NCAER's August Monthly Economic Review reports noted that the Indian economy has remained resilient despite global geopolitical risks, but deceleration in a handful of high-frequency indicators has lowered the forecast. The research claimed that scheduled commercial banks' food and non-food lending growth moderated in June 2024. Personal loan and services sector bank credit growth has slowed, it said. The Purchasing Managers' Index for manufacturing and services declined marginally in July 2024 but maintained its expansionary momentum.
Top 3 Leads Today
- Making UPI, RuPay truly global amid encouraging response, says RBI Das.
- Banks trying new avenues to fund deposit-credit growth gap, says SBI Tewari.
- Not enough US banks connected to FedNow to link to UPI, says Fed Waller.
Indian Markets
- Money Markets Minute: The call rate closed at the RBI's standing deposit facility rate of 6.25%, reflecting an easing in demand for funds toward the end of trade amid surplus liquidity. This marked an increase from Tuesday's close of 5.75%. The weighted average call rate ended at 6.56%, slightly up from 6.51% on Tuesday.
- Government Bond Brief: Government bond yields remained steady due to the absence of significant domestic cues. Traders refrained from making large bets for the second consecutive day as they awaited key economic data releases in India and the US later this week. The 10-year benchmark 7.10% 2034 bond closed with a yield of 6.86%, unchanged from the previous day. Turnover slightly increased to ₹342.10 billion, compared with ₹330 billion on Tuesday.
- Corporate Bond Beat: Yields on corporate bonds remained largely steady in the secondary market as investors focused on the primary market, where the State Bank of India and Indian Railway Finance Corp were seeking bids for their bond issuances. The exchanges recorded deals totalling ₹98.80 billion, compared with ₹51.09 billion on Tuesday.
- Forex Flash: The rupee remained steady against the dollar, as some banks likely sold dollars on behalf of the RBI to counteract the downward pressure caused by ongoing dollar purchases by oil marketing companies. After dipping to a two-week low of 83.9675 per dollar during the day, the rupee settled at 83.9525 per dollar. This was slightly weaker than Tuesday's close of 83.9250 per dollar.
- Stocks Spotlight: The indices closed higher, with the Nifty surpassing its previous record to break the 25,100 mark for the first time, driven by gains in Information Technology and pharma stocks. However, some profit booking occurred toward the end of the session. At the close, the Sensex rose by 0.09% to 81,785.56, while the Nifty gained 0.14% to finish at 25,052.30.
International Markets
- US Stocks: The benchmark indices declined Wednesday ahead of Nvidia's quarterly results, led by technology shares. Nvidia shares fell 2.1% before the close, but the company posted second-quarter revenue of $30.04 billion, exceeding projections of $28.70 billion after market hours. The technology-heavy Nasdaq fell 1.12%, the S&P 500 was down 0.60%, and the Dow Jones index declined 0.39%.
- Treasuries: On Wednesday, yields climbed as traders anticipated a 25-basis point interest rate reduction by the Fed at its September policy meeting. On Thursday, traders will focus on the second quarter's US GDP estimates and personal consumption expenditure data on Friday to determine whether the US central bank is prepared to reduce interest rates further. They expect another soft landing. The 10-year benchmark treasury note yield rose by 0.8 basis points to 3.841% on Wednesday.
- Currency: The dollar rebounded following previous falls due to month-end buying and a view that US economic data has supported the assumption that the economy is not collapsing. The dollar index rose 0.5% to 101.10 against a basket of six major currencies, while the euro fell 0.63% to $1.1114.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| NBFC | 211 | 1377 | 863 | 1227 | 230 |
| Financial Institution | 800 | 776 | 574 | 105 | 25 |
| Housing Finance Company | 10 | 3 | 664 | 146 | 15 |
| Private Sector Bank | 80 | 50 | 4 | 156 | - |
| Power - Transmission | 5 | 90 | - | 128 | - |
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 | 1510 | 7.35 | 7.35 |
| 7.75 LICHSGFIN 23AUG29 | 2024-08-23 | 965 | 7.74 | 7.74 |
| 7.81 TATA CHEMICALS LIMITED 20AUG2027 | 2024-08-20 | 950 | 7.81 | 7.81 |
| 9.50 CHOLAINVFIN PERP 22AUG34 C | 2024-08-22 | 886 | 9.62 | 9.49 |
| 8.00 IIDL 29OCT29 | 2024-08-13 | 803 | 8.01 | 7.94 |
| 7.95 ICICI HFL 16NOV27 | 2024-08-16 | 180 | 7.97 | 7.97 |
| 7.95 IIDL 13AUG39 | 2024-08-13 | 125 | 7.95 | 7.94 |
| 10.40 NAVIFIN 13NOV26 | 2024-08-13 | 78 | 11.11 | 11.22 |
| 10.25 SCNL 21AUG26 | 2024-08-22 | 60 | 11.79 | 11.62 |
Source: Harmoney data analytics
Events This Week
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.
For any inquiries or assistance related to market data, please reach out to us at support@harmoney.in