The government of India said Thursday that it will borrow ₹6.61 trillion from the market through 21 weekly auctions in the second half of this financial year. The borrowing meets market expectations at 47% of the overall market borrowing objective of ₹14.01 trillion. This contains ₹200 billion sovereign green bonds. On the bond issuance calendar, the finance ministry announced borrowing over three, five, seven, 10-, 15-, 30-, 40-, and 50-year securities. The finance ministry stated that the government will switch or acquire securities to balance out the redemption profile.
Top 3 Leads Today
- Easing crude oil prices offer leeway to RBI ahead of MPC decision.
- SEBI cuts time to list debt securities public issue to T+3 from T+6.
- Pickup in public expenditure may keep growth steady: Finance ministry.
Indian Markets
- Money Markets Minute: The call rate closed below the RBI's repo rate of 6.50% due to reduced demand for funds from banks, as liquidity tightened with government month-end spending. The call money market rate for one-day loans rose to 6.30%, up from 5.75% on Wednesday, while the weighted average call rate fell to 6.54% from 6.68%.
- Government Bond Brief: Yields fell on expectations of a gross borrowing cut for 2024-25, detailed in the upcoming Oct-Mar calendar. The 10-year 7.10% 2034 gilt closed at 6.72%, down from 6.74% on Wednesday, marking its lowest yield since February 21, 2022. Turnover rose to ₹1.14 trillion from ₹718.80 billion on Wednesday.
- Corporate Bond Beat: Yields on corporate bonds in the secondary market remained steady as investors refrained from making large bets ahead of the central government's Oct-Mar borrowing calendar. Total deals reached ₹160.56 billion, up from ₹139.86 billion on Wednesday.
- Forex Flash: The rupee finished slightly lower against the dollar but recovered much of its losses in the final trading session as some foreign and private banks sold dollars, likely due to foreign fund inflows. After hitting a low of 83.7175, the rupee settled at 83.6425, up from 83.5925 previously. It traded within a range of 8 paise.
- Stocks Spotlight: The Nifty 50 index extended its gains for the sixth consecutive session, closing at a record high. Despite a flat start, the market gained momentum throughout the day, reaching 26,250 for the first time, driven by broad sector buying. Both the Nifty 50 and Sensex rose 0.8%, closing at 26,216.05 and 85,836.12 points, respectively.
International Markets
- US Stocks: The S&P 500 set a new closing high on Thursday, while the Dow and Nasdaq climbed as Micron Technology shares soared and a solid U.S. unemployment claims report alleviated labour market fears. After Micron Technology forecast first-quarter revenue above projections, shares soared 15.78%, indicating robust demand for AI computer memory chips. A stable labour market was indicated by weekly unemployment claims falling more than expected. S&P 500 finished up 0.40% at 5,745.37 after reaching a record intraday high of 5,767.37, Dow increased 0.62% to 42,175.11, and Nasdaq rose 0.60% to 18,190.29.
- Treasuries: Yields rose marginally as traders reduced bets that the Federal Reserve would slash rates by another 50 basis points during its meeting in November, prompted by robust US data, which included an unexpected decline in weekly unemployment claims. Other US data revealed that corporate earnings rose faster than expected in the second quarter, while GDP grew at an unrevised 3%. After hitting a high of 3.821% on September 4, benchmark 10-year yield increased by 0.8 basis points to 3.789%.
- Currency: The dollar fell as US data showed a relatively strong economy, while the Swiss franc surged after the country's central bank cut interest rates. The Swiss National Bank lowered rates by 25 basis points on Thursday, avoiding a 50-bp move markets had expected. The SNB made its third such step this year. Against the Swiss franc, the dollar fell 0.52% to 0.846. After reaching 100.95 earlier in the day, the dollar index slid 0.42% to 100.52, its sixth decrease in seven sessions.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| NBFC | 461 | 3428 | 359 | 1146 | 163 |
| Financial Institution | 260 | 1696 | 563 | 828 | 129 |
| Public Sector Bank | 1 | - | - | 331 | 1100 |
| Housing Finance Company | 21 | 787 | 181 | 530 | 26 |
| Private Sector Bank | 90 | 235 | 500 | 399 | - |
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 | 1600 | 7.64 | 7.58 |
| 7.33 SBI 20SEP34 C 20SEP39 M | 2024-09-20 | 1075 | 7.31 | 7.31 |
| 7.85 TATA POWER RENEWABLE 19SEP34 | 2024-09-19 | 900 | 7.84 | 7.80 |
| 0% CYQURE INDIA PRIVATE LIMITED 17MAR2028 | 2024-09-17 | 308 | 14.30 | 14.00 |
| 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 |
| 8.03 ADITYA BIRLA HFL 11SEP29 | 2024-09-11 | 202 | 8.00 | 7.95 |
| 7.95 ICICI HFL 20DEC27 | 2024-09-19 | 195 | 7.98 | 7.98 |
| 8.22 TCL 13SEP34 | 2024-09-13 | 146 | 8.23 | 8.14 |
| 9.90 ADANIENTLTD 12SEP29 | 2024-09-12 | 134 | 9.98 | 9.89 |
| 9.50 INCRED 18SEP26 | 2024-09-19 | 63 | 9.90 | 9.73 |
| 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 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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