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Quick Summary
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Indian Economic Update
India’s retail inflation came in at 4.87% YoY in October (vs. 5.02% in September). This was driven by core inflation,... which softened to 4.2% YoY (vs. 4.5% in September) even as overall food inflation was relatively stable at 6.2% YoY (vs. 6.3% in September).

WPI inflation printed in at -0.52% YoY in October vs. (-0.26% in September), remaining in the deflationary territory for the 7th consecutive month. On an MoM basis, the index rose by 40 bps.

The government’s net direct tax collections came in at INR 10.60 trillion up to November 9 in the current fiscal year, up 21.8% YoY and constituting 58.2% of the budget estimates for FY24.

India's industrial production fell sharply to a three-month low of 5.8% YoY in September from a 14-month high of 10.8% YoY in August, mainly on account of a sharp fall in output growth of manufacturing which plunged to 4.5% YoY and electricity at 9.9% YoY.

According to the Commerce Ministry, India’s imports from Russia rose 64% to USD 36.3 billion during the Apr-Oct period this fiscal on higher shipments of crude oil and fertilisers. With this, Russia has become India’s second largest import source.

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Global Update
US CPI inflation increased to 3.2% in October 2023, down from 3.7% in the previous month. Core inflation too eased to an over two-year ...low of 4% from 4.1% in the preceding month.

The euro zone economy contracted marginally quarter-over-quarter in the third quarter. A new estimate confirmed that expectations of a technical recession in the fourth quarter turned out equally weak, but employment still rose.

China’s consumer spending and industrial activity expanded faster than expected in October but a worsening property market fuelled expectations, the government will have to roll out more stimulus.

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Equity
This week the benchmark equity traded higher amid higher Asian and US markets. BSE Sensex crossed 65K on the Mahurat session on Sunday.... Meanwhile, FII's selling spree continued as they dumped Indian equity worth INR 58 billion this month so far on rising interest rates in US. We expect the market to consolidate in a broader range due to the lack of major events and the Q2 earning season coming to an end.

During the week Sensex inclined 1.37% to close at 65794.73 while Nifty gained 1.58% to close at 19731.80

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Debt
Government bond yields remained lower after the 10Y UST fell by 18 bps as investors reacted to the latest US CPI data along ...with domestic CPI and WPI figures. Investors will remain cautious of the systemic liquidity for further cues on bond prices.

The 10Y benchmark G-Sec was trading at a yield of 7.20% on 17 Nov, 2023 at 15:45 IST

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Oil
Oil prices traded lower amid a strong USD and higher UST rates along with a larger-than-expected increase in weekly U.S.... crude inventories that renewed concerns about the demand outlook and recovery in USD. The U.S. EIA reported that inventories of US crude rose by about 3.6 million barrels, well above expectations of about only 1.8 million barrels.

Brent was trading at $78.18 on 17 Nov, 2023 at 15:53 IST

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Gold
Gold prices gained as the USD and Treasury yields retreated after softer-than-expected U.S. CPI inflation data fuelled bets that... the Federal Reserve may be done hiking interest rates.

Gold was trading at $1995.75 Per Ounce on 17 Nov, 2023 at 15:54 IST

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Currency
The USD/INR pair traded higher reflecting the global USD trend after the softer US inflation print. However, falling oil prices ...should support the rupee at the margin while RBI intervention will likely ensure continued range trading in the near term.

USD/INR was trading at 83.27 on 17 Nov, 2023 at 15:55 IST

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Sensex
65794.73
1.37%
During the week Sensex inclined 1.37% to close at 65794.73 while Nifty gained 1.58% to close at 19731.80
 
Bond Yields
7.20%

The 10Y benchmark G-Sec was trading at a yield of 7.20% on 17 Nov, 2023 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.