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Morning News Call - India, June 24

·4 min read
In this article:
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To access a PDF version of this newsletter, please click here https://share.refinitiv.com/assets/newsletters/Indiamorning/MNC_IN_06242022.pdf If you would like to receive this newsletter via email, please register at: https://solutions.refinitiv.com/MNCIndiaSubscriptionpage FACTORS TO WATCH • 11:00 am: Reserve Bank of India Deputy Governor M. D. Patra at PHD Chamber of Commerce and Industry event on geopolitical spillovers and Indian economy. INDIA TOP NEWS • India aims to keep FY2023 fiscal deficit at last year's level - sources India's government will not be able to cut its budget deficit this fiscal year as previously projected, officials said, but will seek to cap the shortfall at last year's level to prevent a major deterioration in public finances. • India orders investigation into Tata Motors EV fire incident India has ordered an investigation into a fire incident involving a Tata Motors electric vehicle, a government official said on Thursday, after the automaker described it as an "isolated thermal incident". • Fall in onshore forward premiums could push India rupee even lower A shortage of cash dollars and forward market intervention by the Reserve Bank of India which has pushed onshore 1-year forward premiums to their lowest levels in more than a decade could pressure the rupee to new lows, traders and analysts said. • India to support crisis-hit Sri Lanka's economic recovery India's top diplomat held talks with Sri Lanka's president and prime minister on Thursday as India signalled its willingness to go beyond the $4 billion in loans, swaps and aid that it has already provided its cash-strapped neighbour. GLOBAL TOP NEWS • Fed says U.S. banks can weather severe downturn comfortably The largest U.S. banks on Thursday easily cleared the Federal Reserve's annual health check, in a vote of confidence for the sector amid signs the U.S. economy could tip into a recession in the months ahead. • Japan's inflation tops BOJ target for 2nd month in test of monetary stance Japan's annual core consumer inflation topped the central bank's target for a second straight month in May, data showed on Friday, highlighting the intensifying pressure on the country's fragile economy from soaring global raw material costs. • Ukraine becomes EU membership candidate as Donbas battles reach 'fearsome climax' Ukraine became a candidate to join the European Union on Thursday, a bold geopolitical step triggered by Russia's invasion that Kyiv and Brussels hailed as an "historic moment". LOCAL MARKETS OUTLOOK (As reported by NewsRise) • SGX Nifty nearest-month futures were trading 0.6% higher at 15,656. • The Indian rupee is expected to strengthen versus the dollar, tracking an uptick in Asian shares amid softening Treasury yields. • The Indian federal government bond yields will likely open little changed as investors await fresh supply of debt at a weekly auction today. The yield on the benchmark 6.54% bond maturing in 2032 is likely to trade in a 7.39%-7.44% band until the auction today. GLOBAL MARKETS • Wall Street's main indexes posted solid gains on Thursday, fueled by strong performance from defensive and tech shares that outweighed declines for economically sensitive groups as worries persisted about a potential recession. • Stocks and bonds were both headed for their first weekly gain in a month on Friday as investors wagered on central banks bringing inflation to heel, though growth fears dragged on commodities. • The U.S. dollar turned lower versus major peers, keeping it on course for its first weekly decline this month as investors tried to assess the path for Federal Reserve policy and whether aggressive rate hikes would trigger a recession. • U.S. Treasury yields fell to two-week lows on Thursday on concerns that the Federal Reserve will cause a recession by aggressively hiking interest rates, and on a growing belief that yields may have topped for the near term even if inflation stays high. • Oil prices pared gains in a volatile session after rising nearly $1 per barrel in early Asian trade, as fears of slower demand from cooling U.S. economic activity and global supply uncertainty weighed on sentiment. • Gold prices were flat but on course for their second straight weekly decline, with worries over major central banks potentially implementing big interest rate hikes to target runaway inflation weighing on bullion demand. CLOSE FII INVESTMENTS EQUITIES DEBT PNDF spot 78.16/78.18 June 23 (2,612.92) crores 2,448.10 crores 10-yr bond yield 7.419% Month-to-date (43,831) crores 1,107 crores Year-to-date (2,10,986) crores (12,349) crores (FII investment numbers are in Indian rupees. Source: National Securities Depository Limited) For additional data: India govt bond market volumes Stock market reports Non-deliverable forwards data Corporate debt stories [IN CORPD] Local market closing/intraday levels [IN SNAPSHOT] Monthly inflows [INFLOWS RTRS TABLE IN] ($1 = 78.17 Indian rupees) (Compiled by Archak Sengupta)