On Monday, the Income Tax department asked the public for feedback on a review of the I-T Act, which is 60 years old, with the goal of making it easier to understand, reducing litigation, increasing compliance, and getting rid of old provisions. In response to Finance Minister Nirmala Sitharaman's announcement in the budget for a full review of the Income-tax Act, 1961, the Central Board of Direct Taxes formed an internal committee to oversee the review and make the Act short, clear, and easy to understand. This will cut down on disputes and lawsuits and give taxpayers more tax certainty.
Top 3 Leads Today
- India's clean energy tech capacity to rise significantly by 2030, says S&P.
- RBI, Maldives monetary authority sign $400 million currency swap agreement.
- IFC extends $500 million loan to Axis Bank to fund green projects in India.
Indian Markets
- Money Markets Minute: The rate ended at 5.75%, well below the RBI's standing deposit facility rate of 6.25%, due to low demand for funds as banks dealt with high surplus liquidity. In comparison, the rate for two-day loans on Saturday was 5.00%. The weighted average call rate was 6.43%, up from 6.09% on Saturday.
- Government Bond Brief: Yields rose as traders reduced bond holdings ahead of the RBI's MPC outcome on Wednesday. An intraday rise in US yields also pressured gilt prices. The 10-year benchmark 7.10%, 2034 gilt yield increased to 6.85% from 6.83% on Friday, with turnover reaching ₹787.40 billion, up from ₹751.80 billion.
- Corporate Bond Beat: Yields on corporate bonds rose by 3-4 bps in the secondary market due to significant selling pressure from mutual funds and banks. This activity occurred as investors adjusted their portfolios ahead of the RBI's MPC meeting, set to conclude on Wednesday. A total of ₹115.60 billion in transactions were recorded on exchanges, up from ₹99.27 billion on Friday.
- Forex Flash: The rupee remained steady against the dollar as the RBI's intervention, through verbal cues and dollar sales, prevented pressure from a rising dollar index and weak domestic equities. It closed at 83.9775, just shy of its all-time low of 83.9900, trading in a tight range of 3 paise.
- Stocks Spotlight: In a highly volatile session, benchmark indices ended lower, marking a six-day losing streak. Selling pressure hit most sectors, with information technology being the only one to offer some relief. Investor sentiment was weighed down by escalating tensions in the Middle East. By the close, the Sensex dropped 0.78% to 81,050, and the Nifty declined 0.87% to 24,795.80.
International Markets
- US Stocks: On Monday, all three major indexes fell approximately 1% as traders lowered Federal Reserve interest-rate cut expectations and were concerned about oil prices due to the West Asia tensions. A US judge's order for market heavyweight Alphabet's Google dampened confidence on Monday. Google plans to restructure its mobile app business to provide more options to Android phone customers. The Dow index sank 0.94% to 41,954.24, the S&P 500 dropped 0.96% to 5,695.94, and the Nasdaq slid 1.18% to 17,923.90.
- Treasuries: Yields rose, with the benchmark 10-year note exceeding 4%, as investors revised their expectations for the Fed’s interest rate path. The US 10-year note rose to 4.033%, its highest level since Aug 1 and first time above 4% since Aug 8, after Friday's stronger-than-expected payrolls report raised hopes the Fed may slow rate cuts. The yield on 10-year notes rose 4.3 basis points to 4.024%. The 2-year note yield surged 5.7 basis points to 3.989% from 4.027%, its highest level since August 20.
- Currency: On Monday, the US dollar halted near a seven-week high as investors reassessed their positions following last week's solid US jobs data and fears that West Asia tensions will escalate into a larger conflict driven demand for safe havens. The September jobs report showed the highest increase in nonfarm payrolls in six months, a reduction in the unemployment rate, and good wage growth, encouraging markets to reduce expectations on more U.S. rate cuts. Dollar index fell 0.05% to 102.48, while euro fell 0.03% to $1.0973.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| NBFC | 1339 | 1584 | 307 | 231 | 665 |
| Financial Institution | 450 | 2645 | 718 | 175 | - |
| Private Sector Bank | 386 | 50 | 200 | 2 | - |
| Telecom | 620 | - | - | - | - |
| Housing Finance Company | - | 1 | 85 | 262 | - |
Secondary trade details for recently issued primary corporate bonds:
Security Name |
Issue Date |
Trades Since Issue(Cr) |
Avg Yield(%) |
LTY (%) |
|---|---|---|---|---|
| 13.83 SHREM AJANTA INFRASTRUCTURE PRIVATE LIMITED 26SEP2027 | 2024-09-26 | 486 | 13.83 | 13.83 |
| 7.86 TCHFL 21SEP29 | 2024-09-23 | 425 | 7.83 | 7.78 |
| 8.01 M&MFINSERV 24DEC27 | 2024-09-26 | 205 | 7.99 | 7.86 |
| 7.49 BOI 26SEP29 C 26SEP34 M | 2024-09-26 | 187 | 7.52 | 7.51 |
| 10.15 SAMMAAN CAPITAL LIMITED 25SEP2029 | 2024-09-25 | 105 | 10.20 | 10.08 |
| 10.30 INDOSTAR 25SEP27 | 2024-09-25 | 102 | 10.64 | 10.70 |
| 9.90 SAMMAAN CAPITAL LIMITED 25SEP2027 | 2024-09-25 | 75 | 10.10 | 9.90 |
| 8.47 BOBCARD PERP 30SEP34 C | 2024-09-30 | 75 | 8.46 | 8.46 |
| 9.35 ADANIAIRPORT 08SEP28 | 2024-10-01 | 50 | 9.76 | 9.76 |
| 7.96 EMBASSYOFFICE 27SEP27 | 2024-09-26 | 50 | 7.95 | 7.95 |
Source: Harmoney data analytics
Events This Week
October 8, Tuesday:
- US International trade in goods & services for August.
October 9, Wednesday:
- US Monthly wholesale trade for August.
- US FOMC meeting minutes and economic forecast.
- India RBI MPC's meeting for monetary policy.
October 10, Thursday:
- US Unemployment insurance weekly claims report for Oct 5 week.
- US CPI for September.
- US Real earnings for September.
- US Weekly export sales.
October 11, Friday:
- US PPI for September.
- India FX reserves for Oct 4 week.
- India Industrial production for August.
- India Manufacturing production for August.
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