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| Indian Economic Update
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The government’s direct tax-to-GDP ratio stood at a 23-year high of 6.11% in FY2023, data released by the Central Board of Direct... Taxes showed this week.
Retail inflation for farm workers and rural labourers increased marginally to 7.71% YoY and 7.46% YoY in December compared to 7.37% and 7.13%, respectively, in November due to higher prices of certain food items.
The finance ministry has raised import duties on gold to 15% from 10%. The higher tariffs are aimed at curbing the surge in imports of the yellow metal.
The government will develop 200 ropeway projects at a cost of INR 1.25 trillion in the coming five years under the National Ropeways Development Programme, ‘Parvatmala Pariyojana’, according to Union Minister Nitin Gadkari.
The flash Purchasers Managers Index launched by S&P and HSBC, indicates that the consumer price index is expected to rise moderately in coming months as service providers have not passed on input price increases to final consumers while manufacturers have.
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| Global Update
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The Bank of Japan maintained its ultra-easy monetary settings but signalled its growing conviction that conditions for phasing out its huge... stimulus were falling into place, suggesting that an end to negative interest rates was nearing.
Demand for credit in the Eurozone may be bottoming out after falling for more than a year in the face of rising interest rates and a struggling economy, according to the European Central Bank.
The Federal Reserve raised the rate on loans for banks issued under an emergency lending programme launched last year after borrowing surged in recent weeks as institutions took advantage of the attractive financing terms.
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| Equity
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Benchmark equity traded lower due to global market trends, lack of domestic cues and ongoing foreign investor selling pressure driven... by concerns over high valuations and disappointing quarterly results.
During the week Sensex lost 0.68% to close at 70700.67 while Nifty declined 0.51% to close at 21352.60
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| Debt
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The government bond yields traded tracking the US Treasury yields. Given that there are a lack of domestic cues this week and... systemic liquidity is also in a significant deficit, we expect global developments to drive yields in the near term.
The 10Y benchmark G-Sec was trading at a yield of 7.17% on 25 Jan, 2024 at 15:45 IST
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| Oil
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Oil prices were largely flat after Libya restarted production at a major oilfield and as output slowly recovered in North Dakota... after a winter storm. As supply concerns ease and overall demand is muted, conflicts in the Middle East put upward pressure.
Brent was trading at $81.12 on 25 Jan, 2024 at 16:07 IST
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| Gold
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Gold prices eased as investors rolled back expectations of a US interest rate cut at the end of March 2024. Data points such... as US Q4 GDP and US PCE inflation would also influence bullion prices. More downside bias in the near term is possible for gold prices.
Gold was trading at $2017.95 Per Ounce on 25 Jan, 2024 at 16:07 IST
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| Currency
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The USD/INR pair traded in line with a rising dollar index and increased crude oil prices, contributing to an uncertain rupee trajectory... amidst delayed Fed rate cuts, equity outflows and oil price hikes.
USD/INR was trading at 83.10 on 25 Jan, 2024 at 16:08 IST
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| Sensex |
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During the week Sensex lost 0.68% to close at 70700.67 while Nifty declined 0.51% to close at 21352.60
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| Bond Yields |
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The 10Y benchmark G-Sec was trading at a yield of 7.17% on 25 Jan, 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.
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