• Domestic equity markets rose for the fourth consecutive week as key benchmark indices S&P BSE Sensex and Nifty 50 rose 0.51% and 0.69% respectively. The mid-cap segment closed the week in green, however, the small-cap segment closed the week in red.

• Domestic equity markets rose during the week due to optimism for future growth of domestic economy supported by the robust economic growth of the Indian economy during the third quarter of the financial year 2023-24.

• Sentiments were boosted after the U.S. Federal Reserve Chairperson hinted at potential rate cuts later this year but signaled uncertainty about inflation and growth.

• Meanwhile, gains were restricted as mutual fund schemes have begun to limit inflows into small-cap funds after the SEBI has asked the mutual fund industry to be more watchful in small-cap and mid-cap schemes to safeguard investor.

• Bond yields fell during the week following the ease in U.S. Treasury yields as expectations of a rate cut later this year were reinforced by remarks made by the chairperson of the U.S. Federal Reserve. However, the inclusion of government bonds to Bloomberg Index Services failed to have a significant effect on bond yields even after disclosing its timeline.

• Yield on the 10-year benchmark paper (7.18% GS 2033) fell by 3 bps to close at 7.03% from the previous week’s close of 7.06%.

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• Data from Reserve Bank of India showed that reserve money grew 6.0% on a yearly basis for the week ended Mar 01, 2024 compared to an increase of 10.2% in the same period of the previous year. The currency in circulation grew 3.3% on a yearly basis for the week ended Mar 01, 2024 compared to an increase of 8.2% in the same period of the previous year.

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• According to preliminary data compiled by the rural development ministry, demand for work under the Mahatma Gandhi National Rural Employment Guarantee Scheme fell to 26.21 million in Feb 2024 compared to 26.23 million a year earlier. As the economy is predicted to grow at a higher rate of 7.6% in FY24, up from 7% the previous fiscal year, this trend aligns with the broader economic recovery.

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• According to the data released by the Petroleum Planning and Analysis Cell of the oil ministry, India's fuel consumption rose 5.7% YoY in Feb 2024 to 19.72 million metric tons, supported by strong factory activity.

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• India’s Services Purchasing Managers’ Index (PMI) eased to 60.6 in Feb 2024 as compared to 61.8 in Jan 2024 due to softer expansions in business activity, sales and jobs. Composite PMI also eased to 60.6 from 61.2 in the same period.

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• A major global credit rating agency increased India's GDP growth forecast for the 2024 calendar year to 6.8% from 6.1%. The rise in the estimate was ascribed to the improving global economic conditions and India's strong economic performance in 2023.

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Best Regards,

Alpha Research Team

Disclaimer

The above views are our expectations of the economy, market and investments. The views may or may not play out accordingly. You are requested to do your own due diligence before making any investment.