Strengthening core fundamentals is the strongest protection against global uncertainty, Reserve Bank of India Governor Shaktikanta Das said on Tuesday, amid rising tensions in West Asia. Das said that strong commitment to inflation goals, keeping reserve buffers, and using smart, forward-looking financial policies along with good fiscal management will make emerging market economies a lot more resilient. Das was invited to Nepal to give the inaugural Himalaya Shumsher Memorial Lecture. Das stated that India's flexible inflation targeting framework set price stability as the primary objective of monetary policy, but not unconditionally, because growth must also be considered.
Top 3 Leads Today
- Moody's Analytics pegs India 2024 GDP growth at 7.1%, 6.5% in 2025.
- S&P retains India's FY25 growth forecast at 6.8%, expects rate cut in Oct.
- Private banks' employee strength grows 2.8 times in over a decade.
Indian Markets
- Money Markets Minute: The call money market rate settled sharply below the RBI's 6.25% standing deposit facility rate due to low demand for funds from banks in the latter session on Tuesday. The rate for one-day loans remained unchanged at 5.75%, while the weighted average call rate rose slightly to 6.69% from 6.68% on Monday.
- Government Bond Brief: Yields declined as some traders rushed to cover short bets just before the close. The 10-year benchmark 7.10% 2034 gilt ended at 6.76%, down from 6.77% on Monday. Turnover rise to ₹546.60 billion from ₹507 billion the previous day.
- Corporate Bond Beat: Yields on three- and five-year corporate bonds dipped slightly after the Small Industries Development Bank of India's bond cut-off fell short of expectations, while 10-year yields remained stable. Total deals on the exchanges reached ₹121.58 billion, down from ₹148.3 billion on Monday.
- Forex Flash: The rupee fell against the dollar, dropping 11 paise to close at 83.63, as state-owned banks bought dollars for oil marketing companies and other importers. It had settled at 83.54 on Monday.
- Stocks Spotlight: Indices finished mostly flat after three days of gains, with declines in banking and FMCG shares offsetting progress. The Nifty 50 ended at 25,940.40, while the Sensex closed at 84,914.04.
International Markets
- US Stocks: Mining stocks rose after China's stimulus program, pushing the S&P 500 and Dow to new highs on Tuesday despite dismal consumer confidence data. After the Conference Board reported an unexpected drop in the US consumer confidence in September due to job market concerns, the indexes initially curtailed gains. Dow Jones index was up 0.20% to 42,208.22, S&P 500 rose 0.25% to 5,732.93, and Nasdaq gained 0.56% to 18,074.52.
- Treasuries: Yields fell in a volatile trading session on Tuesday as US data, especially negative confidence figures, raised the possibility of another large rate cut at the Fed's November policy meeting. The Conference Board's consumer confidence index fell to 98.7 this month, from an upwardly revised 105.6 in August. The drop was the biggest since August 2021. The benchmark 10-year yield was slightly lower at 3.733%, after reaching a three-week high of 3.81%.
- Currency: China's yuan touched a 16-month high versus the US dollar after Pan Gongsheng, Governor of the People's Bank of China, announced measures to reduce borrowing costs and infuse more cash into the economy, as well as to lessen home mortgage repayment burdens. The news included a 50-basis-point reserve requirement cut for banks. The yuan rose 0.65% to 7.017 per dollar. After the US consumer confidence data, the dollar index fell further. The dollar index declined 0.57% to 100.35, while the euro rose 0.59% to $1.1178. Dollar fell 0.31% against the yen 143.15.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| NBFC | 637 | 2309 | 249 | 1317 | 141 |
| Housing Finance Company | 321 | 205 | 741 | 956 | - |
| Financial Institution | 653 | 338 | 309 | 419 | 20 |
| Private Sector Bank | 336 | 840 | - | 408 | - |
| Investment Company | 250 | 116 | - | 10 | - |
Secondary trade details for recently issued primary corporate bonds:
Security Name |
Issue Date |
Trades Since Issue(Cr) |
Avg Yield(%) |
LTY (%) |
|---|---|---|---|---|
| 7.65 LIC HOUSING 19AUG31 | 2024-09-19 | 1000 | 7.65 | 7.65 |
| 7.85 TATA POWER RENEWABLE 19SEP34 | 2024-09-19 | 900 | 7.84 | 7.80 |
| 9.65 ADANIENTLTD 09SEP27 | 2024-09-09 | 556 | 9.74 | 9.64 |
| 8.40 CHOLAINVFIN 18SEP27 | 2024-09-18 | 270 | 8.40 | 8.40 |
| 7.24 INDIAN BANK 13SEP34 | 2024-09-13 | 260 | 7.23 | 7.23 |
| 7.26 BOB 09SEP34 | 2024-09-09 | 245 | 7.23 | 7.19 |
| 0% CYQURE INDIA PRIVATE LIMITED 17MAR2028 | 2024-09-17 | 204 | 14.27 | 14.48 |
| 8.03 ADITYA BIRLA HFL 11SEP29 | 2024-09-11 | 175 | 8.01 | 7.97 |
| 8.22 TCL 13SEP34 | 2024-09-13 | 146 | 8.23 | 8.14 |
| 7.36 IREDALTD 10SEP34 C 09SEP39 M | 2024-09-10 | 145 | 7.34 | 7.30 |
| 9.90 ADANIENTLTD 12SEP29 | 2024-09-12 | 105 | 10.00 | 9.85 |
| 7.95 ICICI HFL 20DEC27 | 2024-09-19 | 95 | 7.97 | 7.98 |
| 8.10 ABFL 07SEP29 | 2024-09-09 | 85 | 8.11 | 8.10 |
| 7.94 ICICI HFL 19SEP29 | 2024-09-19 | 60 | 7.93 | 7.93 |
| 8.45 GODREJHSGFIN 18SEP29 | 2024-09-18 | 50 | 8.44 | 8.45 |
Source: Harmoney data analytics
Events This Week
September 25, Wednesday:
- US New residential sales for August.
September 26, Thursday:
- US 3rd estimate GDP for Q2.
- US Revised corporate profits for Q2.
- US Advance report on durable goods for August.
- US Unemployment insurance weekly claims report for Sep 21 week.
- US Weekly export sales.
September 27, Friday:
- US Advance economic indicators report for August.
- US State quarterly personal income for Q2.
- US GDP by state for Q2.
- India Balance Payment for Q2.
- India Current Account Balance for Q2.
- India FX Reserves for Sep 16 week.
- India Trade Deficit for Q2.
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