0:00
/
0:00
Quick Summary
0:00
/
0:00
Indian Economic Update
India's WPI inflation eased to a 21-month low of 5.85% YoY in November from 8.39% in October...

India’s CPI inflation eases to an 11-month low of 5.88% YoY in November led by lower vegetable and fruit inflation while cereals and spices continue to see an elevated inflation

India's Central Bank has lifted informal restrictions placed on banks for trading in the Non-Deliverable Forward Market (NDF), as per media sources. The Reserve Bank of India had placed these restrictions in October to manage the volatility on the Indian rupee

India’s Index of Industrial Production (IIP) contracted to a 26-month low of -4.0% YoY in October 2022 vs. an increase of 3.5% in September 2022

The Government has started a comprehensive exercise to identify “non-essential imports” across sectors to curb their impact on trade balance and zero in on areas where domestic manufacturing needs to be pushed aggressively

India and the UK on Tuesday agreed to conclude the free trade agreement talks at the earliest.

Read More

Global Update
The FOMC raised the benchmark rate by 50 bps to 4.25-4.50% target range. Policymakers projected rates would end next... year at 5.1%

Chinese regulators have asked some of the nation’s biggest banks to buy bonds through their proprietary trading desks. The move is likely to help stabilise the domestic bond market

As restrictions have been eased in China, media reports indicate that there has been a sharp surge in cases of COVID-19 across the country that will continue to work as a headwind in keeping private consumption demand weak.

Read More

Equity
The week opened lower amidst the subdued Asian equity market. However, during the week Markets traded higher as... US CPI inflation rose lower than expected, indicating elevated inflationary pressure beginning to loosen up. FOMC hiked policy rate by 50 bps on expected lines. However, they revised the terminal rate projections higher and indicated that the rate will remain higher for longer to bring down inflation. This weighed on the equity markets in the overnight session.

During the week Sensex lost 1.36% to close at 61337.81 while Nifty declined 1.23% to close at 18269.00

Read More

Debt
Bond prices opened lower given the rise seen in UST yields. During the week the Government bond prices opened sharply... higher as domestic CPI print came well below the expectations. November CPI moderated to 5.88% on the back of lower food inflation. Core inflation remains sticky at ~6%. The FOMC raised rates by 50 bps to 4.25-4.50%. Hawkish comments from the Fed Chair weighed on the sentiment.

The 10Y benchmark yield ended at 7.28% as compared to the previous week’s close of 7.30%

Read More

Oil
Russian President Vladimir Putin warned that he may cut production in response to EU price cap on Russian exports. The... upside was capped as the keystone pipeline started one leg of the halted pipeline over the weekend. The EIA warned that prices may rise as sanctions squeeze Russian exports. In addition, US official oil inventory data reported a sharp increase last week.

Brent was trading at $79.20 on December 16, at 16:15 IST

Read More

Gold
Gold prices traded flat post overnight gains supported by a falling USD after November US CPI data came below forecasts,... easing some concerns over price pressures. While the hike of 50 bps and the signalling of higher rates in 2023 weighed on sentiment. The hawkish tone is likely to see investor demand for non-yielding assets such as gold remain subdued.

Gold was trading at $1781.30 Per Ounce on December 16, at 16:15 IST

Read More

Currency
The USD/INR opened higher given the strengthening USD. The hawkish Fed may weigh on the local unit. Oil prices will be... watched closely. Subdued equity market performance may weigh on INR. Any sharp movement in the pair is unlikely on the back of expected RBI interventions.

USD/INR was trading at 82.83 on December 16, at 15:30 IST

Read More

 
Sensex
61337.81
-1.36%
During the week Sensex lost 1.36% to close at 61337.81 while Nifty declined 1.23% to close at 18269.00
 
Bond Yields
7.28%
-2 bps
The 10Y benchmark yield ended at 7.28% as compared to the previous week’s close of 7.30%
 
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.