Indian stocks continued their upward trajectory for the second consecutive week, helping the Nifty 50 index scale record highs, thanks to a surge in the financial stocks. Government bond yields eased marginally, and the Rupee reported gains against the dollar for the second week. Last week, US benchmark indexes surged to new highs on Friday, securing weekly gains as artificial intelligence stocks continued their upward momentum. Investor sentiment shifted as expectations for Federal Reserve interest rate cuts diminished amid the impressive performance of Nvidia and other major tech firms.

Indian Markets Last Week

• Indian stocks rose for the second week in a row, with the benchmark Nifty 50 index reaching record highs in all five sessions, boosted by a jump in heavyweight financials. Energy stocks ended a 16-week winning streak on concerns about the durability of refining and marketing profits. Technology shares recovered in the last two sessions of the week.
• Government bond yields eased by two basis points last week. On Friday, the yield remained steady amid a lack of fresh triggers. Market participants believe that RBI may keep the key interest rate steady in the foreseeable future based on the February policy review meeting minutes released last week.
• The rupee posted its second weekly gains but fell marginally on Friday due to the dollar demand from importers and oil companies. The local unit reached a three-week high of 82.8350 on Thursday owing to increased foreign fund inflows in Indian stocks and bond markets.

Global Markets Last Week:

• US benchmark indexes hit a new high on Friday and posted weekly gains as artificial intelligence stocks surged last week. After it reported excellent profit growth, Nvidia briefly traded over $2 trillion in market capitalization. Investors reduced their expectations for Federal Reserve interest rate cuts. Interest rate concerns were pushed to the background after the performance of Nvidia and other major tech companies.
• Treasury yields fell from multi-month highs on Friday as investors consolidated positions after a week-long run-up, fully pricing in the Federal Reserve's easing path. Treasury yields had risen after less dovish Fed statements and European Central Bank comments.
• The US dollar fell against a major basket of currencies last week, signaling a change from the continuous advance of over two months. The dollar weakness was spurred by fading expectations of Federal Reserve rate cuts. Despite recent strong economic data, the Fed officials emphasized the fight against inflation, and market participants expect that rate cuts are likely to decrease from June onwards.

Corporate Bonds

Secondary Market

Yields rose for 5-year corporate bonds by 4 basis points as mutual funds turned sellers last week after the slew of issuance in the primary market. Yields on 10-year remained steady with muted trade on lack of fresh cues tracking government bond markets.

Outlook For This Week

Domestic shares are likely to rise further on the expectation that foreign funds may continue to flow into Indian equities. The rupee will take cues from the dollar index and crude oil price movement. Government bond yields are expected to open flat on Monday and may track US treasuries for further direction.

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• Jr IT minister says got two proposals worth $22 billion for semiconductor units.
• US weekly jobless claims unexpectedly fall amid labor market tightness.
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• Goldman raises global equities to 'overweight' on economic growth prospects.
• China's central bank leaves key policy rates unchanged under the shadow of the Federal Reserve.
• Fed signals 'patience' on rate cuts as data disappoints.