• Indian stock markets end the week in red after a stellar performance on Wednesday. The fade out in markets happened due weak global cues. The hotter than expected inflation numbers dampened the hopes of US rate cuts. Nifty 50 was flat with marginal gains of 0.03% underperforming Nifty Midcap 150 Index and the Nifty Small cap 250 Index which also registered slight gains of 0.3% and 0.5% respectively.

• This meant that US bond yields would stay higher for longer, impacting foreign inflows. Higher commodity prices and geo-political tensions further hampered sentiments.

• Sectoral indices were a mixed bag. Nifty Metal, Nifty Realty and Nifty Oil and Gas were high performers gaining 2.9%, 1.6% and 1.3% respectively. While Nifty Oil and Gas, Nifty Healthcare and Nifty FMCG were at the bottom. Nifty Pharma, Nifty PSU Banks and Nifty Media were at the bottom with (-) 1.9%, (-) 1.5% and (-) 1.5% respectively.

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• Sentiments were affected following escalating geopolitical tensions in the Middle East along with rising crude oil prices which crossed the $90 per barrel mark due to supply concerns.

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• Bond yields rose following the rise in U.S. Treasury yields after strong U.S. non-farm payrolls data in Mar 2024 along with drop in unemployment rate further pushed back expectations around the timing of the first rate cut by the U.S. Federal Reserve. Losses were extended after elevated U.S. inflation data of Mar 2024 reaffirmed doubts over interest rate cuts in the near future by the U.S. central bank.

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• Yield on the 10-year benchmark paper (7.18% GS 2033) rose by 6 bps to close at 7.18% from the previous week’s close of 7.12%.

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• Industrial production growth in India (IIP) accelerated to 5.7% YoY in Feb 2024, as compared to 4.1% rise in Jan 2024. Production in the manufacturing industry increased by 5.0%, mining by 8.0% and electricity by 7.5% in Feb 2024.

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• The consumer price index-based inflation eased to 10-month low of 4.85% YoY in Mar 2024 compared to 5.09% in Feb 2024, mainly due to cooling food prices. The retail inflation remained below the central bank’s upper tolerance level for consecutive seven months. Consumer food price inflation also eased to 8.52% in Mar 2024 from 8.66% in Feb 2024.

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• The RBI stood out with its continued accumulation of gold reserves. According to weekly data of the RBI, gold holdings of the RBI was increased by 6-tonne in Feb 2024 alone. The RBI has now purchased over 13 tonnes of gold this year, bringing its total holdings to 817 tonnes.

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.