Oil prices rose on Thursday, as fears grew that a worsening regional war in West Asia will impede global crude flows. Brent crude futures closed $3.72, or 5.03%, at $77.62 a barrel. Brent futures rose to an intraday high of $77.89 per barrel. Markets are concerned that Israel will target Iranian oil infrastructure, potentially leading to retaliation. The Pentagon stated that it was in negotiations with Israeli officials about a possible reaction to Iran's missile attack but declined to provide specifics. On Thursday, Prime Minister Narendra Modi chaired a Cabinet Committee on Security meeting to assess the beginning of new hostilities in West Asia, as well as the impact on trade and petroleum product supply.
Top 3 Leads Today
- OPEC maintains its policy, with Iran, Kazakhstan, and Russia pledging compliance.
- New MPC members more neutral than hawkish, 1 may dissent Oct 9, say economists.
- PSU banks reduce numbers on FX desks as RBI grip on rupee hits trade prospects.
Indian Markets
- Money Markets Minute: The rate ended sharply below the RBI's standing deposit facility rate of 6.25% as demand for funds from banks remained subdued owing to high surplus liquidity in the banking system. The one-day call money rate ended at 5.75%, unchanged from two-day loans on Tuesday. The weighted average call rate was 6.45%, against 6.48% on Tuesday.
- Government Bond Brief: Yields rose as expectations for a shift to a 'neutral' monetary policy stance at the upcoming review meeting on Wednesday diminished. The 10-year benchmark 7.10%, 2034 gilt closed at a yield of 6.78%, up from 6.73% on Tuesday. Market-wide turnover declined to ₹672.10 billion, compared with ₹731.65 billion the previous day.
- Corporate Bond Beat: The market remained relatively quiet, with yields in the secondary market holding steady due to a lack of major direct triggers. Trading volume increased, with deals totalling ₹174.57 billion, up from ₹101.95 billion on Tuesday.
- Forex Flash: The rupee closed at its lowest level in over three weeks, pressured by a stronger dollar index, which hit a one-month high, and consistent dollar buying by oil marketing companies and foreign portfolio investors. After a 0.2% drop, the rupee settled at 83.9675 per dollar, fluctuating within a narrow range of just 7 paise.
- Stocks Spotlight: Equity benchmarks, Sensex and Nifty, fell over 2% due to broad-based selling triggered by rising West Asia tensions, SEBI's stricter regulations on F&O trading, and a booming Chinese market drawing foreign investors. The Sensex closed at 82,497, while the Nifty ended at 25,267.
International Markets
- US Stocks: Wall Street's major indices ended the day down after trading slightly higher in the early hours. According to data released on Thursday, the US services sector activity increased to a 1-1/2-year high in September due to strong growth in new orders, but its measure of services employment declined, indicating a slowing labour market. The Dow sank 0.44% to 42,011.59, the S&P 500 dropped 0.17% to 5,699.94, and the Nasdaq fell 0.04% to 17,918.48.
- Treasuries: Yields climbed following the release of US unemployment claims and a report on the service sector. The other data released on Thursday showed that the number of Americans filing new unemployment claims grew slightly last week. Traders will watch closely the highly anticipated nonfarm payrolls report for September is due on Friday. On Thursday, two-year treasury yields rose to 3.7095%, while benchmark 10-year yields climbed to 3.853%.
- Currency: The dollar hit a six-week high on Thursday as data showed that the US economy was still strong before Friday's highly anticipated jobs report. Concerns about rising West Asia tensions also helped the currency rise. The dollar has also gained from other currencies, like the euro, sterling, and yen, having more dovish central bank expectations built into them. The dollar index rose 0.33% to 101.98 and touched 102.09, its highest level since Aug. 19. It fell to a 14-month low of 100.15 on September 27.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| Telecom | 660 | 5000 | - | 162 | - |
| Financial Institution | 670 | 1860 | 975 | 842 | - |
| NBFC | 1006 | 1858 | 946 | 216 | 78 |
| Housing Finance Company | 100 | 210 | 112 | 68 | 22 |
| Public Sector Bank | - | - | - | 3 | - |
Secondary trade details for recently issued primary corporate bonds:
Security Name |
Issue Date |
Trades Since Issue(Cr) |
Avg Yield(%) |
LTY (%) |
|---|---|---|---|---|
| 7.65 LIC HOUSING 19AUG31 | 2024-09-19 | 1909 | 7.62 | 7.46 |
| 7.33 SBI 20SEP34 C 20SEP39 M | 2024-09-20 | 1075 | 7.31 | 7.31 |
| 7.85 TATA POWER RENEWABLE 19SEP34 | 2024-09-19 | 900 | 7.84 | 7.80 |
| 13.83 SHREM AJANTA INFRASTRUCTURE PRIVATE LIMITED 26SEP2027 | 2024-09-26 | 486 | 13.83 | 13.83 |
| 7.86 TCHFL 21SEP29 | 2024-09-23 | 375 | 7.83 | 7.74 |
| 8.40 CHOLAINVFIN 18SEP27 | 2024-09-18 | 320 | 8.40 | 8.39 |
| 7.95 ICICI HFL 20DEC27 | 2024-09-19 | 245 | 7.97 | 7.97 |
| 8.01 M&MFINSERV 24DEC27 | 2024-09-26 | 175 | 8.02 | 8.02 |
| 7.49 BOI 26SEP29 C 26SEP34 M | 2024-09-26 | 92 | 7.54 | 7.48 |
| 10.30 INDOSTAR 25SEP27 | 2024-09-25 | 89 | 10.64 | 10.60 |
| 9.90 SAMMAAN CAPITAL LIMITED 25SEP2027 | 2024-09-25 | 75 | 10.10 | 9.90 |
| 9.50 INCRED 18SEP26 | 2024-09-19 | 64 | 9.90 | 9.73 |
| 7.94 ICICI HFL 19SEP29 | 2024-09-19 | 60 | 7.93 | 7.93 |
| 8.45 GODREJHSGFIN 18SEP29 | 2024-09-18 | 50 | 8.44 | 8.45 |
Source: Harmoney data analytics
Events This Week
October 4, Friday:
- US Employment report for September.
- India Composite PMI for September.
- India Bank loan growth for Sep 20 week.
- India Deposit growth for Sep 20 week.
- India FX reserves for Sep 27 week.
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