Daily Newsletter - 19th June 2024
India’s current account deficit is expected to be less than 1% in 2023-24, according to Reserve Bank of India Governor Shaktikanta Das. However, with his assertion that the RBI will continue to build reserves, the central bank will likely keep a vice-like grip on the rupee. India could see foreign exchange reserves rising to new highs while the rupee occasionally hits new lows.
Top 3 Leads Today
- Fitch ups India's FY25 GDP growth forecast by 20 bps to 7.2%
- Rural demand picking up, likely to hold this year: RBI Governor Das
- Advance tax collection surges 27.34% to Rs 1.48 trillion in the June quarter so far
Indian Markets
- Money Markets Minute: The call money rate ended at the RBI’s repo rate of 6.50% Tuesday due to strong demand for funds from banks caused by outflows for advance tax payments.
- Government Bond Brief: Government bond yields closed flat at 6.98% in the absence of strong cues. Foreign portfolio investors were among the buyers despite the overnight rise in US yields.
- Corporate Bond Beat: Corporate bond yields held steady on Tuesday after a slight decline last week, with traders cautious and avoiding major positions due to muted market signals.
- Forex Flash: The rupee strengthened Tuesday as banks sold dollars on behalf of foreign investors. The rupee moved in a 14-paise range and closed at 83.4100/$1.
- Stocks Spotlight: Indices surged to record highs on Tuesday, driven by expectations of stable post-election policies. Strong corporate profitability is expected to continue. Nifty closed at 23,557.90 points, its highest level yet, up 0.4%.
International Markets
- US Stocks: On Tuesday, the S&P 500 and Nasdaq reached new highs driven by Nvidia's ongoing surge, while the Dow saw a modest rise in quiet pre-holiday trading after weaker-than-expected US retail sales figures. In May, retail sales increased by 0.1%, falling short of the 0.3% growth predicted by economists.
- US Treasuries: Yields fell across the maturity curve on Tuesday after disappointing US retail sales data. A reduction of about 8 basis points in the two-year yield, to 4.69%, drove the slide, while the 10-year benchmark treasury was down 6 basis points to 4.219%. The US Federal officials said they cautiously expect an end-of-year interest rate reduction.
- Dollar: The dollar index remained steady against a major basket of currencies at 105.30 on Tuesday. The euro gained following the release of retail sales data that suggested a possible decline in consumer activity in the US. Investors expect the US Federal Reserve to cut its key interest rate.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Macro Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| Financial Services | 1,121 | 1,412 | 881 | 1,246 | 2 |
| Utilities | 68 | 488 | 3 | 3 | |
| Diversified | 10 | 76 | |||
| Consumer Discretionary | 100 | 3 | |||
| Telecommunication | 75 | 12 |
Secondary trade details for recently issued primary corporate bonds:
Security Name |
Issue Date |
Traded Volume(Cr) |
Avg Yield(%) |
LTY (%) |
|---|---|---|---|---|
| 7.44 IRFC 13JUN34 | 13-Jun-24 | 885.00 | 7.48 | 7.43 |
| 8.55 HDB PERP - C | 13-Jun-24 | 150.00 | 8.53 | 8.53 |
| 9.16 360ONEPRIME 12JUN27 | 12-Jun-24 | 75.00 | 9.67 | 9.90 |
| 8.55 MASFINANCIAL 06DEC25 | 6-Jun-24 | 117.25 | 9.39 | 10.20 |
| 7.50 IREDALTD 05JUN34 | 5-Jun-24 | 425.39 | 7.50 | 7.50 |
| 8.67 AXISFIN PERP - C | 4-Jun-24 | 182.00 | 8.47 | 8.07 |
| 9.09 MUTHOOT FIN 01JUN29 | 3-Jun-24 | 305.00 | 9.08 | 9.08 |
| 9.00 CHOLAINVFIN 03JUN34 | 3-Jun-24 | 150.00 | 8.99 | 8.99 |
| 9.25 SKFL 03JUN26 | 3-Jun-24 | 100.00 | 9.75 | 9.75 |
Source: Harmoney data analytics
Events This Week
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 ₹330 billion worth of government bonds
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