Indian foreign exchange reserves fell for the fifth week in a row, reaching a two-month low of $682.13 billion on November 1. This was reported by the Reserve Bank of India on Friday. The reserves declined by $2.7 billion during the reporting week. They had declined by a total of $20.1 billion during the preceding four weeks. Changes in foreign currency assets are driven by both the central bank's activity in the forex market and the appreciation or depreciation of foreign assets kept in reserves.
Top 3 Leads Today
- State Bank of India to sell ₹100 billion worth of infra bonds by Nov-end.
- FPIs withdrew around ₹200 billion from equities in last 5 trading sessions.
- Banks' credit-deposit ratio on downward trend, at 79.5% on Sept 20.
Indian Markets
- Money Markets Minute: The interbank call money rate finished the day just a bit higher than the Reserve Bank of India's repo rate of 6.50%. This was because some banks needed money at the end of the session. The three-day call money rate concluded at 6.55%, compared to 5.75% for one-day loans on Thursday, with a weighted average rate of 6.44%, slightly higher than 6.42% on Thursday.
- Government Bond Brief: Yields declined slightly, reflecting the US Federal Reserve's decision to decrease interest rates by 25 basis points as global market pessimism has eased. The 10-year benchmark 7.10% 2034 bond yielded 6.81% on Friday, compared to 6.82% on Thursday. The newer 6.79% 2034 bond concluded at 6.78% yield, compared to 6.79% on Thursday.
- Corporate Bond Beat: Yields continue to remain steady last week across the yield curve in secondary corporate bond market as the US Fed rate cut was on expected lines. Volumes were moderate because traders avoided any large bets for most part of the week waiting on US election results and US Federal Reserve’s monetary policy decisions.
- Forex Flash: The Indian rupee fell to a record low on Friday, its worst weekly drop since May, weighed down by continued outflows from local stocks and predictions of a stronger dollar following Donald Trump's victory in the US election. The rupee closed barely changed at 84.3750 against the dollar, after falling to 84.38 late in the session and surpassing its previous all-time low of 84.3775 set on Thursday.
- Stocks Spotlight: Indian stocks fell on Friday, closing the week in the red, as concerns about muted corporate earnings and continued foreign outflows outweighed gains in information technology sectors following the US Federal Reserve's projected interest rate cut. The NSE Nifty 50 declined 0.21% to 24,148.2, while the BSE Sensex dipped 0.07% to 79,486.32. They are down 0.64% and 0.3%, respectively, last week, marking their fifth weekly loss in six.
Trading Trends
Most actively traded Corporate bonds in the Standard Lot Market:
| ISIN | Security Name | Volume (Cr) | Avg. Yield(%) |
|---|---|---|---|
| INE261F08DI1 | NABARD 31JAN25 | 7170 | 7.25 |
| INE296A07SF4 | BAJAJ FINANCE 17NOV25 | 2250 | 7.77 |
| INE403D08181 | BHARATI TELECOM 04DEC25 | 1075 | 8.65 |
| INE556F08KT6 | SIDBI 10APR28 | 975 | 7.45 |
| INE261F08DK7 | NABARD 31JUL25 | 845 | 7.59 |
Most actively traded Corporate bonds in the Odd Lot Market:
| ISIN | Security Name | Volume (Cr) | Avg. Yield(%) |
|---|---|---|---|
| INE01YL07292 | EARLYSALARY 27MAR26 | 29 | 11.93 |
| INE0KNX07029 | AYYAPPA DEVELOPERS PRIVATE LIMITED 30SEP2027 | 24 | 17.92 |
| INE06E507280 | HELLA INFRA 30MAR26 | 24 | 14.44 |
| INE950O07487 | MAHINDRA RURAL HOUSING 03AUG29 | 23 | 8.05 |
| INE06E507231 | HELLA INFRA 08JAN26 | 21 | 15.53 |
Traded volume in corporate bonds by maturity:
| Maturity | Volume(in Cr) |
|---|---|
| 1Y | 20642 |
| 3Y | 4403 |
| 5Y | 2701 |
| 7Y | 309 |
| 10Y | 2427 |
Source: Harmoney data analytics
The Week Ahead
- Money Markets: The one-day call money rate may open around the RBI's repo rate of 6.50% on Monday due to early demand for funds from banks for reserve requirements. During the day, the call rate may move in 6.00-6.60% band. On Friday, the three-day call rate closed at 6.55%.
- Government Bonds: On Monday, yields may be influenced by movements in US Treasury yields, crude oil prices, and geopolitical developments. Traders may avoid placing significant wagers before Tuesday's release of India's CPI inflation statistics for October. Though the print is expected to be higher, traders will look for any divergence from the estimated 5.9% to generate an opinion on the Monetary Policy Committee's December rate cut possibility.
- Corporate Bonds: Yields are expected to remain steady this week and volumes are expected to be muted in the secondary market. Investors are expected to flock for any primary issues this week.
- Forex: The rupee is expected to trade in a tight range on Monday, at 84.35-8.40 per dollar, as traders expect the RBI to continue intervening to avoid big changes in the rupee, as seen by the currency's low implied volatility compared to its Asian counterparts. Market participants expect that the RBI is gradually allowing the rupee to rise, but the upside should be limited to around 84.40 in the near term.
- Stocks: The benchmark indices are expected to remain volatile this week as investors keenly monitor companies Q2 earnings reports and India's IIP and CPI data, which will be released on Tuesday. Traders foresee greater fall this week as foreign portfolio investors continue to sell.
Events This Week
November 11, Monday:
- US Bond market holiday for Veterans Day.
November 12, Tuesday:
- US OPEC monthly report.
- US Consumer inflation expectations for October.
- India Industrial production for September.
- India Inflation rate for October.
- India Manufacturing Production for September.
- India Inflation rate for October.
November 13, Wednesday:
- US CPI for October.
- US Real earnings for October.
- India M3 Money supply for Nov 1 week.
- India Passenger vehicles sales for October.
November 14, Thursday:
- US Unemployment insurance weekly claims report for Nov 9 week.
- US PPI for October.
- India WPI for October.
November 15, Friday:
- US Weekly export sales.
- US Advance monthly sales for retail & food services for October.
- US Import & export price indexes for October.
- India Bank loan growth for Nov 1 week.
- India Deposit growth for Nov 1 week.
- India Foreign exchange reserves Nov 8 week.
- India Balance of Trade for October.
- India Exports and Imports for October.
For any inquiries or assistance related to market data, please reach out to us at support@harmoney.in