The Asian Development Bank stated Wednesday that agricultural and government spending will boost India's growth rate from the July-September quarter onward, maintaining its 2024-25 GDP growth prediction at 7%. The first quarter of 2023-24 saw GDP growth drop to 6.7% Y-o-Y, but agriculture and industry and services are likely to boost it in the future quarters. Exports in FY24 will be greater than previously expected, driven by increased service exports, particularly in information technology and professional services, according to the Asian Development Outlook report.
Top 3 Leads Today
- OECD raises India's FY25 GDP growth forecast to 6.7%; FY26 to 6.8%.
- RBI Swaminathan says lot of ground to cover to deepen financial inclusion.
- SEBI for individual investors using UPI to block funds for debt issues.
Indian Markets
- Money Markets Minute: The rate ended well below the RBI's standing deposit facility rate of 6.25% due to low demand for funds from banks at the end of the session. The call money market rate for one-day loans remained unchanged at 5.75%, while the weighted average call rate slightly decreased to 6.68% from 6.69% on Tuesday.
- Government Bond Brief: Bond yields fell in anticipation of a reduction in the gross borrowing plan for 2024-25, supported by an overnight drop in US Treasury yields that boosted prices earlier. The 10-year benchmark 7.10% 2034 bond closed with a yield of 6.74%, down from 6.76% on Tuesday. Turnover reached ₹718.80 billion, compared with ₹536 billion at Tuesday's close.
- Corporate Bond Beat: Yields on 10-year corporate bonds dipped slightly in the secondary market, following a similar trend in Indian government bond yields. In contrast, yields on three- and five-year corporate bonds remained stable. Total deals on the exchanges reached ₹139.86 billion, up from ₹121.58 billion on Tuesday.
- Forex Flash: Despite the rupee finishing higher against the dollar, it gave up much of its gains as state-owned banks bought dollars, likely on behalf of the RBI and importers. After peaking at 83.5025, the rupee settled at 83.5925, compared to the previous close of 83.6700.
- Stocks Spotlight: Benchmark indices hit new all-time highs, fuelled by optimism over potential interest rate cuts in India and stronger earnings growth expected in the second half of the financial year. At close, the Sensex rose 0.30% to 85,169.87, while the Nifty increased 0.25% to 26,004.15.
International Markets
- US Stocks: On Wednesday, the Dow and S&P 500 fell from record highs pushed by China's stimulus plan as investors awaited economic indications and interest rate reduction. After the Federal Reserve's Sept. 18 rate cut raised optimism for a gentle landing, the three main indices rose monthly. However, a dismal consumer sentiment data released on Tuesday increased concerns about the labour market's health. The Dow Jones Index sank 0.70% to 41,914.75, the S&P 500 declined 0.19% to 5,722.26, and the Nasdaq gained 0.04% to 18,082.21.
- Treasuries: Yields climbed as investors remained optimistic that the Federal Reserve could deliver a soft landing for the US economy. Long-term bond yields rose on concerns that looser financial conditions will boost inflation. Investors will be looking for US unemployment claims for the week ending September 21 today, as well as personal income data for the second quarter on Friday. The 10-year benchmark yield edged up 4.9 basis points to 3.784%.
- Currency: The dollar rose from a 14-month low against the euro, but investors stuck to their bets that the Federal Reserve will cut interest rates again by a big amount at its meeting in November because job prospects are getting worse. The euro fell 0.41% to $1.1134 after touching $1.1214, its highest level since July 2023. The dollar index rose 0.68% to 100.91. It hit 100.21, marking a Sept. 18 low, the worst since July 2023. The dollar touched 144.75 yen, its best level since Sept. 3, up 1.03%.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| NBFC | 665 | 2466 | 738 | 2313 | 559 |
| Financial Institution | 335 | 1028 | 1996 | 9 | - |
| Housing Finance Company | 650 | 458 | 358 | 502 | - |
| Private Sector Bank | 355 | 50 | 31 | 2 | - |
| Public Sector Bank | - | - | - | 220 | 92 |
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 | 1300 | 7.65 | 7.66 |
| 7.85 TATA POWER RENEWABLE 19SEP34 | 2024-09-19 | 900 | 7.84 | 7.80 |
| 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 |
| 0% CYQURE INDIA PRIVATE LIMITED 17MAR2028 | 2024-09-17 | 242 | 14.29 | 14.50 |
| 8.03 ADITYA BIRLA HFL 11SEP29 | 2024-09-11 | 200 | 8.00 | 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 | 117 | 9.99 | 9.88 |
| 7.95 ICICI HFL 20DEC27 | 2024-09-19 | 95 | 7.97 | 7.98 |
| 7.94 ICICI HFL 19SEP29 | 2024-09-19 | 60 | 7.93 | 7.93 |
| 9.50 INCRED 18SEP26 | 2024-09-19 | 55 | 9.92 | 9.73 |
| 8.45 GODREJHSGFIN 18SEP29 | 2024-09-18 | 50 | 8.44 | 8.45 |
Source: Harmoney data analytics
Events This Week
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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