Nirmala Sitharaman, the finance minister, said on Tuesday that the GST council will talk about lowering tax rates next month, but that a final decision on changing taxes and slabs will not be made until later. She also stated that compensatory cess on luxury and sin items will be discussed, either during the September 9 meeting or later. The panel also directed the fitment committee, a group of tax officers, to examine the implications of changing rates on certain commodities and propose them to the GST council.
Top 3 Leads Today
- No NPS rollback; UPS an attempt to improve it: FM Nirmala Sitharaman.
- Moody's says infra growth will continue to boost India's economy.
- NSE files for Sebi NOC to gain approval for long-awaited IPO listing.
Indian Markets
- Money Markets Minute: The rate fell below the RBI's 6.25% deposit facility as bank demand eased, thanks to ample liquidity. The one-day call rate stayed at 5.75%, while the weighted average call rate slipped to 6.51% from 6.52% on Monday.
- Government Bond Brief: Bond yields rose as US Treasury yields increased intraday. Bond prices remained within a narrow range due to a lack of significant developments. The 10-year benchmark 7.10%, 2034 bond closed with a yield of 6.86%, up from 6.85% the previous day, marking its highest level in over a week. Turnover was ₹330 billion, down from ₹474.55 billion on Monday.
- Corporate Bond Beat: Corporate bond yields remained largely unchanged across tenures in the secondary market as investors focused on the primary market, where major issuers were seeking bids. Total deals on the exchanges amounted to ₹51.09 billion, down from ₹83.26 billion on Monday.
- Forex Flash: The rupee ended steady against the dollar as banks bought dollars for importers' payment needs, balancing out the effects of a generally weak dollar index. The rupee traded within a 4-paise range and closed at 83.9250 per dollar, compared with 83.9000 on Monday.
- Stocks Spotlight: The indices struggled to maintain early gains and ended the session flat. This followed a nearly 1% rise in both benchmarks the previous day, driven by optimism over a potential Federal Reserve rate cut hinted at by Jerome Powell in his Jackson Hole speech. At the close, the Sensex was up 0.02% at 81,711.76, and the Nifty was up 0.03% at 25,017.80.
International Markets
- US Stocks: The benchmark indices rose on Tuesday ahead of Nvidia quarterly earnings report scheduled for Wednesday and US economic data. On Tuesday, US consumer confidence rose to a six-month high in August and investor await July personal consumption expenditure data on Friday to further gauge insight on the US interest rate cuts in September. The S&P 500 and Nasdaq both rose 0.16%, and the Dow Jones index rose 0.02%.
- Treasuries: On Tuesday, US bond yields were little changed as investors considered geopolitical threats and upcoming US inflation data to determine the extent of the rate cut implied in September. Market participants expect the Federal Reserve to cut interest rates by 50 basis points rather than 25 basis points at its September meeting. The 10-year US treasury yield ended at 3.83%, up 0.01%.
- Currency: On Tuesday, sterling rose to its highest level versus the US dollar in more than two years, while the dollar index fell to a more than one-year low after earlier advances, as investors awaited major economic data this week and next. The dollar has been pushed by impending US interest rate cuts in recent weeks. The euro rose 0.2% to $1.1181, below Monday's 13-month high. The dollar index was down 0.3% against major currencies to 100.55 on Tuesday.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| NBFC | 256 | 608 | 100 | 327 | 74 |
| Financial Institution | 25 | 681 | 237 | 100 | 25 |
| Housing Finance Company | 36 | 70 | 543 | 48 | - |
| Private Sector Bank | 0 | 50 | 52 | 196 | - |
| Telecom - Cellular & Fixed line services | 50 | 110 | 25 | 2 | - |
Secondary trade details for recently issued primary corporate bonds:
Security Name |
Issue Date |
Trades Since Issue(Cr) |
Avg Yield(%) |
LTY (%) |
|---|---|---|---|---|
| 7.36 NBFID 12AUG44 | 2024-08-13 | 1485 | 7.35 | 7.35 |
| 7.81 TATA CHEMICALS LIMITED 20AUG2027 | 2024-08-20 | 950 | 7.81 | 7.81 |
| 8.00 IIDL 29OCT29 | 2024-08-13 | 803 | 8.01 | 7.94 |
| 7.75 LICHSGFIN 23AUG29 | 2024-08-23 | 520 | 7.75 | 7.75 |
| 9.50 CHOLAINVFIN PERP 22AUG34 C | 2024-08-22 | 431 | 9.64 | 9.65 |
| 9.75 SAMMAAN CAPITAL LIMITED 12APR2028 | 2024-08-12 | 168 | 9.65 | 9.71 |
| 7.95 ICICI HFL 16NOV27 | 2024-08-16 | 155 | 7.97 | 7.94 |
| 7.95 IIDL 13AUG39 | 2024-08-13 | 125 | 7.95 | 7.94 |
| 8.49 ADITYA BIRLA SUN LIFE INSURANCE COMPANY LIMITED - C 12AUG2034 M | 2024-08-12 | 96 | 8.48 | 8.48 |
| 10.40 NAVIFIN 13NOV26 | 2024-08-13 | 76 | 11.11 | 11.22 |
| 10.25 SCNL 21AUG26 | 2024-08-22 | 60 | 11.79 | 11.62 |
Source: Harmoney data analytics
Events This Week
August 28, Wednesday:
- US Metropolitan area employment and unemployment for July.
August 29, Thursday:
- US 2nd estimate GDP for Q2.
- US Unemployment insurance weekly claims report for Aug 24 week.
- US Weekly export sales.
August 30, Friday:
- US Personal income and outlays for July.
- US Agricultural prices for July.
- India Federal fiscal deficit for July.
- India FX reserves Aug 19 week.
- India GDP quarterly for Q2.
- India Infrastructure output for July.
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