In its new India Outlook, S&P Global Ratings predicts sustained growth in 2025 due to strong urban consumption, consistent services sector development, and infrastructure investment. The global ratings agency maintained its FY25 GDP growth forecast at 6.8% due to reduced fiscal stimulus reducing urban demand.
The rating agency said increasing labour force participation, infrastructure and technological improvements, and stronger public and consumer balance sheets can boost India's economy. S&P Global Ratings forecasts India's GDP growth at 6.7% in 2025-26 and 6.8% in 2026-27, down 20 basis points from earlier predictions.
Top 3 Leads Today
- India markets regulator to allow optional same-day settlement for 500 stocks.
- India's outgoing central bank chief stresses importance of restoring growth-inflation balance.
- MF industry net inflows fall over 70% to ₹602.95 billion in November, says AMFI.
Indian Markets
- Money Markets Minute: The call rate closed near the RBI's marginal standing facility rate of 6.75% on Tuesday, driven by strong demand for funds as the liquidity surplus continued to narrow. The one-day call money rate ended at 6.74%, significantly higher than 5.75% from its previous close. The weighted average call rate also rose to 6.67%, up from 6.56% in the previous session, reflecting tightening conditions in the money market.
- Government Bond Brief: Yields edged lower on Tuesday, based on expectations that the new RBI governor would lean on rate cuts starting from February. But profit sales lifted the yields from the day’s lows following an intraday rise in Treasury yields. The 10-year benchmark 6.79%, 2034 bond yield closed at 6.71%, down from 6.72% the previous day. Market turnover rose to ₹601.80 billion from ₹461.85 billion previously.
- Corporate Bond Beat: Corporate bond yields remained steady across tenures in the secondary market on Tuesday due to subdued trading activity amid the absence of strong domestic triggers. Trading volumes were modest, with secondary market transactions totalling ₹70.42 billion, slightly lower than the ₹77.52 billion recorded the previous day.
- Forex Flash: The rupee closed at a record low against the dollar on Tuesday, reflecting increased expectations of a February interest rate cut following the appointment of Revenue Secretary Sanjay Malhotra as the new RBI governor. During the session, the rupee hit an all-time low of 84.8600 per dollar before settling at 84.8525, weaker than its previous close of 84.7300 on Monday.
- Stocks Spotlight: The stock indices ended nearly flat after a volatile trading session on Tuesday. Following a steady start, markets remained in positive territory during the first half. However, profit booking in the latter part of the session pushed the Nifty into the red. Late-hour buying, particularly in IT and Realty stocks, helped erase earlier losses. At the close, the Sensex gained 1.59 points to settle at 81,510.05, while the Nifty slipped 8.95 points to 24,610.05.
International Markets
- US Stocks: The main indexes on Wall Street ended down on Tuesday. Losses in the technology sector were more than offset by gains in communications services. Investors were waiting for important inflation reports that could affect the Fed’s next interest rate decisions. Only three of the S&P 500's 11 key industrial sectors gained a day before the November Consumer Price Index, one of the last big releases before the Fed's Dec. 17-18 meeting. The Dow lost 0.35% to 44,247.83. S&P 500 slid 0.30% to 6,034.91, and Nasdaq fell 0.25% to 19,687.24.
- Treasuries: Yields rose on Tuesday ahead of US Inflation data to be announced on Wednesday and after a report on US small business confidence reached its best level in over three and a half years for November. Investors will keenly monitor Wednesday's consumer price index report for clues on the future of US inflation and subsequent Federal Reserve policies. The yield on benchmark US 10-year notes rose 3.1 basis points to 4.23% from 4.199% Monday.
- Currency: The dollar surged on Tuesday ahead of US inflation data that could shed light on the Federal Reserve's monetary-easing strategy, as investors examine the expected impact of President-elect Donald Trump's plans as he begins his second term. The US dollar gained 0.47% to 151.925 yen. The dollar index, which compares the currency to the yen and five other major peers, increased 0.23% to 106.4. The euro fell 0.27 % to $1.0526.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| NBFC | 861.75 | 1387.4 | 74.43 | 506.08 | 2.15 |
| Financial Institution | 83 | 505.01 | 360 | 51.13 | |
| Private Sector Bank | 235.6 | 20 | 70.02 | 235.2 | 0.8 |
| Holding Company | 360 | ||||
| Other Utilities | 2.09 |
Secondary trade details for recently issued primary corporate bonds:
Security Name |
Issue Date |
Trades Since Issue(Cr) |
Avg Yield(%) |
LTY (%) |
|---|---|---|---|---|
| 7.37 IREDA 27NOV31 | 2024-11-27 | 910 | 7.37 | 7.37 |
| 7.41 BOB 28NOV34 C 28NOV39 M | 2024-11-28 | 745 | 7.40 | 7.41 |
| 7.41 BOI 29NOV34 | 2024-11-29 | 435 | 7.41 | 7.41 |
| 7.74 LIC 22OCT27 | 2024-11-29 | 385 | 7.73 | 7.64 |
| 91.00 ICICI HOME FINANCE 25FEB28 | 2024-11-26 | 355 | 8.16 | 8.16 |
| 7.22 ULTRATECH 24NOV34 | 2024-11-26 | 300 | 7.22 | 7.22 |
| 7.75 ICICI HOME FINANCE 24NOV34 | 2024-11-26 | 190 | 7.75 | 7.75 |
| 0% GOLDEN GUILD PROPERTIES PRIVATE LIMITED 27NOV2026 | 2024-11-28 | 140 | 20.06 | 20.00 |
| 7.78 SUNDARAM HOME FINANCE 02FEB28 | 2024-12-02 | 140 | 7.79 | 7.79 |
| 9.80 IIFL FINANCE - C 03DEC26 M | 2024-12-03 | 81 | 10.69 | 0.00 |
| 9.60 ARKA 24NOV34 | 2024-11-26 | 75 | 9.21 | 9.02 |
| 9.50 HERO FINCORP PERP 25MAY35 C | 2024-11-25 | 75 | 9.36 | 0.00 |
| 8.15 PNB HOUSING 29NOV27 | 2024-11-29 | 70 | 8.15 | 8.15 |
| 7.93 NIIF 05DEC30 | 2024-12-02 | 67 | 7.92 | 7.93 |
Source: Harmoney data analytics
Events This Week
December 11, Wednesday:
- US CPI for November.
- US Real Earnings for November.
- India M3 Money Supply Nov 25 week.
December 12, Thursday:
- US Unemployment Insurance Weekly Claims Report Dec 7 week.
- US Weekly Export Sales.
- US PPI for November.
- US Quarterly Services.
- India Consumer Price Index for November.
- India Cumulative Industrial Output for October.
- India Industrial Output for October.
- India Manufacturing Output for October.
December 13, Friday:
- US Import & Export Price Indexes for November.
- India Bank Loan Growth for Nov 25 week.
- India FX Reserves Dec 2 week.
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