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| Indian Economic Update
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RBI maintained the status quo by keeping the Repo Rate unchanged at 6.5% and retained its stance at ‘withdrawal of accommodation’....
Growth forecast was revised to 7% for FY25 from 6.5% earlier. Inflation forecast for FY25 was retained at 4.5%. Notably, the Q4FY25 CPI forecast has been revised higher to 4.7% from 4.3% earlier even as Q4FY25, Q1FY25 and Q3FY25 projections have been revised marginally lower.
India’s oil demand growth is set to overtake that of China by 2027, said the International Energy Agency. India's increase in oil demand is projected to be almost 1.2 million barrels per day (mb/d) over the period of 2023-30, accounting for more than one-third of the projected 3.2 mb/d global gains.
Minister of State for Finance Pankaj Chaudhary said the Centre’s internal debt ratio has been moderating since hitting 58.3% of GDP in FY21 and is estimated to touch 55.4% in FY24.
The Income Tax department has garnered about INR 46 billion in taxes from 56 million updated I-T returns filed by taxpayers in the past two years.
The HSBC India Services Purchasing Managers’ Index jumped to 61.8 in January from December’s 59.0 on account of buoyant domestic and external demand conditions.
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| Global Update
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Overall borrowing levels in US rose modestly during the final three months of the last year. Total household debt climbed by USD 212 billion... in the fourth quarter of 2023 to USD 17.5 trillion.
The European Central Bank (ECB) doesn't need to rush cutting interest rates, policymaker Boris Vujcic told Reuters, arguing it will be better for its credibility to be sure that inflation is decisively under control.
US Treasury Secretary Janet Yellen stated that US regulators are monitoring risks stemming from Nonbank Mortgage Lenders and cautioned that failure of one of them is possible in the case of market strains.
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| Equity
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The benchmark equity indices traded in a narrow range due to a lack of domestic cues. The market had a limited effect after RBI rate... decision in which the status quo was maintained. Instead, corporate earnings announcements as well as global risk sentiment could work as important drivers in the near term.
During the week Sensex lost 0.68% to close at 71595.49 while Nifty declined 0.33% to close at 21782.50
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| Debt
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Government bond yield remained lower following the UST trends. The Monetary Policy Committee kept the policy Repo Rate ...unchanged at 6.5% and retained its stance of withdrawal of accommodation to ensure inflation progressively aligns with the target. The neutral guidance not committing to a path of rate cuts worked to push yields marginally higher in the overnight session.
The 10Y benchmark G-Sec was trading at a yield of 7.11% on 09 Feb, 2024 at 15:45 IST
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| Oil
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Oil prices traded higher as hostilities in the Red Sea continued with more attacks by Yemen’s Houthi rebels. While US crude oil... inventories increased, gasoline inventories unexpectedly fell which also supported prices. Investors continue to monitor the situation in the Red Sea and wait for US CPI for further cues.
Brent was trading at $81.66 on 09 Feb, 2024 at 16:10 IST
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| Gold
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Gold prices traded higher led by an increase in safe-haven demand as tension in the Red Sea escalated with more attacks by the... Houthi rebels. Investors continue to focus on interest rate cut expectations for further cues.
Gold was trading at $2046.45 Per Ounce on 09 Feb, 2024 at 16:10 IST
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| Currency
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The USD/INR pair traded in a narrow range following DXY. Ranged trading is expected to continue to remain in place, reflecting the lack... of any significant market-moving data releases.
USD/INR was trading at 83.04 on 09 Feb, 2024 at 16:11 IST
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| Sensex |
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During the week Sensex lost 0.68% to close at 71595.49 while Nifty declined 0.33% to close at 21782.50
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| Bond Yields |
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The 10Y benchmark G-Sec was trading at a yield of 7.11% on 09 Feb, 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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