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| Indian Economic Update
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India's unemployment rate dropped to 3.1% in 2023, the lowest in recent years from 3.6% in the previous year, as per the... government data. The female labour force participation rate rose to 41.3% but their participation in certain roles like legislators, senior officials and managers decreased.
The global rating agency Moody’s on Monday raised India’s growth forecast for calendar year 2024 to 6.8% on ‘stronger-than-expected’ economic data and said that the country will remain the fastest growing among G20 countries.
The gross GST collection for February 2024 came in at INR 1.68 trillion, posting a 12.5% YoY increase which shows the robustness of the Indian economy and a strong consumption demand.
According to the revised estimates, the Centre had budgeted INR 1.05 trillion under interest free capital expenditure loans for the states in 2023-24. Out of this, 90% has been released while the remaining will be released in March 2024.
India's services sector activity continued to remain robust in February, although the growth came at a slower rate as reflected by HSBC India services business activity index which slipped to 60.6 from January's six-month high of 61.8.
RBI Governor Shaktikanta Das, in an interview, said the economic growth in the current fiscal year could be close to 8% in view of the Q3 GDP and the high frequency indicators are reflecting a strong economic momentum.
Bloomberg Index Services (BISL) said it will add India’s Fully Accessible Route (FAR) Bonds to the Bloomberg Emerging Market (EM) Local Currency Index from January 31, 2025.
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| Global Update
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Growth in the US service sector cooled in February as shown by ISM PMI Services which slipped to 52.6 in February from... 53.4 in January reflecting softening across all categories.
The J.P. Morgan Global Composite PMI Output Index posted 52.1 in February, up from, 51.8 in January and its highest level since June 2023.
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| Equity
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During the week the benchmark equity indices remained volatile and traded in line with the Asian markets. Sensex touched the... 74,000 mark for the first time this week with FIIs & DIIs being the net buyers. We expect the market to consolidate in the near term given sectoral rotation.
During the week Sensex gained 2.23% to close at 74242.74 while Nifty inclined 2.32% to close at 22493.55
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| Debt
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Government bond yields which remained weaker post the UST yields, fell as ISM data showed signs of easing in inflation. Besides,... IGB has been included in Bloomberg's emerging market index with 10% of weight in the overall index and will work as a bullish catalyst for local fixed income markets. Systemic liquidity remains in surplus after a long time. Foreign portfolio investments were tepid and failed to push gilt prices upward. We see range trading in the near term.
The 10Y benchmark G-Sec was trading at a yield of 7.02% on 07 Mar, 2024 at 15:45 IST
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| Oil
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Brent Crude oil prices continued their upward trajectory as OPEC + members led by Saudi Arabia and Russia agreed to extend voluntary... oil output cuts of 2.2 million barrels per day into Q2 2024, giving extra support to the market amid concerns over global growth and rising output outside the group.
Brent was trading at $82.32 on 07 Mar, 2024 at 16:08 IST
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| Gold
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Gold prices rallied building on momentum driven mostly by bets for US monetary easing as the FOMC Chair indicated that the rate... cuts could come later in the year while safe-haven buying continues to remain in place for the yellow metal.
Gold was trading at $2163.75 Per Ounce on 07 Mar, 2024 at 16:09 IST
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| Currency
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The USD/INR pair remained lower compared to the DXY, while crude oil prices are trading higher. The upward pressure on the... pair primarily stems from the FIIs’ inflow of foreign funds into the equity market. However, we expect RBI intervention to limit any sharp movement in the pair.
USD/INR was trading at 82.73 on 07 Mar, 2024 at 16:08 IST
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| Sensex |
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During the week Sensex gained 2.23% to close at 74242.74 while Nifty inclined 2.32% to close at 22493.55
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| Bond Yields |
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The 10Y benchmark G-Sec was trading at a yield of 7.02% on 07 Mar, 2024 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.
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