Indian stocks continued to scale new peaks. Last week, the markets were buoyed by strong-than-expected growth in India's GDP for the third quarter, which printed 8.4 percent, a six-quarter high. The National Statistical Office also raised the GDP growth estimate for Apr-Jun to 8.2 percent from 7.8 percent earlier and Jul-Sep to 8.1 percent from 7.6 percent earlier. Growth was buoyed by investments, which grew 10.6 percent but economists were worried about consumption, which grew only 3.5 percent. But the bigger concern for the economists was the relatively muted growth in Gross Value Added, which grew only 6.5 percent in the third quarter. Separately, the NSO has estimated that the Indian economy will grow 7.6 percent in 2023-24. It remains to be seen if the strong GDP data deters the RBI from mulling interest rate cuts this year.

Domestic Markets Last Week

• Indian stock indexes Nifty 50 and Sensex hit record highs Friday after the NSO reported faster-than-expected domestic economic growth. Eight of the Nifty 50 stocks set new highs on the day, raising the total market capitalization of all NSE-listed Indian stocks to $4.64 trillion, slightly below the record high of $4.69 trillion. These and 18 other Nifty 50 stocks have set record highs in 2024.
• Government bond yields eased slightly for the week as market players absorbed a strong increase in the domestic GDP data. India's GDP expanded by 8.4 percent in the October-December quarter, the strongest rate in one and a half years, boosted by robust manufacturing and construction activity. The economy grew far faster than market expectations of 6.6 percent and accelerated from 7.6 percent in the preceding three months.
• The rupee strengthened for the third week against the dollar. On Friday, after climbing to its highest level in a week, the rupee ended little changed as importer dollar demand offset gains from inflow. Foreign inflows helped the rupee but not enough to break 82.80. However, market sentiment favored additional appreciation.

Global Markets Last Week:

• US stock indexes continued to hit a new record high on Friday after technology shares climbed on the sustained demand for artificial intelligence companies' shares. All three benchmark indices have gained for the fourth straight month in February led by AI and semiconductor companies. Nvidia shares rose 4 percent Friday, crossing $2 trillion in market value for the first time. AMD shares rose 5.25 percent to $202.64, a record high.
• Treasury yields ended lower for the week but gained on Friday after US manufacturing fell further in February. The ISM manufacturing purchasing managers index slipped to 47.8 from 49.1 in January. The PMI was below 50 for the 16th month, indicating contraction. The two-year treasury yield fell to a two-week low. For the week, the two-year yield fell 16 basis points and the 10-year yield 8.4 basis points.
• The US dollar index rose on Friday against major currencies indicating investors' optimism. Over January and February, it gained 2.7 percent, rising 0.3 percent on Thursday after inflation statistics. In January, the Federal Reserve's preferred Personal Consumption Expenditures (PCE) index showed U.S. inflation matching market forecasts. However, yearly inflation fell to its lowest in three years. This data has influenced traders' estimates of a June Federal Reserve rate decrease.

Corporate Bonds

Secondary Market

Yields were steady tracking government bond yields this week amid lackluster trade in the secondary corporate bond market. Trade was dull as investors flocked to purchase fresh issuance in the primary market. Mutual funds were seen trading at the shorter-tenure papers last week.

Outlook For This Week

Domestic shares are expected to keep an uptrend this week on expectations that foreign fund inflows will continue to flow in Indian equities. Government bonds are likely to track the movement of the US treasury amid a lack of fresh cues.

In Other news

• GST mop-up rises over 12.5 percent to ₹1.68 trillion; car sales remain strong.

• Foreign exchange reserves rise by $2.9 billion to $619 billion: RBI data.

• India's February manufacturing PMI rises to 56.9, the highest in 5 months.

• Protection for Indian farmers, and fishermen ensured at WTO MC 13: Piyush Goyal.

• UPI transactions decline marginally in February to ₹18.28 trillion.

• NEFT records a high of 41 million transactions in a single day: RBI.

• Liquidity deficit narrows to less than ₹1 trillion as govt spending picks up.

• Hyderabad police step up security measures after Bengaluru blast.

• CPSE dividends cross FY24 revised estimate in 11 months.

• Women contribute only 18 percent to GDP despite a 48 percent share in population: Study.

• Corporate tax rate cut led to rise in pvt investments, credit growth: FM Sitharaman.

• India's Financial Intelligence Unit fines Paytm Payments Bank.

• India signs $2.36 bln contracts to buy nuclear-capable missiles.