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Indian Economic Update
India’s CPI inflation eased to 5.09% YoY in February vs. 5.1% YoY in January while core inflation continued to... move lower at 3.3% YoY. Retail food inflation rose to 8.66% YoY in February from 8.3% YoY in the previous month due to a sequential rise in vegetable and meat prices.

The Indian economy may clock over 7% growth rate for the fourth year running, in FY25 too if conditions are favourable, said the Chief Economic Advisor, V. Anantha Nageswaran.

India’s industrial production increased by 3.8% YoY in January 2024 as compared to 4.2% YoY in December 2023 vs. 5.8% YoY in January 2023. On a sequential basis, industrial activity increased by 0.6% in January 2024.

India signed a significant trade agreement with the European Free Trade Association (EFTA) comprising Switzerland, Norway, Liechtenstein and Iceland, committing to a USD 100 billion investment over 15 years.

NITI Aayog has proposed a series of measures including boosting e-commerce exports, creating a comprehensive trade portal, promoting ease of merchandise exports, improving access to export finance and creating a one stop information channel for exporters especially MSMEs.

Wholesale inflation eased to 0.20% YoY vs. 0.27% in January led by fuel and power and manufactured products.

Fitch Ratings revised its GDP growth forecast for India higher at 7% in FY25, marking a 0.5% point increase. It said that the domestic demand, particularly investment, will be the primary driver of growth in India, supported by sustained levels of business and consumer confidence.

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Global Update
Donald Trump has clinched the Republican presidential nomination ensuring that a re-match between him and the... US President Biden takes place in the Presidential elections that are due in November 2024.

US CPI, printed in at 3.2% YoY in February vs 3.1% YoY in the past month, printing marginally above expectations at 3.1%. On a sequential basis, it remained elevated at 0.4% as core goods surprised marginally to the upside.

China's Central Bank left the key policy rate unchanged at 2.50% as expected when rolling over maturing medium-term loans.

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Equity
This week, the benchmark equity indices traded lower. The market reacted to the US inflation and local economic indicators.... Indices witnessed wide sell-offs in mid and small cap categories. Robust relative local growth prospects, compared to the rest of the world, limited a sharp move. We expect broader market volatility to continue in the near term.

During the week Sensex lost 1.99% to close at 72643.43 while Nifty declined 2.09% to close at 22023.35

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Debt
During the week, the government bond yields slid to a 9-month low, lower than the anticipated supply of local debt created... appetite for sovereign debts. However, the yields recovered with the rise in UST yields, which rose higher after the producer inflation report worried investors about its potential impact on the Fed policy.

The 10Y benchmark G-Sec was trading at a yield of 7.06% on 15 Mar, 2024 at 15:45 IST

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Oil
Crude prices are seeing upward pressure, at the highest level since early November 2023, with the International Energy Agency... now forecasting a supply deficit for 2024. This assumes that OPEC+ will keep its production cuts in place through 2024.

Brent was trading at $84.89 on 15 Mar, 2024 at 15:50 IST

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Gold
Gold prices came under pressure after a larger-than-expected rise in the US PPI index cooled expectations of early rate... cuts by the US Fed, boosting UST yields and the USD index.

Gold was trading at $2173.95 Per Ounce on 15 Mar, 2024 at 15:51 IST

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Currency
The USD/INR pair traded higher in response to some degree of risk aversion in global USD after the inflation report. However,... any sharp movement is unlikely to occur in the pair due to RBI’s persistent intervention.

USD/INR was trading at 82.88 on 15 Mar, 2024 at 15:51 IST

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Sensex
72643.43
-1.99%
During the week Sensex lost 1.99% to close at 72643.43 while Nifty declined 2.09% to close at 22023.35
 
Bond Yields
7.06%

The 10Y benchmark G-Sec was trading at a yield of 7.06% on 15 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.