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Indian Economic Update
The gross Goods and Services Tax (GST) collections in October came in at INR 1.72 trillion and increased by 13% YoY. This was the... second highest monthly mop-up since the July 2017 launch of indirect tax.

India's unemployment rate increased to its highest level in over two years due to the rising joblessness in rural areas, according to private research firm, Centre for Monitoring Indian Economy (CMIE). The overall unemployment rate rose to 10.0% in October from 7.1% in September.

The core sector growth decelerated to a 4-month low at 8.1% in September 2023 from 12.5% in August 2023. However, coal, steel and electricity continue to see elevated growth.

India has proposed that the World Trade Organisation clearly define what constitutes goods and services in relation to cross-border electronic transmissions such as content streaming.

India will aim to become a ‘developed nation’ by 2047, with an economy of USD 30 trillion in its 100th year of independence, which will be propelled by the radical policy changes and reforms in governance by 2030, said NITI Aayog Chief Executive Officer, B.V.R. Subrahmanyam.

RBI is not under pressure to raise interest rates in response to potential moves by the US Fed, according to Chief Economic Advisor, V Anantha Nageswaran. He stated that RBI's policy decisions are less closely tied to the Fed's actions due to India's improved external finances and financial stability.

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Global Update
The Federal Open Market Committee (FOMC) maintained status quo on expected lines on both the policy rate keeping the Fed funds ...rate in the 5.25%-5.50% range and keeping its QT program unchanged at the pace of USD 95 billion per month while it retained its tightening bias.

Israel’s Prime Minister Benjamin Netanyahu dismissed calls for him to resign over security failures in the October 7 Hamas attack and ruled out a ceasefire with the militant group as the army intensifies ground operations in Gaza.

The J.P. Morgan Global Manufacturing PMI fell to a three-month low of 48.8 in October, down from 49.2 in September and below the neutral 50.0 mark for the 14th consecutive month.

The Bank of England’s Monetary Policy Committee maintained status quo in a split 6-3 vote with the dissenters preferring a rate hike. The central bank retained its tightening bias by stating that ‘rates should be sufficiently restrictive for sufficiently long’ and that ‘policy would likely need to be restrictive for an extended period of time’.

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Equity
The benchmark equity indices opened lower tracking mixed Asian market trade with varying sentiments. The outlook was influenced ...by the net FII activity in the market along with the closure of US market. However, investors responded positively to the guidance provided by FOMC. Robust domestic demand that was visible in the PMI manufacturing survey and GST collections worked to support local equity markets.

During the week Sensex inclined 0.91% to close at 64363.78 while Nifty gained 0.96% to close at 19230.60

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Debt
During the week, government bond yields traded lower following the UST which was trading lower. Yields are likely to remain ...lower reflecting the global trend and the lack of any significant OMO announcements by RBI. Markets will also respond to the INR 300 billion weekly government security auction.

The 10Y benchmark G-Sec was trading at a yield of 7.32% on 03 Nov, 2023 at 15:45 IST

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Oil
Oil prices traded lower after rallying due to the escalation of conflicts in the Middle East. Investors continue to bet against the risks that... the Israel-Hamas war could have larger repercussions that impact the crude oil supply. On the demand side, China's manufacturing activity unexpectedly contracted in October raising concerns about energy demand.

Brent was trading at $86.54 on 03 Nov, 2023 at 15:48 IST

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Gold
Gold prices continue to trade as a proxy safe haven trade. Hence, improving risk sentiment worked to limit further upside possibility in the... pair. The safe haven flows are expected to continue reflecting the geo-political uncertainty that will ensure that the downside in gold prices is capped.

Gold was trading at $1989.37 Per Ounce on 03 Nov, 2023 at 15:48 IST

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Currency
The USD/INR pair traded lower reflecting the weaker global USD trend. However, persistent RBI intervention will work to limit the ...possibility of sharp downside in the pair.

USD/INR was trading at 83.29 on 03 Nov, 2023 at 15:48 IST

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Sensex
64363.78
0.91%
During the week Sensex inclined 0.91% to close at 64363.78 while Nifty gained 0.96% to close at 19230.60
 
Bond Yields
7.32%

The 10Y benchmark G-Sec was trading at a yield of 7.32% on 03 Nov, 2023 at 15:45 IST
 
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Source: ICICI Bank Research, Private Banking Investment Strategy Team, Bloomberg and CRISIL.
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