S&P Global Ratings stated Thursday that India would be the third largest economy by 2030, but rising population threatens basic service delivery and investment needed to maintain productivity. According to the report, rising economies have ambitious plans for the next decade and beyond, with India intending to become a $30 trillion economy by 2047, up from $3.6 trillion now. India is currently the fifth-largest economy. S&P said in its research report 'Look forward Emerging Markets: A decisive decade' that emerging markets will shape the global economy over the next decade, averaging 4.06% GDP growth through 2035, compared to 1.59% for established nations.
Top 3 Leads Today
- Direct tax collections jump 182% in 10 years to over ₹19.60 trillion in FY24.
- Gold ETFs drawing investor interest ahead of Dhanteras, says ICRA Analytics.
- Rising demand to hinder India's progress to lower carbon emissions - Moody's
Indian Markets
- Money Markets Minute: The call rate ended at 5.75%, below the RBI's standing deposit facility rate of 6.25%, as surplus liquidity in the banking system reduced demand for funds from banks. This was a decline from the previous rate of 6.40% on Wednesday. The weighted average call rate also dipped slightly to 6.43%, compared with 6.44% on Wednesday.
- Government Bond Brief: Yields rose as traders sold bonds to accommodate the upcoming ₹330-billion gilt auction on Friday. Foreign banks likely contributed to the selling, exercising caution ahead of U.S. economic data released after market hours. The yield on the 10-year benchmark 7.10%, 2034 gilt rose to 6.78%, compared with 6.77% on Wednesday. Trading turnover fell to ₹417.55 billion, down from ₹462.05 billion on Wednesday.
- Corporate Bond Beat: Yields on three-year corporate bonds edged higher in the secondary market as mutual funds sold short-term papers to reinvest their funds. Meanwhile, yields on five-year and 10-year corporate bonds remained steady. The total trading volume amounted to ₹72.98 billion, down from ₹100.41 billion on Wednesday.
- Forex Flash: The rupee ended slightly lower against the dollar due to dollar purchases by importers and a strong dollar index. The currency moved within a narrow range of 8 paise during the day, closing at 84.0675 per dollar, compared to 83.9950 on Wednesday.
- Stocks Spotlight: The market extended losses for the third straight session, with the Nifty 50 closing just below 24,750 amid widespread sectoral selling, except for Information Technology. The Sensex fell 0.61% to 81,006.61, and the Nifty declined 0.89% to 24,749.80.
International Markets
- US Stocks: The benchmark Dow Jones Index rose to its fourth record close in five sessions on Thursday, as higher-than-expected monthly retail sales signalled a strong US consumer and TSMC's positive prediction boosted chipmakers' equities. The other major Wall Street benchmarks remained just stable, with the S&P 500 falling fractionally and the Nasdaq Composite edging out a small gain. The S&P 500 fell 0.02% to 5,841.47 points, while the Nasdaq gained 0.04% to 18,373.61. The Dow gained 0.37%, reaching 43,239.05.
- Treasuries: Treasury yields rose as data showed the US economy is on firm ground, but the Fed still has ample room to proceed slowly toward lower rates. September saw a 0.4% increase in the US retail sales, which was slightly higher than anticipated. Conversely, weekly unemployment claims decreased unexpectedly. Benchmark 10-year note yields jumped 8.2 basis points to 4.098% from 4.016% Wednesday. The 30-year bond yield jumped 9.8 basis points to 4.3972% while the 2-year note yield rose 4.8 basis points to 3.935%.
- Currency: The dollar reached an 11-week high after the US retail sales data exceeded expectations, which increased confidence in the US economy. The euro fell 0.3% to $1.0828, while the dollar index, which gauges the greenback against a basket of currencies including the yen and the euro, increased by 0.24% to 103.79. The dollar rose 0.41% against the Japanese yen, reaching 150.23.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| NBFC | 289 | 1157 | 607 | 514 | 540 |
| Financial Institution | 460 | 625 | 832 | 11 | - |
| Telecom | - | 275 | - | 40 | - |
| Public Sector Bank | - | 0 | - | 60 | 25 |
| Housing Finance Company | 50 | 40 | 26 | 52 | 5 |
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 | 600 | 8.77 | 8.71 |
| 7.7951 BAJAJ FIN 10DEC27 | 2024-10-09 | 550 | 7.77 | 7.81 |
| 8.05 HDFC LIFE 09OCT29 C 09OCT34 M | 2024-10-09 | 310 | 8.04 | 8.04 |
| 9.50 HINDUJA HOUSING 11OCT39 | 2024-10-11 | 265 | 9.31 | 9.49 |
| 7.7810 KMPL 17SEP29 | 2024-10-04 | 250 | 7.74 | 7.73 |
| 8.25 CHOL FINANCE 04OCT29 | 2024-10-04 | 240 | 8.24 | 8.24 |
| 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 |
| 8.24 M&M FINANCE 06OCT34 | 2024-10-08 | 110 | 8.19 | 8.15 |
| 9.49 KIIF 08OCT34 | 2024-10-08 | 73 | 9.65 | 9.74 |
| 9.60 HERO WIND ENERGY 04OCT27 | 2024-10-04 | 69 | 10.11 | 11.20 |
| 9.49 KIIF 08OCT29 | 2024-10-08 | 61 | 9.88 | 9.84 |
| 8.14 TATA PROJECTS 08OCT27 | 2024-10-09 | 50 | 8.14 | 8.14 |
Source: Harmoney data analytics
Events This Week
October 18, Friday:
- India Bank loan growth for Sep 30 week.
- India FX reserves Oct 7 week.
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