In August, the Indian manufacturing sector saw a three-month low in growth because of weaker growth in new orders and output. The headline Purchasing Managers Index data, which was released by HSBC on Monday, was 57.5 in August, down from 58.1 in July. A figure in the index that exceeds 50 indicates expansion, while one that is below 50 indicates contraction. Input price inflation slowed to its slowest level in five months, supporting the spending rise by lowering cost pressures.
Top 3 Leads Today
- Cabinet OKs 7 plans worth ₹140 billion to boost Agri-infra.
- RBI to cut repo rate by 100 bps to 5.50% by mid-2025, says Nomura.
- Nageswaran says no cause for concern over consumption trend as of now.
Indian Markets
- Money Markets Minute: The call money rate closed significantly below the RBI's standing deposit facility rate of 6.25%, due to lower demand for funds from banks amid surplus liquidity. The rate settled at 5.75%, down from 6% for two-day loans on Saturday. The weighted average call rate was 6.49%, against 6.13% on Saturday.
- Government Bond Brief: Government bond yields rose, driven by a rise in their US counterparts. Demand in the secondary market weakened as investors digested the significant supply of bonds issued by both the central and state governments last week. The 10-year benchmark 7.10%, 2034 bond closed at 6.88%, against 6.86% yield on Friday. Turnover stood at ₹260.95 billion, down from ₹356.65 billion on Friday.
- Corporate Bond Beat: Yields on corporate bonds remained steady in the secondary market due to subdued participation from market players. The lack of activity was attributed to the closure of financial markets in the US for Labour Day. Total deals amounted to ₹59.98 billion on the exchanges, compared with ₹74.31 billion on Friday.
- Forex Flash: The Indian rupee weakened, reflecting a broader decline among major Asian currencies, as investors awaited data to assess the potential pace of monetary policy easing by the Federal Reserve. The rupee closed at 83.9175 against the US dollar, down from its previous close of 83.8625.
- Stocks Spotlight: The record-breaking momentum on Dalal Street persisted, with the Nifty closing higher for the 13th consecutive session. However, most sectoral indices, except for banking, FMCG, and IT, ended in the red. Capital goods, metal, healthcare, telecom, and media sectors saw declines ranging from 0.4% to 1.6%. By the close, the Sensex had gained 0.24%, reaching 82,559.84, while the Nifty rose by 0.17% to 25,278.70.
International Markets
- US Stocks: Stock market was shut on Monday in observance of US Labour Day.
- Treasuries: US bond markets were shut on Monday for US Labour Day.
- Currency: The dollar fell on Monday but stayed within striking distance of its highest level in nearly two weeks as investors turned their attention to a US jobs data anticipated at the end of the week. The dollar index against six major currencies fell by 0.08% to 101.67, after reaching 101.79, a high not seen since August 20.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| NBFC | 334 | 545 | 675 | 145 | 50 |
| Public Sector Bank | 460 | 345 | 320 | 41 | 64 |
| Telecom | - | - | - | 804 | - |
| Refineries & Marketing | - | - | 580 | - | - |
| Financial Institution | - | 10 | 50 | 371 | - |
Secondary trade details for recently issued primary corporate bonds:
Security Name |
Issue Date |
Trades Since Issue(Cr) |
Avg Yield(%) |
LTY (%) |
|---|---|---|---|---|
| 7.22 HPCL 28AUG29 | 2024-08-28 | 1074 | 7.22 | 7.22 |
| 7.75 LICHSGFIN 23AUG29 | 2024-08-23 | 1020 | 7.74 | 7.74 |
| 8.27 CANARA BANK PERP 29AUG29 C | 2024-08-29 | 965 | 8.27 | 8.26 |
| 7.81 TATA CHEMICALS LIMITED 20AUG2027 | 2024-08-20 | 950 | 7.81 | 7.81 |
| 9.50 CHOLAINVFIN PERP 22AUG34 C | 2024-08-22 | 896 | 9.62 | 9.60 |
| 8.70 ADANI ENERGY SOLUTIONS LIMITED 28AUG2034 | 2024-08-27 | 240 | 8.50 | 8.50 |
| 7.30 BOB 27AUG34 | 2024-08-27 | 200 | 7.30 | 7.30 |
| 10.25 SCNL 21AUG26 | 2024-08-22 | 70 | 11.64 | 11.58 |
| 9.50 AFL 23AUG34 | 2024-08-27 | 55 | 9.21 | 9.21 |
| 7.25 IRFC 29AUG34 | 2024-08-29 | 50 | 7.25 | 7.26 |
Source: Harmoney data analytics
Events This Week
September 3, Tuesday:
- US Construction spending for July.
- US Global manufacturing PMI for August.
September 4, Wednesday:
- US International trade in goods & services for July.
- US M3 for July.
- US Domestic auto industry sales for August.
- India HSBC Composite PMI for August.
- India HSBC Services PMI for August.
- India M3 Money supply for Aug 19 week.
September 5, Thursday:
- US Unemployment insurance weekly claims report for Aug 31 week.
- US Services data PMI for August.
September 6, Friday:
- US Employment report for August.
- US Weekly export Sales.
- India Bank loan growth Aug 19 week.
- India FX Reserves Aug 26 week.
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