On Wednesday, government data revealed that India's merchandise trade deficit fell to $20.78 billion in September as imports climbed at the slowest pace in six months and exports gained slightly after two months of fall. In August, the trade deficit reached $29.65 billion, a 10-month high. Despite falling global oil prices, imports rose 1.62% to $55.36 billion last month. September gold imports rose 6.9% to $4.39 billion but fell 56% sequentially. Exports rose 0.5% to $34.58 billion in September due to geopolitical concerns, according to data.
Top 3 Leads Today
- SEBI introduces liquidity window facility for investors in debt securities.
- RBI's central board reviews risks from evolving geopolitical conflicts.
- Cabinet hikes dearness allowance to 53% from 50% for central govt staff.
Indian Markets
- Money Markets Minute: The call rate ended below the RBI's repo rate of 6.50%, reflecting subdued demand for funds from banks due to excess liquidity in the banking system. The call money rate closed at 6.40%, up from 5.75% on Tuesday, while the weighted average call rate rose slightly to 6.44%, compared with 6.42% the previous day.
- Government Bond Brief: Yields remained mostly unchanged amid conflicting domestic and global signals. While falling US Treasury yields initially boosted bond prices, concerns about the domestic interest rate outlook later reversed these gains. The 10-year benchmark 7.10%, 2034 gilt yield ended flat at 6.77%, the same as Tuesday's closing level. Volumes were at ₹470.45 billion compared with ₹493 billion on Tuesday.
- Corporate Bond Beat: Yields on corporate bonds in the secondary market remained steady due to a lack of significant domestic triggers. Market participants were cautious and refrained from making large bets as uncertainty surrounding the developments in West Asia continued to affect sentiment. Trading volumes increased, with deals amounting to ₹45.95 billion, compared to ₹27.57 billion on Tuesday.
- Forex Flash: The rupee strengthened slightly against the dollar, closing just above the 84-per-dollar mark as banks sold dollars on behalf of foreign portfolio investors looking to participate in Hyundai Motor India's IPO. However, the rupee's rise was limited due to dollar purchases by banks on behalf of importers. The rupee closed at 83.995, marginally higher than its previous close of 84.0375.
- Stocks Spotlight: Benchmark indices fell for the second straight session, weighed down by losses in IT stocks. Weak global market performance and concerns over high valuations contributed to the decline. Additionally, investor sentiment was dampened by worries about weaker-than-expected earnings for domestic companies. The Nifty 50 dropped 0.3% to close at 24,971.30 points, while the Sensex fell 0.4%, closing at 81,501.36 points.
International Markets
- US Stocks: The Dow Jones index closed at a record high on Wednesday, and the other two benchmark indexes also advanced. Investors focused on small-cap equities, shifting from tech megacaps to cheaper sectors. The Russell 2000 index surged 1.6%, while the S&P Small Cap 600 rose 1.4%, both finishing at their highest levels since November 2021. The S&P 500 was up 0.47% to 5,842.47 points. The Nasdaq climbed 0.28% to 18,367.08. The Dow rose 0.79% to 43,077.70.
- Treasuries: The US benchmark yields fell as investors expect that the Federal Reserve would cut interest rates by a smaller amount at the end of its policy meeting next month. The yield on benchmark 10-year notes declined 2.2 basis points to 4.014%, while the 30-year bond yield declined three basis points to 4.2983%. The 2-year note yield slipped 2.1 basis points to 3.936% on Wednesday.
- Currency: The dollar reached a 10-week high as investors dismissed the possibility of a substantial policy rate cut at the Federal Reserve's upcoming meeting and began to contemplate the possibility that Republican Donald Trump could secure the presidency on November 5. The dollar index increased 0.28% to 103.55, while the euro fell 0.29% to $1.0858 against the greenback. The dollar rose 0.34% to 149.69 against the yen.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| NBFC | 495 | 954 | 226 | 870 | 50 |
| Financial Institution | 50 | 1460 | 211 | 88 | - |
| Housing Finance Company | 700 | 56 | 48 | 20 | 220 |
| Private Sector Bank | 620 | 150 | - | 25 | - |
| Diversified | 375 | - | - | 220 | - |
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 |
| 9.50 HINDUJA HOUSING 11OCT39 | 2024-10-11 | 260 | 9.31 | 9.48 |
| 8.05 HDFC LIFE 09OCT29 C 09OCT34 M | 2024-10-09 | 220 | 8.04 | 8.04 |
| 7.56 BAJAJ HOUSING 04OCT34 | 2024-10-04 | 176 | 7.56 | 7.56 |
| 7.70 BAJAJ FIN 04OCT34 | 2024-10-04 | 155 | 7.69 | 7.69 |
| 7.7810 KMPL 17SEP29 | 2024-10-04 | 150 | 7.75 | 7.73 |
| 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 |
| 9.49 KIIF 08OCT34 | 2024-10-08 | 69 | 9.64 | 9.78 |
| 9.60 HERO WIND ENERGY 04OCT27 | 2024-10-04 | 69 | 10.11 | 11.20 |
| 10.40 SI CREVA CAPITAL SERVICES PRIVATE LIMITED 01OCT2026 | 2024-10-01 | 61 | 13.04 | 13.00 |
| 9.49 KIIF 08OCT29 | 2024-10-08 | 60 | 9.88 | 9.83 |
| 8.14 TATA PROJECTS 08OCT27 | 2024-10-09 | 50 | 8.14 | 8.14 |
Source: Harmoney data analytics
Events This Week
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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