The Reserve Bank of India warned on Tuesday that some banks have "lakhs" of accounts that are used for fraud and to keep loans open over and over again. They said this while meeting with the chief financial officers and accountants of banks and other financial institutions. "Over the last few years, the control and management of internal accounts have become more important." In his speech to the lenders, RBI deputy governor Swaminathan J said, "We found that some banks had lakhs of these accounts for what seemed to be no good reason."
Top 3 Leads Today
- Sustainability reporting must for financial, non-financial cos, says RBI Rao.
- Moody's keeps India GDP growth, CPI inflation forecasts unchanged for 2024.
- MF industry sees outflow of ₹436.4 billion in Jun, AMFI data shows.
Indian Markets
- Money Markets Minute: The one-day call money rate closed lower than the RBI's repo rate of 6.50%, settling at 6.40% due to reduced bank demand for funds by the end of the day. Liquidity in the banking system reduced to ₹772.63 billion from ₹1.11 trillion as per RBI data.
- Government Bond Brief: Government bond yields remained unchanged for the second consecutive day as traders refrained from making any bold moves. Traders exercised caution ahead of upcoming crucial inflation data releases scheduled in the US and India later this week. The 10-year benchmark 7.10%, 2034 bond closed with a yield of 6.99%, the same as Monday's closing yield.
- Corporate Bond Beat: Corporate bond yields stabilised as investors awaited upcoming new issuances scheduled for Wednesday. The subdued activity in the government securities market also influenced the lack of significant movement in the corporate bond market.
- Forex Flash: The rupee maintained stability against the dollar throughout the session, with traders cautious amid limited market cues. Starting the day steady, the rupee fluctuated marginally, closing at 83.4850 per dollar, just below Monday's closing rate of 83.4925 per dollar.
- Stocks Spotlight: Positive sentiments in equity markets persisted driven by optimism surrounding the upcoming Union Budget, expectations of US interest rate cuts, and strong corporate earnings. Benchmark indices achieved new highs after a brief pause on Monday. The Nifty 50 closed up 0.5% at 24,433.20 points, while the Sensex climbed 0.5% to 80,351.64 points.
International Markets
- US Stocks: The key market indices ended mixed on Tuesday, with the Nasdaq reaching a sixth consecutive record high. The S&P 500 rose 0.07%, while the Dow fell 0.13%. The rise in the S&P 500 and Nasdaq was powered by increases in Nvidia and Tesla shares after US Federal Reserve Chair Powell told legislators that additional "good" economic data would strengthen the possibility of rate cuts.
- Treasuries: Yields climbed on Tuesday after Federal Reserve Chairman Jerome Powell expressed greater confidence that inflation would return to the US central bank's objective of 2% and warned about risks to the labour market and the economy if interest rates remained high. Also, Janet Yellen, the Treasury Secretary, told US senators that rent and housing expenses keep inflation higher than desired, but she expects consumer prices to fall over time. The 10-year benchmark yield increased by 2.9%, to 4.298% Tuesday from 4.269% on Monday.
- Currency: The dollar rose on Tuesday as Federal Reserve Chair Jerome Powell acknowledged progress in inflation and a cooling labour market but did not explicitly state that the US central bank is close to cutting interest rates. The dollar index rose 1.5% versus the basket of currencies to 105.13. Traders increased bets following last week's jobs data, which showed that the US Fed would cut interest rates twice by December.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Macro Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| Financial Institution | 75 | 1815 | 466 | 1265 | - |
| NBFC | 95 | 1133 | 359 | 318 | 30 |
| Private Sector Bank | 1010 | 480 | 2 | 264 | - |
| Investment Company | 50 | 525 | 3 | 25 | - |
| Public Sector Bank | - | 1 | - | 297 | 25 |
Secondary trade details for recently issued primary corporate bonds:
Security Name |
Issue Date |
Trades Since Issue(Cr) |
Avg Yield(%) |
LTY (%) |
|---|---|---|---|---|
| 7.36 SBI 27JUN39 | 2024-06-27 | 1695.00 | 7.36 | 7.35 |
| 7.43 NBFID 04JUL34 | 2024-07-04 | 1440.00 | 7.43 | 7.43 |
| 11.00 GMR INFRA 26JUN2026 CALL 26JUN2027 | 2024-06-26 | 600.00 | 15.67 | 15.71 |
| 7.89 BOM - C 04JUL34 M | 2024-07-04 | 447.00 | 7.91 | 7.85 |
| 7.53 ICICI 03JUL34 | 2024-07-01 | 400.00 | 7.52 | 7.53 |
| 8.64 CHOLAINVFIN 26JUN29 | 2024-06-26 | 355.20 | 8.63 | 8.63 |
| 7.87 INDIGRID 24FEB27 | 2024-06-24 | 350.00 | 8.02 | 8.04 |
| 8.42 GODREJIND 27DEC27 | 2024-06-27 | 295.00 | 8.44 | 8.44 |
| 8.07 ICICI HFL 01OCT27 | 2024-07-01 | 287.75 | 8.10 | 8.09 |
| 9.15 SHRIRAMFIN 28JUN29 | 2024-06-28 | 282.00 | 9.14 | 9.14 |
| 7.93 TATA POWER RENEWABLE 26JUN29 | 2024-06-26 | 265.00 | 7.92 | 7.92 |
| 8.35 AXISFIN 23JUN34 | 2024-06-24 | 245.00 | 8.35 | 8.33 |
| 7.41 IIFCL 26JUN39 | 2024-06-26 | 170.00 | 7.40 | 7.40 |
| 8.1629 L&T FINANCE 30SEP27 | 2024-06-28 | 160.00 | 8.18 | 8.18 |
| 7.93 TATA POWER RENEWABLE 26JUN34 | 2024-06-26 | 150.00 | 7.92 | 7.92 |
| 9.84 SPANDANA 28JUN26 | 2024-06-28 | 109.97 | 10.95 | 11.28 |
| 7.44 IREDALTD 25AUG34 | 2024-06-25 | 75.00 | 7.44 | 7.44 |
| 11.00 UTKRASHBANK - C 26JUN31 M | 2024-06-27 | 60.55 | 11.37 | 10.90 |
Source: Harmoney data analytics
Events This Week
July 10, Wednesday:
- US Monthly Wholesale Trade for May.
- US EIA Weekly Petroleum Status Report for Jul 5 week.
- India M3 Money Supply for Jun 28 week.
July 11, Thursday:
- US Real Earnings for June.
- US Unemployment Insurance Weekly Claims Report.
- US Weekly Export Sales.
- US CPI for June.
- US EIA Weekly Natural Gas Storage Report for Jul 5 week.
July 12, Friday:
- US PPI for June.
- India Bank Loan Growth for Jun 28 week.
- India Deposit Growth for Jun 28 week.
- India Foreign Exchange Reserves for Jul 5 week.
- India Industrial Production for May.
- India Inflation Rate for June.
- India Manufacturing Production for May.
- India Inflation Rate for June.
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