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Indian Economic Update
The Reserve Bank of India (RBI) registered the highest weekly increase in its foreign exchange reserves since Aug 27, 2021, rising... by USD 14.7 billion to USD 544.72 billion in the week ended Nov 11, 2022

According to the Reserve Bank of India’s (RBI) bulletin, India’s Gross Domestic Product (GDP) is expected to grow between 6.1% and 6.3% in the June-September quarter (Q2, FY23) based on high-frequency indicators and economic prediction models. If this is realised, India is on course for a growth rate of about 7% in 2022-23

Foreign Direct Investment (FDI) equity inflows into India contracted by 14% to USD 26.9 billion during the April-September fiscal, according to the data from the Department for Promotion of Industry and Internal Trade (DPIIT)

India’s tax collection will exceed the budget estimate by nearly INR 4.0 trillion in the current fiscal on the back of buoyant Income Tax, Customs Duty and GST mop-up, Revenue Secretary Tarun Bajaj said, adding that the growth in tax revenues will continue to be higher than the GDP growth, helped by formalisation of the economy and better compliance

The Centre is likely to discontinue the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) after December due to considerations on its fiscal position and food grain stocks

The external member of MPC Ms. Ashima Goyal said that the current level of repo rate is sufficient to allow the economic activity to recover, as real rate is positive and inflation expectations remain anchored.

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Global Update
China’s daily COVID-19 infections climbed to a record high, exceeding the previous peak in April, as it battles an outbreak ...since the country adopted a more targeted approach to containing the virus

The Fed officials continue to provide hawkish messaging while emphasising on slower pace of rate hikes going ahead

Saudi Arabia said that OPEC+ was sticking with oil output cuts and could take further measures to balance the market amid falling prices, denying a report that it was considering boosting output.

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Equity
Benchmark indices opened lower this week. However, indices gained during the week tracking mixed Asian equity market and... FOMC minutes indicated that the majority of the FOMC members supported slowing down the pace of rate hikes going ahead. The dovish tone supported the sentiment.

During the week Sensex gained 1.02% to close at 62293.64 while Nifty gained 1.12% to close at 18512.75

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Debt
Government Bond prices opened higher as muted US yields supported the sentiment. FOMC minutes suggested a slower pace of ...rate hikes going ahead, which will aid the domestic bond prices.

The 10Y benchmark yield ended at 7.30% as compared to the previous week’s close of 7.31%

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Oil
Brent oil prices traded higher post sharp overnight fall after reports that Europe is considering a price cap in the range ... of USD 65-70/bbl. The cap is considered to be too high with some consumers currently paying lower prices due to the steep discount against Brent crude.

Brent was trading at $86.75 on November 25, at 15:53 IST

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Gold
Gold prices traded higher as a weaker USD boosted investor demand post FOMC minutes. The minutes showed that Fed officials expect ...to switch to smaller interest rate increases "soon”.

Gold was trading at $1753.32 Per Ounce on November 25, at 15:53 IST

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Currency
The USD/INR pair opened lower as the greenback remained muted post the release of the FOMC minutes. In addition, IPO related ...flows may keep INR supported. However, oil prices will be the key to be monitored as any uptick in the same will put pressure on INR. RBI intervention will curb any sharp volatility in the pair.

USD/INR was trading at 81.69 on November 25, at 15:53 IST

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Sensex
62293.64
1.02%
During the week Sensex gained 1.02% to close at 62293.64 while Nifty gained 1.12% to close at 18512.75
 
Bond Yields
7.30%
-1 bps
The 10Y benchmark yield ended at 7.30% as compared to the previous week’s close of 7.31%
 
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.