Economists at the country's largest lender, SBI, warned on Wednesday that Q2 real GDP growth will fall further to a rate of 6.5% in the September quarter of current fiscal year. Amid concerns about the country's economic growth rate and whether it is declining, economists forecast FY25 growth to be "closer to" 7%. It is worth noting that the real GDP expanded by 6.7% during the April-June period, the lowest rate in 15 quarters. This prompted a spate of analysts to revise their fiscal growth forecasts to less than 7%, and some are wondering if India is experiencing a cyclical slowdown.
Top 3 Leads Today
- Donald Trump becomes 47th US President, defeats Harris.
- RBI Das says India econ well-placed irrespective of US election results.
- RBI 'watchful' of unsecured loan flows into stock market: Shaktikanta Das.
Indian Markets
- Money Markets Minute: The call rate ended slightly below the RBI’s repo rate of 6.50% due to low fund demand from banks amid ample liquidity in the banking system. The one-day call rate closed at 6.35%, up from 5.95% on Tuesday. The weighted average call rate was 6.34%, slightly higher than Tuesday's 6.31%.
- Government Bond Brief: Yields remained steady after a volatile session as markets reacted to Donald Trump's victory in the US presidential election. Gilt prices fluctuated throughout the day, ultimately settling without significant change. The 10-year benchmark 7.10%, 2034 bond closed with an unchanged yield of 6.83%, matching Tuesday’s rate. Market turnover rose substantially, reaching ₹592.15 billion compared with ₹221.55 billion on Tuesday.
- Corporate Bond Beat: Yields on corporate bonds in the secondary market remained steady as Donald Trump's US presidential election win did not provide clear direction for the market. Trading volumes were light, with exchanges recording deals worth ₹24.76 billion in the secondary market.
- Forex Flash: The rupee fell to a record low against the US dollar as Republican candidate Donald Trump appeared poised to become the 47th US president, triggering risk aversion and concerns about foreign fund outflows from emerging markets. The rupee fluctuated within a 12-paise range before settling at an all-time low of 84.2800 per dollar, down from 82.1075 on Tuesday.
- Stocks Spotlight: Indices closed with strong gains as investors reacted positively to Donald Trump's progress toward victory in the US presidential election. Gains were driven by sharp increases in IT and select heavyweight stocks, with approximately three-fourths of all stocks on the exchanges ending higher. The Nifty 50 rose 1.1% to 24,484.05 points, and the Sensex also gained 1.1%, closing at 80,378.13 points.
International Markets
- US Stocks: All benchmark indices rose sharply to close at new highs on Wednesday, after Republican Donald Trump won the 2024 presidential election in a surprising return four years after being thrown out of the White House. Investors expect lower taxes, deregulation, and a US president who weighs in on everything from the stock market to the dollar, but fresh tariffs could raise the deficit and inflation. The Dow rose 3.57%, S&P 500 was up 2.53%, while Nasdaq gained 2.95%.
- Treasuries: Yields rose significantly on Wednesday as Donald Trump's election triumph sparked betting on economic policy revisions that might enhance deficits and inflation. The 10-year Treasury yield rose 14 basis points to 4.4343%, its biggest daily advance in nearly seven months. The 30-year Treasury yield rose 16 bps to 4.6085%, its highest one-day spike since March 2020's pandemic. After its two-day meeting on Thursday, investors were still optimistic the Fed would cut interest rates by 25 basis points.
- Currency: The dollar rose to a four-month high on Wednesday after Republican Donald Trump won the US presidential election, with measures on immigration, taxes, and trade projected to boost US GDP and inflation. The dollar index climbed 1.66% to 105.44, its highest level since July 3. The euro fell 1.78% to $1.0735 and reached a low of $1.0683, its lowest since June 27. The dollar surged 1.92% to 154.5 yen, reaching 154.7, its highest level since July 30.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| NBFC | 5 | 634 | 241 | 643 | 50 |
| Financial Institution | 330 | - | 388 | 130 | - |
| Housing Finance Company | 50 | 583 | 57 | 12 | - |
| Private Sector Bank | 50 | - | - | 222 | - |
| Power - Transmission | - | 60 | - | 153 | - |
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 | |
| 8.96 SHRIRAM FINANCE 24OCT27 | 2024-10-24 | 380 | 8.96 | 8.95 |
| 7.32 IREDA 04NOV29 | 2024-11-04 | 311 | 7.32 | 7.32 |
| 7.43 JUPL 24OCT34 | 2024-10-24 | 295 | 7.43 | 7.42 |
| 7.05 INDIAN BANK 25OCT34 | 2024-10-25 | 280 | 7.15 | 7.18 |
| 7.8750 NIIF 28NOV30 | 2024-10-24 | 155 | 7.87 | 7.87 |
| 7.7980 L&T FINANCE 28DEC29 | 2024-10-28 | 130 | 7.80 | 7.80 |
| 7.65 SUNDARAM HOME FINANCE 29OCT29 | 2024-10-29 | 100 | 7.64 | 7.64 |
| - 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 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.
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