According to a report released on Thursday, the current account deficit for the September quarter is expected to rise to 1.6%, the highest level in the prior seven quarters. In absolute terms, the July-September CAD will be $15 billion, or 1.6%, compared to $9.8 billion, or 1.1%, in the June quarter, according to India Ratings and Research. The second-quarter current account deficit will be the biggest since Q3 FY23, when the key gap indicating the country's external position was $ 16.8 billion, or 2% of GDP. The local rating agency said merchandise exports fell 3.9% during the period, reaching a 12-quarter low of $ 103 billion.
Top 3 Leads Today
- Potential shifts in US trade policy to affect trade in 2025: Unctad.
- SEBI mulls new framework to help passive funds reduce tracking error.
- OPEC+ agrees to delay oil hike plans until April, extends cuts into 2026.
Indian Markets
- Money Markets Minute: The one-day call money rate rose to 6.70% on Thursday from 6.40% on Wednesday, nearing the RBI's marginal standing facility rate of 6.75% amid tighter liquidity. The weighted average rate increased to 6.59% from 6.42%. Participants await the RBI MPC's decision on Friday.
- Government Bond Brief: Yields dipped slightly on foreign inflows and hopes of a softer RBI policy. The 10-year 6.79%, 2034 bond closed at 6.68%, unchanged from the previous day, with turnover falling to ₹506.80 billion from ₹902.45 billion.
- Corporate Bond Beat: Corporate bond yields traded in a narrow range on Thursday as participants limited activity to portfolio adjustments ahead of the RBI's policy decision on Friday. Caution prevailed, with traders focusing on realignment. Transactions totalled ₹104.22 billion on Thursday, down from ₹141.57 billion on previous day.
- Forex Flash: The rupee ended steady on Thursday as RBI's dollar sales offset importer-driven dollar demand. Support also came from dollar sales by foreign portfolio investors. After trading within a narrow 5-paise range, the rupee settled at 84.7325 per dollar, slightly below its record low of 84.7400 on Wednesday.
- Stocks Spotlight: Gains in IT and banking stocks lifted benchmark indices to one-month highs on Thursday. IT stocks rose on hopes of a US Fed rate cut after comments by Chair Jerome Powell, while banking stocks rallied for the third session on expectations of RBI liquidity measures ahead of its policy outcome on Friday. The Nifty 50 closed 1% higher at 24,708.40, and the Sensex gained 1% to end at 81,765.86.
International Markets
- US Stocks: The benchmark indices ended down on Thursday, with UnitedHealth falling significantly and technology companies sliding as investors awaited Friday's employment report. The S&P 500 technology index dipped 0.2% on Thursday, following a record closing high on Wednesday. The Dow sank 0.55% to 44,765.71, the S&P 500 lost 0.19% to 6,075.11, and the Nasdaq Composite fell 0.18% to 19,700.26.
- Treasuries: Yields were mostly flat as investors digested slightly higher jobless claims data. With monthly the US employment data due on Friday, new data released on Thursday revealed that the number of Americans filing new unemployment benefits grew considerably last week, implying that the labour market continues to cool steadily. The benchmark 10-year treasury yield fell 2 basis points to 4.182% on Thursday.
- Currency: The US dollar fell on Thursday ahead of US Nonfarm Payrolls report to be released on Friday. The Greenback's depreciation was driven by pessimistic data from the weekly Initial Jobless Claims and November Challenger Job Cut data, both of which pointed to an increase in layoffs. The dollar fell 0.4% against major currencies, while the euro rose 0.7% to $1.058.
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 | 850 | 1790 | 2210 | 741 | 150 |
| NBFC | 554 | 1230 | 440 | 670 | 426 |
| Housing Finance Company | 105 | 223 | 161 | 831 | - |
| Private Sector Bank | 420 | 50 | - | 171 | - |
| Telecom | 100 | 25 | - | 321 | - |
Secondary trade details for recently issued primary corporate bonds:
Security Name |
Issue Date |
Trades Since Issue(Cr) |
Avg Yield(%) |
LTY (%) |
|---|---|---|---|---|
| 7.37 IREDA 27NOV31 | 2024-11-27 | 910 | 7.37 | 7.37 |
| 7.41 BOB 28NOV34 C 28NOV39 M | 2024-11-28 | 745 | 7.40 | 7.41 |
| 7.41 BOI 29NOV34 | 2024-11-29 | 385 | 7.41 | 7.39 |
| 91.00 ICICI HOME FINANCE 25FEB28 | 2024-11-26 | 355 | 8.16 | 8.16 |
| 7.74 LIC 22OCT27 | 2024-11-29 | 300 | 7.75 | 7.75 |
| 7.22 ULTRATECH 24NOV34 | 2024-11-26 | 300 | 7.22 | 7.22 |
| 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 | 141 | 10.72 | 11.00 |
| 8.10 GODREJ INDUSTRIES 22MAY28 | 2024-11-22 | 125 | 8.12 | 8.12 |
| 0% GOLDEN GUILD PROPERTIES PRIVATE LIMITED 27NOV2026 | 2024-11-28 | 100 | 20.08 | 20.00 |
| 9.60 ARKA 24NOV34 | 2024-11-26 | 75 | 9.21 | 9.02 |
| 9.50 HERO FINCORP PERP 25MAY35 C | 2024-11-25 | 75 | 9.36 | 0.00 |
| 8.15 PNB HOUSING 29NOV27 | 2024-11-29 | 70 | 8.15 | 8.15 |
| 8.28 GIC HOUSING 21AUG26 | 2024-11-21 | 60 | 8.24 | 8.22 |
| 7.70 SUNDARAM HOME FINANCE 21DEC29 | 2024-11-21 | 50 | 7.70 | 7.70 |
Source: Harmoney data analytics
Events This 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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