Daily Newsletter - 17th June 2024
Top 3 Leads Today
- India’s trade deficit is at a 7-month high due to rising imports; exports up 9% in May.
- Foreign exchanges reserves hit a new high of $655.81 billion.
- Wholesale inflation in India rose to a 15-month high of 2.61% in May.
Market Recap: The Week That Was
- Money Markets Minute: The call money rate surged to 6.75% as liquidity in the banking system tightened, primarily due to the advance tax outgo. Since the money markets would be closed on Monday in celebration of Id-Ul-Zuha, banks also tried to maintain their fortnightly obligations ahead of the long weekend.
- Government Bond Brief: Yields fell after lower-than-expected US inflation for May fuelled September rate cut expectations. They rebounded slightly Friday after dismal weekly auction demand. During the week, state-owned banks trimmed their bond holdings and booked profits. The 10-year settled at 6.98%.
- Corporate Bond Beat: Short-term bond yields dropped by 3–4 basis points last week, following the drop in government bond yields. In the secondary market, buyers tried to take advantage of the rising spread between government bonds and corporate bonds. Long-term yields stayed unchanged.
- Forex Flash: The rupee fell against the dollar last week after oscillating in a narrow band for most of the trading sessions. During the week, the banks' dollar sales countered a strong dollar index.
- Stocks Spotlight: In its second straight weekly increase, the NSE Nifty 50 rose 0.75%, and the S&P BSE Sensex rose 0.39%. On Friday, stocks saw record closing highs for Indian shares, propelled by energy and state-run companies. This surge was powered by investors anticipating that the new government would maintain its spending on capital expenditures.
Trading Trends
Most actively traded Corporate bonds in the Standard Lot Market:
| ISIN | Security Name | Volume (Cr) | Avg. Yield(%) |
|---|---|---|---|
| INE261F08EI9 | 7.70 NABARD 30SEP27 | 660 | 7.70 |
| INE261F08DF7 | 5.27 NABARD 23JUL24 | 550 | 7.25 |
| INE261F08DI1 | 5.23 NABARD 31JAN25 | 500 | 7.65 |
| INE163N08230 | 8.57 ONGCPETRO 11SEP24 | 490 | 7.70 |
Most actively traded Corporate bonds in the Odd Lot Market:
| ISIN | Security Name | Volume (Cr) | Avg. Yield(%) |
|---|---|---|---|
| INE07HK07726 | 9.84 KRAZYBEESERVICES 26JUL25 | 18.97 | 10.58 |
| INE306N08516 | 8.15 TATA CAPITAL 27JUL33 | 16.00 | 8.27 |
| INE0GXL07039 | 11.85 NAVITECHN 17MAY26 | 14.17 | 11.89 |
| INE516Y07444 | 6.75 PIRAMALHFC 26SEP31 | 13.70 | 11.12 |
Traded volume in corporate bonds by maturity:
| Maturity | Volume(in Cr) |
|---|---|
| 1Y | 4970 |
| 3Y | 2708 |
| 5Y | 1173 |
| 7Y | 153 |
| 10Y | 1793 |
Source: Harmoney data analytics
The Week Ahead
- Money Markets: The interbank call money rate is expected to open firm on Tuesday and may rise further during this week if banks’ demand for funds rises amid liquidity crunch. The liquidity is expected to be tight this week on account of advance tax payments.
- Government Bonds: Yields will likely stay steady at the beginning of the week before rising later in the week. Bond yields may open flat due to a lack of strong clues. Foreign funds are expected to invest in the bond market this week, ahead of Indian government bond’s entry into the JP Morgan index on June 28.
- Corporate Bonds: Yields on corporate bonds are likely to track government bonds movements on Tuesday and may open steady amid a lack of fresh cues.
- Forex: The rupee will likely be steady against the dollar at 83.55/$1. Investors will take further cues from the dollar index, crude oil prices, and Europe's decision to impose tariffs on electric vehicles from China.
- Stocks: Indian equities may open sideways on Tuesday and take cues from global markets amid a lack of fresh domestic cues. Investors will wait for the Union Budget to be announced in July.
Events This Week
June 17, Monday
- US NY Empire State Manufacturing Index for June
- US FOMC Member Harker Speech
- US Federal Governor Cook’s Speech
June 18, Tuesday:
- Six states to sell ₹95 billion via auction
June 19, Wednesday:
- EIA to release US crude oil inventory report
June 20, Thursday:
- Bank of England monetary policy decision
June 21, Friday:
- RBI to auction ₹230 billion worth of government bonds
For any inquiries or assistance related to market data, please reach out to us at support@harmoney.in