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| Indian Economic Update
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The MPC voted unanimously to keep the Repo Rate unchanged at 6.5% and retained their stance on the withdrawal of... accommodation with a 5:1 vote. The Governor emphasised on reaching a 4% inflation target.
The World Bank retains its April forecast for India, projecting India's growth for FY24 at 6.3%, increasing to 6.4% in FY25 and pegs it to remain the fastest growing major economy in the world.
The Union cabinet approved the third revival package for BSNL with a total outlay of INR 890.5 billion which also includes the allotment of 4G/5G spectrum through equity infusion.
The cost of borrowing for state governments slipped marginally by 3 bps to 7.32% at the weekly auction despite a higher supply as states raise INR 173 billion through market borrowings.
The Union Government received INR 41.85 billion through a 3% stake sale in Coal India as per the Department of Investment and Public Asset Management website. The shareholding of the government has come down to 63.13% after the offer-for-sale.
India’s services activity expanded at the second highest pace in 13 years as indicated by S&P Global India Services PMI Business Activity Index which eased to 61.2 last month from 62.0 in April.
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| Global Update
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The World Bank said that the real global GDP is set to climb 2.1% this year, up from a 1.7% forecast issued in January but well below the ...2022 growth rate of 3.1%.
The Reserve Bank of Australia delivered an unexpected rate hike of 25 bps to 4.1% while providing a hawkish guidance to indicate that further tightening could be on the cards.
President Joe Biden on Saturday signed a bill that suspends the U.S. government's USD 31.4 trillion debt ceiling, averting a default. He further said "It was critical to reach an agreement and it is very good news for the American people."
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| Equity
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The benchmark equity indices opened higher amidst the Asian equities trading higher after Joe Biden signed the Debt Ceiling Bill ...and constant inflows from FIIs in India. However, indices turned flat after the overnight US equity markets traded mixed as the investors were expecting a pause from FOMC and China’s exports fell more than expected.
During the week Sensex gained 0.13% to close at 62625.63 while Nifty gained 0.16% to close at 18536.40
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| Debt
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The government bond prices opened flat this week as the UST 10Y yield rose by 9 bps after the better than expected jobs data. ...The bond prices traded range-bound this week with investors remaining cautious ahead of the MPC meeting. Rising oil prices also weighed on the local fixed income market.
The 10Y benchmark G-Sec was trading at a yield of 7.04% on 09 June, 2023 at 16:11 IST
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| Oil
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Brent prices were volatile this week. The week started with higher oil prices after Saudi Arabia pledged to reduce the output by... another 1 mbd from July, taking its production to the lowest level for several years after a slide in the crude prices.
Brent was trading at $76.01 on 09 June, 2023 at 16:11 IST
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| Gold
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Gold prices traded higher aided by a softer USD and the prevailing cautious sentiment across markets. Firmer China PMIs... and measures to ease credit conditions at home allows the yellow metal prices to move higher. However, a light calendar and absence of any noise ahead of the pre-Fed blackout would limit the upside.
Gold was trading at $1963.19 Per Ounce on 09 June, 2023 at 16:11 IST
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| Currency
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The USD/INR pair traded higher this week as the unexpected US service data raised uncertainty about the future rate hike which made ...investors cautious. Investors are awaiting the US inflation and FOMC policy review next week. The local currency will be supported by falling oil prices. However, any sharp movement in the local currency is unlikely to happen, given RBI intervention in the market.
USD/INR was trading at 82.47 on 09 June, 2023 at 16:11 IST
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| Sensex |
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During the week Sensex gained 0.13% to close at 62625.63 while Nifty gained 0.16% to close at 18536.40
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| Bond Yields |
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The 10Y benchmark G-Sec was trading at a yield of 7.04% on 09 June, 2023 at 16:11 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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