Growth in India's manufacturing sector slowed to 56.5% during November, hampered by tough competition and price pressures, according to a private industry survey issued Monday. S&P Global said that the HSBC final India manufacturing Purchasing Managers' Index fell to a joint 11-month low in November from 57.5 in October. Earlier in January, the level was 56.5. According to Pranjul Bhandari, chief India economist at HSBC, India's manufacturing PMI in November was marginally lower than the previous month but remained in expansionary zone. A score above 50 in the index indicates increased activity, whereas a figure below 50 indicates contraction.
Top 3 Leads Today
- Govt scraps windfall tax on domestic crude, exports of ATF, diesel, petrol.
- GST rate in FY24 at 11.64% vs revenue neutral rate of 15%-15.5%, says Sitharaman.
- GDP base year to be revised to FY23 from FY12, says statistics ministry.
Indian Markets
- Money Markets Minute: The call rate closed at 6.00%, unchanged from Saturday's level for two-day loans, as banks' demand for funds remained low amid surplus liquidity conditions. This kept the rate below the RBI's standing deposit facility rate of 6.25%. Meanwhile, the weighted average call money rate hovered near the RBI's repo rate, rising to 6.52% from 6.22% on Saturday.
- Government Bond Brief: Yields fell as traders increased their purchases ahead of the MPC's decision on Friday. The 10-year benchmark 6.79%, 2034 bond closed at a yield of 6.71%, down from 6.74% on Friday. Market turnover rose significantly to ₹805.05 billion, compared with ₹628.60 billion in the previous session.
- Corporate Bond Beat: The sharply lower-than-expected GDP data released on Friday caught market participants off guard. Corporate bond yields for three-year maturities fell by 6-7 basis points, mirroring a rally in government bond yields. Trading activity surged, with deals totalling ₹121.31 billion on the exchanges, a significant jump from ₹71.53 billion recorded on Friday.
- Forex Flash: The rupee closed at a record low against the dollar, following the release of disappointing GDP data for the July-September quarter on Friday. However, further depreciation was curbed by the RBI's intervention through dollar sales in the forex market. During the session, the rupee weakened by over 20 paise, settling at 84.6950 on Monday, compared with its previous close of 84.4825 on Friday.
- Stocks Spotlight: Despite weaker-than-expected GDP growth for India in the September quarter, indices managed to climb, buoyed by optimism about stronger economic performance in the second half of the fiscal year, fuelled by increased government spending. Both the Nifty 50 and the Sensex rebounded from early losses to close 0.6% higher at 24,276.05 and 80,248.08 points, respectively.
International Markets
- US Stocks: The benchmarks ended mixed on Monday. The Nasdaq and S&P 500 closed at new highs, bolstered by tech-related equities after the market's robust November gains. Investors await this week's economic data, which includes the critical monthly jobs report on Friday to provide further cues on market direction. The Dow finished lower for the day. The Dow lost 0.29% to 44,782.00. The S&P 500 rose 0.24% to 6,047.15, while the Nasdaq soared 0.97% to 19,403.95.
- Treasuries: Yields were steady on Monday as investors awaited the Fed official speeches this week including Fed Chair Jerome Powell on Wednesday and eye US monthly payrolls report due on Friday. Investors expect that both these events will influence policymakers' decision to cut rates again on Dec. 18. The yield on benchmark US 10-year notes was unchanged on the day, at 4.194%.
- Currency: The dollar rose against the euro amid political unrest in France and promising signs for the US economy. Concerns over a French government collapse, which would hinder budget deficit reduction plans, weakened the euro against the strong dollar on Monday. After good U.S. manufacturing data from the Institute for Supply Management and S&P Global, the dollar gained. The dollar index, which measures the currency against six others, was up 0.33% at 106.39, after rising 1.8% in November.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| Financial Institution | 10 | 1485 | 2436 | 544 | - |
| NBFC | 447 | 1098 | 90 | 606 | 615 |
| Housing Finance Company | 200 | 308 | 397 | 175 | - |
| Public Sector Bank | - | - | - | 151 | 745 |
| Private Sector Bank | 100 | 90 | 250 | 211 | - |
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 | 1485 | 7.22 | 7.20 |
| 7.37 IREDA 27NOV31 | 2024-11-27 | 750 | 7.37 | 7.34 |
| 7.41 BOB 28NOV34 C 28NOV39 M | 2024-11-28 | 535 | 7.40 | 7.41 |
| 7.22 ULTRATECH 24NOV34 | 2024-11-26 | 300 | 7.22 | 7.22 |
| 10.20 CLIX CAPITAL 18MAR27 | 2024-11-19 | 219 | 10.55 | 10.22 |
| 8.25 GIC HOUSING 19JUN26 | 2024-11-21 | 200 | 8.33 | 8.34 |
| 10.00 MUTHOOT CAPITAL 20NOV26 | 2024-11-21 | 118 | 10.70 | 11.00 |
| 8.10 GODREJ INDUSTRIES 22MAY28 | 2024-11-22 | 100 | 8.12 | 8.12 |
| 7.75 ICICI HOME FINANCE 24NOV34 | 2024-11-26 | 95 | 7.75 | 7.75 |
| 9.50 HERO FINCORP PERP 25MAY35 C | 2024-11-25 | 75 | 9.36 | 0.00 |
| 9.60 ARKA 24NOV34 | 2024-11-26 | 75 | 9.21 | 9.02 |
| 8.28 GIC HOUSING 21AUG26 | 2024-11-21 | 60 | 8.24 | 8.22 |
| 0% GOLDEN GUILD PROPERTIES PRIVATE LIMITED 27NOV2026 | 2024-11-28 | 50 | 20.15 | 20.15 |
| 7.41 BOI 29NOV34 | 2024-11-29 | 50 | 7.41 | 7.41 |
| 7.70 SUNDARAM HOME FINANCE 21DEC29 | 2024-11-21 | 50 | 7.70 | 7.70 |
Source: Harmoney data analytics
Events This Week
December 3, Tuesday:
- US Total vehicle sales for November.
December 4, Wednesday:
- US Composite PMI for November.
- US Services PMI for November.
- India Composite PMI for November.
- India Services PMI for November.
December 5, Thursday:
- US OPEC Meeting.
- US Initial Jobless Claims for Nov 29 week.
December 6, Friday:
- US Nonfarm Payrolls for November.
- US Unemployment Rate for November.
- India RBI Interest Rate Decision.
- India FX Reserves for Nov 25 week.
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