Daily Newsletter - 25th June 2024
India’s current account deficit moderated to $23.2 billion or 0.7% of GDP during 2023-24 from $67.0 billion or 2% of GDP during the previous year due to a lower merchandise trade deficit. Net invisible receipts were higher during 2023-24 than a year ago, primarily on account of services and transfers. During 2023-24, portfolio investment recorded a net inflow of $44.1 billion against an outflow of $5.2 billion a year ago. Net FDI inflow was US$9.8 billion during 2023-24, compared with US$28.0 billion in 2022-23. In 2023-24, $63.7 billion was added to the foreign exchange reserves. India could not boast of a better setting for its external sector.
Top 3 Leads Today
- Must act in Apr-Sep FY25 to aid growth FY26, says MPC Varma
- S&P keeps India's FY25 GDP growth view unchanged at 6.8%
- Hindenburg report designed to defame us, says Gautam Adani
Indian Markets
- Money Markets Minute: The call money rate closed significantly below the Reserve Bank of India's repo rate of 6.50%. This drop occurred as banks' demand for funds decreased following the central bank's four-day variable rate repo auction of 250 billion rupees, which aimed to stabilise money market rates. The one-day call money rate finished at 5.75%, the same as Friday's closing rate for three-day loans.
- Government Bond Brief: Government bonds erased intraday gains as state-owned banks sold gilts to book profits ahead of the June quarter's end. The 10-year benchmark 7.10%, 2034 bond closed at 6.97%, nearly unchanged from Friday.
- Corporate Bond Beat: Yields on corporate bonds remained steady in the secondary market as market participants avoided making large bets due to the absence of significant domestic and global cues.
- Forex Flash: The rupee ended slightly higher against the dollar due to banks selling dollars for foreign portfolio investors and a decline in the dollar index. However, importer demand capped gains. After fluctuating within a range of 11 paise, the rupee settled at 83.46 per dollar, up from 83.53 on Friday. The movement was driven by foreign fund inflows and importers' demand for dollars.
- Stocks Spotlight: The Indian equity market recovered from initial morning panic sparked by reports of the market regulator's inspections on Quantum Mutual Fund. As concerns eased, shares in the automobile and fast-moving consumer goods sectors led the rebound. The Nifty 50 and the Sensex each closed 0.2% higher at 23,537.85 points and 77,341.08 points, respectively.
International Markets
- US Stocks: The Dow hit a one-month high on Monday, while the Nasdaq fell almost 1%. S&P 500 and Nasdaq finished down after investors pulled out of AI technology stocks, which had driven this year's surge and bought underperforming shares.
- Treasuries: Yields declined slightly on Monday ahead of Friday's inflation report. The US personal consumption expenditures price index will be released Friday, and investors predict inflation to fall in May. On Monday, Treasury Secretary Janet Yellen announced $100 million in additional funding to increase affordable housing supply as the Biden administration seeks to lower housing costs before the Nov 5 election
- Currency: The dollar fell to a nearly two-week low against a basket of currencies on Monday. The dollar was weak against the yen, prompting investors to remain concerned about possible Bank of Japan’s involvement, while the euro rose against the dollar as investors eagerly await further details on the Federal Reserve's upcoming moves as it strikes a fine balance between controlling inflation and protecting the economy.
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 | 694 | 1,070 | 1,893 | 795 | 368 |
| Telecommunication | 20 | 380 | 175 | 26 | - |
| Utilities | - | 6 | 52 | 1 | 160 |
| Commodities | - | 90 | - | - | - |
| Healthcare | - | 13 | - | - | - |
Secondary trade details for recently issued primary corporate bonds:
Security Name |
Issue Date |
Traded Volume(Cr) |
Avg Yield(%) |
LTY (%) |
|---|---|---|---|---|
| 9.25 SKFL - C 19SEP27 M | 19-Jun-24 | 100.00 | 9.75 | 9.75 |
| 8.05 TATA CPTL HFL 18JUN29 | 18-Jun-24 | 285.00 | 8.05 | 8.04 |
| 7.9265 LICHSGFIN 14JUL27 | 14-Jun-24 | 1045.00 | 7.93 | 7.93 |
| 7.44 IRFC 13JUN34 | 13-Jun-24 | 1430.00 | 7.45 | 7.40 |
| 8.55 HDB PERP - C | 13-Jun-24 | 246.00 | 8.54 | 8.55 |
| 11.40 KEERTANA 13JUN27 | 13-Jun-24 | 51.13 | 12.96 | 13.75 |
| 9.95 ADANIAIRPORT 12JUN28 | 12-Jun-24 | 77.27 | 9.94 | 9.78 |
| 9.16 360ONEPRIME 12JUN27 | 12-Jun-24 | 75.00 | 9.67 | 9.90 |
| 8.18 G R INFRAPROJECTS 09JUN34 | 10-Jun-24 | 50.00 | 8.17 | 8.18 |
Source: Harmoney data analytics
Events This Week
June 25, Tuesday:
- US Monthly House Price Index for April
- US Consumer Confidence Index for June
- US State Employment and Unemployment for May
June 26, Wednesday:
- EIA to release US crude inventory report
- US New Residential Sales for May
June 27, Thursday:
- US 3rd estimate GDP for Q1.
- US Revised Corporate Profits for Q1.
- US Unemployment Insurance Weekly Claims Report for Jun 22 week.
June 28, Friday:
- India Government finances for May, by CGA
- India Core sector output for May, by commerce ministry
- US State Quarterly Personal Income for Q1
- US GDP by State for Q1
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