S&P Global, a credit ratings agency, lowered its India growth forecast to 6.7% in FY26 from 6.9% previously. However, in its most recent quarterly economic update for Asia-Pacific, the rating agency maintained its growth prediction for the current fiscal year at 6.8%, citing "high interest rates and a lower fiscal impulse that temper urban demand". The bulletin also underlined that persistent food inflation is delaying RBI rate cuts, with the central bank only likely to lower the policy rate once this fiscal year.
Top 3 Leads Today
- Public sector banks prepare to open AT-1, Tier-2 bond floodgates.
- Government collects ₹163.98 billion GST from health and life insurance in FY24: Finance Ministry.
- Bumper kharif harvest likely to lower food inflation: FinMin report.
Indian Markets
- Money Markets Minute: The call rate closed at 6.24%, just below the RBI's standing deposit facility rate of 6.25%, as fund demand eased. The weighted average call rate was marginally lower at 6.72%, down from 6.73% on Friday.
- Government Bond Brief: Yields eased, tracking a dip in US Treasury yields over the weekend. Demand was supported by the BJP-led Mahayuti's win in Maharashtra. The 10-year 6.79% 2034 bond ended at a 6.82% yield, down from 6.85% on Friday. Market turnover fell to ₹329.95 billion from ₹420.25 billion.
- Corporate Bond Beat: Yields on 10-year corporate bonds dropped 4 basis points in the secondary market, tracking a fall in government bond yields after a previous rise. Trade volume was subdued, with exchanges recording deals worth ₹67.32 billion.
- Forex Flash: The rupee saw its largest single-day gain since June 3, driven by foreign inflows from MSCI index rebalancing, a weaker dollar index, and softer US yields, according to market participants. It appreciated 17 paise to close at 84.286 per dollar, compared with 84.455.
- Stocks Spotlight: The equity market extended its rally, with the Nifty closing above 24,200 after the BJP-led Mahayuti's clear win in Maharashtra. Boosted by positive global cues, indices opened strong, with Nifty hitting 24,250 early on. Despite some profit booking, the market ended positive with Sensex up 1.25% at 80,109.85, and Nifty up 1.32% at 24,221.90.
International Markets
- US Stocks: Wall Street's main indexes rose on Monday, with the small-cap Russell 2000 index reaching a record high after Scott Bessent's nomination as Treasury secretary lowered bond yields. Bessent's selection alleviated fears about potential tariffs, which pushed bond yields higher before the election. The S&P 500 rose 0.30% to 5,987.15, and the Nasdaq rose 0.27% to 19,055.15. The Dow increased 0.99% to 44,735.53. The small-cap index reached an all-time intraday high of 2,466.49, surpassing the record set three years earlier.
- Treasuries: Yields fell sharply as bond investors bet on a more moderate than expected US fiscal trajectory after Trump's appointment of fund manager Scott Bessent as the next Treasury secretary. In a Sunday interview with the Wall Street Journal, Bessent stated that both tax and budget cutbacks were a priority. The 10-year note yield fell 14.1 basis points to 4.269% from 4.41% late Friday, while the 30-year bond yield fell 13.9 basis points to 4.4562%. The two-year note yield declined 10.5 basis points to 4.264% from 4.369% late Friday.
- Currency: The dollar declined from two-year highs on Monday as Treasury yields fell after Bessent was named US Treasury secretary. The dollar index, which compares the dollar to a basket of currencies, declined 0.56% to 106.89. The euro rose 0.74% versus the dollar to $1.0494, while the dollar fell 0.37% to 154.16 yen. The euro fell substantially last month amid concerns about Trump tariffs, poor economic circumstances, and hints of an escalation in the Russia-Ukraine conflict.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| NBFC | 720 | 1051 | 100 | 258 | 1 |
| Financial Institution | 50 | 1046 | 241 | 411 | - |
| Public Sector Bank | - | - | - | 5 | 670 |
| Private Sector Bank | 470 | - | 5 | 102 | - |
| Housing Finance Company | 0 | 226 | 13 | 2 | - |
Secondary trade details for recently issued primary corporate bonds:
Security Name |
Issue Date |
Trades Since Issue(Cr) |
Avg Yield(%) |
LTY (%) |
|---|---|---|---|---|
| 7.23 SBI 19NOV39 | 2024-11-19 | 995 | 7.22 | 7.21 |
| 7.70 FEDERAL BANK 11NOV34 | 2024-11-11 | 480 | 7.76 | 7.76 |
| 7.15 IRFC 14NOV39 | 2024-11-13 | 440 | 7.15 | 7.16 |
| 8.25 GIC HOUSING 19JUN26 | 2024-11-21 | 200 | 8.33 | 8.34 |
| 11.00 GMR INFRA 13NOV27 | 2024-11-13 | 200 | 15.93 | 15.94 |
| 10.20 CLIX CAPITAL 18MAR27 | 2024-11-19 | 111 | 10.64 | 10.98 |
| 9.45 OXYZO FINSERV 11NOV26 | 2024-11-11 | 90 | 9.90 | 10.50 |
| 9.90 IKF FINANCE 15MAR27 | 2024-11-13 | 60 | 11.00 | 11.00 |
| 7.70 SUNDARAM HOME FINANCE 21DEC29 | 2024-11-21 | 50 | 7.70 | 7.70 |
Source: Harmoney data analytics
Events This Week
November 26, Tuesday:
- US Monthly House Price Index for September.
- US Quarterly House Price Index.
- US Consumer Confidence Index for November.
- US New Residential Sales for October.
- US Federal Open Market Committee meeting minutes published.
November 27, Wednesday:
- US 2nd estimate GDP for Q3.
- US Advance Report on Durable Goods for October.
- US Unemployment Insurance Weekly Claims Report for Nov 23 week.
- US Metropolitan Area Employment and Unemployment for October.
- US Pending Home Sales Index for October.
- India M3 Money Supply for Nov 11 week.
November 28, Thursday:
- US Thanksgiving Day. Financial markets closed.
November 29, Friday:
- US Weekly export sales.
- US Financial markets close early after Thanksgiving.
- India Federal Fiscal Deficit for October.
- India Bank Loan Growth for Nov 11 week.
- India FX Reserves Nov 18 week.
- India Gross Domestic Product Quarterly for Q3.
- India Infrastructure Output for October.
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