.
The Western region that accounted for one-fourth of overall registrations during the
month saw a MoM dip of 23%. This was followed by Southern region (-21% MoM; share:
18%) and Eastern regions (-20% MoM; share: 13%). The Northern region that accounted
for nearly 43% of the total monthly registrations saw a MoM dip of 18%, contributing 37%
to the sequential drop at the pan India level. Total new investor registrations in FY23
dropped by 31.3% to 13.3m as compared to 19m in FY22, translating into monthly
average of 1.1m investors.
Figure 97: Region-wise distribution of new investors registered
Number of new investors (million)
East India
2.5
North India
South India
2.0
2.0
1.5 1.5
1.5
1.0
0.6
0.7
0.8
0.8
0.9
1.0 1.0
1.2
1.9
West India
Total
1.9 1.8
1.6
1.5 1.5 1.6
1.5
1.3
1.4
1.0
0.9 1.0
1.2 1.1
0.9 1.0
1.1
1.2
1.1 1.0
0.8
0.6 0.6
Apr-23
Mar-23
Jan-23
Feb-23
Dec-22
Nov-22
Oct-22
Sep-22
Aug-22
Jul-22
Jun-22
Apr-22
May-22
Feb-22
Mar-22
Jan-22
Dec-21
Nov-21
Oct-21
Sep-21
Jul-21
Aug-21
Jun-21
Apr-21
May-21
Feb-21
Mar-21
Jan-21
Dec-20
Nov-20
Oct-20
Sep-20
Aug-20
Jun-20
0.0
Jul-20
0.5
Source: NSE EPR.
Note: East India includes Mizoram, Odisha, West Bengal, Assam, Manipur, Arunachal Pradesh, Tripura, Nagaland, Meghalaya, Sikkim, Chhattisgarh; West India includes
Maharashtra, Gujarat, Madhya Pradesh, Daman & Diu, Goa, Dadra & Nagar Haveli; North India includes Bihar, Jharkhand, Uttar Pradesh, Uttarakhand, Haryana, Delhi,
Punjab, Jammu & Kashmir, Himachal Pradesh, Chandigarh And Rajasthan; South India includes Telangana, Kerala, Andhra Pradesh, Tamil Nadu, Karnataka, Pondicherry,
Lakshadweep and Andaman & Nicobar.
Uttar Pradesh continued to lead investor registrations for third month in a row: The
state-wise distribution of new investor registrations saw Uttar Pradesh surpassing
118/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Maharashtra in February and has remained at the top spot since. While new registrations
in the state dropped 19% MoM to 126k—15.1% of total monthly registrations, it still is up
28% on a two-year CAGR basis. Maharashtra has been witnessing a consistent drop in
registrations since October 2021 barring a modest increase in the second half of last year,
with 118k new registrations in the month gone by (-22% MoM/-43.5% YoY). Its share in
total registrations fell to 15.3% over the last 12-month period from 17.4% in the previous
12 months. Among other top 10 states, West Bengal and Tamil Nadu have gained share
over the last 12 months at the expense of Maharashtra, Delhi, and Karnataka. Delhi’s rank
in total investor registrations deteriorated from 4 two years back to 10 in April, resulting
in its share dropping by 170bps to 4.7% in the last 12-month period. The contribution of
the top five states to total monthly registrations dropped for the fourth consecutive month
from 48.7% in January to 47.5% in April 2023.
Figure 98: State-wise distribution of new investor registrations in Apr’22 and Apr’23
Apr 2022
Apr 2023
Source: NSE EPR.
Note: 1. Data for Ladakh is included in Jammu & Kashmir.
2. The maps above are created using the state-level shapefile from https://geographicalanalysis.com/gis-blog/download-free-india-shapefile-including-kashmirand-ladakh/
Contribution of top 10 districts remained steady in April 2023: New investor
registrations continue to remain concentrated in a few districts, as shown in the chart
below. Contribution of the top 10 districts remained steady at 19.9% in April 2023 despite
a 21% MoM decrease in the number of new registrations in these districts. Delhi and
Mumbai maintained the first and second spot respectively, together accounting for 11.5%
share, followed by Pune at 1.6%, and Bangalore at 1.3%. Surat, Jaipur, and Ahmedabad
accounted for 1% individually. All the districts in the top-10 pack witnessed a decrease
in their registrations. In fact, out of 579 districts, only 30 with negligible share saw a MoM
increase.
119/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 99: Number of new investors registered in top 10 districts (in ‘000)
Nov-22
90
Dec-22
Jan-23
Feb-23
Mar-23
Apr-23
80
70
60
58.0
50
37.6
40
30
20
13.7
11.0
10
0
Delhi - NCR
Mumbai
(MH/TN/RG)
Pune
Bangalore
8.4
Surat
8.2
Jaipur
Source: NSE EPR.
Note: Top 10 districts are chosen based on the last month data.
120/140
8.1
Ahmedabad
7.4
North
24 Parganas
7.2
Nagpur
5.6
Nashik
Market Pulse
May 2023 | Vol. 5, Issue 4
Region-wise distribution of individual investor turnover in the cash market
Retail turnover has been decreasing across all regions…: Turnover for all the regions in
the retail segment has been decreasing over the last three years (Apr’20 is the starting
period of our analysis). Overall turnover dropped 28% YoY in FY23 on top of 2% drop I
the previous year. Southern India contributed the most to this overall decline, seeing a
30% YoY drop in turnover. On a MoM basis, total turnover dropped 11% to Rs6trn in
Apr’23 with Southern India leading (-14% MoM), followed by Northern (-13.5% MoM),
Eastern (-12% MoM) and Western (-7% MoM) regions.
Figure 100: Region-wise distribution of monthly individual investors’ turnover
East India
Rs trn
North India
South India
West India
6.0
5.0
4.0
3.0
2.5
2.0
1.7
1.3
1.0
Western region recorded the highest share of retail turnover…: The distributional
pattern of Eastern and Western India has been consistent over the last three years until
last month. The month gone by saw major distributional changes with Western India’s
share increasing by 180bps MoM to a four-year high of 41% (Apr’20 is starting period of
our analysis). This increase in share came at the expense of 90bps and 80bps MoM drop
in share of Northern and Southern regions to 28.7% and 21.8% respectively.
Interestingly, activity in the Southern region has come off meaningfully over the last four
years, with its share falling by a steep 6.5pp from peak levels (28.3% share in Sep’20)
during this period. After seeing a steady increase between October 2020 until January
this year, the Northern region has been losing share since then, seeing a drop of nearly
3pp over the last three months.
…But declined in terms of number of active individual investors: The distributional
pattern for the number of active investors (Who traded at least once during the month)
has significantly changed in the last three years. The share of the Eastern and Northern
region has increased while that of the Western and Southern regions has declined during
this period. The Eastern India’s share rose from 8.8% in Apr’20 to 10% in Apr’23 while
that of Northern India surged from 29.3% to 33.5%. On the other hand, despite a recent
increase in the turnover share, the Western region has seen a drop in its share of the active
client base from 39.3% in Apr’20 to 36.2% in Apr’23. This is in contrast to Southern India,
where both turnover as well as active clients have been declining over the years.
121/140
Apr-23
Mar-23
Jan-23
Feb-23
Dec-22
Nov-22
Oct-22
Sep-22
Jul-22
Source: NSE EPR.
Aug-22
Jun-22
Apr-22
May-22
Mar-22
Jan-22
Feb-22
Dec-21
Nov-21
Oct-21
Sep-21
Jul-21
Aug-21
Jun-21
Apr-21
May-21
Feb-21
Mar-21
Jan-21
Dec-20
Nov-20
Oct-20
Sep-20
Aug-20
Jul-20
Jun-20
May-20
0.5
Apr-20
0.0
Market Pulse
May 2023 | Vol. 5, Issue 4
The number of active retail investors at the pan India level saw a 15% MoM drop to 6.7m
in Apr’23 as compared to 7.9m in the previous month. All regions contributed to the
decline with the Western India declining the most by 16% MoM in April, followed by
Northern (-15% MoM), Eastern (-14% MoM) and Southern (-13% MoM) region.
Figure 102: Region-wise share of individual investors
traded in cash market (%)
Figure 101: Region-wise share of individual investors’
turnover in cash market (%)
Region wise - Percentage of turnover
East India
South India
45
41.0
40
East India
South India
50
North India
West India
45
35
36.2
40
28.7
30
35
30
25
20
21.8
25
8.3
15
15
10
33.5
20
20.1
10
5
10.0
Jan-23
Oct-22
Jul-22
Apr-22
Jan-22
Oct-21
Jul-21
Apr-21
Jan-21
Oct-20
Jul-20
Apr-20
0
Apr-23
Jan-23
Oct-22
Jul-22
Apr-22
Jan-22
Oct-21
Jul-21
Apr-21
Jan-21
Oct-20
Jul-20
5
Apr-20
0
Region wise - Percentage of clients traded
%
North India
West India
Apr-23
%
Source: NSE EPR.
Figure 103: Region-wise distribution of individual investors traded
million
East India
5.0
North India
South India
West India
4.5
4.0
3.5
3.0
2.5
2.4
2.0
2.2
1.5
1.4
1.0
0.7
Source: NSE EPR.
Share of retail turnover in the top 10 districts further increased in the cash market:
Individual investors' total turnover and trade volume remained concentrated in a few
districts, as illustrated in the chart below. In April 2023, the contribution of top 10
districts in total cash market turnover further increased to 49% in Apr’23 (vs. 48%MoM
Mar’23) after increasing to 45% in Feb’23. The share of Mumbai increased to 15.3% in
Apr’23 (vs. 13.6% Mar’23) while that of Delhi decreased from 9.9% in Apr’23 (vs. 10.4%
Mar’23). The total contribution of Mumbai and Delhi also increased to 25.2% in Apr’23
122/140
Apr-23
Mar-23
Feb-23
Jan-23
Dec-22
Nov-22
Oct-22
Sep-22
Aug-22
Jul-22
Jun-22
Apr-22
May-22
Mar-22
Jan-22
Feb-22
Dec-21
Nov-21
Oct-21
Sep-21
Jul-21
Aug-21
Jun-21
Apr-21
May-21
Mar-21
Feb-21
Jan-21
Dec-20
Nov-20
Oct-20
Sep-20
Aug-20
Jul-20
Jun-20
Apr-20
0.0
May-20
0.5
Market Pulse
May 2023 | Vol. 5, Issue 4
(vs. 24% in Mar’23). Surat saw a decline of 1.2 percentage points to 5.1% in Apr’23 as
compared to 6.3% in the previous month. Contribution of Ahmedabad and Rajkot also
increased by 0.8 and 1.2 percentage points respectively.
Figure 104: Top 10 districts based on Cash turnover of individual investors
18
% of Cash turnover of individual investors
16
Nov-22
15.3
Dec-22
Jan-23
Feb-23
Mar-23
Apr-23
14
12
9.9
10
8
6
5.1
4.4
4
3.7
2.5
2.5
2
0
Mumbai
Delhi - NCR
(MH/TN/RG)
Surat
Ahmedabad Bangalore
Pune
Rajkot
2.0
Kolkata
1.9
Hyderabad
1.6
Jaipur
Source: NSE EPR.
Note: Individual investors include Individual / Proprietorship firms and HUF. Top ten districts are chosen based on last month’s data.
Figure 105: Top 10 districts based on individual investors traded
12
% of of individual
investors in cash market
10
Nov-22
10.1
Dec-22
Jan-23
Feb-23
Mar-23
Apr-23
8.5
8
6
4
3.0
3.0
2.9
2.0
2
0
Mumbai
Delhi - NCR Ahmedabad
(MH/TN/RG)
Pune
Bangalore
Surat
1.4
Kolkata
1.4
Jaipur
Source: NSE EPR.
Note: Individual investors include Individual / Proprietorship firms and HUF. Top ten districts are chosen based on last month’s data.
123/140
1.2
Hyderabad
1.1
Vadodara
Market Pulse
May 2023 | Vol. 5, Issue 4
Investment through mutual funds in India
Mutual funds’ asset under management (AUM) declined in the last two months: The
overall AUM of Indian mutual funds fell by a modest 1.6% MoM to Rs 40trn in Mar’23—
the second MoM drop in a row but rose by 6.2% on a YoY basis and is up 73% from the
post-pandemic lows. Even though fund mobilization rose by 27% MoM to Rs 10trn in
Mar’23 as compared to Rs 8trn in the previous month, redemptions increased at a faster
rate of 31% MoM, leading to net outflow of Rs 193bn during the month. Closed-ended
schemes saw a whopping 152% MoM jump in net inflows to Rs20.6m but contributed a
meagre 0.7% to the total mutual fund AUM.
Number of schemes rose sharply in FY23…: After declining between March 2020 and
mid-2022, total number of schemes has been rising since due to market regulator's
recategorization and rationalisation of mutual funds. The fiscal year gone by saw a 5.5%
jump in number of schemes as compared to a 10% decline in FY22. With a 2.8% MoM
jump in schemes, the total reached 1,455 in Mar’23 as compared to 1,416 in the previous
month. Of the total schemes, 1,278 were open-ended schemes, 165 were close-ended
and the rest 12 were interval schemes.
Figure 106: Monthly trend of total MF schemes and average AUM
AAUM* for the month (Rs bn) - RHS
2,500
No. of Schemes
45
40
2,000
35
30
1,500
25
20
1,000
15
10
500
Source: AMFI, NSE EPR. *AAUM-Average Assets under Management.
124/140
Mar-23
Jan-23
Nov-22
Sep-22
Jul-22
May-22
Mar-22
Jan-22
Nov-21
Sep-21
Jul-21
May-21
Mar-21
Jan-21
Nov-20
Sep-20
Jul-20
May-20
0
Mar-20
5
0
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 107: Monthly trend of total investment through mutual funds
Fund mobilized during the month (Rsbn)
Repurchase/Redemption during the month (Rsbn)
Net Inflow (+ve)/Outflow (-ve) for the month (Rsbn) - RHS
20,000
2,000
18,000
1,500
16,000
1,000
14,000
500
12,000
0
10,000
(500)
8,000
(1,000)
6,000
(1,500)
4,000
Mar-23
Jan-23
Nov-22
Sep-22
Jul-22
May-22
Mar-22
Jan-22
Nov-21
Sep-21
Jul-21
May-21
Mar-21
Jan-21
Nov-20
Sep-20
(2,500)
Jul-20
0
May-20
(2,000)
Mar-20
2,000
Source: AMFI, NSE EPR.
More new schemes were launched but garnered much lower funds: There were 45
new schemes getting launched in Mar’23 as compared to 27 in the previous month. These
new schemes led to a fund mobilization of Rs86bn, a 20% MoM jump from Rs72bn in
Feb’23. Per scheme fund mobilization, however, dropped to Rs1.9bn in Mar’23 (vs.
Rs2.6bn in Feb’23). Total funds mobilized in 2023 thus far stood at Rs202bn over 80 new
schemes. Even as the fiscal year gone by saw a launch of 253 new schemes vs. 158 in the
previous year, total fund mobilization in such schemes at Rs 624bn was down 40% YoY.
Figure 108: Monthly trend of total investment through new schemes
Funds mobilized through new schemes (Rsbn) - RHS
No. of new schemes
Average Funds mobilized
45
250
40
200
35
30
150
25
20
100
15
10
50
5
0
Mar-20
Jun-20
Sep-20
Dec-20
Mar-21
Jun-21
Sep-21
Dec-21
Mar-22
Jun-22
Sep-22
Source: AMFI, NSE EPR.
…Primarily led by equity schemes: Total AUM of the growth or equity-oriented schemes
stood at Rs15.1trn as of March 2023, implying a 14.2% YoY jump from Rs13.2trn in
Mar’22. The overall AUM of the mutual fund industry increased by 6.2% during this period.
125/140
Dec-22
Mar-23
0
Market Pulse
May 2023 | Vol. 5, Issue 4
The AUM share of pure equity funds rose to 38% in Mar’23 from 35% in the year-ago
period. Debt-oriented schemes, on the contrary, saw a 10% YoY drop in their AUM in
Mar’23 to Rs13trn, leading to its share dropping to 32% in Mar’23 as compared to 38%
in Mar’22. Even though the AUM of hybrid funds increased by 2.2% YoY, its share
decreased by 0.5 percentage points to 12.5% in Mar’23 as compared to 13% in Mar’22.
Figure 109: Share of overall mutual fund AUM across asset classes
March 2022
Others
14%
Equity
35%
Hybrid
13%
Others
17%
March 2023
Equity
38%
Hybrid
13%
Debt
38%
Debt
32%
Source: CMIE Economic Outlook, AMFI, NSE EPR.
Note: Others include Solution oriented schemes, Index Funds, Gold ETFs, Other ETFs and Funds of funds investing overseas.
Equity AUM surged meaningfully since the pandemic: The AUM of equity or growthoriented schemes has been consistently improving since 2020, rising by 123% since
March 2020. Strong inflows into equity mutual funds via SIPs, relative outperformance
vis-à-vis other asset classes including debt and limited redemptions are the factors that
led to this steep growth in equity AUM during this period. The AUM of debt-oriented
schemes, on the other hand, has remained broadly steady since the onset of the
pandemic, and in fact has fallen 10% in March, weighed down by steep rise in interest
rates over the last year or so. Interestingly, equity AUM surpassed that of debt for the first
time in 2022, with nearly 10pp increase in its share to the industry’s AUM since the
pandemic. The share of Hybrid schemes has also risen by 47% since the pandemic.
Figure 110: Category-wise AUM split
Rs trn
Hybrid
40
Equity
Debt
Others
35
30
25
20
15
10
Source: CMIE Economic Outlook, AMFI, NSE EPR.
*Others include Interval schemes, Solution oriented schemes, Index Funds, Gold ETFs, Other ETFs and Funds of funds investing overseas.
126/140
Mar-23
Jan-23
Nov-22
Sep-22
Jul-22
May-22
Mar-22
Jan-22
Nov-21
Sep-21
Jul-21
May-21
Mar-21
Jan-21
Nov-20
Sep-20
Jul-20
May-20
Mar-20
Jan-20
Nov-19
Sep-19
Jul-19
0
May-19
5
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 111: Category-wise share in MF AUM
%
Equity
60
Debt
Hybrid
Others
50
40
30
20
10
0
May-19
Oct-19
Mar-20
Aug-20
Jan-21
Jun-21
Nov-21
Apr-22
Source: CMIE Economic Outlook, AMFI, NSE EPR.
* Others include Interval schemes, Solution oriented schemes, Index Funds, Gold ETFs, Other ETFs and Funds of funds investing overseas.
Sep-22
Feb-23
Equity AUM remains concentrated in a few states: Similar to concentration in retail
participation, the AUM of Equity schemes remains concentrated in a few states.
Maharashtra and Gujarat together account for 40% of the overall equity mutual fund AUM.
This is followed by Delhi and Karnataka at 8%, Uttar Pradesh at 7% and West Bengal at
6% market share. Rest all the states contribute less than 5% to the overall Equity AUM.
Figure 112: State-wise distribution of Equity schemes AUM in Mar’22 and Mar’23
March 2022
March 2023
Source: NSE EPR.
Note: 1. Data for Ladakh is included in Jammu & Kashmir.
2. The maps are created using the state-level shapefile (https://geographicalanalysis.com/gis-blog/download-free-india-shapefile-including-kashmir-and-ladakh/
127/140
Market Pulse
May 2023 | Vol. 5, Issue 4
AUM of Corporates and Retail has been rising…: The AUM of Corporates, Retail
Investors and HNIs has been consistently rising while that of Banks and FIIs has
remained consistent over the last couple of years. On a year-to-year basis, AUM of Retail
investors and HNIs has increased by 9% and 11% respectively in Mar’23. On the other
hand, AUM of FIIs and Banks has dropped by 6.5% and 39% respectively in Mar’23.
Figure 113: Investor category-wise share in MF AUM
Rs trn
Corporates
High networth individuals
18
Banks/Financial institutions
Retail
Foreign institutional investors
16
14
12
10
8
6
4
Source: CMIE Economic Outlook, NSE EPR
AUM share of top funds has remained consistent: The share of top five funds to overall
industry’s AUM has remained highly concentrated and consistent over the years. The top
five mutual funds contributed ~56% to overall AUM in Q4 of FY23. Out of 42 funds, the
top ten funds contributed ~80% to the total AUM of the mutual fund industry.
Figure 114: Fund-wise share of MF AUM
Top 5
100%
Next 5
Others
90%
80%
70%
60%
50%
40%
30%
20%
Source: AMFI, CMIE Economic Outlook, NSE EPR
Jump in equity AUM aided by strong SIP inflows: Indirect participation has picked up
meaningfully since the pandemic, as reflected in a steady increase in retail inflows into
mutual funds via the SIP route. Monthly SIP inflows increased by a strong 16% YoY and
128/140
Q4FY23
Q3FY23
Q2FY23
Q1FY23
Q4FY22
Q3FY22
Q2FY22
Q1FY22
Q4FY21
Q3FY21
Q2FY21
Q1FY21
Q4FY20
Q3FY20
Q2FY20
0%
Q1FY20
10%
Mar-23
Jan-23
Nov-22
Sep-22
Jul-22
May-22
Mar-22
Jan-22
Nov-21
Sep-21
Jul-21
May-21
Mar-21
Jan-21
Nov-20
Sep-20
Jul-20
May-20
Mar-20
Jan-20
Nov-19
Sep-19
Jul-19
May-19
Mar-19
Jan-19
Nov-18
Sep-18
Jul-18
0
May-18
2
Market Pulse
May 2023 | Vol. 5, Issue 4
increased 4.3% MoM to Rs142bn in Mar’23. Average monthly SIP run rate during FY23
stood at Rs129bn as compared to Rs104bn in FY22 and Rs80bn in FY21. The total
number of outstanding SIP accounts has also continued to grow, rising to 63.6mn at the
end of Mar’23.
Figure 115: Monthly SIP inflows into mutual funds
Rs bn
Monthly SIP inflows into mutual funds
160
140
120
100
80
60
40
Source: AMFI, NSE EPR.
129/140
Apr-23
Jan-23
Oct-22
Jul-22
Apr-22
Jan-22
Oct-21
Jul-21
Apr-21
Jan-21
Oct-20
Jul-20
Apr-20
Jan-20
Oct-19
Jul-19
Apr-19
Jan-19
Oct-18
Jul-18
Apr-18
Jan-18
Oct-17
Jul-17
Apr-17
Jan-17
Oct-16
Jul-16
0
Apr-16
20
Market Pulse
May 2023 | Vol. 5, Issue 4
Policy developments
India
Key policy measures by the SEBI during January 2023 26
Formulation of price bands for the first day of trading pursuant to Initial Public Offering
(IPO), re-listing etc. in normal trading session
April 11, 2013
SEBI in a circular dated Jan 20, 2012, prescribed parameters regarding price discovery
through Call Auction and applicable price band for the first day of trading pursuant to IPO.
Call Auction sessions are conducted on multiple stock exchanges, the discovered price
pursuant to such call auction sessions could be different on each exchange. If the difference
in these discovered prices is significant, there could be a situation wherein price bands on
individual exchanges are far apart from each other, giving an incorrect picture of price band
to investors.
Contribution by eligible Issuers of Debt Securities to the Settlement Guarantee Fund of
the Limited Purpose Clearing Corporation for repo transactions in Debt Securities
April 13, 2023
A well-functioning repo market helps in contributing the development of the debt securities
market by providing the liquidity of the underlying debt securities and by providing a facility
to market participants to monetize their debt holdings without selling the underlying. The
SEBI approved setting up Limited Purpose Clearing Corporation (LPCC) for clearing and
settling repo transactions in debt securities. An amount of 0.5 basis points of the issuance
value of the debt securities be collected. AMC Repo Clearing Ltd. has been granted
recognition as LPCC by SEBI. The RBI also approved ARCL to function as a Clearing
Corporation.
Dispute Resolution Mechanism for Limited Purpose Clearing Corporation
April 17, 2023
Securities Contracts Regulation 22F dictates that a recognized LPCC should be put into place
for settlement of disputes or claims arising out from transactions. LPCC shall adopt the
following dispute resolution mechanism for settlement of disputes –
1) It will adopt an appropriate dispute resolution mechanism for deciding disputes
between the clearing members.
2) The disputes arising between clearing members of the LPCC shall be settled by
conciliation.
Issue of Master Circular by Stock Exchanges, Clearing Corporations and Depositories
April 20, 2023
Stock Exchanges, Clearing Corporations and Depositories (collectively known as “Market
Infrastructure Institutions” (MIIs) communicate with the market participants by issuing
guidelines. With so many guidelines of varied nature in place and from the market
participant’s feedback, the MIIs need to ensure few things –
1) To issue Master Circulars in which there will be all the guidelines segregated subject
wise.
2) To include only the relevant guidelines in the Master Circular.
The Master Circulars shall not include –
1) Bye laws, Rules and Regulations issued by the MIIs.
26
For more details, please visit http://www.sebi.gov.in
130/140
Market Pulse
May 2023 | Vol. 5, Issue 4
2) Actions taken against any entity.
3) The first Master Circular to be issued on or before June 30, 2023.
Global policy developments
ESMA finds data quality significantly improves under new monitoring approach 27
The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, published
its Data Quality Report under the European Markets Infrastructure Regulation (EMIR) and the Securitised Financing
Transactions Regulation (SFTR) reporting regimes. The report highlights the increased use of transaction data by EU
financial regulatory authorities in their day-to-day supervision and identifies significant quality improvements following
a new approach to data monitoring. In addition, it sets out how ESMA, together with the National Competent Authorities
(NCAs), the European Central Bank (ECB) and the European Systemic Risk Board (ESRB), has incorporated key insights
from its data monitoring in several internal workstreams. The new framework, adopted in 2022, takes a more datadriven and outcome-focused approach to data monitoring and to collaborating with the NCAs on data quality issues
under EMIR and SFTR. Specifically, it consists of two new elements:
•
•
a centralised data quality dashboard with EU-wide indicators covering the most fundamental data quality
aspects under EMIR.
a data sharing framework that enables relevant authorities to follow up with
counterparties when potentially significant data quality issues are detected.
Over 140,000 EEA issuers and instruments rated by CRAs 28
The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, published
its report on the European Union (EU) Credit Ratings market, providing for the first time a cross-market view of credit
ratings reported to the EU. ESMA finds that there were 823,400 credit ratings at the end of 2022. These ratings were
mostly for US-issued debt or issuers (69%), with 17% (141,600 credit ratings) on EEA30 instruments and issuers.
The main findings included in today’s report are:
•
Size: Of the141,600 credit ratings for EEA30 instruments and issuers at the end of 2022, most were corporate
ratings (79%), followed by sovereigns (12%) and structured finance ratings (9%).
•
Composition: Over 90% of ratings for EEA debt and issuers had long-term horizons (a year or more), most are
ratings of instruments (70%) rather than of issuers, and most were solicited by the debt issuer (73%). The
largest three CRAs had issued most outstanding ratings (69%), including almost all the ratings solicited by a
debt issuer (92%).
•
Credit risk trends: The COVID-19 pandemic was the most visible driver of events over the reporting period.
Early in 2020 there was a marked increase in rating downgrades across asset classes, particularly for nonfinancial corporates and commercial mortgage-backed securities. These reflected the pressures faced in
certain business sectors from the lockdowns and the associated economic uncertainties. In contrast, in late
2020 and in 2021 there was an improvement in credit risk indicators across asset classes, as government
business support measures were introduced and took effect. In 2022, there were also the negative effects on
credit quality of the Russian invasion of Ukraine and tightening monetary policy, though impacts here were
much less pronounced and widespread than those of the pandemic.
The EU credit rating market report is based on data collected under Credit Rating Agency Regulation and provides an
overview of credit rating markets in the EU, as well as risk indicators and metrics for ongoing risk monitoring related to
27
28
https://www.sec.gov/news/press-release/2023-17
https://www.sec.gov/news/press-release/2023-19
131/140
Market Pulse
May 2023 | Vol. 5, Issue 4
credit ratings. Importantly, the analysis presented in the report is separate from the supervisory work ESMA conducts
on CRAs and does not present indicators at an individual CRA level.
FCA proposes to support insurance customers in financial stress 29
To help protect customers during the current cost of living squeeze, the FCA is
proposing to update guidance which was introduced during the Covid-19 pandemic.
Under this, insurers should consider whether a different product is more suitable for
customers facing financial difficulties and whether they should waive cancellation and
other fees associated with adjusting customers’ policies.
29
https://www.fca.org.uk/news/press-releases/financial-watchdog-consults-about-protections-insurance-customers-financial-difficulty
132/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Comparison of trading activities across major exchanges globally
After navigating the worst year for Global equities since Global Financial Crisis, weighed down by a confluence of
factors such as rate hikes, uncertainty regarding the policy pivot, Global equities marched higher despite SVB’s
collapse and UBS’ takeover of Credit Suisse in Europe. This was aided by strengthening expectations of a policy pivot
which resulted in the top 10 exchanges recording a marginal increase in aggregate market cap of 2% MoM in Mar’23,
led by the US. In this section, we look at the overall trend of trading patterns in the securities market over the last three
years in various segments across stock exchanges around the world.
We used data from the World Federation of Exchanges (WFE) over the period Apr’20-Mar’23, covering a total of 123
exchanges, 63 of which are from the EMEA region, 36 from Asia-Pacific, and the rest from the Americas. We have also
highlighted NSE's share across asset classes in cash and spot markets based on market capitalisation and trading
activity. The key takeaways of the analysis are as follows.
• Market capitalisation of major global exchanges increased marginally in
Mar'23…: Following a huge sell-off in the first three quarters of 2022, global
equities have since rebounded, supported by strengthening expectations of a
policy pivot, improved prospects of other Asian counterparts and China reopening.
Developed equities (MSCI World Index) rose by 2.8% in Mar’23 and emerging
markets (MSCI EM Index) also performed in-line with 2.7% increase in Mar’23.
Major exchanges saw 1-7% MoM jump in their market capitalization during the
month, led by Hong Kong, Japan and the US. India underperformed among the
global markets, due to stretched valuations and relatively cheaper investment
avenues including China, Taiwan and South Korea. This led to a 1% MoM increase
in NSE’s market cap to US$3.1trn in March 2023.
• …With NSE retaining the ninth spot: The NYSE remained the world’s largest stock
exchange, followed by Nasdaq-US, Shanghai Stock Exchange, and Euronext. Japan
Exchange Group and Shenzhen Stock Exchange also retained fifth and sixth
position respectively. India's NSE slipped to the 9th position in Feb’23 and stayed
there in March 2023 due to underperformance of the Indian equities in the month
gone by.
• Shenzhen Stock Exchange (SZSE) has maintained its top position in the Cash
market globally: Despite volatility seen across all major exchanges over the last
two years, SZSE has remained the largest exchange globally in the cash market with
a 13% MoM jump to 973m trades in March from 862m in February. The Shanghai
Stock Exchange (SSE) retained the second spot with 35% MoM increase in the
number of trades from 568m in February to 698m in March. NSE retained its third
spot despite a marginal decline of 2% MoM in number of trades to 373m in March
2023 as compared to 382m in the previous month. Almost all top 10 exchanges
saw a major MoM jump in the number of trades in March.
• NSE remained at fourth position in Stock futures globally in Mar’23…: Brazil’s
B3 retained its first position with 148m contracts traded in March 2023. Borsa
Istanbul remained at the second position with a 45% MoM increase in the number
of contracts traded from 99m in February 2023 to 142m in March 2023. The third
and fourth spots were retained by Korea Exchange and NSE with 78m and 22m
contracts traded in Mar’23 respectively. DBAG’s number of contracts traded
increased by 220% MoM, with 10m contracts traded in Mar’23.
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Market Pulse
May 2023 | Vol. 5, Issue 4
• …and slipped to sixth position in the Stock options segment: Most major
exchanges (except India’s NSE and Tehran Stock Exchange) saw a rise in the
number of contracts traded in the Stock options segment in March 2023. Nasdaq
retained its first position with a 7% MoM increase to 157m contracts traded in
March 2023. Brazil’s B3 and CBOE global markets were at the second and third
position with 128m and 126m contracts traded respectively in March 2023. With a
12% MoM fall, NSE moved a rank lower to the sixth position with 67m contracts
traded.
• NSE continued to solidify its dominance in the equity index options segment
with around 95% share: NSE has consistently maintained the global leadership
position in equity index options, with a significant 23% MoM increase in contracts
traded. Even though a few other exchanges saw a huge jump in contracts traded in
March 2023, NSE kept its market share steady at 95%. CBOE global markets rose
to the second position due to a 34% MoM increase in March while Korea Exchange
(KRX) slipped to the third position following a 3% MoM drop to 59m contracts.
• …and slipped to the eighth position in Equity index futures segment: All large
exchanges saw an increase in volumes in the equity index futures segment. NSE
fell to the ninth position despite a 42% MoM jump with 9.4m contracts traded in
March 2023, with a market share of 2%. B3 - Brasil Bolsa Balco continued to lead
in this segment with 287m contracts traded followed by CME Group, DBAG, and
JPX. DBAG saw a 132% MoM rise from 34m contracts to 79m contracts in March
2023. Taiwan Futures Exchange saw a 42% MoM increase to 10m contracts traded
as compared to 7m in the previous month.
• NSE retained its top rank in the Currency options and Currency futures
segment: For more than three years, NSE has been the world's largest exchange in
the Currency options segment. NSE’s market share remained stable at 98% in
March 2023 with a 29% MoM rise in contracts traded to 382m as compared to
297m in the previous month. This was followed by Johannesburg Stock Exchange,
CME Group, Tel-Aviv Stock Exchange and B3 with 3.7m, 1.2m, 0.8m and 0.3m
contracts traded respectively. NSE maintained its dominance in the Currency
futures segment as well with its market share further increasing to 44% along with
a 10% MoM rise in contracts traded to 95m in March h. The second and third spots
were taken by B3 and CME Group with a share of 30% and 8% respectively.
134/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Figure 116: Domestic market cap of top ranked
exchanges**
Figure 117: Number of trades in Cash market of top
eight exchanges**
b. Number of trades - Cash market (m)
a. Domestic market capitalization (US$trn)*
NYSE
1,400
Nasdaq
1,200
SSE
Mar-23
Euronext
SSE
KRX
NYSE
1,000
Mar-22
Mar-21
JPX
SZSE
NSE
Nasdaq
800
600
SZSE
HKEX
400
LSE Group
Table 51: Number of contracts traded (m) traded in
Stock futures of top-ranked exchanges**
Exchange
Jan-Mar-21
Jan-Mar-22
Jan-Mar-23
% YoY
B3
236.0
393.8
382.9
-2.8
BIST
458.6
507.6
446.3
-12.1
KRX
391.9
231.8
226.8
NSE
60.6
73.7
DBAG
20.5
TFEX
Feb-23
Nov-22
Aug-22
May-22
Feb-22
12.0 15.0 18.0 21.0 24.0
Nov-21
9.0
Aug-21
6.0
May-21
3.0
Feb-21
0.0
Nov-20
0
TMX Group
Aug-20
NSE
May-20
200
Table 52: Number of contracts traded (m) traded in
Stock options of top-ranked exchanges**
Jan-Mar-21
Jan-Mar-22
Nasdaq
657.0
488.4
453.7
-7.1
B3
458.7
452.2
398.1
-12.0
-2.2
CBOE Global
429.5
405.7
369.2
-9.0
68.9
-6.5
NYSE
311.6
306.2
293.5
-4.1
25.3
19.1
-24.4
MIAX
243.1
212.2
245.9
15.9
16.7
20.6
15.1
-26.7
NSE
107.0
186.1
211.1
13.5
3.2
3.9
6.1
54.3
TSE
8.2
15.7
102.8
553.5
TAIFEX
12.3
14.1
8.9
-37.1
ISE
270.7
150.7
134.1
-11.0
ICE
19.2
12.5
9.4
-24.3
DBAG
60.3
55.3
49.7
-10.1
BDM
4.9
5.3
3.6
-32.0
HKEX
50.2
38.6
40.3
4.4
BME Spanish
Exchange
135/140
Jan-Mar-23
% YoY
Market Pulse
May 2023 | Vol. 5, Issue 4
Table 53: Number of contracts traded (m) in Index
futures of top ranked exchanges**
Exchange
Jan-Mar-21 Jan-Mar-22
Jan-Mar-23
% YoY
Table 54: Number of contracts traded (m) in Index
options of top ranked exchanges**
Exchange
Jan-Mar-21
Jan-Mar-22
Jan-Mar-23
% YoY
2464.4
6198.6
14169.4
128.6
1058.5
1119.2
904.8
-19.2
NSE
CME Group
332.6
418.5
369.9
-11.6
CBOE Global
116.0
149.7
222.9
48.9
DBAG
115.7
149.2
145.4
-2.5
KRX
201.5
186.7
187.9
0.7
JPX
77.0
95.8
73.5
-23.2
DBAG
96.3
123.4
120.8
-2.0
SGX
44.3
46.9
41.1
-12.4
CME Group
40.5
74.4
83.1
11.7
HKEX
27.6
34.0
35.1
3.3
TAIFEX
53.7
49.0
37.9
-22.6
KRX
39.1
29.1
29.9
2.8
India INX
61.2
39.8
30.5
-23.3
TAIFEX
31.2
29.1
23.1
-20.7
HKEX
6.7
7.2
9.5
32.0
NSE
26.7
30.9
25.7
-16.9
TASE
6.5
8.1
7.1
-11.9
ICE Futures US
14.8
17.0
15.4
-9.6
JPX
7.0
6.6
6.5
-2.3
B3
Table 55: Number of contracts traded (m) in Currency
futures of top ranked exchanges**
Exchange
Jan-Mar-21
Jan-Mar-22
Jan-Mar-23
% YoY
NSE
181.4
302.7
294.0
-2.9
B3
212.4
201.9
186.2
-7.7
CME Group
43.0
53.5
57.5
7.5
MTR.BA
29.1
31.4
47.4
KRX
25.7
25.8
BIST
17.0
JSE
Table 56: Number of contracts traded (m) in Currency
options of top ranked exchanges**
Jan-Mar-21
Jan-Mar-22
Jan-Mar-23
% YoY
NSE
268.7
692.0
1066.5
54.1
JSE
5.2
2.2
7.8
253.6
CME Group
2.1
2.6
2.6
0.6
51.2
TASE
3.4
2.8
2.7
-3.0
29.7
15.5
B3
1.4
1.0
0.9
-8.5
21.9
14.3
-34.5
BIST
0.2
0.0
0.1
256.6
4.5
7.4
7.7
4.1
SGX
0.0
0.0
0.0
719.2
SGX
6.6
6.8
9.3
35.9
BMV
0.0
0.0
0.0
70.6
BMV
0.6
1.8
2.7
44.9
MTR.BA
0.0
0.0
0.0
55.1
0.6
1.7
3.4
101.1
MX
0.0
0.0
0.0
-86.3
ICE Futures
US
Exchange
Source: WFE monthly statistics, NSE EPR.
** ASX - Australian Securities Exchange, BIST - Borsa Istanbul, BME - Spanish Exchanges, BSE - BSE India Limited, HKEX - Hong Kong Exchanges and Clearing, ISE International Securities Exchange, JPX - Japan Exchange Group Inc., JSE - Johannesburg Stock Exchange, KRX - Korea Exchange, LSE – London Stock Exchange, MOEX
- Moscow Exchange, NSE - National Stock Exchange of India Ltd., NYSE – New York Stock Exchange, SGX - Singapore Exchange, SSE - Shanghai Stock Exchange, SZSE Shenzhen Stock Exchange, TMX – TMX Group, TSE - Tehran Stock Exchange, TFE - Taiwan Futures Exchange, Tadawul - Saudi Stock Exchange (Tadawul), TASE - TelAviv Stock Exchange, MIAX - Miami International Securities Exchange, DBAG - Deutsche Boerse AG, India INX - India International Exchange. Only WFE member
exchanges are included in the analysis.
*** Due to unavailability of derivatives data for the month of Mar’23 for B3, China Financial Futures Exchange and Johannesburg Stock Exchange, data for the month of
Feb’23 has been used for analysis.
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Market Pulse
May 2023 | Vol. 5, Issue 4
Annual macro snapshot
National income
GDP (Current) (Rs trn)
GDP (Current) Growth (%)
GDP (Constant) Growth (%)
FY17
FY18
FY19
FY20
FY21
FY22*
FY23**
FY24BE#
153.9
170.9
188.9
201.0
198.3
234.7
272.0
301.8
8.3
6.8
6.5
3.9
-5.8
9.1
7.0
11.8
11.0
10.6
6.4
-1.4
18.4
15.9
GVA (Constant) Growth (%)
8.0
6.2
5.8
3.9
-4.2
8.8
6.6
Industry growth (%)
7.7
5.9
5.3
-1.4
-0.9
11.6
3.6
Agriculture growth (%)
Services growth (%)
Per Capita GDP (Curr) (Rs)
Prices
CPI Inflation (%)
Food & beverages (%)
Core inflation (%)
WPI Inflation (%)
Primary articles (%)
Fuel & power (%)
Manuf. prods (%)
Money, banking & interest rates
Money supply (M3) growth (%)
Aggregate deposit growth (%)
Bank credit growth (%)
Non-food credit growth (%)
Cash Reserve Ratio (%, eop)
6.8
8.5
6.6
6.3
2.1
7.2
6.2
6.4
4.1
-8.2
3.5
8.8
1,18,489
1,30,061
1,42,424
1,49,915
1,46,301
1,71,498
4.5
3.6
3.4
4.8
6.2
5.5
4.9
4.6
5.5
3.8
5.5
4.4
1.7
3.4
-0.3
2.2
2.9
1.4
0.7
4.3
2.7
6.0
1.7
6.8
7.3
32.5
10.2
11.5
-1.8
-8.0
10.1
9.2
10.5
8.9
12.2
8.7
8.2
10.0
13.3
6.1
5.6
8.6
15.3
9.0
4.0
2.8
6.2
10.2
4.0
3.7
10.0
13.4
4.0
0.3
7.9
6.1
4.0
2.8
11.4
5.5
3.0
9.4
1,96,716
6.1
13.0
8.2
1.3
3.4
4.2
1.3
1.7
11.1
8.9
8.7
4.0
4.5
Bank Rate (%, eop)
6.75
6.25
6.50
4.65
4.25
4.25
6.75
GOI rev. receipts growth (%)
15.0
4.4
8.2
8.4
-3.0
32.8
8.2
Public Finance
Gross tax receipts growth (%)
GOI Expenditure growth (%)
Subsidies growth (%)
Interest expense growth (%)
External transactions
Exports growth (%)
POL exports growth (%)
Non-POL exports (%)
Imports growth (%)
Non-POL imports growth (%)
POL imports growth (%)
Net FDI (US$bn)
Net FII (US$bn)
Trade Balance – RBI (US$bn)
Current Acc. Balance (US$bn)
Forex Reserves (US$bn)
Exchange rate (USDINR)
17.9
11.8
-11.1
-4.4
10.3
8.4
8.8
10.0
5.1
10.1
5.4
9.0
3.4
8.4
-3.4
8.1
16.0
10.2
5.0
-0.7
8.8
17.6
-5.2
0.8
30.7
189.0
11.1
-7.1
33.7
10.4
18.5
16.8
-11.6
-37.6
162.6
1.0
21.2
10.5
-7.8
-17.1
56.0
5.3
25.0
29.9
-7.5
-36.9
22.1
-0.6
1.4
36.1
-0.2
35.6
7.6
20.1
30.3
4.5
-7.9
30.7
43.0
-2.5
-9.6
44.0
38.6
-16.8
-157.5
-102.2
-189.5
370.0
424.4
411.9
475.6
579.3
617.6
67.09
64.45
69.89
-24.7
70.88
23.9
74.20
14.8
96.7
-180.3
-57.3
7.5
-28.3
45.1
-160.0
-48.7
10.4
33.7
-112.4
-14.4
11.5
12.1
45.1
24.5
-4.1
12.3
8.1
-33.5
18.8
6.6
10.5
-38.7
74.52
578.4
80.38
Source: CMIE Economic Outlook, NSE. * FY22 GDP data pertains to Second Revised Estimates, FY22 public finance data is actual as per Budget FY24; **FY23 public
finance data are revised estimates and national income data is as per FAE; #FY24 public finance data are budget estimates
137/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Our reports on the economy and markets in 2022-23
Sr. No.
Date
Report
1
12-Apr-23
Market Pulse February 2023: A monthly review of Indian economy and markets
2
06-Apr-23
Macro Review: RBI Monetary Policy
3
29-Mar-23
India Ownership Tracker December 2022
4
24-Feb-23
Market Pulse February 2023: A monthly review of Indian economy and markets
5
08-Feb-23
Macro Review: RBI Monetary Policy
6
01-Feb-23
Macro Review: Union Budget FY2023-24
7
25-Jan-23
Market Pulse January 2023: A monthly review of Indian economy and markets
8
23-Dec-22
Market Pulse Nov-Dec 2022: A monthly review of Indian economy and markets
9
07-Dec-22
Macro Review: RBI Monetary Policy
10
05-Dec-22
Q2FY23 Corporate Earnings Review
11
30-Nov-22
Macro Review: Q2FY23 India GDP
12
21-Oct-22
Market Pulse October 2022: A monthly review of Indian economy and markets
13
30-Sep-22
Macro Review: RBI Monetary Policy
14
28-Sep-22
Market Pulse September 2022: A monthly review of Indian economy and markets
15
22-Sep-22
India Ownership Tracker June 2022
16
26-Aug-22
Market Pulse August 2022: A monthly review of Indian economy and markets
17
25-Aug-22
Q1FY23 Corporate Earnings Review
18
05-Aug-22
Macro Review: RBI Monetary Policy
19
28-Jul-22
Market Pulse July 2022: A monthly review of Indian economy and markets
20
29-Jun-22
Market Pulse June 2022: A monthly review of Indian economy and markets
21
27-Jun-22
Q4FY22 Corporate Earnings Review
22
24-Jun-22
India Ownership Tracker March 2022
23
24-Jun-22
Macro Review: Q4FY22 Balance of Payments
24
08-Jun-22
Macro Review: RBI Monetary Policy
25
03-Jun-22
Macro Review: State Budget Analysis
26
01-Jun-22
Corporate Governance: ESG scores of NIFTY 50 companies
27
01-Jun-22
Macro Review: Q4FY22 India GDP
28
24-May-22
Market Pulse May 2022: A monthly review of Indian economy and markets
29
05-May-22
Macro Review: RBI Monetary Policy
30
29-Apr-22
Market Pulse April 2022: A monthly review of Indian economy and markets
31
11-Apr-22
India Ownership Tracker December 2021
32
08-Apr-22
Macro Review: RBI Monetary Policy
33
03-Apr-22
Macro Review: Q3FY22 Balance of Payments
34
31-Mar-22
Quarterly Briefing: Mandatory Board Governance in India
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May 2023 | Vol. 5, Issue 4
35
26-Mar-22
Market Pulse March 2022: A monthly review of Indian economy and markets
36
28-Feb-22
Market Pulse February 2022: A monthly review of Indian economy and markets
37
24-Feb-22
Q3FY22 Corporate Earnings Review
38
18-Feb-22
Quarterly Briefing: Related Party Transactions: Implications for Investor Protection
39
10-Feb-22
Macro Review: RBI Monetary Policy
40
01-Feb-22
Union Budget FY2022-23
41
29-Jan-22
Market Pulse January 2022: A monthly review of Indian economy and markets
42
03-Jan-22
Macro Review: Q2FY22 Balance of Payments
139/140
Market Pulse
May 2023 | Vol. 5, Issue 4
Economic Policy & Research
Tirthankar Patnaik, PhD
tpatnaik@nse.co.in
+91-22-26598149
Prerna Singhvi, CFA
psinghvi@nse.co.in
+91-22-26598316
Ashiana Salian
asalian@nse.co.in
+91-22-26598163
Smriti Mehra
smehra@nse.co.in
+91-22-26598163
Ansh Tayal
atayal@nse.co.in
+91-22-26598163
Anand Prajapati
aprajapati@nse.co.in
+91-22-26598163
Tanika Luthra
consultant_tluthra@nse.co.in
Isha Sinha
consultant_isinha@nse.co.in
Krishnandu Ghosh
consultant_kghosh@nse.co.in
Muskan Mundra
consultant_mmundra@nse.co.in
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