India's retail inflation rate, based on the consumer price index, fell within the Reserve Bank of India's tolerance band at 5.48% in November from a 14-month high of 6.21% in October due to food price slowdowns and a favourable base. These raised hopes that RBI will cut policy rates in February. The National Statistics Office said on Thursday that year-over-year food inflation fell to 9% from 10.87% in October. Separately, industrial production appears to be rebounding. Industrial production rose 3.5% in October from 3.1% in September.
Top 3 Leads Today
- Credit grows at 10.6% and deposits at 10.7% in November 29 fortnight.
- India's corporate credit conditions to see positive momentum next year, says S&P.
- Aim to end SEBI compliance for FPIs investing in govt bonds, says SEBI Narayan.
Indian Markets
- Money Markets Minute: The interbank call money rate closed below the RBI's standing deposit facility rate of 6.25% on Thursday, as banks' demand for funds eased towards the end of the trading session. The one-day call money rate fell to 5.75% from 6.75% previously. The weighted average call rate also fell to 6.62% from 6.70% the previous day.
- Government Bond Brief: Yields rose on Thursday as traders offloaded holdings ahead of Friday's government bond auction, aiming to buy back securities at lower prices. The November CPI inflation data aligned with market expectations and had minimal impact on gilt movements. The 10-year benchmark 6.79%, 2034 bond ended at a 6.74% yield, up from 6.72% on Wednesday. Market turnover rose to ₹403.25 billion from ₹339.30 billion in the previous session.
- Corporate Bond Beat: Yields in the secondary market remained stable on Thursday as market participants avoided making large moves in the run-up to the release of India's November CPI inflation data. Total secondary market transactions amounted to ₹85.34 billion, up from ₹70.10 billion on Wednesday.
- Forex Flash: The rupee ended at a record closing low against the dollar Thursday as importers continuously purchased the greenback, in fear of a further fall in the rupee in the near term. This was despite the Reserve Bank of India's persistent intervention through dollar sales during the day. After hitting a lifetime low of 84.8800 a dollar during the day, the rupee ended at a record closing low of 84.8575 on Thursday. During the day, the rupee moved in a tight range of just 4 paise.
- Stocks Spotlight: Indian benchmark indices closed lower on Thursday, with the Nifty ending near 24,550 as broad-based selling and caution ahead of inflation data weighed on sentiment. Losses in banking, FMCG, and oil & gas stocks overshadowed gains in IT, dragging the Nifty 50 down 0.4% to 24,548.70 points, while the Sensex slipped 0.3% to close at 81,289.96 points.
International Markets
- US Stocks: The benchmark indices retreated on Thursday as investors assessed crucial economic data ahead of the Federal Reserve's meeting next week. According to Labor Department data released on Thursday, the US producer prices climbed more than expected in November. Still, a decrease in service costs suggested that the larger disinflationary trend would continue. The Dow Jones Industrial Average sank 0.53% to 43,914.12, the S&P 500 dropped 0.54% to 6,051.25, and the Nasdaq declined 0.66% to 19,902.84.
- Treasuries: Yields rose Thursday to a three-week high as investors considered a higher-than-expected November producer price index. Wednesday's inflation estimate revealed that the consumer price index grew exactly as expected in November, boosting bets of a Federal Reserve interest rate drop next week. The yield on benchmark US 10-year notes rose 6.3 basis points to 4.334% from 4.271% Wednesday. The 2-year notes gained more than 4 basis points to 4.199%.
- Currency: The US dollar rose on Thursday after a stronger-than-expected inflation report, while the euro fell a little following the European Central Bank's decision to cut interest rates for the fourth time this year. According to a Labor Department report released on Thursday, producer prices increased 0.4% monthly in November, contrary to expectations of a 0.2% increase. The dollar index increased 0.41% to 106.99, while the euro fell 0.23% to $1.047.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| NBFC | 695 | 1174 | 113 | 452 | 25 |
| Financial Institution | 245 | 755 | 554 | 109 | - |
| Private Sector Bank | 945 | 125 | 60 | 6 | - |
| Housing Finance Company | 550 | 411 | 6 | 34 | - |
| Telecom | 150 | - | 50 | - | - |
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 | 635 | 7.41 | 7.41 |
| 7.74 LIC 22OCT27 | 2024-11-29 | 385 | 7.73 | 7.64 |
| 7.92 INDIA INFRADEBT LIMITED 06JUN2030 | 2024-12-06 | 273 | 7.93 | 7.90 |
| 9.35 TELANGANA STATE INDUSTRIAL INFRASTRUCTURE CORPORATION LIMITED 31DEC2030 | 2024-12-06 | 219 | 9.46 | 9.20 |
| 9.35 TELANGANA STATE INDUSTRIAL INFRASTRUCTURE CORPORATION LIMITED 31DEC2029 | 2024-12-06 | 217 | 9.47 | 9.10 |
| 0% GOLDEN GUILD PROPERTIES PRIVATE LIMITED 27NOV2026 | 2024-11-28 | 150 | 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 | 133 | 10.65 | 10.16 |
| 9.35 TELANGANA STATE INDUSTRIAL INFRASTRUCTURE CORPORATION LIMITED 24NOV2034 | 2024-12-06 | 126 | 9.66 | 9.68 |
| 9.35 TELANGANA STATE INDUSTRIAL INFRASTRUCTURE CORPORATION LIMITED 30DEC2033 | 2024-12-06 | 114 | 9.67 | 9.68 |
| 9.35 TELANGANA STATE INDUSTRIAL INFRASTRUCTURE CORPORATION LIMITED 29DEC2028 | 2024-12-06 | 110 | 9.67 | 9.10 |
| 9.35 TELANGANA STATE INDUSTRIAL INFRASTRUCTURE CORPORATION LIMITED 31DEC2032 | 2024-12-06 | 108 | 9.66 | 9.13 |
| 9.35 TELANGANA STATE INDUSTRIAL INFRASTRUCTURE CORPORATION LIMITED 31DEC2031 | 2024-12-06 | 106 | 9.68 | 9.10 |
| 9.35 TELANGANA STATE INDUSTRIAL INFRASTRUCTURE CORPORATION LIMITED 31DEC2027 | 2024-12-06 | 100 | 9.66 | 9.10 |
| 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 |
| 11.25 INDEL MONEY 06APR26 | 2024-12-06 | 53 | 12.65 | 13.10 |
| 8.92 CHOLA 02DEC34 | 2024-12-02 | 50 | 8.91 | 8.91 |
Source: Harmoney data analytics
Events This Week
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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