Sensex Is Trading Higher Today

INR was marginally weaker, monitoring movement in oil prices. But it is trading stronger today, while other Asian currencies are trading lower.

Sonal Badhan,

Economist,

Bank of Baroda

Mumbai, March 18, 2024: Industrial production in the US rebounded (MoM) in Feb’24 as it rose by 0.1% (est.: 0%), following downwardly revised (-) 0.5% decline noted in Jan’24. Improvement was led by business equipment, construction and materials. On the other hand, University of Michigan’s consumer sentiment index eased in Mar’24 to 76.5 from 76.9 in Feb’24, dragged by sub-index of consumer expectations. Current conditions index remained unchanged. Elsewhere in Asia, in China, retail sales growth in Jan-Feb’24 slowed to 5.5% (est.: 5.6%) from 7.4% in Dec’23, despite it being a festive season in that period. Industrial production on the other hand jumped by 7% (est.: 5.3%) in Jan-Feb’24 from 6.8% in Dec’23. FAI, an indicator of investment, also beat expectations (3.2%) and rose by 4.2% in Jan-Feb’24 versus 3% in CY23. This week, markets await decisions of US Fed, BoE, BoJ, and RBA.

• Except Shanghai Comp (higher), global stock indices closed lower. Investors remained cautious amidst anticipation of delayed start to the rate cut cycle by Fed. Apart from this, expectation of a likely pivot by BoJ after 8 years, also impacted investor sentiments. Sensex fell by 0.6%, led by oil and gas stocks. However, it is trading higher today, in line with other Asian stocks.
• Except EUR and CNY, other global currencies ended weaker against US$. DXY rose by 0.1%, supported by continued increase in US treasury yields. Amongst major currencies, JPY depreciated the most by 0.5%, ahead of BoJ’s policy decision. INR was marginally weaker, monitoring movement in oil prices. But it is trading stronger today, while other Asian currencies are trading lower.

Except China, global yields closed higher. US 10Y yield rose by 2bps as uncertainty around the timing and quantum of Fed rate cuts remains, owing to revival in price pressures and sustained economic momentum. India’s 10Y yield rose by 2bps, as pressure from elevated oil prices remains. It is trading further higher today at 7.08%.

(The views expressed in this research note are personal views of the author(s) and do not necessarily reflect the views of Bank of Baroda. Nothing contained in this publication shall constitute or be deemed to constitute an offer to sell/ purchase or as an invitation or solicitation to do so for any securities of any entity.)