Good morning!

Last week, financial shares led the third straight weekly gains for domestic shares as the Reserve Bank of India kept its key lending rate at 6.50⁒ and maintained its withdrawal of accommodative stance. Thanks to HDFC Bank's deposit increase, the Nifty Fin Services index surged 2.70⁒, its highest level in four months. Rising crude oil prices pushed up the yields on government bonds, while the Reserve Bank's monetary policy review helped the rupee appreciate against the dollar.

The US stocks ended lower in a volatile week after frail services activity and better manufacturing data. They recovered on Friday following a solid jobs report that validated the economy's strength and hinted that the Federal Reserve would delay interest rate decreases. Investors expect the US Federal Reserve may have two rate cuts in 2024.

Domestic Markets Last Week

• Indian stock indexes reported their third straight weekly gains led by financial shares as the Reserve Bank of India maintained its key lending rate at 6.50⁒ as expected. Nifty Fin Services index, rose 2.70⁒ last week, its strongest in four months, spurred by top private lender HDFC Bank's sequential deposit growth in the March quarter.
• Government bond yields rose as foreign investors trimmed their bond holdings in response to the increase in crude oil prices. On Friday, Brent crude oil futures for June delivery crossed he psychologically significant threshold of $90 per barrel. The government bond market regarded the Reserve Bank of India's monetary policy as a non-event and failed to provide market direction as the RBI maintained the status quo at its monetary policy review.
• The rupee strengthened against the dollar last week supported by dollar inflows from state-owned and foreign banks, following the RBI's decision to hold interest rates for the seventh consecutive meeting.

During the early trade on Friday, higher Brent crude oil prices and hawkish remarks from Federal Reserve policymakers added to the pressure but it recovered after the RBI policy statement.

Global Markets Last Week

• US stock indexes fell for the week after a soft services activity report and a stronger manufacturing report. Stocks rose on Friday after a robust jobs report confirmed the economy's health and suggested the Federal Reserve may defer interest rate cuts. US Labour Department data showed firms recruited more people than expected in March and raised salaries, suggesting the economy ended the first quarter strong.
• Treasury yield closed at its highest level in over four months on Friday, offsetting the two previous sessions' decline. In early trades on Friday treasuries rose after the Labour Department reported that US firms recruited more people than expected in March. The non-farm payroll jobs grew 303,000 for March. The unemployment rate fell to 3.8⁒ for March from 3.9⁒ in February.
• The US dollar strengthened on Friday but reported a weekly loss. The trade week was turbulent for the US dollar as it fell from a five-month high to a two-week low due to an unexpected slowdown in the US services growth, which increased expectations of Fed rate cuts earlier. But after the data revealed that the US employers had hired significantly mor number of recruits for March, led trades to hold a view that the US central bank will delay its rate cuts. Traders now expect a possibility of two rate cuts in the current calendar year.

Corporate Bonds

Secondary Market

Yields remained unchanged on Friday, following an initial increase earlier in the week. Yields remained unchanged as the Reserve Bank of India maintained key interest rates at its Monetary policy review. Activity in the market was relatively quiet.

Outlook For This Week

On Monday, domestic stock markets will mirror their overseas counterparts. This week marks the beginning of the corporate earnings season, and investors will be watching TCS's results for the quarter ending in March. On Monday, the government bond market will follow its US counterparts and respond to any further changes in crude oil prices. At the beginning of this week, the rupee is expected to stay firm against the dollar.

In Other news

• India's forex kitty jumps $2.9 billion to a new high of $645.6 billion.

• Gold prices hit a new record high, and continue to gain for third week straight.

• Earnings of India's top 500 companies growing faster than US peers.

• In a first, India's demat tally surged past the 150 million mark in March.

• Would like inflation elephant to return to forest, stay there: RBI Guv Das.

• Consumer confidence in India at more than four-year high, RBI survey shows.

• India building up gold reserves as part of forex deployment: RBI Guv Das.

• UNHRC adopts resolution over Gaza war, India among 13 countries to abstain.

• One dead, one injured in blast in Kerala's Kannur; Congress, BJP blames CPI(M)

• One dead, one injured in blast in Kerala's Kannur.

• IMF distances itself from 8⁒ growth chances for India.