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Indian Economic Update
According to data released by the IMF, India overtook UK to become the world's fifth biggest economy...

Finance Minister Mrs. Nirmala Sitharaman said the nation is on a strong wicket as compared to others and is responsive in terms of extending hand-holding to the required sections

RBI Governor Mr. Shaktikanta Das said that the banking system is healthy enough to withstand any negative spill overs from external headwinds emanating from the Jackson Hole speech by the US Fed. He also said that inflation is likely to stay within the tolerance band in the next financial year

India's exports momentum eased with YoY decline of 1.1% in August. Imports increased by 37% YoY led by energy and electronic imports

According to RBI's Deputy Governor Mr. T Rabi Sankar, the Central Bank Digital Currency (CBDC) to be launched this year could become a tool for reducing time and cost for cross-border transactions

Moody's retained India's sovereign credit rating of Baa3 with a stable outlook.

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Global Update
Ms. Liz Truss will replace Boris Johnson as Britain's Prime Minister. She has drafted plans to fix the annual electricity and gas bills for a typical ...UK household at or below the current level over the next 18 months

The FOMC Chair Mr. Powell provided strong guidance that another 75 bps rate hike in the September policy meeting is on the table

China extended its lockdown in districts of the megacity Chengdu and ordered more mass testing

The ECB raised its policy rates by 75 bps with the deposit rate moving to 0.75%. The Central Bank has provided a hawkish guidance.

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Equity
The benchmark indices opened on a flat level this week amidst volatile Asian Equity Markets due to Russia's response to indefinitely shutdown gas supply... to Germany. The week remained volatile as the investors were waiting for ECB's rate decision along with Powell's speech.

During the week Sensex gained 1.68% to close at 59,793.14 while Nifty advanced 1.68 % to close at 17,833.35

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Debt
India's Benchmark 10 year G-Sec started the week on a flat note. Development around the Bond Index inclusion in the Global Bond Index kept the yields range bound during ...the week.

According to Ms. Ashima Goyal, external member of the Monetary Policy Committee (MPC), an aggressive monetary policy tightening was required to ensure a quick return to near a neutral real rate as the effects of COVID-19 faded from the Indian economy. The steps announced by the government to ease supply-side inflation gave monetary policy the leeway to avoid tightening in FY22, she added.

10Y benchmark yield ended at 7.16% as compared to 7.23% of previous week

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Oil
Oil prices were trading higher in the beginning of the week as traders mulled over the supply outlook ahead of an OPEC+ (Ten non-OPEC nations joined OPEC to form ... OPEC+ in late 2016) meeting. OPEC+ surprised the markets by agreeing on a slight oil production cut. The oil cartel will reduce output by 100K Barrels per day in October. Weaker demand and the prospect of more interest rate hikes trumped support from OPEC+'s first output target cut since 2020, weighed on the sentiment pushing oil prices lower. The Brent crude oil prices remain in a bearish sell-off mode with the China lockdown and global growth concerns weighing on oil demand. It rebounded a little after dropping to a seven-month low during the week as Russian President Vladimir Putin threatened to halt oil and gas exports if price caps are imposed by European buyers.

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Gold
Golds prices started flat this week after the European energy crisis supported a safe-haven gold demand. Pullback in USD also supported the bullion. ...Prices traded lower during the week as the US Dollar and Treasury yields climbed amid expectations for aggressive monetary policy tightening by major Central Banks. Gold was trading higher towards the end of the week but struggled to hold onto gains as the Fed Governors signalled a big rate hike.

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Currency
The USD/INR pair opened week higher as the greenback remained strong against major currencies on the back of aggressive rate hike expectations. USD ...retraced from the highs on ECB rate hike decision. RBI intervention is expected to provide relief to the local unit.

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Sensex
59,793.14
1.68%
During the week Sensex gained 1.68% to close at 59,793.14 while Nifty advanced 1.68 % to close at 17833.35
 
Bond Yields
7.16%
-7 bps
10Y benchmark yield ended at 7.16% as compared to 7.23% of previous week
 
Source: ICICI Bank Research, Private Banking Investment Strategy Team, Bloomberg and CRISIL.
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