Higher food costs drove September retail inflation in India to its highest in nine months, according to government data released Monday. September retail inflation was 5.49%, up from 3.65% in August and economists' projection of 5.04%. It was the biggest retail inflation since December 2023 at 5.69%. Food, which makes up nearly half the consumption basket, jumped to 9.24% from 5.66% in August. Vegetable prices jumped 36% in September year-over-year vs 10.71% in August. In September, cereal inflation was 6.84%, down from 7.31% in August, while pulse inflation was 9.89%, down from 13.6%.
Top 3 Leads Today
- Could explore expanding RTGS for major trade currency settlement - RBI Das.
- Sept WPI inflation rises to 1.84%, core inflation falls to 0.1%.
- OPEC cuts growth view for oil demand in 2024 by 106,000 bpd to 1.9 mln bpd.
Indian Markets
- Money Markets Minute: The call rate ended at 5.75%, lower than the RBI's standing deposit facility rate of 6.25%, reflecting low demand for funds from banks due to ample liquidity in the system. For comparison, the rate for three-day loans on Friday was 5.85%. The weighted average call rate was slightly down at 6.42%, compared with 6.43% on Friday.
- Government Bond Brief: Yields ended down, as traders remained cautious during the latter half of the day. The rise in bond prices allowed some traders to sell and lock in profits. The yield on the 10-year benchmark 7.10%, 2034 bond closed at 6.78%, slightly down from 6.79% on Friday. Trading volumes also fell to ₹387.45 billion, compared with ₹531.40 billion on Friday.
- Corporate Bond Beat: Yields on corporate bonds in the secondary market remained within a narrow range. The total volume of deals was ₹71.47 billion, significantly lower compared with ₹110.68 billion traded on Friday, indicating reduced activity.
- Forex Flash: The rupee ended flat against the dollar as bank interventions, likely on behalf of the RBI, balanced out the impact of a stronger dollar index. It closed at 84.0600 per dollar, unchanged from its previous record low. Throughout the day, the rupee moved within a narrow range of just 3 paise.
- Stocks Spotlight: Benchmark indices ended higher, driven by gains in select banking and IT stocks. The positive sentiment came from strong US market cues, a drop in crude oil prices, and optimism around upcoming domestic corporate commentary amid expectations of weaker September quarter earnings. The Nifty 50 and Sensex rose 0.7%, closing at 25,127.95 and 81,973.05 points, respectively.
International Markets
- US Stocks: The benchmark indices finished higher on Monday, boosted by technology firms as investors looked for indications of economic weakness in China and braced themselves for a slew of high-profile earnings reports. Mega-cap tech-adjacent growth stocks provided much of the rally, pushing the Nasdaq ahead. The S&P 500 and blue-chip Dow both set new closing highs. The Dow Jones Industrial Average climbed 0.47% to 43,067.00, the S&P 500 rose 0.78% to 5,860.20, and the Nasdaq Composite jumped 0.87% to 18,502.69.
- Treasuries: On Monday, the US bond market was closed to observe Columbus Day/Indigenous Peoples' Day.
- Currency: The dollar rose to a 10-week high on Monday in light trade, continuing its long bullish run spurred by data showing a modestly weakened economy, which coincided with predictions on moderate interest rate cuts by the Federal Reserve. Volume was modest, since some markets, including Japan and Canada, were closed on Monday. The dollar index against six major currencies reached 103.36, its highest level since Aug. 8. The euro fell to a 10-week low below $1.09 and was down 0.3% at $1.0902.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| NBFC | 1251 | 837 | 463 | 660 | - |
| Financial Institution | 150 | 1401 | 340 | 117 | - |
| Private Sector Bank | 100 | 301 | 150 | 400 | - |
| Telecom | - | 25 | - | 129 | - |
| Public Sector Bank | - | - | - | 129 | - |
Secondary trade details for recently issued primary corporate bonds:
Security Name |
Issue Date |
Trades Since Issue(Cr) |
Avg Yield(%) |
LTY (%) |
|---|---|---|---|---|
| 8.78 MUTHOOT FIN 04OCT29 | 2024-10-04 | 590 | 8.77 | 8.77 |
| 7.7951 BAJAJ FIN 10DEC27 | 2024-10-09 | 550 | 7.77 | 7.81 |
| 7.56 BAJAJ HOUSING 04OCT34 | 2024-10-04 | 176 | 7.56 | 7.56 |
| 9.35 ADANI AIRPORT 08SEP28 | 2024-10-01 | 125 | 9.76 | 9.76 |
| 8.24 M&M FINANCE 06OCT34 | 2024-10-08 | 110 | 8.19 | 8.15 |
| 7.70 BAJAJ FIN 04OCT34 | 2024-10-04 | 100 | 7.69 | 7.69 |
| 10.90 EARLYSALARY 27MAR26 | 2024-09-30 | 80 | 12.41 | 11.50 |
| 10.80 WHIZDM FINANCE PRIVATE LIMITED 31MAR2026 | 2024-09-30 | 80 | 12.02 | 12.00 |
| 8.47 BOBCARD LIMITED PERP 30SEP2034 CALL | 2024-09-30 | 75 | 8.46 | 8.46 |
| 9.60 HERO WIND ENERGY 04OCT27 | 2024-10-04 | 65 | 10.08 | 10.70 |
| 9.49 KIIF 08OCT34 | 2024-10-08 | 51 | 9.57 | 9.83 |
| 8.14 TATA PROJECTS 08OCT27 | 2024-10-09 | 50 | 8.14 | 8.14 |
| 7.7810 KMPL 17SEP29 | 2024-10-04 | 50 | 7.78 | 7.78 |
Source: Harmoney data analytics
Events This Week
October 15, Tuesday:
- US Monthly budget statement for August.
October 16, Wednesday:
- US Export and import price index for September.
- India Trade deficit government for September.
- India M3 Money supply.
October 17, Thursday:
- US Jobless claims for Oct 4 week.
- US Retail sales for September.
- US Industrial production for September.
October 18, Friday:
- India Bank loan growth for Sep 30 week.
- India FX reserves Oct 7 week.
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