Commercial bank deposit growth slowed to 10.64% for the fortnight ending June 28, according to the latest figures released by the Reserve Bank of India. Credit growth also slowed during the period. According to the report, scheduled commercial banks' credit increased by 13.88% year on year to ₹163.8 trillion as of June 28. The bank deposit base increased by 10.64% year on year to ₹211.95 trillion.
Top 3 Leads Today
- Premature to talk about interest rate cut: RBI Governor.
- Wage hikes, lower spending weigh on TCS Apr-Jun consol PAT.
- US inflation hits 3.0% in June, lower than expected.
Indian Markets
- Money Markets Minute: Despite the banking system's liquidity surplus of over ₹1 trillion, the interbank call money rate ended at the RBI's repo rate of 6.50% due to demand for funds from some banks at the end of the session. The one-day call money rate closed at 6.50%, up from 5.75% on Wednesday. The weighted average call rate remained unchanged at 6.47%.
- Government Bond Brief: Government bond yields edged slightly higher after the RBI Governor reiterated that it was too early to discuss rate cuts. The yield on the 10-year benchmark 7.10% 2034 bond ended at 6.98%, unchanged from Wednesday. The trading volume was ₹379.60 billion, down from ₹501.70 billion on Wednesday.
- Corporate Bond Beat: Despite an initial negative reaction in government bonds following the RBI Governor's statement, yields on corporate bonds remained steady, ending flat across all maturities amid low trading volumes. Most participants engaged in requirement-based trading, leading to a subdued trade volume.
- Forex Flash: The rupee slipped to a two-week low against the dollar as banks bought the greenback on behalf of importers during an otherwise quiet trading day. However, dollar sales by some exporters helped limit the decline. The rupee fluctuated within a 10-paise range before closing at 83.5600 per dollar. On Wednesday, it had settled at 83.5200 per dollar.
- Stocks Spotlight: The benchmark indices ended lower due to caution ahead of the upcoming Budget and June quarter earnings. However, the decline was limited by a recovery in heavyweight stocks and banking shares. The Nifty fell by 8.50 points, closing at 24,315.95, while the BSE Sensex dropped 27.43 points, ending at 79,897.34.
International Markets
- US Stocks: The Nasdaq and S&P 500 ended their six-day record high streak on Thursday, led by technology shares after the US consumer price index in June was softer than expected, triggering some rotation of shares in favour of smaller companies. However, the Dow Jones index managed to finish marginally higher. The Nasdaq ended 1.95% down 18,283.41 points, and the S&P 500 declined 0.88% to 5,584.54 points, while the Dow rose 0.08% to 39,753.75 points.
- Treasuries: Yields fell across the curve after the US consumer price index for June unexpectedly fell by 0.1% in June. Lower inflation boosted investors' hopes that the Federal Reserve may start cutting its interest rates in September. The 10-year benchmark yield fell by 7.4 basis points, its lowest since mid-March this year to 4.206% on Thursday.
- Currency: The dollar index fell 0.48% to 104.47 against six major currencies on Thursday as traders priced-in a likelihood for the US Federal Reserve interest rate cuts after lower-than-expected US inflation. The yen rose 2% against the dollar which fell last week to a 38-year low, while the euro was up 0.31% on Thursday.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| Financial Institution | 125 | 1659 | 841 | 76 | 3 |
| NBFC | 202 | 891 | 291 | 355 | 4 |
| Private Sector Bank | 465 | 310 | - | 300 | - |
| Housing Finance Company | 155 | 117 | 35 | 434 | - |
| Diversified | 70 | - | - | 250 | - |
Secondary trade details for recently issued primary corporate bonds:
Security Name |
Issue Date |
Trades Since Issue(Cr) |
Avg Yield(%) |
LTY (%) |
|---|---|---|---|---|
| 7.43 NBFID 04JUL34 | 2024-07-04 | 1910.00 | 7.43 | 7.43 |
| 7.36 SBI 27JUN39 | 2024-06-27 | 1695.00 | 7.36 | 7.35 |
| 11.00 GMR INFRA 26JUN2026 CALL 26JUN2027 MAT | 2024-06-26 | 600.00 | 15.67 | 15.71 |
| 7.89 BOM 04JUL29 C 04JUL34 M | 2024-07-04 | 547.00 | 7.91 | 7.93 |
| 7.53 ICICI 03JUL34 | 2024-07-01 | 400.00 | 7.52 | 7.53 |
| 8.42 GODREJIND 27DEC27 | 2024-06-27 | 400.00 | 8.44 | 8.44 |
| 8.64 CHOLAINVFIN 26JUN29 | 2024-06-26 | 355.20 | 8.63 | 8.63 |
| 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 |
| 7.92 TATA CAPITAL HFL 07JUL34 | 2024-07-08 | 215.00 | 7.92 | 7.92 |
| 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 | 120.48 | 10.82 | 11.00 |
| 8.23 SUNDARAM FINANCE 05JUL34 | 2024-07-05 | 90.00 | 8.22 | 8.22 |
| 11.00 UTKRASHBANK - C 26JUN31 M | 2024-06-27 | 61.51 | 11.37 | |
| 10.50 SCNL 04JAN27 | 2024-07-04 | 55.43 | 11.61 | 11.50 |
Source: Harmoney data analytics
Events This 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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