Macroeconomic stability is a shared responsibility of both monetary and fiscal institutions, and strong fiscal-monetary cooperation was key to India's success in the face of adverse shocks, RBI Governor Shaktikanta Das said Thursday. Multiple and overlapping food and oil price shocks made 2020–23 distinctive, challenging monetary policy. Das said fiscal policy had to be coordinated to neutralize these shocks while monetary policy anchored inflation expectations and contained demand-pull pressures. Government supply management reduced supply chain pressures and cost-push inflation.
Top 3 Leads Today
- SEBI abolishes 1% mandatory security deposit requirements in public issues.
- Moody's says indictment of Adani group chairman credit-negative for group cos.
- Goldman Sachs sees India's FY26 GDP growth at 6.3% vs 6.4% FY25.
Indian Markets
- Money Markets Minute: The call rate ended at 6.00%, up from 5.75% for two-day loans on Tuesday. The weighted average call money rate remained above the RBI's repo rate of 6.50%, closing at 6.62% compared with 6.50% on Tuesday. The interbank call money rate also stayed below the RBI's standing deposit facility rate of 6.25%.
- Government Bond Brief: Yields edged higher due to an overnight rise in the US Treasury yields and concerns over an escalation in the Russia-Ukraine war. The benchmark 7.10%, 2034 bond ended at a 6.86% yield, up from 6.85% on Tuesday. Trading volumes remained subdued amid a lack of domestic cues, with market turnover falling to ₹247.55 billion from ₹339.30 billion on Tuesday.
- Corporate Bond Beat: Yields on three-year corporate bonds rose by 3-4 basis points in the secondary market due to mutual fund selling, while yields on five-year and 10-year bonds remained steady. Trading activity fell, with deals worth ₹56.10 billion recorded on exchanges, compared with ₹79.84 billion on Tuesday.
- Forex Flash: The rupee fell to a record low of 84.4925 against the dollar, down from 84.4150 on Tuesday, as persistent dollar demand from importers and strong dollar index gains pressured the local currency. Banks’ dollar purchases on behalf of foreign portfolio investors further weighed on the rupee. It traded within a wider 10-paise range.
- Stocks Spotlight: Bribery allegations against the Adani Group chairman and senior officials shocked Indian investors, exacerbating market concerns over foreign fund outflows, slowing earnings growth, and high valuations. The benchmark indices fell to five-month lows, erasing Tuesday's gains. The Nifty 50 fell 0.7% to 23,349.90, while the Sensex fell 0.5% to 77,155.79.
International Markets
- US Stocks: After volatile trading on Thursday, Wall Street's major indexes ended the day higher, with the S&P 500 and the blue-chip Dow reaching one-week highs. Salesforce's 3.1% increase helped boost the Dow after three brokerages raised their price estimates for the stock. The Dow Jones Industrial Average increased 1.06% to 43,870.35, the S&P 500 gained 0.53% to 5,948.71, and the Nasdaq rose 0.03% to 18,972.42.
- Treasuries: Yields remained steady on Thursday with upward bias, amid geopolitical concerns following Russia's missile attack against Ukraine. The US initial unemployment claims figures fell to the lowest level in seven months, indicating that the economy was doing well. The 10-year benchmark treasury rate climbed to 4.413% from 4.406% on Wednesday.
- Currency: In tumultuous trading, the dollar went up as investors looked at falling weekly jobless claims, which is a sign of a strong job market, and comments from two Federal Reserve governors about the future of interest rates. The dollar fell 0.62% to 154.45 against the yen but up 0.29% to 0.887 against the Swiss franc. The dollar index climbed 0.37% to 107, a 13-month high against major currencies. The euro fell 0.41% to $1.0479.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| NBFC | 511 | 876 | 601 | 354 | 261 |
| Financial Institution | 411 | 470 | 49 | 241 | - |
| Private Sector Bank | 250 | - | 95 | 9 | - |
| Power - Transmission | 225 | - | - | 101 | - |
| Housing Finance Company | 50 | 146 | 21 | 29 | - |
Secondary trade details for recently issued primary corporate bonds:
Security Name |
Issue Date |
Trades Since Issue(Cr) |
Avg Yield(%) |
LTY (%) |
|---|---|---|---|---|
| 11.00 GMR INFRA PROJECTS PRIVATE LIMITED 26JUN2027 | 2024-06-26 | 600.00 | 15.67 | 15.71 |
| 7.44 IREDALTD 25AUG34 | 2024-06-25 | 75.00 | 7.44 | 7.44 |
| 8.35 AXISFIN 23JUN34 | 2024-06-24 | 180.00 | 8.36 | 8.35 |
| 8.07 NIIF 23AUG29 | 2024-06-21 | 430.00 | 8.07 | 8.07 |
| 10.25 AYEFINANCE 20MAR26 | 2024-06-20 | 205.04 | 11.43 | 10.63 |
| 9.10 SHRIRAMFIN 20JUN34 | 2024-06-20 | 129.00 | 9.09 | 9.09 |
| 9.25 SKFL - C 19SEP27 M | 2024-06-19 | 100.00 | 9.75 | 9.75 |
| 10.20 KRAZYBEESERVICES 19DEC25 | 2024-06-19 | 87.60 | 11.24 | 12.60 |
| 8.05 TATA CAPITAL HFL 18JUN29 | 2024-06-18 | 285.00 | 8.05 | 8.04 |
| 7.9265 LICHSGFIN 14JUL27 | 2024-06-14 | 1060.00 | 7.93 | 7.93 |
| 7.44 IRFC 13JUN34 | 2024-06-13 | 1530.00 | 7.45 | 7.40 |
| 8.55 HDB PERP - C | 2024-06-13 | 259.00 | 8.54 | 8.54 |
| 11.40 KEERTANA 13JUN27 | 2024-06-13 | 62.05 | 13.00 | 13.53 |
| 9.95 ADANIAIRPORT 12JUN28 | 2024-06-12 | 96.51 | 9.93 | 9.78 |
| 9.16 360ONEPRIME 12JUN27 | 2024-06-12 | 75.00 | 9.67 | 9.90 |
Source: Harmoney data analytics
Events This Week
November 22, Friday:
- US Flash Manufacturing PMI for November.
- US Flash Services PMI for November.
- India HSBC Composite PMI for November.
- India HSBC Manufacturing PMI for November.
- India HSBC Services PMI for November.
- India FX Reserves for Nov 11 week
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