|
|
|
|
|
| Indian Economic Update
|
|
The RBI Bulletin for April 2024 noted the following: ...
1) Extreme weather events may pose a risk to India’s inflation in the near-term, along with geopolitical tensions that could keep crude oil prices “volatile” 2) To harness the full potential of its demographic dividend, the Indian economy must grow at 8-10% annually over the next decade 3) An analysis of India’s revealed comparative advantage in services exports, indicates that it has an edge in Telecom and IT services
The MPC elaborated the rationale behind keeping the interest rate unchanged despite the benign inflation outlook. The RBI Governor Dr Shaktikanta Das said “The success in the disinflation process should not distract us from the vulnerability of the inflation trajectory to the frequent incidences of supply side shocks, especially to food inflation, which could spill over to core inflation. Also, geopolitical tension poses risks to commodity prices.”
India's total consumption of crude oil or petroleum products rose 4.6% in FY24 to 233.3 Metric Ton while domestic production of crude oil rose marginally by 0.6% to 29.4 Metric Ton. While the country is short in crude oil production, it has surplus refining capacity
Aiming to increase pulse cultivation and reduce import dependence, the Indian Government is collaborating with farmers in Bihar, Jharkhand, and Uttar Pradesh for the first time to sow kharif pulses before sowing for the season starts, with a promise to procure an unlimited quantity of their produce at the Minimum Support Price (MSP).
|
|
|
|
|
|
|
| Global Update
|
|
Chinese banks in consultation with the PBoC kept the loan prime lending rates for the one-year and five-year tenors ...unchanged at 3.45% and 3.95% respectively
The European Central Bank will not be swayed from a first interest-rate cut in June by oil price uncertainty
US business activity cooled in April to a 4-month low due to weaker demand, while rates of inflation eased slightly even as input prices rose sharply, suggesting some relief ahead, as the Federal Reserve looks for signs that the economy is ebbing enough to bring inflation down further
The US GDP slowed from 3.3% QoQ SAAR in Q42023 to 1.6% in Q12024, which was below the expected 2.5%. The source of downside came owing to a drag from inventories that subtracted 0.4% from GDP and net exports that subtracted 0.9%.
The US core PCE Price Index increased by 3.7% QoQ SAAR in Q12024 and was much higher than the 2% recorded in the prior two quarters. The Fed Funds Futures market has pushed back the timing of its rate cut from September to November, with a cumulative 33bps worth of easing priced in over 2024.
|
|
|
|
|
|
|
| Equity
|
|
The benchmark equity indices opened higher this week, tracking gains in Asian peers, amid weak global market cues. The indices ...moved positively through the week amid improving global market cues. The sharp decline in India's VIX amid the start of the election, indicates lower market volatility in the near term. We expect positive momentum to continue in the markets with India's robust growth prospects.
During the week Sensex gained 0.88% to close at 73730.16 while Nifty moved up 1.23% to close at 22419.95
|
|
|
|
|
|
|
| Debt
|
|
10-Year Government bond yields traded range bound broadly following the move in UST. The market was impacted by risk-averse ...sentiment across global markets and the volatility in crude oil prices.
The 10Y benchmark G-Sec was trading at a yield of 7.21% on 26 April, 2024 at 15:32 IST
|
|
|
|
|
|
|
| Oil
|
|
Brent Crude oil prices opened lower this week as Israel and Iran played down the risks of an escalation of hostilities in the Middle East.... Recent production curbs from Russia, higher fuel demand during the spring season in the US combined with tighter supplies as data showed overall US inventories shrinking more than expected in the last week, pushed prices upwards. Persistent geopolitical unrest in the Middle East is contributing to keeping prices higher & further upside is possible in the near-term.
Brent was trading at $83.84 on 26 April, 2024 at 15:06 IST
|
|
|
|
|
|
|
| Gold
|
|
Gold prices weakened as worries over a wider Middle East conflict subsided, prompting investors to scale back safe-haven trades. Investors... adopted a wait and watch stance, to take cues from US economic data such as US Q1 GDP and US PCE data that could offer clues to the Federal Reserve’s interest rate path going forward.
Gold was trading at $2361.75 Per Ounce on 26 April, 2024 at 15:05 IST
|
|
|
|
|
|
|
| Currency
|
|
The USD/INR traded positive for most of the week in line with the global USD, which fell after US business activity came ...lower than expected. The easing of geopolitical tension in the Middle East has resulted in an improvement in risk sentiment along with softer crude oil prices. However, the RBI's persistent intervention will limit any sharp movement in the pair.
USD/INR was trading at 83.36 on 26 April, 2024 at 15:40 IST
|
|
|
|
|
|
|
|
| |
| Sensex |
|
|
|
During the week Sensex gained 0.88% to close at 73730.16 while Nifty moved up 1.23 % to close at 22419.95
|
|
|
|
|
| |
| Bond Yields |
|
|
|
The 10Y benchmark G-Sec was trading at a yield of 7.21% on 26 April, 2024 at 15:32 IST
|
|
|
|
|
|
|
|
|
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.
|
