Could the US Presidential election serve as a “clearing event” that kicks off a year-end rush into the US stocks? Most strategists believe it is likely. Once the results are called, the markets will likely focus again on the Fed and its easing cycle. Continued resilience of the economy and strong earnings growth could buoy the markets. The markets, it appears, are neutral to who wins the election..
Top 3 Leads Today
- SEBI asks MFs to separately disclose expenses, half-yearly returns for direct & regular plans.
- Banking secy asks PSU banks to up CASA deposits for sustainable credit growth.
- Rising small-loan defaults may throw risk into India's broader economy.
Indian Markets
- Money Markets Minute: The rate ended below the RBI's standing deposit facility rate of 6.25% as demand for funds from banks remained muted owing to high surplus liquidity in the banking system. The one-day call money rate ended at 5.95%, against 5.75% on Monday. The weighted average call rate was 6.31%, against 6.41% Monday.
- Government Bond Brief: Yields ended steady as traders remained cautious ahead of the US presidential election. Volumes remained thin amid some banks placing short bets to hedge their investment risk. The 10-year benchmark 7.10%, 2034 bond closed at 6.83% yield, flat from Monday. The market turnover was ₹224.40 billion, against ₹275.95 billion on Monday.
- Corporate Bond Beat: Corporate bond yields in the secondary market held steady across tenures as investors avoided large trades ahead of the U.S. presidential election on Tuesday. Trading activity recorded deals worth ₹100.04 billion, from ₹36.14 billion on Thursday.
- Forex Flash: The rupee ended at a record low against the dollar, pressured by persistent dollar buying from banks acting on behalf of foreign portfolio investors withdrawing funds from Indian equities. The currency moved within a narrow range of just 6 paise and closed at 84.1150 per dollar. On Thursday, the rupee had inched up by 1 paisa to settle at 84.07 against the dollar.
- Stocks Spotlight: Caution ahead of the U.S. presidential election drove benchmark indices down to near three-month lows, as investors remained wary about the election outcome's impact on U.S. monetary policy. Concerns over potential shifts in the Federal Reserve's policy weighed on sentiment, leading to a sharp fall in the markets. The Nifty 50 closed 1.3% down at 23,995.35 points, while the Sensex ended down 1.2% at 78,782.24 points.
International Markets
- US Stocks: Benchmark indices closed higher on Tuesday after several data showed a strong economy, but investors braced for tumultuous trading this week as voting began in an incredibly tight US presidential election. The S&P 500 rose 1.23% to 5,783.11 points, while the Nasdaq Composite rose 1.43% to 18,439.17. The Dow Jones Industrial Average gained 1.04% to 42,227.74.
- Treasuries: Yields rose more than 10 basis points to 4.366% before correcting following a solid auction. The 10-year benchmark yield ended down by 2 basis points at 4.289% on Tuesday. Bond investors were managing their portfolios conservatively as the US presidential election was too close to call yesterday. Investors will also be looking forward to the Federal Reserve's policy meeting this week, where interest rates are expected to be slashed by 25 basis points. In September, the Fed reduced its policy rate by 50 basis points to begin its easing cycle.
- Currency: The dollar declined as US voters participated in the elections on Tuesday, with the outcomes expected to influence the short-term trajectory of the currency. Polls show a close fight between Republican presidential candidate Donald Trump and Democratic contender Kamala Harris, and the most drastic currency swings are expected if the new president's party also gains control of Congress. The dollar index reached 103.37, its lowest level since Oct. 16, down 0.48%. The euro rose 0.48% to $1.0929 and reached $1.09368, its highest level since Oct. 11.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| NBFC | 791 | 1438 | 448 | 339 | 2 |
| Financial Institution | 1750 | 825 | 350 | 50 | - |
| Housing Finance Company | - | 26 | 477 | 201 | - |
| Private Sector Bank | 500 | 5 | - | 126 | - |
| Telecom - Cellular & Fixed line services | 110 | 360 | - | 10 | - |
Secondary trade details for recently issued primary corporate bonds:
Security Name |
Issue Date |
Trades Since Issue(Cr) |
Avg Yield(%) |
LTY (%) |
|---|---|---|---|---|
| 7.98 SBI PERP 24OCT34 C | 2024-10-24 | 1203 | 7.97 | 7.97 |
| 8.96 SHRIRAM FINANCE 24OCT27 | 2024-10-24 | 380 | 8.96 | 8.95 |
| 7.43 JUPL 24OCT34 | 2024-10-24 | 295 | 7.43 | 7.42 |
| 7.05 INDIAN BANK 25OCT34 | 2024-10-25 | 230 | 7.14 | 7.12 |
| 9.75 SAMMAAN CAPITAL LIMITED 20OCT2029 | 2024-10-21 | 220 | 10.19 | 10.52 |
| 7.8750 NIIF 28NOV30 | 2024-10-24 | 155 | 7.87 | 7.87 |
| - SURYAPET KHAMMAM ROAD PRIVATE LIMITED - CALL 30JUN2031 MAT | 2024-10-24 | 81 | 8.59 | 9.45 |
| - SURYAPET KHAMMAM ROAD PRIVATE LIMITED - CALL 30JUN2035 MAT | 2024-10-24 | 54 | 8.24 | 8.24 |
| 7.72 ICICI HOME FINANCE 28SEP29 | 2024-10-25 | 50 | 7.72 | 7.72 |
Source: Harmoney data analytics
Events This Week
November 6, Wednesday:
- US Global services PMI for October.
- US FOMC meeting.
- India Services and composite PMI for October.
November 7, Thursday:
- US Unemployment insurance weekly claims report for Nov 2 week.
- US Weekly export sales.
- US Monthly wholesale trade for September.
- US Interest rate decision.
November 8, Friday:
- India FX Reserves for Nov 1 week.
For any inquiries or assistance related to market data, please reach out to us at support@harmoney.in