Daily Newsletter - 21st June 2024

The Reserve Bank of India has boosted its gold reserves by about 1% in 2024. The Indian central bank is increasing its gold reserves and diversifying away from foreign currency assets due to the global geopolitical climate of trade tensions, political instability, and conflicts like the Russia-Ukraine war. According to the latest RBI data, gold reserves were $56.982 billion on June 7, 8.69% of the total, and $48.328 billion on December 29, 2023, 7.76%.

Top 3 Leads Today

• RBI has increased its gold hoard in 2024, may acquire more.
• 46 Indian startups may become unicorns in the next three years: Report.
• Emcure Pharmaceuticals gets market regulator Sebi's approval for IPO.

Indian Markets

• Money Markets Minute: The weighted average call money rate was little changed at 6.64% Thursday as the liquidity deficit from the monthly GST payments was offset by the maturity of two government bonds.  Once demand petered off, the call money rate eased to 5.75% in scanty trades.
• Government Bond Brief: Yields nudged up, with the 10-year rising to 6.98% from 6.97%, after investors grew nervous about the sudden fall in the rupee to a new record low. Some traders wondered if the rupee’s movement could deter some of the expected inflows into bonds.
• Corporate Bond Beat: Yields were steady amidst a lack of cues for fresh big position-taking.
• Forex Flash: The rupee fell to a new intraday low of 83.67/$1 and a closing low of 83.65/$1 due to strong demand for the dollar from oil companies and a likely telecom company. RBI was said to have sold dollars, but that could not prevent the rupee from touching new lows.
• Stocks Spotlight: Indian shares rebounded from a slow start to achieve record closing highs. The rally was driven by gains in private banking stocks. The Sensex and Nifty both logged significant gains, reaching new peaks by the end of the trading session. Key contributors to the upward movement included prominent private banks, which helped lift the overall market sentiment.

International Markets

• US Stocks: On Thursday,  the US stock indices ended mixed as market leader Nvidia’s shares fell. The S&P 500 reached 5,500 points intraday but gave up gains at the end of the session, while the Nasdaq ended its seventh session of record closing high, and the Dow rose 0.77% on Thursday. The S&P 500 and Nasdaq retreated after the number of people on benefits rolls reached its highest level since January, signaling that the job market is cooling.
• Treasuries: Treasury yields went up amid weak US data on Thursday and as investors waited for new supply next week. A report on jobless claims that showed the job market slowly cooling down indicated the US Fed's tough stance of keeping interest rates high is having the desired effect.
• Currency:  The dollar reached a seven-week high versus the yen on Thursday, while the sterling and euro sank as investors watched for fresh data supporting a Federal Reserve rate cut this year.

Trading Trends

Traded volume(in Cr) in corporate bonds by sector and maturity:‌

Secondary trade details for recently issued primary corporate bonds:‌

‌Source: Harmoney data analytics

Events This Week

June 21, Friday:

• RBI to auction ₹330 billion worth of government bonds
• HSBC Flash Purchasing Managers' Index for June, by S&P Global

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