The Indian government has done better than the Reserve Bank of India.

The National Statistics Office has predicted that India will grow at 7.3 percent in 2023-24, higher than the revised 7.0 percent forecast made by the central bank.

This would cement India's position as one of the fastest-growing economies in the world.

Industry and services are seen as the bright spots. Industry is estimated to grow sharply by 7.9 percent this year, as against 4.4 percent in 2022-23. The services segment is likely to expand by 7.7 percent, slightly lower than last year's growth of 9.5 percent.

India's agriculture sector growth is projected to slow down to 1.8 percent in 2023-24 compared with 4.0 percent in the previous year.

Domestic Markets Last Week

Indian stocks rose marginally Friday but ended down for the week led by IT and auto companies. IT shares lost value amid a lackluster earnings outlook and after US Federal Reserve policy minutes diminished the hopes of interest rates cut by March. Auto shares weakened because of mixed monthly sales data.

Government bond yields went up slightly on Friday tracking US treasuries after strong US economic data decreased the probability of an early interest rate reduction by the US central bank. Bond traders were wary of a fresh supply of debt. The number of initial unemployment claims declined to 202,000 last week from 216,000. In December, private payrolls added 164,000 jobs, the most since August.

The rupee closed higher against the dollar on Friday owing to dollar sales by some foreign banks on behalf of foreign funds. Some private banks sold the dollar to their corporate clients. The rupee closed higher for the week as well.

Global Markets Last Week:

US stocks ended slightly up on Friday but reported their worst weekly performance in the last 3 to 4 months. Investors were busy digesting the latest macroeconomic data, which presented differing opinions on the timing of interest rate cuts. Initially, during the week, the impressive jobs data dampened hope of interest rate cuts in March. However, the Institute for Supply Management released US service sector data indicating a softer economy.

Treasury yields eased after the latest macroeconomic data revealed a slowdown in the US service sector, leading to potential expectations that the US central bank may contemplate early rate cuts. In December, the U.S. services sector experienced a significant slowdown, as the measure of employment reached its lowest level in over three years.

The US dollar dropped from its three-week peaks on Friday in choppy trading sessions after the weak US service sector data for December. The dollar posted a strong weekly gain since early December. The Institute for Supply Management reported a decline in its non-manufacturing index to 50.6 in December, marking the lowest level since May, compared to 52.7 in November.

Corporate Bonds

Secondary Market

Yields ended steady for the week across tenure for corporate bonds amid dull trading activity. Few mutual funds and insurance companies were trading during the week and pension funds bought long-term bonds in the secondary market.

Outlook For This Week

Domestic stocks are likely to weaken tracking weakness in global equity markets at the close of last week. Market participants will closely monitor companies' Oct-Dec quarter results for further cues. The rupee is likely to trade in a narrow range this week.

In Other news

• India's services PMI touches a three-month high at 59 in December.
• Meeting the 5.9 percent fiscal deficit target may get tough.
• India's GDP may grow 7.3 percent in FY24: Govt's first advance estimates.
• UN report revises India's GDP projection downward to 6.2 percent for 2024.
• Banks report healthy loan growth in Q3; Casa ratio continues to decline.
• RBI turns down Federal Bank MD & CEO extension request for one year.
• Brookfield Asset Management to buy ATC India in $2 bn deal
• Agri growth was pegged at a 7-year low of 1.8 percent in FY24 due to poor Kharif harvest.
• SEBI tightens short-selling rules.
• Indian Navy rescues all 21 crew of the hijacked vessel.
• RBI says Rs 2,000 notes can be exchanged through post offices as well.