Reserve Bank of India Governor Shaktikanta Das said on Thursday that the India is expected to achieve full-year growth of 7.2%, despite the deceleration in first quarter GDP growth. As government spending fell amid national elections, India's April-June quarter economic growth slowed to 6.7% year-on-year, below the polled forecast of 6.9% and the RBI's projection of 7.1%. The "Fundamental growth drivers of the Indian economy are not slowing; they are gaining momentum, and this gives us confidence to say that the Indian growth story remains intact," Das said.
Top 3 Leads Today
- India to add $1 trillion to GDP every 18 months in 10 years: Gautam Adani.
- GST Council may decide on tax treatment of life, health insurance.
- Foreign portfolio investors turned net buyers in second half of August.
Indian Markets
- Money Markets Minute: The one-day call money rate closed near the RBI's standing deposit facility rate of 6.25% as subdued demand for funds persisted amidst surplus liquidity. It ended at 6.24%, up from 5.75% on Wednesday.
- Government Bond Brief: Bond yields remained largely unchanged as caution prevailed ahead of Friday's weekly auction. The 10-year benchmark 7.10% 2034 bond closed with a yield of 6.86%, unchanged from Wednesday. Turnover fell to ₹359.45 billion from ₹406.05 billion on Wednesday.
- Corporate Bond Beat: Corporate bond yields remained in a narrow range as investors participated in only requirement-based trading. Total deals amounted to ₹25.95 billion, slightly lower than Wednesday's ₹27.64 billion.
- Forex Flash: Despite the RBI's active dollar sales, the rupee hit a record closing low as banks continued buying dollars on behalf of oil companies and foreign investors. After touching an all-time low of 83.9900 per dollar, the rupee settled at 83.9825, down from 83.9650 on Wednesday.
- Stocks Spotlight: Indian stock indices dipped slightly, tracking steady global equities amid uncertainty over the US economy and the pace of potential Federal Reserve rate cuts. The Sensex fell 0.18% to 82,201, while the Nifty closed 0.21% lower at 25,145.
International Markets
- US Stocks: The benchmarks S&P 500 and the Dow fell in volatile trading on Thursday after a brief boost from economic news faded and investors awaited Friday's jobs data. The Nasdaq closed marginally higher. Wall Street's main indexes rose earlier as news eased labour market concerns. Data showed that services sector activity increased in August, while unemployment claims fell last week. Indexes ended mixed, with the Dow down 0.54%, the S&P 500 down 0.30%, and the Nasdaq up by 0.25%.
- Treasuries: Treasury yields plummeted, and two-year yields fell to a 15-month low after ADP's private sector August jobs data indicated fewer jobs than expected. On Thursday, US private companies recruited the fewest people in 3-1/2 years in August and revised down July's total, suggesting a significant labour market downturn. The 10-year note yield fell 3.9 basis points to 3.729%, while 2-year note yield declined 2.2 basis points to 3.7476%.
- Currency: In a volatile session, the dollar dropped as investors got ready for Friday's US payrolls report. The dollar's slide is accelerating as the Federal Reserve's expected interest rate reduction threaten its years-long strength. Since its high point in 2024, the dollar has dropped 5% against a group of other currencies. It is now close to its lowest level in about a year after a sharp drop last month. The dollar index declined 0.17% to 101.09. The euro rose 0.22% to $1.1106, while the dollar fell 0.2% to 143.44 yen.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| NBFC | 309 | 927 | 424 | 528 | 1 |
| Private Sector Bank | 801 | 111 | - | 3 | - |
| Financial Institution | - | 440 | 151 | 125 | 5 |
| Housing Finance Company | - | 452 | 167 | 5 | - |
| Telecom | - | - | - | 440 | - |
Secondary trade details for recently issued primary corporate bonds:
Security Name |
Issue Date |
Trades Since Issue(Cr) |
Avg Yield(%) |
LTY (%) |
|---|---|---|---|---|
| 8.27 CANARA BANK PERP 29AUG29 C | 2024-08-29 | 1624 | 8.27 | 8.27 |
| 7.75 LICHSGFIN 23AUG29 | 2024-08-23 | 1145 | 7.74 | 7.76 |
| 7.22 HPCL 28AUG29 | 2024-08-28 | 1074 | 7.22 | 7.22 |
| 9.50 CHOLAINVFIN PERP 22AUG34 C | 2024-08-22 | 926 | 9.62 | 9.57 |
| 7.30 BOB 27AUG34 | 2024-08-27 | 450 | 7.30 | 7.30 |
| 7.61 LICHSGFIN 29AUG34 | 2024-08-29 | 450 | 7.61 | 7.61 |
| 7.37 IIFCL 02SEP34 | 2024-09-02 | 400 | 7.36 | 7.37 |
| 8.55 CENTURYTEX 30AUG29 | 2024-08-30 | 350 | 8.57 | 8.58 |
| 7.72 THDC 02SEP34 | 2024-09-03 | 335 | 7.72 | 7.72 |
| 7.74 LICHSGFIN 11FEB28 | 2024-08-29 | 285 | 7.76 | 7.76 |
| 8.35 CENTURYTEX 30AUG27 | 2024-08-30 | 250 | 8.35 | 8.35 |
| 8.70 ADANI ENERGY SOLUTIONS LTD 28AUG2034 | 2024-08-27 | 240 | 8.50 | 8.50 |
| 7.42 SBI 29AUG34 C 29AUG39 M | 2024-08-29 | 220 | 7.41 | 7.42 |
| 8.43 JSW STEEL LIMITED - CALL 29AUG2031 M | 2024-08-29 | 150 | 8.43 | 8.43 |
| 8.35 JSW STEEL LIMITED - CALL 29AUG2029 M | 2024-08-29 | 150 | 8.34 | 8.34 |
| 9.50 AFL 23AUG34 | 2024-08-27 | 85 | 9.31 | 9.49 |
| 10.25 SCNL 21AUG26 | 2024-08-22 | 80 | 11.54 | 10.75 |
| 10.40 SICREVACAP 23AUG26 | 2024-08-23 | 76 | 13.42 | 12.50 |
| 7.25 IRFC 29AUG34 | 2024-08-29 | 75 | 7.25 | 7.26 |
Source: Harmoney data analytics
Events This Week
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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