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India is in discussion with the Association of Southeast Asian Nations to review the FTA, to plug loopholes to stop the import of Chinese goods through the regional bloc, as per the official sources. India and ASEAN are aiming to increase total trade between the two sides to USD 200 billion by 2025, from the current USD 80 billion The Indian Finance Ministry will start daily monitoring of revenue receipts and expenditure, to keep the deficit targets within the stated revised estimates. The deficit may come under pressure, given a possibility of the deferment of LIC IPO and the ongoing evacuation of Indian students from Ukraine, as per media reports

GDP growth for Q3 came in at 5.4%. GDP and GVA growth for FY22 has been revised lower to 8.9% and 8.3% (9.2% and 8.9% earlier). The Indian economy grew by 5.4% year-on-year in the third quarter of the current fiscal year. India, Asia’s third-largest economy has now posted the fifth consecutive instance of positive growth. The growth, albeit, is slower than the previous two quarters, amid rising risks from higher prices of crude oil and commodities, after Russia's invasion of Ukraine

MPC member Mr. Jayanth Varma believes that the Central Bank’s credibility is at risk by keeping policy accommodative for long, as it would risk a higher interest rate in the future. He expressed his concerns over the Central Bank’s commitment for future actions, citing rising uncertainty on the back of the current geopolitical crisis

Manufacturing PMI rose to 54.9 in February, vs. 54 in the previous month. The manufacturing activities grew at a strong pace, on the back of a rise in new work intakes and output. Employment fell at the softest pace, in three months

The Goods and Services Tax (GST) revenues rose by 18% in February to INR 1.33 lakh crore, official data released Tuesday showed, indicating that the third COVID wave impact remained mild and did not dent economic activity. Collections stayed above the INR 1.3 trillion mark for the fifth time, but slipped from the record high of INR 1.4 trillion recorded in January 2022. The trend so far indicates that the Central GST (CGST) collections could exceed the FY22 revised estimate (RE), by at least INR 200 billion.
Indian Economic Update
India is in discussion with the Association of Southeast Asian Nations to review the FTA, to plug loopholes to stop the import of Chinese goods through the regional... bloc, as per the official sources. India and ASEAN are aiming to increase total trade between the two sides to USD 200 billion by 2025, from the current USD 80 billion

The Indian Finance Ministry will start daily monitoring of revenue receipts and expenditure, to keep the deficit targets within the stated revised estimates. The deficit may come under pressure, given a possibility of the deferment of LIC IPO and the ongoing evacuation of Indian students from Ukraine, as per media reports

GDP growth for Q3 came in at 5.4%. GDP and GVA growth for FY22 has been revised lower to 8.9% and 8.3% (9.2% and 8.9% earlier). The Indian economy grew by 5.4% year-on-year in the third quarter of the current fiscal year. India, Asia’s third-largest economy has now posted the fifth consecutive instance of positive growth. The growth, albeit, is slower than the previous two quarters, amid rising risks from higher prices of crude oil and commodities, after Russia's invasion of Ukraine

MPC member Mr. Jayanth Varma believes that the Central Bank’s credibility is at risk by keeping policy accommodative for long, as it would risk a higher interest rate in the future. He expressed his concerns over the Central Bank’s commitment for future actions, citing rising uncertainty on the back of the current geopolitical crisis

Manufacturing PMI rose to 54.9 in February, vs. 54 in the previous month. The manufacturing activities grew at a strong pace, on the back of a rise in new work intakes and output. Employment fell at the softest pace, in three months

The Goods and Services Tax (GST) revenues rose by 18% in February to INR 1.33 lakh crore, official data released Tuesday showed, indicating that the third COVID wave impact remained mild and did not dent economic activity. Collections stayed above the INR 1.3 trillion mark for the fifth time, but slipped from the record high of INR 1.4 trillion recorded in January 2022. The trend so far indicates that the Central GST (CGST) collections could exceed the FY22 revised estimate (RE), by at least INR 200 billion.

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Global Update
Europe’s largest nuclear power plant in eastern Ukraine came under attack from Russian shelling, early Friday, Ukrainian officials said. However, so far... there are no reports of a change in radiation levels at the plant. This development has resulted in acute risk aversion and pushed global commodity prices higher, across the board. US President Biden and Ukraine’s Volodymyr Zelenskiy have urged Russia “to cease its military activities in the area and allow firefighters and emergency responders to access the site”

In the second day of his testimony to the House of Congress, the FOMC Chairman Powell, reaffirmed that the U.S. Central Bank is on track to raise interest rates this month and commence a series of hikes, to curb the highest inflation in decades, though Russia’s invasion of Ukraine means it will move “carefully.” Other members of the FOMC—New York Fed President Williams and Barkin—also emphasised the need to move forward with a tightening policy

S&P Global Ratings downgraded Russia for the second time in a week, as sweeping sanctions and the nation’s increasing isolation increases the risk of a default to CCC- that is about three steps above the debt, that has just fallen into default

The JP Morgan Global Composite Output Index – produced by JP Morgan and IHS Markit in association with ISM and IFPSM – rose to 53.4 in February, up from 51.1 in January. The headline index has now signalled expansion in each of the past 20 months reflecting a pick-up, in both manufacturing and service sector PMIs 

Russian forces pound Ukraine's capital Kyiv and other cities for the seventh day. Ukraine's second biggest city, Kharkiv, suffered heavy bombardment, as Russia's weeklong invasion was denounced by the United Nations, in a historic vote

Oil prices extended their rally on Thursday, with Brent rising above USD 116 per barrel, as trade disruption and shipping issues from Russian sanctions over the Ukraine crisis, sparked supply worries, while US crude stocks fell to multi-year lows. OPEC and its allies agreed another modest revival in supplies for April at a low-key meeting, despite the ongoing concerns about supply disruptions from Russia. The 23-nation coalition led by Saudi Arabia ratified an increase of 400,000 barrels a day

Fed Chair Jerome Powell, is making the fight against inflation his top priority over the risks from Russia’s invasion of Ukraine, backing a quarter-point interest-rate rise later this month. He, however, did emphasise that it was too soon to conclude the impact of the Russia-Ukraine conflict

In his State of Union address, the US President said that the Russian President ‘badly miscalculated’ with his invasion of Ukraine and called the Russian leader a ‘dictator’. He said that the war would leave Russia much weaker after the wave of sanctions that have been imposed, and continued to express his support for Ukraine. He also stated that controlling inflation remains a top priority

European Union ambassadors agreed to exclude seven Russian Banks from the SWIFT Financial Messaging System, but spared the nation’s biggest lender Sberbank PJSC and a bank partly-owned by the Russian gas giant Gazprom PJSC. The EU Parliament also stated that it will move forward with plans to give Ukraine EU Candidate status

The European Central Bank should take time to properly assess the implications of Russia’s war in Ukraine, before continuing its exit from the pandemic-era support for the Eurozone economy, according to the Governing Council member Mr. Olli Rehn.

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Equity
Benchmark indices are likely to open lower as the geopolitical crisis between Russia and Ukraine deteriorates. Asian share indices slipped in early trade,... as did the European and US indices, as investors closely monitor the developments on the European front, while the soaring commodity prices keep investors on the edge.

During the week Sensex lost 2.72% to close at 54333.81 while Nifty declined 2.47% to close at 16245.35

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Debt
Government bond prices are expected to open lower, as the ongoing tensions in East Europe worsens, resulting in high crude oil and commodity prices that will put... pressure on the yields.

10Y benchmark yield ended at 6.81% as compared to 6.74% of previous week.

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Oil
Global crude oil prices are trading higher amid risks of a Russian attack on the largest nuclear plant in Ukraine. Brent crude oil prices are trading at USD 112/bbl....

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Gold
Gold prices are trading higher as investors rushed to a safe haven, after Russia attacked a nuclear power plant in Ukraine. Gold prices are trading at USD 1937 per ounce.... We see more upside possibility in the near-term.

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Currency
The USD/INR pair is likely to open lower over the continued uncertainties in Europe. Sharply elevated prices of brent crude oil alongside the global risk aversion,... are expected to dampen sentiment for the local currency. Any sharp movement is unlikely, as RBI’s interventions may curb the volatility. The Indian Rupee closed weaker at the 75.91 level against the US Dollar, in the previous trading session.

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Sensex
54333.81
-2.72%
During the week Sensex lost 2.72% to close at 54333.81 while Nifty declined 2.47% to close at 16245.35
 
Bond Yields
6.81%
7 bps
10Y benchmark yield ended at 6.81% as compared to 6.74% of previous week.
 
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.