Daily Newsletter - 26th June 2024
Indian economy in the last financial year 2023-24 contributed to 18.5% of the global growth, i.e., 18.5% of the global growth was driven by India, according to RBI governor Shaktikanta Das. The major drivers of this growth are the implementation of GST, the Insolvency and Bankruptcy Code, and Flexible Inflation Targeting, he said. The world needs India to keep growing. India is moving ahead towards 8% GDP growth in a sustained manner. The average growth India recorded in the last three years is 8.3%.
Top 3 Leads Today
- RBI governor confident of 7.2% GDP growth in FY25
- India's external debt rises to $663.8 bn; debt to GDP ratio falls: RBI
- Adani Group to invest Rs 1.3 trn in FY25; raise up to $3 bn in equity
Indian Markets
- Money Markets Minute: The call money rate closed near the RBI's marginal standing facility rate of 6.75% due to strong demand for funds from banks. The liquidity deficit in the banking system reached a four-week high, exceeding 1.5 trillion rupees. The one-day call money rate ended at 6.70% vs. 5.75% on Monday.
- Government Bond Brief: Government bond yields rose as mutual funds, facing outflows, sold securities to generate cash for month-end redemptions. The yield on the 10-year benchmark 7.10%, 2034 bond ranged between 6.95-7.02%, closing at 6.99%.
- Corporate Bond Beat: Yields on corporate bonds remained flat in the secondary market as participants mostly stayed on the sidelines due to a lack of significant domestic and foreign triggers. Despite a rise in government bond yields, the corporate bond market was unaffected due to minimal trading activity.
- Forex Flash: The rupee settled largely steady against the dollar as banks' purchases of the US currency on behalf of importers offset their dollar sales for foreign portfolio investors. After fluctuating within a range of 8 paise, the rupee closed at 83.4325 per dollar, slightly down from Monday's close of 83.4600 per dollar.
- Stocks Spotlight: Extending gains for the second consecutive session, benchmark equity indices reached new lifetime highs as a surge in banking and financial services shares provided strong support. The Nifty 50 and the Sensex hit record highs of 23,754.15 points and 78,164.71 points, respectively.
International Markets
- US Stocks: On Tuesday, the Dow fell as investors awaited important inflation data that is expected out this week, while the Nasdaq surged 1.3% and the S&P climbed 0.39%, driven by strength in Nvidia and other tech mega-caps. Nvidia, a leading AI chip firm, experienced a 6.8% increase, recovering from a recent three-session sell-off.
- Treasuries: The yield on the 10-year treasuries remained stable at 4.25%, despite the hawkish remarks made by two US Fed governors. On Tuesday, Federal Reserve Governor Michelle Bowman said holding the policy rate steady "for some time" should moderate inflation, but she would raise borrowing costs if needed. According to US Fed Reserve Governor Lisa Cook, interest rates should be lowered "at some point" because of declining inflation and a weaker labour market.
- Currency: The US dollar rose on Tuesday as Federal Reserve officials expressed optimism and housing market statistics showed stability. These indicators suggested the central bank would start rate cuts slowly. After remaining stable in March, U.S. single-family house prices rose 0.2% in April. The 12-month housing price index rose 6.3% after 6.7% in March, providing a boost to the greenback.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Macro Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| NBFC | 419 | 1,669 | 435 | 646 | 213 |
| Financial Institution | 50 | 800 | 952 | 256 | - |
| Private Sector Bank | 350 | 35 | - | 700 | - |
| Housing Finance Company | 210 | 57 | 11 | 566 | - |
| Investment Company | 51 | 147 | 51 | 71 | - |
| Telecom - Infrastructure | - | 25 | 200 | - | - |
Secondary trade details for recently issued primary corporate bonds:
Security Name |
Issue Date |
Traded Volume(Cr) |
Avg Yield(%) |
LTY (%) |
|---|---|---|---|---|
| 8.07 NIIF 23AUG29 | 21-Jun-24 | 210.00 | 8.07 | 8.07 |
| 10.25 AYEFINANCE 20MAR26 | 20-Jun-24 | 155.00 | 11.36 | 10.64 |
| 9.10 SHRIRAMFIN 20JUN34 | 20-Jun-24 | 69.00 | 9.09 | 9.09 |
| 9.25 SKFL - C 19SEP27 M | 19-Jun-24 | 100.00 | 9.75 | 9.75 |
| 8.05 TATA CAPITAL 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 | 1530.00 | 7.45 | 7.40 |
| 8.55 HDB PERP - C | 13-Jun-24 | 253.00 | 8.54 | 8.55 |
| 11.40 KEERTANA 13JUN27 | 13-Jun-24 | 55.16 | 12.90 | 13.75 |
| 9.95 ADANIAIRPORT 12JUN28 | 12-Jun-24 | 78.08 | 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 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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