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Indian Economic Update
India’s Q2FY24 GDP was positively surprising at 7.6% YoY, led by investments while consumption was relatively muted at... 3.1% YoY (due to weak rural demand). Nominal GDP growth in Q2 was only marginally higher than real GDP growth at 9.1% as against 8.0% in Q1.

India’s fiscal deficit stood at INR 8.03 trillion (45% of BE) during April to October 2023 as against INR 7.6 trillion (45.6% of BE) in the same period last year.

India's eight key infrastructure sectors exhibited a growth of 12.1% YoY in October, up from 9.2% YoY in September 2023 and 0.7% a year ago.

The urban unemployment rate in India declined to 6.6% in the September 2023 quarter from 7.2% a year ago as per the data released by the NSSO. During the quarter, the labour force participation rate increased to 49.3% from 47.9% a year ago.

India's GDP growth rate will rise to 7% by 2026 compared to 4.6% for China, S&P Global Ratings said in a report titled 'China Slows India Grows', adding that it expects Asia-Pacific's growth engine to shift from China to South and Southeast Asia.

NITI Aayog CEO Mr. Subrahmanyam said that a vision document is being prepared which will outline the institutional and structural changes/ reforms that will be needed for India to become a developed economy of about USD 30 trillion by 2047. PM Narendra Modi will release it in January next year.

FM Nirmala Sitharaman urged tax officers to maintain the growth in direct tax collections by at least 17% in FY24, the level achieved in the previous financial year.

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Global Update
The US GDP growth for Q3-2023 was revised higher from 4.9% to 5.2% reflecting a much more robust increase in private business ...investments and stronger-than-expected government spending while private consumption was revised marginally lower.

The ECB President stated that the economic activity was expected to remain weak over 2023, although it could improve going into 2024. She also stated that there was some uncertainty about the medium-term domestic inflation outlook with wages expected to play a pivotal role on this front.

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Equity
The benchmark equity indices traded higher as the Asian markets traded largely higher after the major indices rebounded from negative ...territory. Indices are expected to remain higher as better than expected domestic GDP may lift sentiments amid mixed global cues.

During the week Sensex inclined 2.29% to close at 67481.19 while Nifty gained 2.39% to close at 20267.90

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Debt
Government bond yields remain in line with the UST yields. Meanwhile, increased systemic deficit is expected to affect the short-term... yield curve. In addition, elevated near-term inflation prints and lack of fresh updates on the inclusion of Indian bonds in the Bloomberg index dampened investor sentiment.

The 10Y benchmark G-Sec was trading at a yield of 7.29% on 01 Dec, 2023 at 15:45 IST

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Oil
Oil prices witnessed upward pressure with a supply disruption caused by a storm in the Black Sea and with an OPEC+ meeting where ... supply cuts were announced to the tune of 1 million bpd that were due to expire in December 2023 to December 2024. This would however be capped by signs of weak demand from the US and China.

Brent was trading at $81.13 on 01 Dec, 2023 at 16:11 IST

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Gold
Gold prices continue to trade with an upside bias responding to a softening profile in US yields that has remained intact as investors... position for possible rate cuts by the FOMC going into 2024.

Gold was trading at $2043.91 Per Ounce on 01 Dec, 2023 at 16:11 IST

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Currency
The USD/INR pair is trading sideways responding to global USD trends amidst the upward revision in Q3 GDP data. Strong stocks ...rally and FII inflows into the capital market should appreciate the rupee. However, RBI intervention will likely continue to limit sharp upside bias in the USD/INR pair.

USD/INR was trading at 83.30 on 01 Dec, 2023 at 16:11 IST

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Sensex
67481.19
2.29%
During the week Sensex inclined 2.29% to close at 67481.19 while Nifty gained 2.39% to close at 20267.90
 
Bond Yields
7.29%

The 10Y benchmark G-Sec was trading at a yield of 7.29% on 01 Dec, 2023 at 15:45 IST
 
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Source: ICICI Bank Research, Private Banking Investment Strategy Team, Bloomberg and CRISIL.
Disclaimer: The information set out herein has been prepared by ICICI Bank in good faith and from sources deemed reliable. ICICI Bank does not provide any assurance as regards the accuracy of such information. ICICI Bank does not accept any responsibility for any errors whether caused by negligence or otherwise or for any direct or indirect loss / claim/ damage caused to any person, arising out of or in relation to the use of information communicated herein.