EUpDates March 2016

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E-UpDates March 2016 Surge Research Support

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www.ecofin-surge.co.in

Special Feature —Highlights of the Union Budget

2016-17

Table of Contents

1. Key Rates to Remember

2. Indian Economy — Growth Indicators

3. Indian Economy — Price Indicators

4. Indian Economy — Banking Indicators

10. Global Economy — Economic Indicators

11. Global Economy — Stock Indices

12. Global Economy — Commodity Indices

5. Indian Economy — Exchange Rates

6. Indian Economy — Interest Rates

7. Indian Economy — Stock Markets

8. Indian Economy — Capital Flows

9. Indian Economy — Commodity Markets

E-UpDates March 2016 Surge Research Support

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2015-16* 7.40% Dec-15 -1.30%

2014-15* 7.50% Dec-14 3.60%

As on 29-Feb-16 28-Feb-15 As on 29-Feb-16 28-Feb-15

Repo rate 6.75% 7.75% CRR 4.00% 4.00%

Reverse repo rate 5.75% 6.75% Base rate 9.30-9.70% 10.00-10.25%

MSF rate 7.75% 8.75% CMR 5.00-7.50% 3.25-8.00%

Inflation CPI-C* CFPI-C* WPI

Jan-16 5.89% 6.85% -0.90% Feb-16 31.1

Jan-15 5.19% 6.14% -0.95% Feb-15 54.9

*Base: 2012=100 US$ per barrel

February

51.1 29-Feb-16 68.6251.4 27-Feb-15 61.79

Nikkei Markit Mnfg. PMI

Nikkei Markit Services PMI

RBI Reference rate

For global rates visit: http://www.ecofin-surge.co.in/publications.html

For explanations visit: http://www.ecofin-surge.co.in/terminology.html

GDP IIP

Base : 2004-05=100.

Oil Price (World Average)

Purchasing Managers Index US$/Rupee Rate

New Series (at 2011-12 prices). *April-

December.

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GDP Growth Rates

(at 2011-12 prices)

Q1 Q2 Q3 Q4 FY

2015-16 7.6 7.7 7.3 7.6 (AE)

2014-15 7.5 8.4 6.6 7.2 (1st RE)

GVA at Basic Price by

Economic Activity

1 Agriculture, forestry & fishing 16,02,036 1.1 15,84,293 -0.2

2 Mining & quarrying 3,16,811 6.9 2,96,328 10.8

3 Manufacturing 18,25,371 9.5 16,67,069 5.5

4 Electricity, gas, water supply &

other utlility services

2,29,681 5.9 2,16,970 8

5 Construction 8,86,179 3.7 8,54,636 4.4

6 Trade, hotels, transport,

communication and services

related to broadcasting

20,07,866 9.5 18,33,997 9.8

7 Financial, real estate &

professional services

22,49,243 10.3 20,39,460 10.6

8 Public administration, defence

and other services

13,20,393 6.9 12,34,737 10.7

9GVA at basic prices (1 to 8) 104,37,579 7.3 97,27,490 7.1

Estimates of Final

Expenditures on GDP

10 Private final consumption

expenditure (PFCE)

63,10,565 7.6 (55.6) 58,64,283 6.2 (55.6)

11 Government final consumption

expenditure (GFCE)

11,38,558 3.3 (10.0) 11,02,607 12.8 (10.4)

12 Gross fixed capital formation

(GFCF)

35,87,515 5.3 (31.6) 34,08,251 4.9 (32.3)

13 Changes in stocks (CIS) 2,05,809 5.5 (1.8) 1,95,007 20.3 (1.8)

14 Valuables 1,96,245 13.3 (1.7) 1,73,275 15.4 (1.6)

15 Exports 23,49,643 `-6.3 (20.7) 25,08,402 1.7 (23.8)

16 Less Imports 24,96,119 `-6.3 (22.0) 26,64,390 0.8 (25.2)

17 Discrepancies 58,745 `(0.5) -35,284 `(-0.3)

18GDP (10 to 17) 113,50,962

7.6

(100.0)105,52,151 7.2 (100.0)

Growth Indicators

YoY Growth

(Share in

GDP)

(%)

GDP

[at Constant(2011-12) prices]

2015-16

(AE)

Rs.Crore YoY

Growth

(Share in

GDP)

(%)

2014-15

(1st RE)

Rs.Crore

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1 GVA at basic prices 104,37,579 7.3 97,27,490 7.1

2 Taxes 11,93,486 7.7 11,08,339 8.0

3 Less Subsidies 2,80,102 -1.3 2,83,679 4.8

4GDP (1+2-3) 113,50,962 7.6 105,52,151 7.2

5 Net Domestic Product (GDP less

Consumption of Fixed Capital)

100,71,224 7.6 93,59,476 7.1

6 Net factor income from abroad -1,36,885 -1,24,450

7 Gross National Income (4+6) 112,14,077 7.5 104,27,701 7.3

8 Net National Income (GNI less

Consumption of Fixed Capital)

99,34,339 7.6 92,35,026 7.2

9 Population (in million) 1,283 1.3 1,267 1.3

10 Per capita GDP (Rs.) 88,472 6.2 83,285 5.9

11 Per capita GNI (Rs.) 87,405 6.2 82,302 6.0

12 Per capita PFCE (Rs.) 49,186 6.3 46,285 4.9

AE : Advance Estimates; RE : Revised Estimates.

Index of Industrial Production Dec-15 Dec-14 Dec-15 FY2015-16* FY2014-15*

General Index 183.4 185.9 -1.3 3.1 2.6

1. Mining 137.5 133.6 2.9 2.3 1.8

2. Manufacturing 192.0 196.8 -2.4 3.1 1.8

3. Electricity 183.2 177.6 3.2 4.5 10.0

*April-December.

Index 2004-05 =100 Change (YoY, %)

Rs.Crore YoY Growth

(%)

GDP

[at Constant(2011-12) prices]

2015-16

(AE)

Rs.Crore YoY

Growth

2014-15

(1st RE)124.7

126.5

125.3

181.9

186.0

186.6

164.7 178.6

188.5

172.0176.8 178.1

100

110

120

130

140

150

160

170

180

190

200IIP-Annual Averages (Base : 2004-05=100) Mining &

Quarrying (141.75)

Manufacturing (755.27)

Electricity (103.16)

General Index (1000.0)

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Wholesale Price Index

(Base: 2004-05=100)

(Inflation %)

All

Commodities

Primary Articles Food Articles Non-food

Articles

Crude

Petroleum

Manufactured

Products

November– 2015 177.6 (-1.99) 256.5 271.0 221.7 180.4 153.0

December– 2015 177.4 (-0.73) 257.8 272.7 223.9 180.1 152.6

January– 2016 175.7 (-0.90) 253.3 267.6 224.5 166.9 152.7

Consumer Price Index

(Inflation %)

All India

General Index

(All Groups

combined)

Base 2010=100

Rural Areas (All

Groups) Base

2010=100

Urban Areas

(All Groups)

Base 2010=100

Industrial

Workers Base

2001=100

Rural

Labourers

Base 1986-

87=100

Agricultural

Labourers

Base 1986-

87=100

November– 2015 126.6 (5.41) (F) 128.3 (5.95) (F) 124.6 (4.71) (F) 270.0 857.0 853.0

December– 2015 126.1 (5.61) (F) 127.9 (6.32) (F) 124.0 (4.73) (F) 269.0 857.0 853.0

January– 2016 126.3(5.69) (P) 128.1 (6.48) (P) 124.2 (4.81) (P) 269.0 854.0 849.0

Price Indicators

Build up of inflation in the financial year so far is -0.23% compared to a build up of -1.66% in the corresponding period of the previous year.

F: Final; P: Provisional.

176.0

177.7

178.6

177.5

176.7

176.6

176.7

177.6

177.4

175.7

180.2

181.7

182.6

184.6

185.7

185.0

183.9

181.5

179.8

178.3

175.8

176.1

171.5

171.6

172.7

175.4

177.5

179.7

180.3

181.5

179.2

178.9

178.9

179.8

120.0

130.0

140.0

150.0

160.0

170.0

180.0

190.0

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

WPI (Base 2004-05=100) New Series

2015-16 2014-15 2013-14

CPI Inflation – January 2016 Rural Urban Combined

Cereals & Products 3.01 0.56 2.19

Pulses & Products 39.85 49.80 43.32

Oils etc 7.03 5.08 6.36

Meat & Fish 8.12 8.29 8.23

Milk & Products 4.48 3.19 4.00

Vegetables 5.90 7.22 6.39

Food & Beverages 7.00 6.23 6.66

Fuel & Light 6.67 3.09 5.32

Clothing etc 6.94 3.91 5.71

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March 31 2015 January 2016 February 2016

Reserve Money : 19,28,470 20,05,370 20,44,630

% change during the month 1.53 1.96

% change since March 31 3.99 6.02

(A) Components of Reserve Money (1+2+3)

1 Currency in circulation 14,48,320 15,83,970 16,20,570

% change during the month 1.90 2.31

% change since March 31 9.37 11.89

2 Banker's deposits with RBI 4,65,560 4,08,050 4,11,320

% change during the month 0.59 0.80

% change since March 31 (12.35) (11.65)

3 "Other" deposits with RBI 14,590 13,350 12,750

% change during the month (12.06) (4.49)

% change since March 31 (8.50) (12.61)

(B) Sources of Reserve Money (4+5+6+7-8)

4 Net RBI credit to Government 3,73,410 4,14,030 4,48,770

% change during the month (5.46) 8.39

% change since March 31 10.88 20.18

5 RBI credit to Banks & Commercial Sector 2,02,500 1,56,810 1,74,340

% change during the month 57.52 11.18

% change since March 31 (22.56) (13.91)

5.1 RBI credit to banks(including NABARD) 1,87,660 1,49,850 1,66,280

% change during the month 61.79 10.96

% change since March 31 (20.15) (11.39)

5.2 RBI credit to Commercial Sector 14,840 6,960 8,060

% change during the month 0.43 15.80

% change since March 31 (53.10) (45.69)

6 Net Foreign Exchange Assets of RBI 21,27,280 23,49,020 23,70,790

% change during the month 1.90 0.93

% change since March 31 10.42 11.45

7 Govt's Currency Liabilities to the Public 19,440 21,310 21,310

% change during the month - -

% change since March 31 9.62 9.62

8 Net Non-monetary Liabilities of RBI 7,94,160 9,35,800 9,70,570

% change during the month 5.30 3.72

% change since March 31 17.84 22.21

Note: (i) Figures in parentheses denote negative numbers.

Banking IndicatorsCOMPONENTS & SOURCES OF RESERVE MONEY AND THEIR VARIATIONS (Rs. crore)

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March 31 2015 January 2016* February 2016#

M3 105,75,680 114,43,250 115,80,770

% change during the month 0.93 1.20

% change since March 31 8.20 9.50

(A) Components of M3 ( 1+2+3+4)

1 Currency with the public 13,86,990 15,17,790 15,58,350

% change during the month 1.22 2.67

% change since March 31 9.43 12.35

2 Demand deposits with banks 8,96,350 9,19,620 9,48,440

% change during the month (3.73) 3.13

% change since March 31 2.60 5.81

3 Time deposits with banks 82,77,750 89,93,180 90,46,850

% change during the month 1.40 0.60

% change since March 31 8.64 9.29

4 Other deposits with RBI 14,590 12,660 27,130

% change during the month (11.72) 114.30

% change since March 31 (13.23) 85.95

(B) Sources of M3 (5+6+7+8-9)

5 Net bank credit to govt.(i+ii) 30,15,120 32,81,440 33,24,880

% change during the month 0.93 1.32

% change since March 31 8.83 10.27

i RBI's credit 3,73,410 4,08,670 4,44,480

% change during the month 3.93 8.76

% change since March 31 9.44 19.03

ii Other banks' credit 26,41,710 28,72,780 28,80,410

% change during the month 0.51 0.27

% change since March 31 8.75 9.04

6 Bank credit to commercial sector (i+ii) 70,55,800 76,11,440 76,94,190

% change during the month 1.04 1.09

% change since March 31 7.87 9.05

i RBI's credit 14,850 6,960 8,020

% change during the month 7.74 15.23

% change since March 31 (53.13) (45.99)

ii Other banks' credit 70,40,960 76,04,480 76,86,170

% change during the month 1.04 1.07

% change since March 31 8.00 9.16

7 Net foreign exchange assets of the banking sector 22,02,110 24,58,420 25,10,650

% change during the month 0.68 2.12

% change since March 31 11.64 14.01

8 Government's currency liabilities to the public 19,440 21,310 21,310

% change during the month - 0.0

% change since March 31 9.62 9.6

9 NNML of the banking sector (i+ii) 17,16,800 19,29,360 19,70,270

% change during the month 1.07 2.12

% change since March 31 12.38 14.76

i RBI's NNML 7,94,160 9,21,760 9,77,690

% change during the month 2.37 6.07

% change since March 31 16.07 23.11

ii Other bank's NNML(Residual) 9,22,640 10,07,600 9,92,580

% change during the month (0.10) (1.49)

% change since March 31 9.21 7.58

COMPONENTS & SOURCES OF MONEY STOCK (M3) AND THEIR VARIATIONS (Rs. crores)

Note: (i) Figures in parentheses denote negative numbers; (ii) * Data are of January 22, 2016; (iii) #: Data are of February

19, 2016.

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Date Day Spot 1 Month 3 Month 6 Month Spot 1 Month 3 Month 6 Month

1-Feb-16 Mon 67.86 68.22 68.96 70.00 73.72 74.13 75.02 76.35

2-Feb-16 Tue 67.99 68.36 69.12 70.17 74.20 74.62 75.54 76.87

3-Feb-16 Wed 68.09 68.50 69.22 70.27 74.40 74.87 75.75 77.08

4-Feb-16 Thu na na

5-Feb-16 Fri na na

8-Feb-16 Mon na na

9-Feb-16 Tue na na

10-Feb-16 Wed 67.86 68.27 69.02 70.07 76.40 76.88 77.82 79.21

11-Feb-16 Thu 68.33 68.71 69.50 70.57 77.31 77.76 78.75 80.17

12-Feb-16 Fri 68.26 68.64 69.41 70.48 77.02 77.46 78.44 79.84

15-Feb-16 Mon 68.08 68.47 69.24 70.32 76.23 76.67 77.63 79.03

16-Feb-16 Tue na na

17-Feb-16 Wed 68.44 68.83 69.64 70.73 76.23 76.69 77.69 79.10

18-Feb-16 Thu na na

19-Feb-16 Fri na na

22-Feb-16 Mon 68.61 69.08 69.85 70.96 75.86 76.38 77.33 78.76

23-Feb-16 Tue 68.59 69.03 69.81 70.91 75.45 75.95 76.91 78.32

24-Feb-16 Wed 68.57 69.01 69.81 70.91 75.28 75.78 76.76 78.17

25-Feb-16 Thu na na

26-Feb-16 Fri na na

29-Feb-16 Mon 68.41 68.88 69.66 70.73 74.48 75.02 75.98 77.35

Date Day Spot 1 Month 3 Month 6 Month Spot 1 Month 3 Month 6 Month

1-Feb-16 Mon 96.94 97.45 98.51 100.04 55.91 56.23 56.91 57.91

2-Feb-16 Tue 97.81 98.33 99.43 100.98 56.26 56.59 57.28 58.29

3-Feb-16 Wed 98.68 99.26 100.32 101.87 57.02 57.39 58.06 59.08

4-Feb-16 Thu na na

5-Feb-16 Fri na na

8-Feb-16 Mon na na

9-Feb-16 Tue na na

10-Feb-16 Wed 98.60 99.18 100.28 101.85 59.03 59.41 60.14 61.22

11-Feb-16 Thu 98.72 99.26 100.40 101.98 61.22 61.60 62.39 63.53

12-Feb-16 Fri 99.28 99.83 100.97 102.55 60.73 61.10 61.87 62.99

15-Feb-16 Mon 98.54 99.07 100.20 101.81 59.75 60.11 60.88 61.99

16-Feb-16 Tue na na

17-Feb-16 Wed 97.85 98.40 99.57 101.15 60.01 60.39 61.17 62.29

18-Feb-16 Thu na na

19-Feb-16 Fri na na

22-Feb-16 Mon 97.08 97.71 98.82 100.43 60.55 60.98 61.75 62.90

23-Feb-16 Tue 96.78 97.40 98.51 100.11 61.20 61.62 62.40 63.56

24-Feb-16 Wed 95.24 95.84 96.96 98.54 61.33 61.75 62.54 63.71

25-Feb-16 Thu na na

26-Feb-16 Fri na na

29-Feb-16 Mon 94.78 95.44 96.53 98.07 60.60 61.07 61.85 62.96

Exchange RatesMovement of the Rupee (INR) (Average of Buying & Selling Rates)

Dollar Euro

Pound Yen

E-UpDates March 2016 Surge Research Support

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Euro

Date Day 1 Month 3 Month 6 Month 1 Month 3 Month 6 Month

1-Feb-16 Mon 6.56 6.64 6.41 6.83 7.27 7.27

2-Feb-16 Tue 6.82 6.82 6.52 7.03 7.43 7.35

3-Feb-16 Wed 7.56 6.84 6.52 7.85 7.49 7.35

4-Feb-16 Thu na na

5-Feb-16 Fri na na

8-Feb-16 Mon na na

9-Feb-16 Tue na na

10-Feb-16 Wed 7.40 6.98 6.60 7.72 7.64 7.48

11-Feb-16 Thu 6.98 7.03 6.66 7.30 7.66 7.54

12-Feb-16 Fri 6.89 6.91 6.61 7.11 7.57 7.45

15-Feb-16 Mon 7.00 6.99 6.69 7.15 7.58 7.50

16-Feb-16 Tue na na

17-Feb-16 Wed 7.06 7.20 6.79 7.40 7.86 7.66

18-Feb-16 Thu na na

19-Feb-16 Fri na na

22-Feb-16 Mon 8.44 7.40 6.95 8.63 8.01 7.81

23-Feb-16 Tue 7.98 7.31 6.88 8.33 7.97 7.75

24-Feb-16 Wed 7.88 7.40 6.93 8.27 8.13 7.84

25-Feb-16 Thu na na

26-Feb-16 Fri na na

29-Feb-16 Mon 8.56 7.51 6.90 8.97 8.27 7.86

Date Day 1 Month 3 Month 6 Month 1 Month 3 Month 6 Month

1-Feb-16 Mon 6.46 6.64 6.48 7.09 7.31 7.28

2-Feb-16 Tue 6.55 6.79 6.58 7.16 7.45 7.35

3-Feb-16 Wed 7.29 6.82 6.57 7.96 7.50 7.36

4-Feb-16 Thu na na

5-Feb-16 Fri na na

8-Feb-16 Mon na na

9-Feb-16 Tue na na

10-Feb-16 Wed 7.29 7.01 6.71 8.01 7.74 7.56

11-Feb-16 Thu 6.77 6.98 6.72 7.60 7.87 7.67

12-Feb-16 Fri 6.80 6.97 6.70 7.46 7.69 7.58

15-Feb-16 Mon 6.65 6.93 6.76 7.47 7.75 7.64

16-Feb-16 Tue na

17-Feb-16 Wed 6.89 7.20 6.86 7.76 7.96 7.73

18-Feb-16 Thu na na

19-Feb-16 Fri na na

22-Feb-16 Mon 8.07 7.34 7.02 8.97 8.17 7.93

23-Feb-16 Tue 7.90 7.32 6.99 8.55 8.08 7.86

24-Feb-16 Wed 7.76 7.42 7.05 8.43 8.13 7.89

25-Feb-16 Thu na na

26-Feb-16 Fri na na

29-Feb-16 Mon 8.62 7.59 7.05 9.61 8.47 7.94

Pound Yen

Dollar

Annualised Forward Premia

E-UpDates March 2016 Surge Research Support

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RBI

LAF

Net Injection(+)/

Absorption(-) of Liquidity

(Rs. billion)*

Repo Rates

(Repo/Reverse

Repo)

Over-

night

Rates

(%)

Call

Money**

CBLO** Mibor USD Libor

01-Feb-16 6.75/5.75% 6.68 6.75 7.02 0.367

02-Feb-16 179.9 6.65 6.77 6.95 0.366

03-Feb-16 175.2 6.63 6.41 6.85 0.369

04-Feb-16 -57.0 6.68 6.69 6.76 0.369

05-Feb-16 -23.7 6.68 6.50 6.76 0.370

06-Feb-16 314.1 7.11 7.00

08-Feb-16 698.5 6.90 7.06 6.97 0.370

09-Feb-16 641.8 6.75 6.93 7.11 0.376

10-Feb-16 420.8 6.84 6.92 7.05 0.377

11-Feb-16 438.4 6.97 6.86 7.07 0.373

12-Feb-16 697.6 6.62 6.85 7.01 0.372

15-Feb-16 474.5 6.86 6.87 6.95 0.371

16-Feb-16 399.3 6.75 6.76 7.00 0.371

17-Feb-16 20.2 6.81 6.45 6.95 0.371

18-Feb-16 344.7 6.37 6.49 6.95 0.370

19-Feb-16 -127.0 6.95 0.371

20-Feb-16

22-Feb-16 179.3 6.82 6.79 6.93 0.371

23-Feb-16 215.3 6.69 6.74 6.90 0.371

24-Feb-16 249.6 6.89 6.84 6.90 0.371

25-Feb-16 200.2 6.67 6.79 6.96 0.372

26-Feb-16 583.0 6.58 6.85 6.94 0.374

29-Feb-16 508.8 6.75/5.75% 7.04 6.84 6.96 0.375

Money Market Rates & Liquidity

Interest Rates

0.3600

0.3650

0.3700

0.3750

0.3800

6.00

6.50

7.00

7.50

1-F

eb-1

6

3-F

eb-1

6

5-F

eb-1

6

7-F

eb-1

6

9-F

eb-1

6

11-F

eb-1

6

13-F

eb-1

6

15-F

eb-1

6

17-F

eb-1

6

19-F

eb-1

6

21-F

eb-1

6

23-F

eb-1

6

25-F

eb-1

6

Call Money Mibor USD Libor

E-UpDates March 2016 Surge Research Support

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Date 3 months 6 months 1 year 2 Year 3 Year 4 Year 5 Year 7 Year 10 Year >10

Year &

<=15

Year

>15

Year &

<= 20

Year

>20

Year

1-Feb-16 7.21 7.21 7.35 7.57 7.65 7.85 7.65 7.99 8.18 8.25

2-Feb-16 7.22 7.26 7.39 7.45 7.60 7.68 7.88 7.69 8.01 8.19 8.28

3-Feb-16 7.33 7.26 7.39 7.64 7.70 7.90 7.73 8.04 8.24 8.31

4-Feb-16 7.31 7.24 7.38 7.44 7.63 7.68 7.89 7.71 8.03 8.24 8.30

5-Feb-16 7.29 7.24 7.38 7.60 7.67 7.88 7.70 8.00 8.20 8.27

8-Feb-16 7.30 7.27 7.37 7.60 7.68 7.91 7.71 7.99 8.21 8.29

9-Feb-16 7.30 7.24 7.26 7.45 7.60 7.68 7.90 7.73 7.99 8.22 8.29

10-Feb-16 7.34 7.26 7.37 7.61 7.68 7.92 7.72 7.99 8.23 8.30

11-Feb-16 7.31 7.24 7.26 7.37 7.62 7.68 7.92 7.71 8.01 8.24 8.29

12-Feb-16 7.30 7.26 7.26 7.37 7.70 7.70 7.93 7.72 8.05 8.26 8.30

15-Feb-16 7.29 7.26 7.39 7.65 7.73 7.95 7.75 8.06 8.24 8.31

16-Feb-16 7.30 7.28 7.40 7.71 7.77 8.00 7.77 8.06 8.26 8.33

17-Feb-16 7.33 7.28 7.26 7.40 7.51 7.71 7.82 7.79 8.08 8.29 8.33

18-Feb-16 7.31 7.29 7.28 7.40 7.52 7.73 7.82 8.03 7.76 8.08 8.27 8.35

19-Feb-16

22-Feb-16 7.30 7.25 7.27 7.42 7.54 7.78 7.85 8.08 7.77 8.11 8.30 8.36

23-Feb-16 7.30 7.37 7.26 7.47 7.54 7.81 7.91 8.14 7.80 8.16 8.33 8.39

24-Feb-16 7.28 7.28 7.27 7.51 7.61 7.86 7.93 8.15 7.81 8.22 8.35 8.42

25-Feb-16 7.27 7.36 7.22 7.63 7.59 7.90 8.00 8.26 7.84 8.22 8.40 8.43

26-Feb-16 7.32 7.41 7.27 7.55 7.69 7.94 8.03 8.21 7.80 8.26 8.38 8.43

29-Feb-16 7.23 7.36 7.45 7.57 7.72 7.78 7.98 7.66 8.13 8.28 8.32

February 2016 7.30 7.29 7.26 7.42 7.54 7.70 7.77 7.99 7.74 8.07 8.27 8.33

Constant Maturity Yields for Government Bonds—February 2016

Debt Market Yields

E-UpDates March 2016 Surge Research Support

13

Debt Market Yields

7.4

07

.29

7.2

67

.30

7.2

7 7.4

07

.43

7.4

7 7.5

47

.55

7.5

6 7.6

87

.73

7.7

07

.74 7.8

17

.84

7.8

67

.88

7.9

27

.88 8

.00

8.0

67

.87 7.9

5 8.0

27

.89 7.9

87

.74

8.0

78

.02

8.0

78

.05

8.1

18

.01

8.0

68

.22

8.2

78

.28

8.2

58

.28

8.2

58

.25 8

.37

8.3

38

.31

8.3

48

.32

8.3

0

7.20

7.40

7.60

7.80

8.00

8.20

8.40

8.60

Apri

l 20

16

Aug

ust

20

16

Jan

uar

y 2

01

7A

pri

l 20

17

July

20

17

Jan

uar

y 2

01

8A

pri

l 20

18

Sep

tem

ber

20

18

Feb

ruar

y 2

01

9Ju

ne

20

19

July

20

19

Jan

uar

y 2

02

0M

ay 2

020

June

20

20

Dec

emb

er 2

02

0A

pri

l 20

21

No

vem

ber

20

21

Feb

ruar

y 2

02

2M

ay 2

022

Aug

ust

20

22

Sep

tem

ber

20

22

May

20

23

No

vem

ber

20

23

Dec

emb

er 2

02

3Ju

ne

20

24

July

20

24

May

20

25

Sep

tem

ber

20

25

Jan

uar

y 2

02

6N

ovem

ber

20

26

Feb

ruar

y 2

02

7A

ug

ust

20

27

Sep

tem

ber

20

27

June

20

28

Mar

ch 2

02

9M

arch

20

30

Sep

tem

ber

20

30

Feb

ruar

y 2

03

2A

ug

ust

20

32

Aug

ust

20

32

No

vem

ber

20

33

Dec

emb

er 2

03

4S

epte

mber

20

35

July

20

40

Dec

emb

er 2

04

1D

ecem

ber

20

42

Dec

emb

er 2

04

3D

ecem

ber

20

44

June

20

45

Wei

ghte

d A

ver

age

YT

Ms

Maturity Year

Yields of Gsecs Traded in February 20168

.31

8.3

0

8.7

3

8.9

9

8.3

4

9.8

0

8.7

6

8.5

5

8.7

8

8.4

5

8.8

3

8.7

9

10

.23

9.3

8

8.7

9

8.7

3

9.3

5

8.8

9

8.7

6

9.0

8

8.6

3

9.2

7

8.4

8

9.1

9

8.7

7

9.3

5

9.1

5

8.5

1

8.5

0

9.0

5

7.3

0

7.3

50.00

2.00

4.00

6.00

8.00

10.00

12.00

Ma

rch

20

17

Oct

ob

er 2

01

7

No

vem

ber

20

18

Feb

rua

ry 2

01

9

Ma

rch

20

19

Ap

ril

20

19

July

20

19

July

20

20

Au

gust

20

20

Dec

emb

er 2

02

0

Jun

e 2

02

1

Jun

e 2

02

1

July

20

24

Au

gust

20

24

Oct

ob

er 2

02

4

Oct

ob

er 2

02

4

No

vem

ber

20

24

Feb

rua

ry 2

02

5

Jun

e 2

02

5

July

20

25

Sep

tem

ber

20

25

Sep

tem

ber

20

25

Oct

ob

er 2

02

5

Oct

ob

er 2

02

5

No

vem

ber

20

25

Dec

emb

er 2

02

5

Dec

emb

er 2

02

5

Dec

emb

er 2

02

5

Dec

emb

er 2

02

5

Dec

emb

er 2

02

5

Feb

rua

ry 2

02

7

Sep

tem

ber

20

28

Wei

ghte

d A

ver

age

YT

Ms

Maturity Year

Yields of Traded Corporate Bonds (AAA) in February 2016

E-UpDates March 2016 Surge Research Support

14

Month/Y

ear

No of co.s

listed*

No. of co.s

traded

Turnover

(Rs.cr)

Average

Daily

Turnover

(Rs.cr)

Market

Capitalisation

(Rs.cr)*

Month

High

Month Low Month-

Closing

P/E P/B Dividend

Yield

Nov-15 5806 2898 50799 2674 9888227 26824.3 25451.4 26145.7 20.61 2.75 1.43

Dec-15 5835 2891 61741 2806 10037734 26256.4 24867.7 26117.5 19.88 2.73 1.43

Jan-16 26197.3 23839.8 24870.7 18.49 2.71 1.45

Month/Y

ear

No of co.s

listed*

No. of co.s

traded

Turnover

(Rs.cr)

Average

Daily

Turnover

(Rs.cr)

Market

Capitalisation

(Rs.cr)*

Month

High

Month Low Month-

Closing

P/E P/B Dividend

Yield

Nov-15 1786 1541 307150 16166 9675669 8116.1 7714.2 7935.3 21.36 3.17 1.44

Dec-15 1794 1549 334954 15225 9831658 7979.3 7551.1 7946.4 21.10 3.13 1.47

Jan-16 7972.6 7241.5 7563.6 20.34 3.02 1.54

*End of the Month.

No. of

contracts

Turnover

(Rs. cr.)

No. of

contracts

Turnover

(Rs. cr.)

No. of contracts Notional

Turnover

(Rs. cr.)

No. of

contracts

Notional

Turnover

(Rs. cr.)

No. of

contracts

Turnover

(Rs. cr.)

Nov-15 7790 405.5 332 16.3 1928905 101611.5 68170 3493.0 2005197 105526.3 5554.0

Dec-15 7353 380.8 551 27.3 2179628 113635.4 121108 6244.1 2308640 120287.5 5467.6

Jan-16

No. of

contracts

Turnover

(Rs. cr.)

No. of

contracts

Turnover

(Rs. cr.)

No. of contracts Notional

Turnover

(Rs. cr.)

No. of

contracts

Notional

Turnover

(Rs. cr.)

No. of

contracts

Turnover

(Rs. cr.)

Nov-15 5139890 289437.9 11876912 597632.5 54497693 3197357.8 5056362 262625.1 76570868 4347054.3 228792.3

Dec-15 5397473 300357.4 12428874 630520.7 58859095 3419733.8 5371176 280559.7 82056618 4631171.6 210507.8

Jan-16 7151353 379135.9 14605105 698909.2 78948191 4391173.3 7127920 359809.8 107832579 5829029.0 291451.5

Total Average

Daily

Turnover

(Rs. cr.)

CNX Nifty (50 Scrips)(Nov.3, 1993=100)NSE Capital Market Segment

BSE Derivatives (F&O) Trades

NSE Derivatives (F&O) Segment

Month/

Year

Index Futures Stock Futures Index Options Stock Options

Derivatives Turnover

Month/

Year

Index Futures Stock Futures Index Options Stock Options Total Average

Daily

Turnover

(Rs. cr.)

STOCK MARKETSEquity Market Turnover

S&P BSE Sensex (30 Scrips) (1978-79=100)BSE Equity Market

E-UpDates March 2016 Surge Research Support

15

Open High Low Close Price/Earnings Price/Bookvalue Dividend Yield

01-Feb-16 24982.2 25002.3 24788.6 24824.8 18.50 2.72 1.45

02-Feb-16 24868.2 24928.8 24460.5 24539.0 18.24 2.68 1.47

03-Feb-16 24393.6 24409.3 24187.5 24223.3 17.99 2.64 1.49

04-Feb-16 24386.5 24514.0 24224.7 24338.4 18.08 2.63 1.47

05-Feb-16 24360.4 24672.9 24345.8 24617.0 18.30 2.66 1.45

08-Feb-16 24637.4 24699.0 24196.8 24287.4 18.01 2.62 1.48

09-Feb-16 24076.9 24111.2 23919.5 24021.0 17.77 2.59 1.50

10-Feb-16 23938.3 23938.3 23636.7 23758.9 17.61 2.56 1.52

11-Feb-16 23758.5 23758.5 22909.1 22951.8 16.92 2.46 1.58

12-Feb-16 23060.4 23161.2 22600.4 22986.1 16.95 2.47 1.58

15-Feb-16 23223.4 23622.6 23197.7 23554.1 17.40 2.53 1.53

16-Feb-16 23688.6 23692.1 23164.5 23192.0 17.05 2.48 1.56

17-Feb-16 23237.2 23434.9 22920.8 23381.9 17.17 2.50 1.55

18-Feb-16 23536.5 23735.4 23448.2 23649.2 17.36 2.53 1.53

19-Feb-16 23640.3 23774.5 23508.4 23709.2 17.40 2.53 1.53

22-Feb-16 23783.5 23855.0 23674.9 23788.8 17.45 2.54 1.51

23-Feb-16 23850.4 23851.5 23361.9 23410.2 17.19 2.50 1.54

24-Feb-16 23332.9 23338.9 23057.5 23088.9 16.94 2.47 1.56

25-Feb-16 23105.2 23143.0 22948.1 22976.0 16.82 2.45 1.57

26-Feb-16 23141.1 23227.9 23021.9 23154.3 16.95 2.47 1.56

29-Feb-16 23238.5 23343.2 22494.6 23002.0 16.91 2.46 1.56

Open High Low Close Price/Earnings Price/Bookvalue Dividend Yield

01-Feb-16 7589.5 7600.5 7541.3 7556.0 20.22 3.03 1.53

02-Feb-16 7566.7 7576.3 7428.1 7455.6 19.90 2.99 1.55

03-Feb-16 7392.5 7419.4 7350.3 7361.8 19.65 2.95 1.57

04-Feb-16 7411.5 7457.1 7366.0 7404.0 19.76 2.97 1.56

05-Feb-16 7418.3 7503.2 7406.7 7489.1 19.99 3.00 1.54

08-Feb-16 7489.7 7512.6 7363.2 7387.3 19.69 2.96 1.57

09-Feb-16 7304.0 7323.5 7275.2 7298.2 19.46 2.93 1.58

10-Feb-16 7264.3 7271.9 7177.8 7215.7 19.27 2.89 1.60

11-Feb-16 7203.6 7208.7 6960.0 6976.4 18.65 2.80 1.66

12-Feb-16 7023.7 7034.8 6869.0 6981.0 18.67 2.80 1.66

15-Feb-16 7057.4 7182.8 7056.8 7163.0 19.32 2.87 1.61

16-Feb-16 7201.3 7204.7 7037.7 7048.3 19.01 2.83 1.64

17-Feb-16 7058.9 7123.7 6960.7 7108.5 19.18 2.85 1.63

18-Feb-16 7177.4 7215.1 7127.9 7191.8 19.44 2.89 1.61

19-Feb-16 7170.6 7226.9 7146.0 7210.8 19.50 2.89 1.60

22-Feb-16 7208.9 7252.4 7200.7 7234.6 19.56 2.90 1.60

23-Feb-16 7240.3 7241.7 7090.7 7109.6 19.23 2.85 1.63

24-Feb-16 7075.0 7090.8 7009.8 7018.7 18.98 2.82 1.65

25-Feb-16 7029.9 7034.2 6961.4 6970.6 18.85 2.80 1.66

26-Feb-16 7039.3 7052.9 6985.1 7029.8 19.01 2.82 1.65

29-Feb-16 7050.5 7094.6 6825.8 6987.1 18.90 2.81 1.66

Index MovementsBSE: S&P BSE Sensex (30 Scrips) (1978-79=100)

NSE: CNX Nifty (50 Scrips) (Nov.3, 1993=100)

E-UpDates March 2016 Surge Research Support

16

6825

6925

7025

7125

7225

7325

7425

7525

2245022650

228502305023250234502365023850240502425024450246502485025050

01-F

eb-1

6

02-F

eb-1

6

03-F

eb-1

6

04-F

eb-1

6

05-F

eb-1

6

08-F

eb-1

6

09-F

eb-1

6

10-F

eb-1

6

11-F

eb-1

6

12-F

eb-1

6

15-F

eb-1

6

16-F

eb-1

6

17-F

eb-1

6

18-F

eb-1

6

19-F

eb-1

6

22-F

eb-1

6

23-F

eb-1

6

24-F

eb-1

6

25-F

eb-1

6

26-F

eb-1

6

29-F

eb-1

6

Sensex High Low Nifty High Low

FUTIDX-NIFTY Futures

(Expiry 25 February '16)

Open High Low Close No. of Contracts Turnover ('00,000) Change in OI

01-Feb-16 7593.5 7606.8 7551.0 7565.4 124799 709341 690000

02-Feb-16 7566.2 7594.5 7448.0 7475.0 202973 1146729 -731175

03-Feb-16 7408.0 7433.0 7375.0 7383.5 161319 895342 129075

04-Feb-16 7421.1 7478.7 7377.5 7422.7 173559 967157 -553875

05-Feb-16 7431.3 7529.0 7425.6 7519.2 176039 988580 -420450

08-Feb-16 7495.0 7534.5 7369.6 7393.5 186483 1043900 810975

09-Feb-16 7305.0 7353.9 7295.6 7325.1 185925 1021408 -741000

10-Feb-16 7268.0 7293.4 7194.1 7246.6 242379 1318175 104250

11-Feb-16 7205.0 7215.0 6970.2 6993.5 296451 1576963 1090875

12-Feb-16 7030.0 7043.0 6875.6 6990.0 301936 1579219 1071825

15-Feb-16 7064.8 7194.8 7059.0 7161.5 204947 1098566 -401625

16-Feb-16 7202.3 7208.5 7042.5 7054.1 227590 1214998 762300

17-Feb-16 7059.8 7134.3 6967.3 7120.9 257745 1362488 -84150

18-Feb-16 7186.1 7225.0 7126.5 7190.9 229991 1238168 524325

19-Feb-16 7174.5 7236.9 7151.0 7212.5 173846 938171 -1076700

22-Feb-16 7221.0 7257.7 7211.1 7240.7 141147 765871 -1941150

23-Feb-16 7237.8 7237.8 7096.5 7113.1 270895 1452310 -4278825

24-Feb-16 7135.8 7135.8 7008.3 7019.1 249884 1322699 -2980350

25-Feb-16 7015.0 7030.0 6961.3 6968.5 244599 1282971 -2177550

E-UpDates March 2016 Surge Research Support

17

Equity Gross

Purchases (Rs

Crores)

Gross Sales

(Rs Crores)

Net Investment

(Rs Crores)

01-Feb-16 710.9 1090.3 -379.4

02-Feb-16 767.2 1174.3 -407.1

03-Feb-16 847.2 1119.8 -272.6

04-Feb-16 1234.9 955.4 279.5

05-Feb-16 1503.9 1050.7 453.2

08-Feb-16 906.6 779.4 127.2

09-Feb-16 998.6 772.8 225.9

10-Feb-16 1305.9 926.3 379.7

11-Feb-16 1479.7 975.3 504.4

12-Feb-16 1850.1 1605.6 244.5

15-Feb-16 1788.4 903.4 885.0

16-Feb-16 742.8 570.2 172.6

17-Feb-16 855.2 643.5 211.7

18-Feb-16 964.9 617.5 347.4

19-Feb-16 614.2 589.1 25.1

22-Feb-16 766.6 482.7 283.8

23-Feb-16 885.5 675.6 209.9

24-Feb-16 897.6 513.3 384.3

25-Feb-16 1948.2 1339.2 609.1

26-Feb-16 1398.3 752.6 645.7

29-Feb-16 1782.7 766.6 1016.1

Total for February 24249.4 18303.6 5946

Debt Gross

Purchases (Rs

Crores)

Gross Sales

(Rs Crores)

Net Investment

(Rs Crores)

01-Feb-16 7178.8 4531.5 2647.3

02-Feb-16 4773.9 2666.6 2107.3

03-Feb-16 3634.7 2954.8 679.9

04-Feb-16 3445.4 2588.3 857.1

05-Feb-16 6845.2 4728.7 2116.5

08-Feb-16 3647.8 2898.8 749

09-Feb-16 7183.5 6709.9 473.6

10-Feb-16 4146.1 4783.8 -637.7

11-Feb-16 4746.2 6616.6 -1870.3

12-Feb-16 4776.1 5211.6 -435.5

15-Feb-16 3995.7 3491.2 504.6

16-Feb-16 4495.8 5601.9 -1106.1

17-Feb-16 5392.3 3718.3 1674.1

18-Feb-16 8565.7 4493.1 4072.6

19-Feb-16 24.8 25.3 -0.5

22-Feb-16 5830.6 4112.7 1717.8

23-Feb-16 5905.6 3587.1 2318.5

24-Feb-16 6126.6 4284.6 1842.1

25-Feb-16 11126.7 5333 5793.7

26-Feb-16 7171.6 4376.7 2794.9

29-Feb-16 7960.1 5573.2 2386.9

Total for February 116973.2 88287.7 28685.8

Capital FlowsMutual Funds Investment Trends

E-UpDates March 2016 Surge Research Support

18

Mutual Funds Asset

Position (Rs. Crore)

April 2015-January 2016Private Sector

Mutual Funds

Public Sector

Mutual Funds (of which) UTI Total

10,61,555.9 2,12,156.6 98,981.7 12,73,712.4

83.34% 16.66% 7.77% 100.00%Cumulative Position of Net Assets as on

January 31, 2016 (%)

111,71,945.1

Net Inflow/ Outflow (-ve) of funds 1,37,328.8 46,936.7 20,742.6 1,84,265.6

Mobilisation of Funds 90,87,901.8 20,84,043.3 8,80,644.4

ECB Dec-15 Jan-16

Automatic Route 1,906,037,997 1,391,579,793

Approval Route 1,128,255,075 38,30,089

Total ECB 3,034,293,072 1,395,409,882

Value in US$.

01-Feb-16 1275.69 916.05 359.64 52.98

02-Feb-16 2255.26 640.15 1615.11 238.66

03-Feb-16 1255.17 1158.84 96.33 14.2

04-Feb-16 791.53 1316.79 -525.26 -77.04

05-Feb-16 599.17 180.05 419.12 61.81

08-Feb-16 879.48 1346.24 -466.76 -69.01

09-Feb-16 427.29 33.45 393.84 58.07

10-Feb-16 209.5 299.98 -90.48 -13.27

11-Feb-16 146.47 395.97 -249.5 -36.76

12-Feb-16 2946.99 4746.8 -1799.81 -264.62

15-Feb-16 4907.77 5997.64 -1089.87 -159.25

16-Feb-16 583.35 1110.17 -526.82 -77.32

17-Feb-16 640.56 330.83 309.73 45.33

18-Feb-16 1232.26 1027.32 204.94 29.88

22-Feb-16 387.85 1120.72 -732.87 -107

23-Feb-16 805.63 2203.52 -1397.89 -203.92

24-Feb-16 1201.39 3050.42 -1849.03 -269.39

25-Feb-16 271.39 1575.62 -1304.23 -190.21

26-Feb-16 509.99 1555.09 -1045.1 -152.35

29-Feb-16 758.76 2527.97 -1769.21 -257.23

Total for February 14449.25 22644 -8194.75 -1192.2

Total for 2016 34587.86 40469.88 -5882.02 -844.52

Gross Sales

(Rs Crores)Net Investment

(Rs Crores)

Net

Investment

US$ million

FPI Investments in Primary & Secondary Markets

Debt Gross

Purchases

(Rs Crores)

E-UpDates March 2016 Surge Research Support

19

01-Feb-16 5714.0 4954.1 759.8 111.9

02-Feb-16 4281.4 3876.8 404.7 59.8

03-Feb-16 4102.3 4168.3 -66.0 -9.7

04-Feb-16 3178.4 3495.7 -317.3 -46.6

05-Feb-16 3123.4 3301.0 -177.6 -26.2

08-Feb-16 3139.1 3606.6 -467.5 -69.1

09-Feb-16 1875.9 1914.9 -39.1 -5.8

10-Feb-16 1984.4 2620.5 -636.1 -93.3

11-Feb-16 3759.0 4264.2 -505.2 -74.4

12-Feb-16 2942.0 4151.8 -1209.8 -177.9

15-Feb-16 4694.3 4737.9 -43.6 -6.4

16-Feb-16 3668.0 4791.0 -1123.1 -164.8

17-Feb-16 2941.8 3730.5 -788.7 -115.4

18-Feb-16 3125.3 3419.0 -293.7 -42.8

22-Feb-16 6853.6 6233.7 619.9 90.5

23-Feb-16 2750.1 3031.8 -281.7 -41.1

24-Feb-16 4281.3 3470.0 811.3 118.2

25-Feb-16 2972.8 3493.4 -520.6 -75.9

26-Feb-16 4965.0 6027.9 -1062.9 -154.9

29-Feb-16 2834.3 3418.6 -584.3 -85.0

Total for February 73186.3 78707.7 -5521.4 -808.9

Total for 2016 143928.0 160575.9 -16647.8 -2456.3

Equity Gross

Purchases (Rs

Crores)

Gross Sales

(Rs Crores)Net Investment

(Rs Crores)

Net

Investment

US$ Million

-1200.0

-800.0

-400.0

0.0

400.0

800.0

1200.0

1-Feb-16

8-Feb-16

15-Feb-16

22-Feb-16

29-Feb-16

Net Flows (Rs.Cr.)

FPI Equity

MF Equity

Foreign Investment 2014-15* 2015-16* Dec-15 Jan-16

Foreign Investment Inflows 29,477.0 38,717.0 5,068.0 5,343.0

Net Direct Investments 26,449.0 31,678.0 3,598.0 4,413.0

Net Portfolio Inflows 35,122.0 –12,589 –2,568 –1,969

*April-January; US$ million.

E-UpDates March 2016 Surge Research Support

20

Date Futures Spot Futures Spot Futures Spot Futures Spot Futures Spot

01-Feb-16 3155.0 3166.9 1645.0 1710.8 612.5 615.0 2278.0 2282.0 26987.0 26778.0

02-Feb-16 3079.0 3153.4 1636.0 1705.0 615.8 615.0 2200.0 2146.0 26963.0 26867.0

03-Feb-16 3063.0 3153.4 1615.0 1705.0 617.5 616.2 2290.0 2027.0 27265.0 27052.0

04-Feb-16 3070.0 3145.0 1620.0 1706.3 618.1 615.4 2303.0 2201.0 27422.0 27221.0

05-Feb-16 3053.0 3146.3 1612.0 1704.3 620.2 615.4 2291.0 2151.0 27524.0 27486.0

08-Feb-16 3054.0 3160.0 1614.0 1705.0 620.1 614.0 2198.0 2089.0 28458.0 27789.0

09-Feb-16 3096.0 3160.0 1608.0 1705.0 617.0 612.0 2075.0 2014.0 28437.0 28199.0

10-Feb-16 3124.0 3172.5 1594.0 1705.0 613.1 610.2 2061.0 1904.0 28317.0 28199.0

11-Feb-16 3176.0 3214.6 1587.0 1707.5 628.5 611.3 2023.0 1863.0 29791.0 28934.0

12-Feb-16 3140.0 3255.0 1576.0 1710.4 629.1 616.7 2180.0 1783.0 29386.0 29305.0

15-Feb-16 3130.0 3223.1 1590.0 1706.3 625.4 615.0 2202.0 2015.0 28690.0 28459.0

16-Feb-16 3130.0 3226.8 1594.0 1707.5 626.1 615.9 2147.0 2015.0 28899.0 28654.0

17-Feb-16 3135.0 3230.0 1572.0 1707.9 632.8 615.7 2282.0 1984.0 28888.0 28473.0

18-Feb-16 3125.0 3215.9 1568.0 1713.1 630.7 617.3 2295.0 2103.0 29309.0 28560.0

19-Feb-16 3074.0 3209.6 1571.0 1715.0 627.1 618.1 2203.0 2108.0 29515.0 28918.0

22-Feb-16 3085.0 3195.4 1571.0 1731.4 625.8 621.5 2329.0 2030.0 28966.0 28598.0

23-Feb-16 3133.0 3215.0 1578.0 1727.2 620.3 620.0 2200.0 2289.0 29302.0 28840.0

24-Feb-16 3164.0 3219.6 1578.0 1725.0 615.1 616.2 2220.0 2188.0 29554.0 29154.0

25-Feb-16 3181.0 3231.6 1574.0 1725.4 615.5 616.8 2202.0 2204.0 29774.0 29177.0

26-Feb-16 3181.0 3246.7 1588.0 1728.3 622.2 616.7 2316.0 2269.0 29337.0 29187.0

29-Feb-16 3194.0 3252.5 1588.0 1728.8 615.2 616.6 2321.0 2255.0 29513.0 29181.0

*National Commodity & Derivatives Exchange Ltd. **Multi Commodity Exchange of India. Futures: March contract; Gold: April contract.

Commodity Futures & Spot MarketsCommodity Futures & Spot Prices

Sugar* Wheat* Refined Soya Oil* Energy: Crude Oil** Bullion: Gold**

(100 Kgs) (100 Kgs) (10 Kgs) (1 Bbl.) (10 Grams)

E-UpDates March 2016 Surge Research Support

21

MCXCOMDEX MCXAGRI MCXMETAL MCXENERGY NCDEX-Futures NCDEX-Spot

01-Feb 2583.94 2066.10 3992.45 1692.75 2676.34 2674.25

02-Feb 2555.74 2064.16 3982.15 1630.68 2669.95 2669.63

03-Feb 2605.68 2084.77 4045.42 1686.97 2668.39 2668.31

04-Feb 2612.20 2084.63 4065.14 1684.27 2670.59 2671.11

05-Feb 2597.34 2077.33 4027.27 1687.15 2672.23 2670.79

08-Feb 2614.59 2069.82 4121.45 1641.57 2682.62 2684.55

09-Feb 2568.25 2074.53 4078.36 1561.83 2696.69 2699.27

10-Feb 2548.94 2060.24 4053.00 1544.13 2695.36 2699.95

11-Feb 2580.80 2086.46 4148.95 1517.89 2719.83 2716.15

12-Feb 2612.00 2093.49 4136.88 1607.58 2715.80 2713.36

15-Feb 2610.54 2105.24 4118.21 1616.58 2729.09 2725.63

16-Feb 2606.23 2110.22 4141.84 1579.24 2726.30 2725.80

17-Feb 2642.36 2121.17 4143.74 1665.81 2744.63 2743.58

18-Feb 2654.04 2112.28 4178.83 1665.53 2732.07 2731.90

19-Feb 2655.71 2110.71 4229.81 1619.67 2711.86 2709.51

22-Feb 2685.03 2109.51 4219.11 1707.22 2700.59 2699.87

23-Feb 2663.05 2105.00 4222.83 1648.60 2687.91 2689.01

24-Feb 2685.59 2093.03 4249.48 1686.53 2693.20 2693.93

25-Feb 2683.50 2110.65 4234.38 1687.39 2692.82 2692.69

26-Feb 2706.74 2119.67 4232.66 1745.04 2707.80 2711.12

29-Feb 2700.49 2084.97 4234.60 1744.20 2686.19 2690.58

Multi Commodity Exchange of India and National Commodity & Derivatives Exchange Ltd: Index Close

Commodity Futures Indices

1450.00

1650.00

1850.00

2050.00

2250.00

2450.00

2650.00

2850.00

3050.00

3250.00

3450.00

3650.00

3850.00

4050.00

4250.00

1-F

eb

3-F

eb

5-F

eb

7-F

eb

9-F

eb

11-F

eb

13-F

eb

15-F

eb

17-F

eb

19-F

eb

21-F

eb

23-F

eb

25-F

eb

27-F

eb

29-F

eb

MCXCOMDEX MCXMETAL MCXENERGY

MCXAGRI NCDEX-Futures NCDEX-Spot

E-UpDates March 2016 Surge Research Support

22

Stock

Market

Country Risk

Indicator/

Country

(per US$)

Q4 Feb

USA 1.9 Jan -0.7 1.4 -1.2 0.64 1.82 Jan -760.0 Jan/117.2 -2.7 AA+/Stable

Canada 0.5 Dec -2.2 2.0 1.7 0.82 1.25 1.33 Jan -17.8 81.2 7.5 AAA/Stable

UK 1.9 Jan 0.2 0.3 -1.0 0.57 1.56 0.70 Dec -191.1 134.3 -5.0 AAA/-ve

Euro area 1.6 Dec -1.3 0.3 -2.9 -0.22 0.24 0.91 Dec 273.4 Jan/332.9 -6.0 AA+/-ve

Germany 1.3 Jan 2.3 0.5 -2.4 -0.22 0.24 0.91 Dec 274.8 -8.3 AAA/Stable

France 1.4 Dec -0.7 0.2 -2.5 -0.22 0.58 0.91 Jan -48.9 -3.3 AA/-ve

Italy 1.0 Dec -1.0 0.3 -3.0 -0.22 1.41 0.91 Dec 49.8 -13.8 BBB-/Stable

Spain 3.5 Jan 0.6 -0.3 -4.3 -0.22 1.64 0.91 Dec -26.9 -7.0 BBB+/Stable

Russia Q3/-4.1 Jan -2.6 9.8 7.5 12.5 9.2 71.1 Dec 146.3 380.5 10.4 BB+/-ve

Japan 0.7 Jan -3.8 -0.1 -3.4 -0.01 -0.11 113.00 Jan -1.6 1254.1 -6.8 A+/ Stable

China 6.8 Dec 5.9 1.8 -4.9 2.80 2.66 6.52 Feb 576.6 3223.0 -19.4 AA-/Stable

Hong Kong 1.9 Q3 -2.0 2.7 0.57 1.29 7.77 Jan -54.6 359.3 -8.9 AAA/Stable

Malaysia 4.5 Dec 2.7 3.5 3.79 3.90 4.13 Jan 22.7 95.6 3.6 A-/Stable

Singapore 1.8 Jan -0.5 -0.6 .. 2.08 1.38 Jan 48.4 244.0 0.3 AAA/Stable

South Korea 3.0 Jan -1.9 0.8 -3.3 1.53 1.84 1216.00 Feb 89.6 365.8 -4.0 AA-/Stable

Taiwan -0.5 Jan -5.7 0.8 0.80 0.81 32.9 Feb 15.0 428.8 3.3 AA-/Stable

Thailand 2.8 Jan -3.3 -0.5 1.46 2.12 35.3 Jan 12.4 167.7 10.0 BBB+/Stable

Brazil -5.9 Jan -13.8 10.7 14.1 14.6 3.69 Feb 29.7 359.4 20.2 BB/-ve

Chile 2.2 Jan -8.3 4.8 0.47 4.44 677.00 Feb 3.9 38.3 7.7 AA-/ Stable

Mexico 2.5 Dec 0.0 2.6 4.06 6.17 17.80 Jan -14.6 176.0 0.6 BBB+/Stable

South Africa 0.6 Dec -0.5 6.2 7.6 7.02 9.27 15.30 Jan -1.7 45.7 3.2 BBB-/-ve

India 7.3 Dec -1.3 5.7 -0.9 7.23 7.65 67.2 Jan -124.8 346.8 -6.6 BBB-/Stable

Note: Trade balance for last 12 months. FX Reserves at end of period.

*Per cent change of the major index in US$ terms between 31st December 2015 and March 09, 2016. **Foreign Currency Ratings by S&P.

For more Countrywise Indicators and Updates visit: http://www.ecofin-surge.co.in/publications.html

(%) (US$ bn.)

FX

Reserves

Economic & Financial Market Indicators for Major Global Economies

Growth Inflation Interest Rates External Sector

Global Economic Indicators

Jan 09-Mar

GDP Short-

term

Rate

Long-

term

Rate

Exchange

Rate

Trade BalanceIIP CPI PPI Share

Price

Growth*

Sovereign

Rating**

(% change on year ago)

3.4

3.1

3.4

3.63.9

3.5

3.33.4

3.3 3.4

2.6

3.4

2.4

2.6

2.8

3.0

3.2

3.4

3.6

3.8

4.0

4.2

2014 2015 2016 2017

World Output, Inflation & Trade (% change, IMF, WEO Database & Updates)

GDP Inflation Trade

E-UpDates March 2016 Surge Research Support

23

S&P BSE

Sensex

(India)

DJI (US) S&P

500(US)

FTSE

100(UK)

NIKKEI

225 (Japan)

HSI

(HongKong)

STI

(Singapore)

IPC

(Mexico)

BOVESPA

(Brazil)

01-Feb-16 24,824.83 16,449.18 1,939.38 6,060.10 17,865.23 19,595.50 2,602.41 43,630.77 40,570.00

02-Feb-16 24,539.00 16,153.54 1,903.03 5,922.00 17,750.68 19,446.84 2,579.23 43,092.49 38,596.00

03-Feb-16 24,223.32 16,336.66 1,912.53 5,837.10 17,191.25 18,991.59 2,550.74 43,257.54 39,589.00

04-Feb-16 24,338.43 16,416.58 1,915.45 5,898.80 17,044.99 19,183.09 2,558.49 43,751.93 40,822.00

05-Feb-16 24,616.97 16,204.97 1,880.05 5,848.10 16,819.59 19,288.17 2,623.21 43,229.67 40,592.00

08-Feb-16 24,287.42 16,027.05 1,853.44 5,689.40 17,004.30 42,774.85

09-Feb-16 24,020.98 16,014.38 1,852.21 5,632.20 16,085.44 42,399.19

10-Feb-16 23,758.90 15,914.74 1,851.86 5,672.30 15,713.39 2,582.10 42,535.74 40,377.00

11-Feb-16 22,951.83 15,660.18 1,829.08 5,537.00 18,545.80 2,538.28 42,359.26 39,318.00

12-Feb-16 22,986.12 15,973.84 1,864.78 5,707.60 14,952.61 18,319.58 2,539.95 42,416.44 39,808.00

15-Feb-16 23,554.12 5,824.30 16,022.58 18,918.14 2,607.90 43,205.91 40,093.00

16-Feb-16 23,191.97 16,196.41 1,895.58 5,862.20 16,054.43 19,122.08 2,644.58 43,100.32 40,948.00

17-Feb-16 23,381.87 16,453.83 1,926.82 6,030.30 15,836.36 18,924.57 2,613.79 43,585.23 41,631.00

18-Feb-16 23,649.22 16,413.43 1,917.83 5,972.00 16,196.80 19,363.08 2,657.57 43,516.66 41,478.00

19-Feb-16 23,709.15 16,391.99 1,917.78 5,950.20 15,967.17 19,285.50 2,656.87 43,375.31 41,543.00

22-Feb-16 23,788.79 16,620.66 1,945.50 6,037.70 16,111.05 19,464.09 2,660.65 43,546.72 43,235.00

23-Feb-16 23,410.18 16,431.78 1,921.27 5,962.30 16,052.05 19,414.78 2,672.07 43,216.58 42,521.00

24-Feb-16 23,088.93 16,484.99 1,929.80 5,867.20 15,915.79 19,192.45 2,619.96 42,744.91 42,085.00

25-Feb-16 22,976.00 16,697.29 1,951.70 6,012.80 16,140.34 18,888.75 2,603.40 43,434.55 41,888.00

26-Feb-16 23,154.30 16,639.97 1,948.05 6,096.00 16,188.41 19,364.15 2,649.38 43,473.37 41,593.00

29-Feb-16 23,002.00 16,516.50 1,932.23 6,097.10 16,026.76 19,111.93 2,666.51 43,714.93 42,794.00

Closing Values

International Stock Index Movements vs S&P BSE Sensex (February-2016, with 1st February=100)

Global Stock IndicesSelected Indian & International Stock Indices

DJI (US) S&P 500 (US)FTSE 100(UK) NIKKEI 225 (Japan)

HSI (HongKong) STI (Singapore) IPC (Mexico) BOVESPA (Brazil)

E-UpDates March 2016 Surge Research Support

24

Units Descriptor Dec-14 Jan-15 Feb-15 Dec-15 Jan-16 Feb-16

Index Number Fuel and Non-Fuel 130.87 114.80 120.88 90.73 83.15 84.83

Index Number Non-Fuel 150.75 145.68 142.39 121.67 121.30 123.01

Index Number Food 158.19 153.27 147.68 132.39 134.19 134.92

Index Number Agricultural Raw Materials 131.87 130.28 130.65 109.42 108.76 108.86

Index Number Industrial Inputs 141.64 136.11 134.51 106.89 105.82 108.88

Index Number Metals 148.70 140.32 137.29 105.06 103.70 108.89

Index Number Energy 119.24 96.74 108.30 72.64 60.83 62.50

Index Number Crude Oil 113.88 89.15 103.47 68.60 56.05 58.32

USD per Barrel Crude Oil, Brent 62.16 48.42 57.93 37.72 30.80 33.20

USD per Barrel Crude Oil Dubai Fateh 60.39 46.34 56.15 34.70 27.25 29.61

USD per Barrel Crude Oil WTI 59.10 47.60 50.72 37.24 31.70 30.35

USD per Million Metric British Thermal

Unit

Natural Gas, H H, Louisiana 3.43 2.97 2.85 1.92 2.27 1.96

USD per Metric Ton Coal, Australian Thermal 66.90 66.54 65.79 55.85 53.37 54.54

USD per Metric Ton Aluminum 1909.46 1814.72 1817.82 1497.20 1481.10 1531.26

USD per Metric Ton Copper 6446.45 5830.54 5729.28 4638.83 4471.79 4598.62

USD per Metric Ton Zinc 2175.76 2113.05 2097.76 1527.79 1520.36 1709.85

US Cents per Metric Ton Iron Ore 68.80 67.39 62.69 39.60 41.25 46.18

US cents per Pound Rubber 72.72 75.03 82.03 56.59 55.33 57.04

US cents per Pound Cotton 68.30 67.35 69.84 70.39 68.75 66.57

USD per Metric Ton Palm oil 624.54 641.60 634.38 520.60 531.62 595.90

USD per Metric Ton Sunflower Oil 1049.03 1004.20 960.52 1022.14 1020.14 1039.58

USD per Metric Ton Soybean Oil 705.56 707.88 697.94 677.20 659.90 686.90

USD per Metric Ton Soybeans 378.78 367.49 364.74 323.32 323.20 320.13

US cents per Pound Sugar, European 26.02 25.17 25.49 24.93 23.95 23.77

US cents per Pound Sugar, Free Market 14.99 15.06 14.51 15.00 14.29 13.29

US cents per Pound Sugar, U.S. 24.81 25.24 24.62 25.83 25.83 25.50

US cents per Kg. Tea 243.31 269.62 296.35 343.49 319.83 287.26

US cents per Pound Coffee, Arabicas 200.59 190.90 179.94 149.52 146.32 148.94

USD per Metric Ton Rice, Bangkok 410.74 409.68 409.50 354.35 359.48 373.33

USD per Metric Ton Wheat, US 232.97 210.61 201.71 163.79 164.56 159.25

*Base 2005=100

Primary Commodity Indices*/ Prices

Global Commodity Prices

0 50 100 150 200 250

2014

2015

2016

2017

Observed & Projected Price Movements, IMF WEO DatabaseFuel and Non-Fuel Price Indices

Food Price Index includes Cereal, Vegetable

Oils, Meat, Seafood, Sugar, Bananas, and Oranges Industrial Inputs Price Index includes

Agricultural Raw Materials and Metals

Agricultural Raw Materials Index includes

Timber, Cotton, Wool, Rubber, and Hides PriceCrude Oil Index(Petroleum), Brent, West

Texas Intermediate, and the Dubai Fateh

Metals Price Index, Copper, Aluminum, Iron

Ore, Tin, Nickel, Zinc, Lead, and Uranium Price Indices

E-UpDates March 2016 Surge Research Support

25

Following are some highlights of the Union Budget 2016-17

� Nine pillars of the Budget — Agriculture and farmers' welfare, rural sector, social sector including healthcare, education, skills

and job creation, infrastructure, financial sector reforms, ease of doing business, fiscal discipline, tax reforms to reduce compliance

burden.

� To give statutory status to Aadhaar programme

� Create closer engagement between states and districts

� Continue with the ongoing reform programme and ensure passage of the Goods and Service Tax bill and Insolvency and

Bankruptcy law

FISCAL DEFICIT

• Fiscal deficit in RE 2015-16 and BE 2016-17 retained at 3.9% and 3.5%.

• Revenue Deficit target from 2.8% to 2.5% in RE 2015-16

• Total expenditure projected at Rs. 19.78 lakh crore

• Plan expenditure pegged at Rs. 5.50 lakh crore under Plan, increase of 15.3%

• Non-Plan expenditure kept at Rs. 14.28 lakh crores.

• Rs. 1,060 crore revenue loss through direct tax proposals, and Rs. 20,670 crore revenue gain through indirect tax proposals.

• Total resources going to States including the devolution of State’s share in taxes, Plan and Non Plan grants/loans, and

releases under centrally sponsored scheme in BE (2016-17) is Rs. 9,11,330 crore, with a jump of Rs. 99,846 crore over RE

(2015-16) and Rs. 2,43,093 crore more than the Actual (2014-15).

• Mobilisation of additional finances to the extent of Rs. 31,300 crore by NHAI, PFC, REC, IREDA, NABARD and Inland

Water Authority by raising Bonds.

• Plan / Non-Plan classification to be done away with from 2017-18. Every new scheme sanctioned will have a sunset date

and outcome review.

• Rationalised and restructured more than 1500 Central Plan Schemes into about 300 Central Sector and 30 Centrally

Sponsored Schemes.

• Committee to review the implementation of the FRBM Act.

TAXES

• Companies with revenue less than Rs 5 crore to be taxed at 29% plus surcharge

• Tax holiday for startups setup between April, 2016 to March, 2019, for three of five years of setting up the company. MAT will be

applicable for startups that qualify for 100 per cent tax exemption.

• Increase the turnover limit under Presumptive taxation scheme under section 44AD of the Income Tax Act to Rs. 2 crores to bring

relief to a large number of assessees in the MSME category.

• Corporate IT rate for companies not exceeding Rs. 5 crore turnover lowered of to 25% plus surcharge.

• Limited tax compliance window from Jun 1 - Sep 30 for declaring undisclosed income by paying tax at 30%, and surcharge at

7.5% and penalty at 7.5%, which is a total of 45% of the undisclosed income. Declarations will have immunity from prosecution..

• Excise duty raised from 10 to 15 per cent on tobacco products other than beedis.

• Excise 1 per cent imposed on articles of jewellery, excluding silver.

• 1 per cent service charge on purchase of luxury cars over Rs. 10 lakh and in-cash purchase of goods and services over Rs. 2 lakh.

• SUVs, Luxury cars to be more expensive. 4% high capacity tax for SUVs.

• Infrastructure and agriculture cess to be levied. 0.5 per cent Krishi Kalyan Cess to be levied on all services.

• Pollution cess of 1 per cent on small petrol, LPG and CNG cars; 2.5 per cent on diesel cars of certain specifications; 4 per cent on

higher-end models.

• Dividend in excess of Rs. 10 lakh per annum to be taxed at additional 10 per cent.

• 13 different cesses levied by various ministries with collections less than Rs.50 crore a year to be done away with.

• Long term capital gains for unlisted companies to be reduced from 3 to 2 years.

• Dividend distribution tax on Real Estate Investment Trusts (REITs) removed to help developers to raise funds.

E-UpDates March 2016 Surge Research Support

26

PERSONAL FINANCE

• No changes have been made to existing income tax slabs.

• Relief for tax payers who earn below Rs 5 lakh; ceiling of rebate u/s 87A raised to Rs 5,000 from Rs 2,000.

• 15 per cent surcharge on income above Rs. 1 crore.

• 40% of withdrawal at the time of retirement under National Pension Scheme to be tax exempt.

• Deduction for rent paid will be raised from Rs 20,000 to Rs 60,000 to benefit those living in rented houses.

• Additional exemption of Rs. 50,000 for housing loans up to Rs. 35 lakh, provided cost of house is not above Rs. 50 lakh.

• 100% deduction for profits in housing project for flats up to 30 sq metres in four metros; 60 sq mts in other cities, approved during

June 2016 to March 2019 and completed in 3 years. MAT to apply.

INVESTMENTS AND INFRASTRUCTURE

• Total outlay for infrastructure in Budget 2016 stands at Rs. 2,21,246 crore.

• 65 eligible habitats to be connected via 2.23 lakh kms of road. Current construction pace is 100 kms/day. Pace of completion of

road projects to rise to 10,000 km in 2016-17.

• Rs. 55,000 crore for roads and highways. Total allocation for road construction, including PMGSY, - Rs 97,000 crore.

• New greenfield ports to be developed on east and west coasts.

• Centre to partner with States to revive small airports for regional connectivity.

• Further relaxation of FDI rules in insurance, pension, stock exchanges, asset reconstruction companies

• 100 per cent FDI in marketing of food products produced and marketed in India.

• Rs. 3,000 crore per annum for the power sector, where the government is drawing up a plan for 15-20 years to augment investment

in nuclear power.

• 100% rural electrification by May 1, 2018

AGRICULTURE

• Total allocation for agriculture and farmer welfare at Rs. 35984 crores

• 28.5 lakh heactares of land will be brought under irrigation.

• Dedicated irrigation fund in NABARD of Rs. 20.000 crore

• Rs. 5 lakh acres to be brought under organic farming over a three year period

• Rs. 60,000 crore for recharging of ground water recharging as there is urgent need to focus on drought hit areas cluster

development for water conservation.

• Nominal premium and highest ever compensation in case of crop loss under the PM Fasal Bima Yojna. Govt to allocate Rs. 5,500

crore for crop insurance scheme.

• Direct Benefit Transfer for fertiliser subsidy.

• 2,000 model retail outlets of Fertilizer companies will be provided with soil and seed testing facilities during the next three years

• Soil Health Card scheme will cover all 14 crore farm holdings by March 2017.

• Unified Agricultural Marketing ePlatform to provide a common e- market platform for wholesale markets.

To reduce the burden of loan repayment on farmers, a provision of ` 15,000 crore has been made in the BE 2016-17 towards

interest subvention.

SOCIAL Sector, SKILL Development and JOB Creation

• Allocation for social sector including education and health care – Rs. 1,51,581 crore.

• Rs. 2,000 crore allocated for initial cost of providing LPG connections to BPL families.

• Rs. 2.87 lakh crore for gram panchayats as per recommendation of 14th finance commission.

• New health protection scheme will provide health cover up to Rs. 1 lakh per family.

• For senior citizens an additional top-up package up to Rs. 30,000 will be provided.

• Rs. 9,000 crore for Swachch Bharat Abhiyan.

• Rs. 38,500 crore for MNREGA.

• Rs. 1,700 crore for 1500 multi-skill development centres.

• Rs 1,000 crore allocated for new EPF (Employees' Provident Fund) scheme.

• Govt. will pay EPF contribution of 8.33% for all new employees for first three years.

E-UpDates March 2016 Surge Research Support

27

• Amendments in Companies Act to improve enabling environment for start-ups.

FINANCIAL SECTOR

• Rs. 25,000 crore allocated towards recapitalisation of public sector banks.

• Target of disbursement under MUDRA increased to Rs.1,80,000 crore.

• Banking Board Bureau will be operationalised.

• Process of transfer of government stake in IDBI Bank below 50% started.

• PSU General Insurance companies will be listed in the stock exchange.

• Govt to increase ATMs, micro-ATMs in post offices in next three years.

• NBFCs to get deduction of 5% of its income in respect of provision for bad and doubtful debts.

• Comprehensive Code for providing specialised resolution mechanism for bankruptcy of banks/insurance firms.

• To amend SEBI Act for more benches for SAT.

• GAAR to be implemented from April 1, 2017.

• New credit rating system for infrastructure projects.

• New derivative products for the commodity market to be developed by SEBI.

• RBI Act 1934 to be amended to provide statutory basis for monetary policy framework and a Monetary Policy Committee through

the Finance Bill 2016.

• Financial data management centre to be set up.

• RBI to facilitate retail participation in Government securities.

• Amendments in the SARFAESI Act 2002 to enable the sponsor of an ARC to hold up to 100% stake in the ARC and permit non

institutional investors to invest in securitization receipts.

E-UpDates March 2016 Surge Research Support

28

Following are the some highlights of the RBI’s Sixth Bi-Monthly Monetary Policy Statement, 2015-16:

Policy Decisions

On the basis of an assessment of the current and evolving macroeconomic situation, RBI decided to:

• reduce the policy repo rate under the LAF from 6.75 per cent to 6.5 per cent;

• reduce the minimum daily maintenance of the cash reserve ratio (CRR) from 95 per cent of the requirement to 90 per cent

with effect from the fortnight beginning April 16, 2016, while keeping the CRR unchanged at 4.0 per cent of net demand and

time liabilities (NDTL);

• continue to provide liquidity as required but progressively lower the average ex ante liquidity deficit in the system from one

per cent of NDTL to a position closer to neutrality; and

• narrow the policy rate corridor from +/-100 basis points (bps) to +/- 50 bps by reducing the MSF rate by 75 basis points and

increasing the reverse repo rate by 25 basis points, with a view to ensuring finer alignment of the weighted average call rate

(WACR) with the repo rate; (consequently, the reverse repo rate under the LAF stands adjusted to 6.0 per cent, and the MSF

rate and the Bank Rate to 7.0 per cent)

• Effective April 2, 2016 the SLR was reduced by 25 basis points from 21.5 per cent to 21.25 per cent of NDTL. Also, from

February 2016, banks were allowed to reckon additional government securities held by them up to 3 per cent of their NDTL

within the mandatory SLR requirement as level 1 high quality liquid assets (HQLA) for the purpose of computing their

liquidity coverage ratio (LCR), thereby taking the total carve-out from SLR available to banks equivalent to 10 per cent of

their NDTL. These measures will create space for banks to increase their lending to productive sectors on competitive terms

so as to support investment and growth.

Global Economy

Perceptions of downside risks to recovery in some advanced economies (AEs) at the beginning of 2016 have eased, while major

emerging market economies (EMEs) continue to contend with weak growth and still elevated inflation amidst tighter financial

conditions. World trade remains subdued due to falling import demand from EMEs and stress in mining and extractive industries. In

China, sluggish industrial production, contracting exports, capital outflows and substantial excess capacity in factories and the property

market remain formidable headwinds, notwithstanding significant monetary and fiscal policy stimulus. EME commodity exporters have

benefited recently from the firming up of commodity prices and risk-on investor sentiment has appreciated their currencies. Across

EMEs, however, weak domestic fundamentals, lacklustre external demand and country-specific constraints continue to restrain growth.

Global financial markets have recouped the losses suffered in the turbulence at the beginning of the year. From mid-February, a

firming up of crude prices buoyed market sentiment, allaying fears of global recessionary risks. With China reducing reserve

requirements, the ECB expanding accommodation and the Fed providing dovish guidance while staying on hold, equity markets rallied.

In bond markets across AEs and EMEs, yields gradually eased, with country-specific variations. The US dollar has retreated from

January peak and has eased further in the aftermath of the FOMC’s March meeting. On the other hand, the euro and the yen have

appreciated, reacting perversely to exceptional accommodation. Currencies across EMEs have also appreciated as portfolio flows

returned cautiously to local debt and equity markets.

Indian Economy

Gross value added (GVA) in agriculture and allied activities moderated in H2 of 2015-16, pulled down by the contraction in Q3

due to the year-on-year decline in kharif production. Advance estimates of the Ministry of Agriculture indicate that despite acutely low

reservoir levels and a deficient north-east monsoon, rabi foodgrains production increased in Q4 over its level a year ago. The implicit

estimate of GVA for agricultural and allied activities in Q4 in the CSO’s advance estimates is likely to be achieved, if not revised

upwards. Value added in industry accelerated in H2, led by manufacturing which benefited from the sustained softness in input costs.

By contrast, industrial production remained flat with manufacturing output shrinking since November. Robust expansion in coal output

has buoyed both mining activity and electricity generation and stemmed the weakening of industrial output. However, capital goods

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29

production fell into deep contraction since November. Consumer non-durables production has been shrinking, with a pronounced

decline in Q4. This reflects the continuing slack in rural demand. On the other hand, consumer durables remained strong, even after

abstracting from favourable base effects, which suggests that urban demand is holding up. The RBI’s Consumer Confidence Survey of

March 2016 shows marginal improvement in consumer sentiments. The March PMI continued in expansionary mode on the back of

new orders, including exports. The RBI’s industrial outlook survey suggests that business expectations for Q1 of 2016-17 continue to

be positive. Services sector activity expanded steadily through the year, with trade, hotels, transport, communication and public

administration, defence and related services turning out to be the main drivers in H2. The construction sector continues to be

overburdened by unsold inventory in the residential space. Cement production, steel consumption, air passenger traffic, air cargo

volumes, foreign tourist arrivals and auto sales increased during H2.The services PMI remained in expansion mode during H2 on new

business and expectations. The outlook for services in surveys is upbeat for Q1 of 2016-17. While exports declined in February in US

dollar terms for the fifteenth successive month, the rate of contraction narrowed to a single digit for the first time in this period and

volume growth turned positive, while the decline in non-POL exports was even smaller. The prolonged contraction in imports also

slowed significantly, and non-POL non-gold import growth turned positive for the first time after seven months. The prolonged

contraction in imports also slowed significantly, and non-POL non-gold import growth turned positive for the first time after seven

months. The trade deficit narrowed to its lowest monthly level since September 2013. In turn, this has likely lowered the current

account deficit (CAD) in Q4 below 1.3 per cent of GDP recorded in Q3, despite a moderation in net receipts from services exports and

remittances. Net FDI inflows were robust in Q4 (up to January), more than sufficient to fund the external financing requirement. FPIs,

who were net sellers in the domestic capital market up to February, became net buyers in March.

CPI inflation dropped sharply in February after rising for six consecutive months due to a larger than anticipated decline in vegetable

prices, helped by prices of pulses starting to come off the surge that began in August, and effective supply management that helped limit

cereal price increases. Accordingly, food inflation eased for the first time in the second half of 2015-16. Inflation in the fuel group

moderated across items. Three months ahead household inflation expectations declined to a single digit for the second consecutive round

of the survey in response to these dynamics.

Liquidity conditions, which had tightened since mid-December, were stretched further by the larger-than-usual accumulation of cash

balances by the Government, unusually heightened and persistent demand for currency, a pick-up in bank credit and flatter deposit

mobilisation relative to past years. The RBI supplemented normal operations with large amounts of liquidity injected through fine-tuning

variable rate repo auctions in tenors ranging between overnight and 56 days. The average daily liquidity injection (including variable rate

overnight and term repos) increased from Rs.1,345 billion in January to Rs.1,935 billion in March. Besides, durable liquidity was also

provided through OMOs of the order of ₹ Rs.14 billion and Rs. 375 billion through buy-back operations in February and March. The RBI

also started conducting reverse repo and MSF operations on holidays to enable the frictionless functioning of the payment and settlement

system.

Policy Stance

The uneven recovery in growth in 2015-16 is likely to strengthen gradually into 2016-17, assuming a normal monsoon, the likely boost to

consumption demand from the implementation of the 7th Pay Commission recommendations and OROP, and continuing monetary policy

accommodation. On the other hand, the fading impact of lower input costs on value addition in manufacturing, persisting corporate sector

stress and risk aversion in the banking system, and the weaker global growth and trade outlook could impart a downside to growth outcomes

going forward. The GVA growth projection for 2016-17 is accordingly retained at 7.6 per cent, with risks evenly balanced. Inflation has

evolved along the projected trajectory and the target set for January 2016 was marginally undershot. Going forward, CPI inflation is expected

to decelerate modestly and remain around 5 per cent during 2016-17 with small inter-quarter variations. There are uncertainties emanating

from recent unseasonal rains, the likely spatial and temporal distribution of monsoon, the low reservoir levels by historical averages, and the

strength of the recent upturn in commodity prices, especially oil. The implementation of the 7th Central Pay Commission awards will impart

an upside to the baseline through direct and indirect effects. Inflation is expected to trend towards the 5 per cent target in March 2017. Given

weak private investment in the face of low capacity utilisation, a reduction in the policy rate by 25 bps will help strengthen activity and aid

the Government’s initiatives as outlined in the Union Budget.

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30

Developmental and Regulatory Measures

Several measures, aimed at broadening and deepening of financial markets, were set out in the RBI’s February monetary policy

statement: (I) On a review of the external sector outlook and as a further exercise in macro prudential management, the RBI has decided

to enhance the limit under the LRS to US$250,000 per person per year. The RBI had reduced the eligibility limit for foreign exchange

remittances under the LRS to US$75,000 in 2013 as a macro-prudential measure.1 (II) To harmonise requirements with respect to

government and corporate debt securities, the RBI has decided in consultation with the Government of India that all future investment by

FPIs in the debt market in India will be required to be made with a minimum residual maturity of three years.2 The measure would impart

more stability to the corporate debt market. (III) In order to develop the money and Government securities markets, cash settled 10-year

IRF contracts were permitted to be introduced by stock exchanges in December 2013. A cash settled IRF contract on the 10-year GoI

security was launched in January 2014 and has received an encouraging response. In order to provide market participants with greater

flexibility to hedge their interest rate risk, it has been decided to permit stock exchanges to introduce cash settled IRF contracts on 5-7

year and 13-15 year GoI securities. (IV) Learning from the Libor-fixing scandal that hurt large European banks, RBI is changing the way

Mibor is calculated. In the policy, RBI announced the formation of Financial Benchmarks India, an independent firm that would

transform the Mibor from a polled rate to a transaction-based rate. This is aimed to minimise manipulation. Unlike the Libor, the Mibor

is not used to price loan products, but it is regularly used as a benchmark for inter rate swap transactions that banks and institutions enter

into to cover risks arising from interest-rate fluctuations. (V) With a view to providing greater flexibility to both FPIs and domestic

participants in the ETCD market, it has been decided that:

• domestic entities and FPIs will henceforth be allowed to take foreign currency positions in the US$-INR pair up to US$

15 million per exchange without having to establish the existence of any underlying exposure. In addition, they shall be

allowed to take foreign currency positions in EUR-INR, GBP-INR and JPY-INR pairs, all put together up to US$ 5

million equivalent per exchange, without having to establish the existence of any underlying exposure.

• for domestic participants who are importers of goods and services, the limit up to which they can take appropriate

hedging positions in ETCD markets will be determined as 100 per cent of the higher of the (i) average of their last three

years’ imports turnover or (ii) the previous year’s turnover, instead of 50 per cent at present.

• documentation and other administrative requirements for hedging on the ETCD markets are also being rationalised.

Detailed operational guidelines for all the above policies are expected to be issued by end-March 2015.

1 With stability in the foreign exchange market, this limit was enhanced to US$125,000 in June 2014 without end-use restrictions, except for prohibited foreign exchange transactions such as margin trading, lotteries and the like. 2 FPIs are currently permitted to invest in government securities with a minimum residual maturity of three years, while no such condition has been stipulated for their investments in corporate bonds.

E-UpDates March 2016 Surge Research Support

31

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