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Indian Economic Update
According to S&P Global, India’s nominal GDP could increase to USD 7.3 trillion in 2030, making it the second largest economy in ...Asia-Pacific and third largest in the world.

The Central Government has surpassed 50% of its budgeted capex of INR 10 trillion so far in FY24, according to a Senior Government Official.

According to the Finance Ministry of India, the government’s direct tax collections (net of refunds) are seen ‘comfortably’ crossing INR 19 trillion in FY24. Also, the number of income tax returns filed in FY24 would be close to 81.5 million, which would be 4.8% higher than 77.8 million returns filed in FY23.

The minutes of the MPC meeting held in October highlighted: a) Optimism on recent inflation prints led by declining vegetable prices and easing core inflation; b) Indian growth is holding up as seen in high frequency indicators; c) Domestic demand cycle is driven by consumers going overweight on physical assets which is positive for growth.

CPI is likely to moderate to 4% by H1 FY25 from 5.02% in September, said MPC member Ashima Goyal. She stated that the moderation may happen even sooner than H1 FY25 if there are no more major supply side shocks in the economy.

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Global Update
The US economy grew at its fastest pace in over two and half years as GDP accelerated by 4.9% QoQ ... SAAR (Seasonally Adjusted Annual Rate) in Q3 2023, compared to 2.1% in Q2 2023 reflecting a sharp pick-up in private consumption, positive contribution made by inventories, continued strength in government consumption and improvement in export performance.

Israel’s Prime Minister Benjamin Netanyahu said his nation was in a battle for its very existence and that an invasion was being prepared that pushed oil prices sharply higher.

European Central Bank President Christine Lagarde said the battle to tame consumer-price gains is not over, although she has confidence it can be returned to 2%.

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Equity
The benchmark equity indices remained lower amid weak performance in the global markets reflecting a pick-up in geo-political uncertainty. ...Foreign investors were net sellers in the cash market this week. We expect indices to open lower following a fall in Asian peers and global cues.

During the week Sensex declined 2.47% to close at 63782.80 while Nifty lost 2.53% to close at 19047.25

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Debt
During the week government bond yields traded in a tight range amid a rise in crude prices and developments in the overnight ...session visible in the US fixed income market.

The 10Y benchmark G-Sec was trading at a yield of 7.35% on 27 Oct, 2023 at 15:45 IST

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Oil
Oil prices traded flat after rising by about 2% supported by the conflict in the Middle East. However, the rise was limited by ... higher US crude inventories and sluggish economic data in Europe. US crude inventories increased more than expected by 1.4 mbpd as per the EIA report. Conversely, the API report indicated a larger than expected drawdown in crude stocks.

Brent was trading at $89.86 on 27 Oct, 2023 at 15:59 IST

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Gold
Gold prices traded higher after falling from a five-month high as the dollar index strengthens and treasury yields are higher from ...strong economic data. PMI data showed the US private sector unexpectedly expanded during October showing resilience in the economy and supporting the case for interest rates to remain restrictive.

Gold was trading at $1994.65 Per Ounce on 27 Oct, 2023 at 15:59 IST

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Currency
The USD/INR pair traded with an upside bias reflecting treasury yield movements and the rise in oil prices while RBI intervention ...could ensure that range trading remains in place.

USD/INR was trading at 83.23 on 27 Oct, 2023 at 16:00 IST

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Sensex
63782.80
-2.47%
During the week Sensex declined 2.47% to close at 63782.80 while Nifty lost 2.53% to close at 19047.25
 
Bond Yields
7.35%

The 10Y benchmark G-Sec was trading at a yield of 7.35% on 27 Oct, 2023 at 15:45 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.