The Reserve Bank of India reported $6.9 billion in net foreign direct investment in April-June, up from $4.7 billion a year earlier. Gross inward FDI rose 26.4% to $22.5 billion in Q1 2024-25. Gross FDI inflows were 80% from manufacturing, financial services, communication, computer, electricity and other energy sectors. According to RBI's update on the economy report, Singapore, Mauritius, the Netherlands, the US, and Belgium accounted for 75% of flows.
Top 3 Leads Today
- Cautious monetary policy needed if food inflation persists: RBI paper.
- Private capex could increase to ₹2.45 trillion in FY25, says RBI study.
- Focus on deposits, strengthen cybersecurity: FM Sitharaman to banks.
Indian Markets
- Money Markets Minute: The call rate ended below the RBI's standing deposit facility rate of 6.25% due to an increase in liquidity surplus in the banking system. The one-day call money rate closed at 5.85%, up from 5.75% for two-day loans on Saturday. The weighted average call rate was 6.49%, compared with 6.17% on Saturday.
- Government Bond Brief: Government bond yields ended mixed, with long-term bonds rising due to short covering by traders and demand from investors like life insurers. Bonds maturing in under 10 years saw little change. The yield on the 10-year benchmark 7.10% 2034 bond remained steady at 6.87%, the same as on Friday. Turnover increased to ₹500.15 billion from ₹439.95 billion on Friday.
- Corporate Bond Beat: Corporate bond yields remained unchanged across tenures in the secondary market due to muted activity from market participants, with deals totalling ₹39.84 billion recorded on exchanges.
- Forex Flash: The rupee closed slightly higher at 83.8700 per dollar, up from 83.9400 on Friday, following a dip in the dollar index. After opening stronger, the rupee traded within a 10-paise range before importers started buying dollars.
- Stocks Spotlight: Indian equity indices ended nearly flat after a quiet session. The Sensex dropped slightly by 0.02% to 80,424.68, and the Nifty rose by 0.13% to 24,572.70. Despite starting strong with the Nifty above 24,600, early gains were lost within the first hour, and the market traded in a narrow range before closing with little change.
International Markets
- US Stocks: The benchmark indices rose on Monday, led by technology shares, building on their biggest weekly percentage gain of the year as investors focused on the Democratic National Convention and Jackson Hole Economic Symposium and expectations that the US economy would avoid a recession and slower inflation would lower interest rates. The Dow Jones index jumped 0.58%, the S&P 500 0.97%, and the Nasdaq Composite 1.39% on Monday.
- Treasuries: Yields on benchmark 10-year notes declined 1.9 basis points to 3.873% on Monday, with views that the prospects of a US recession are low based on recent US data. Over the weekend, Federal Reserve members Mary Daly and Austan Goolsbee suggested that interest rates could be reduced in September. Investors will take further cues from the latest policy meeting minutes this week and Fed Chair Jerome Powell's Jackson Hole speech on Friday.
- Currency: The dollar hit a seven-month low, and the Japanese yen touched a more than one-week high as traders awaited Federal Reserve Chair Jerome Powell's comments this week, which are likely to herald its September interest rate cut. The dollar fell 0.64% to 146.64 yen, and the euro rose 0.5% to $1.108, continuing its August rise.
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 | 700 | 225 | 503 | 1,870 | 435 |
| NBFC | 226 | 1,093 | 790 | 240 | 151 |
| Diversified | 1000 | ||||
| Power - Transmission | 261 | ||||
| Housing Finance Company | 50 | 61 | 117 | 1 |
Secondary trade details for recently issued primary corporate bonds:
Security Name |
Issue Date |
Trades Since Issue(Cr) |
Avg Yield(%) |
LTY (%) |
|---|---|---|---|---|
| 7.36 NBFID 12AUG44 | 2024-08-13 | 1005 | 7.35 | 7.35 |
| 8.25 SBICARDS 08AUG34 | 2024-08-08 | 873 | 8.24 | 8.24 |
| 7.80 BOM 05AUG34 | 2024-08-05 | 408 | 7.77 | 7.78 |
| 8.00 IIDL 29OCT29 | 2024-08-13 | 406 | 8.01 | 7.99 |
| 8.30 SMFG 30JUN27 | 2024-08-05 | 250 | 8.38 | 8.38 |
| 7.98 IIDL 05AUG34 | 2024-08-05 | 220 | 7.97 | 7.98 |
| 0% 360ONEPRIME 13MAR26 | 2024-08-08 | 164 | 9.00 | 9.00 |
| 7.95 IIDL 13AUG39 | 2024-08-13 | 125 | 7.95 | 7.94 |
| 8.05 AXISFIN 25APR28 | 2024-08-09 | 119 | 8.02 | 8.03 |
| 8.28 PNB HFL 30DEC26 | 2024-08-07 | 100 | 8.31 | 8.31 |
| 7.99 RCFL 07AUG27 | 2024-08-07 | 100 | 7.99 | 7.99 |
| 9.75 SAMMAAN CAPITAL LIMITED 12APR2028 | 2024-08-12 | 100 | 9.59 | 9.12 |
| 0% EQUINOX INDIA DEVELOPMENTS LIMITED 05SEP2025 | 2024-08-05 | 80 | 11.93 | 11.93 |
| 7.87 SUMMITDIGITELLTD 15DEC29 C 15MAR30 M | 2024-08-05 | 75 | 8.15 | 8.15 |
| 7.98 SUNDARAMHFL 04SEP26 | 2024-08-05 | 75 | 7.96 | 7.96 |
| 8.90 MUTHOOT FINANCE 07OCT27 | 2024-08-07 | 75 | 8.92 | 8.92 |
Source: Harmoney data analytics
Events This Week
August 21, Wednesday:
- US Advance quarterly services for Q2.
- US EIA weekly petroleum status report for Aug 16 week.
- US FOMC meeting minutes.
- India M3 money supply for Aug 9 week.
August 22, Thursday:
- US Unemployment insurance weekly claims report for Aug 17 week.
- US Weekly export sales.
- US PMI data for August.
- US Existing home sales for July.
- India PMI data for August.
August 23, Friday:
- US New residential sales for July.
- India Bank loan growth for Aug 9 week.
- India deposit growth for Aug 9 week.
- India Foreign exchange reserves for Aug 16 week.
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