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Indian Economic Update
Retail inflation climbs up to 7% YoY for the month of August, as compared with 6.71% in July...

Industrial production decelerated sharply to 2.4% YoY in July 2022, as compared with a growth of 12.3% in June 2022

Wholesale Price Index (WPI) inflation eases to a 11-month low of 12.4% from 13.9% in July, led by fuel and manufactured products

Chief Economic Advisor Mr. V Anantha Nageswaran, said that India is not defending the Rupee and the Reserve Bank of India is taking necessary steps to ensure that the movement of the Rupee is gradual and in line with market trends

As per the Finance Ministry, the provisional Gross Direct Tax collections for FY23 till Sep 8, 2022 stood at Rs 6.48 trillion, which is 35.5% higher than the reading for same period, last year

According to the Revenue Secretary, Shri Tarun Bajaj, GST collection in October is expected to top Rs1.5 trillion.

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Global Update
US CPI inflation surprised to the upside as it printed in at 8.3% YoY in August against a previous reading of 8.5% in July. However, the real surprise came from core ...inflation that printed in at 6.3% YoY in August from 5.9% YoY in July

The European Central Bank (ECB) chief economist said that higher energy prices remain a dominant driving force of inflation in the Euro Zone, making imports more expensive

Ukraine’s forces continued their rapid advance in the Kharkiv region, exploiting the extraordinary collapse of Russian defences

Federal officials continue to provide a hawkish guidance

Saudi Arabia replaces Russia as the second-biggest oil importer to India, after a three-month gap

According to the local authorities, Chinese city of Chengdu on Thursday eases COVID-19 lockdown in all districts.

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Equity
The benchmark indices opened on a higher level this week amidst improved investors’ sentiments. The indication of moderation in the US PPI inflation in wholesale prices,... supported the sentiments. In addition, China kept the 1-year medium-term lending facility unchanged at 2.75% along expected lines, that also supported the markets.

During the week Sensex lost 1.59% to close at 58840.79 while Nifty declined 1.70% to close at 17350.85

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Debt
The week started with steady bond prices. However, prices inched up during the week due to higher-than-expected CPI inflation data for August. In addition, elevated UST ...yields also weighed on the prices. Positive developments over global bond indices inclusion, continued to keep the yields anchored.

The 10Y benchmark yield ended at 7.23% as compared to the previous week’s close of 7.16%

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Oil
After the sharp correction witnessed over June-July, Brent Crude prices have been trending flat in a tight range, over August-September. Even as there appears to be ... an excess supply, prices are unable to break lower as concerns about medium-term supply prospects remain firmly in place. The week remained volatile after a positive opening at the start, as traders gauged concerns over the slowing demand and U.S.-led price caps on Russian crude exports.

The International Energy Agency (IEA) said that China faces its biggest annual drop in demand in more than three decades, as COVID-19 lockdowns weigh on growth. Oil demand could fall by 2.7% this year.

Brent was trading at $90.72 on September, 16 at 15:42 IST

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Gold
The week started by retaining mild gains from last week as the dollar fell further from 20-year highs, ahead of key U.S. inflation data. The prices remained under ...pressure after stronger-than-expected U.S. inflation data pointed to more dollar strength in the coming weeks.

Gold was trading at $1659.8 Per Ounce on September, 16 at 15:42 IST

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Currency
The USD/Rupee pair opened lower this week as the greenback retraced from the recent highs, however the week remained volatile. The pair will take further cues ...from the CNY movements and US economic data, as investors now look towards the Fed meeting next week. Expected RBI intervention may continue to provide relief to the local unit.

USD/INR was trading at 79.75 on September, 16 at 15:42 IST

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Sensex
58840.79
-1.59%
During the week Sensex lost 1.59% to close at 58840.79 while Nifty declined 1.70% to close at 17350.85
 
Bond Yields
7.23%
7 bps
The 10Y benchmark yield ended at 7.23% as compared to the previous week’s close of 7.16%
 
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.