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Indian Economic Update
CPI inflation eased below RBI’s upper tolerance band of 6% to 5.66% YoY in March vs 6.44% YoY in February. ...

The India Meteorological Department (IMD) said monsoon in India is likely to be ‘normal’ in 2023 with the country expected to receive rainfall of 96% of the long-period average despite El-Nino conditions.

IMF lowered India’s growth forecast for FY24 by 20bps to 5.9%, broadly inline with the cut in global forecasts. It also cut the economic growth forecast for FY25 by 50bps to 6.3%.

The Centre will start releasing the interest-free capex loans to state governments this month or at the latest in May to ensure the resultant investments by them are evenly spread out during the year to produce a large growth multiplier.

Households’ perception of the current inflation declined by 70bps to 8.9% in March 2023.

RBI’s bi-monthly consumer confidence survey shows that consumer confidence continues to recover from a historic low in mid-2021 with the Current Situation Index (CSI) increasing by 2.2.

Industrial production increased by 5.6% YoY in February 2023 (our estimate: 5.2%) compared with 5.5% in January 2023.

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Global Update
FOMC minutes highlighted that risk of a recession in 2023 had increased given the deterioration witnessed in the banking ...sector that would be followed by a recovery over 2024 and 2025.

US jobs growth moderated in March and the economy added 236K positions. However, a historically low U.S. unemployment rate (3.5%) and rising wages increase the likelihood of a Fed rate hike.

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Equity
This week, benchmark equity indices opened higher amidst mixed Asian equity markets. IMF revised its global growth forecast... lower by 10bps to 2.8% and 3% in 2023 and 2024, respectively. Focus will be on Q4FY23 earnings season in India ahead.

During the week Sensex gained 1% to close at 60431 while Nifty gained 1.30% to close at 17828

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Debt
The government bond prices opened higher as MPC paused rate hikes last week indicating future rate actions will be data dependent. ...Higher supply and global yields movement drove the yields this week. Decline in core inflation momentum is likely to support the sentiment. Rising recession concerns in the US post the release of FOMC minutes could support the bond prices.

The 10Y benchmark G-Sec was trading at a yield of 7.21% on 13 April, 2023 at 15:47 IST

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Oil
Oil prices traded higher, buoyed by prospects of higher Chinese demand and tighter global supplies. Recent data showing softer-than-expected... consumer inflation in China suggested an uneven economic recovery, spurring expectations that the world's second-largest economy and top importer could make further efforts to boost growth. The CPI release also led to a fall in the USD, helping the oil prices.

Brent was trading at $87.10 on 13 April, 2023 at 15:47 IST

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Gold
Gold started trading lower this week as the USD gained some momentum after the US non-farm payrolls report pointed to a tight ...labour market and supported bets for another interest rate hike from the Fed in May. However, price turned positive led by a broad weakness in the USD which in turn led to a rise in the UST bond yield.

Gold was trading at $2027.22 Per Ounce on 13 April, 2023 at 15:47 IST

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Currency
The pair opened higher as the DXY traded stronger against major currencies. Geopolitical tensions kept USD supported. The pair turned lower ...as greenback started trading weaker during the week as lower than expected US CPI prints weighed on the USD. However, higher Brent oil prices have put pressure on INR. Fed members reiterated that the future actions will be data-dependent. Any sharp movement in the pair is unlikely on the back of RBI intervention.

USD/INR was trading at 81.86 on 13 April, 2023 at 15:47 IST

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Sensex
60431
1%
During the week Sensex gained 1% to close at 60431 while Nifty gained 1.30% to close at 17828
 
Bond Yields
7.21%

The 10Y benchmark G-Sec was trading at a yield of 7.21% on 13 April, 2023 at 15:47 IST
 
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.