The Central Board of Indirect Taxes and Customs warned Tuesday that a ministerial panel's GST rate increases recommendations on specific commodities are “premature and speculative.” The Union government's indirect tax body clarifies that it is not considering tax rate increases on items like tobacco, aerated water, and ready-made garments above ₹1,500. This comes amid high interest rates, retail inflation near the central bank's tolerance range, and concerns about indirect taxes' impact on consumption demand and economic growth. CBIC cited “various reports in the media” on ministers' GST rate proposals.
Top 3 Leads Today
- Lok Sabha passes Banking Laws Amendment Bill 2024.
- Govt not considering merger of public sector banks, says Jr finance minister.
- Banks should adopt 'bottom-up' approach for preparing credit plan: RBI's Swaminathan
Indian Markets
- Money Markets Minute: The one-day call money rate settled below the RBI's repo rate of 6.50% on Tuesday, reflecting subdued demand for funds as liquidity shifted to a surplus. The call rate closed at 6.45% on Tuesday, up from 6.00% the previous day. The weighted average call rate stood at 6.44% on Tuesday, slightly lower than 6.52% recorded on the previous day.
- Government Bond Brief: Yields remained steady on Tuesday, with short-term bonds closing on a positive note amid expectations that the RBI might introduce measures to ease liquidity at its policy review on Friday. The 10-year benchmark 6.79% 2034 bond ended with an unchanged yield of 6.71%, matching its previous close. Market turnover fell to ₹605.30 billion on Tuesday, compared with ₹801.55 billion recorded on Monday.
- Corporate Bond Beat: Corporate bond yields in the secondary market remained largely stable on Tuesday, following a 6-7 basis point decline on Monday. This movement mirrored the rally in government bond yields seen earlier, driven by weaker-than-expected GDP data for July-September. Total transaction volumes on the exchanges stood at ₹40.35 billion on Tuesday, slightly lower than the ₹41.06 billion recorded the previous day.
- Forex Flash: The rupee erased its intraday losses to close nearly unchanged against the dollar on Tuesday, supported by significant dollar sales by the RBI. The Indian currency faced pressure earlier in the day due to dollar demand from importers, a weaker offshore Chinese yuan, and a firm dollar index. After touching a record low of 84.7700 during the session, the rupee recovered to settle at 84.6850 against the dollar, slightly stronger than its previous close of 84.6950. The currency traded within a narrow range of 14 paise throughout the day.
- Stocks Spotlight: The benchmark indices continued their winning streak for the third straight session on Tuesday, with the Nifty closing above 24,450, driven by broad-based buying across sectors except for FMCG. Positive global cues set the tone for a higher opening, and sustained buying interest, particularly in media and PSU bank stocks, further propelled the Nifty and Sensex. By the close, the Sensex had gained 0.74% to settle at 80,845.75, while the Nifty advanced 0.75% to 24,457.15.
International Markets
- US Stocks: The S&P 500 and Nasdaq closed at record highs on Tuesday, with tech-related stocks continuing recent gains as investors awaited more job data. The Dow finished marginally down for the day. According to a survey released on Tuesday, job openings in the US grew significantly in October, while layoffs fell to their lowest level in approximately one and a half years. The Dow dipped 0.17% to 44,705.53, while the S&P 500 rose 0.05% to 6,049.88 and the Nasdaq rose 0.40% to 19,480.91.
- Treasuries: The benchmark Treasuries yields rose after the JOLTS report as investors predict a 25-basis point rate cut at the Fed's Dec. 17-18 policy meeting. The closely monitored Job vacancies and Labor Turnover Survey by the Labor Department showed job vacancies rising and layoffs falling, confirming the idea that the labour market is cooling. The Labor Department's November employment data, coming Friday, will be examined for cues on the Fed’s December and beyond policy decisions. The US 10-year note yields jumped 4 basis points to 4.234% on Tuesday from 4.194% on Monday.
- Currency: The dollar fell nominally against a basket of currencies as financial markets bet on another Fed rate drop this month. France's political upheaval and President-elect Donald Trump's tariff threats limited its losses. The dollar index slipped 0.03% to 106.34, while the euro rose 0.1% to $1.0508. South Korea's won fell to a two-year low against the dollar after President Yoon Suk Yeol announced martial law to prevent opposition parties from hijacking parliament.
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 | 75 | 2815 | 820 | 517 | - |
| NBFC | 457 | 1534 | 168 | 672 | 177 |
| Housing Finance Company | 570 | 200 | 574 | 417 | - |
| Public Sector Bank | - | - | - | 215 | 190 |
| Specialty Chemicals | - | 180 | 50 | - | - |
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 | 725 | 7.40 | 7.35 |
| 91.00 ICICI HOME FINANCE 25FEB28 | 2024-11-26 | 355 | 8.16 | 8.16 |
| 7.22 ULTRATECH 24NOV34 | 2024-11-26 | 300 | 7.22 | 7.22 |
| 7.41 BOI 29NOV34 | 2024-11-29 | 225 | 7.41 | 7.41 |
| 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 |
| 7.75 ICICI HOME FINANCE 24NOV34 | 2024-11-26 | 190 | 7.75 | 7.75 |
| 10.00 MUTHOOT CAPITAL 20NOV26 | 2024-11-21 | 129 | 10.72 | 11.00 |
| 8.10 GODREJ INDUSTRIES 22MAY28 | 2024-11-22 | 125 | 8.12 | 8.12 |
| 7.74 LIC 22OCT27 | 2024-11-29 | 100 | 7.75 | 7.75 |
| 0% GOLDEN GUILD PROPERTIES PRIVATE LIMITED 27NOV2026 | 2024-11-28 | 100 | 20.08 | 20.00 |
| 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 |
| 8.15 PNB HOUSING 29NOV27 | 2024-11-29 | 50 | 8.15 | 8.15 |
| 7.70 SUNDARAM HOME FINANCE 21DEC29 | 2024-11-21 | 50 | 7.70 | 7.70 |
Source: Harmoney data analytics
Events This Week
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.
For any inquiries or assistance related to market data, please reach out to us at support@harmoney.in