Festive greetings.

A festive mood had set in last week as witnessed by the rally in the stock markets. Indian stocks experienced a positive trend for the second consecutive week, with notable gains in the financial, metal, and oil & gas sectors.

However, the rupee hit a new low last week against the dollar influenced by the broader trend of Asian currencies reacting to the rise in the US treasury yields. The dollar was propelled by the views that the Federal Reserve would maintain its hawkish interest rate stance for a long time.

US treasuries spiked last week fuelled by US Fed Chair Powell's hawkish remarks and a disappointing 30-year bond auction.

US shares had surged last week driven by gains in technology shares and investor optimism.

In the current truncated week, stock markets are anticipated to remain rangebound, with Tuesday's closure for Diwali Balipratipada. Traders will closely monitor the rupee's movement, fluctuations in crude oil prices, and India's October inflation rate to gauge the market's direction.

Indian Markets Last Week:

Indian stocks ended higher for the second week in a row on Friday led by financial companies, metal, and energy companies, while IT and Auto shares were down. There was renewed buying interest in the market on expectations that retail inflation may ease further and that steady mutual fund inflows will support the market.

Yields ended low on a weekly basis. It moved higher in early trade on Friday as traders braced up for a fresh debt auction, while a rise back in US treasury yields also weighed on sentiment. Yields had risen on hawkish remarks by Federal Reserve Chair Powell's comment that they are not confident about any further rate hikes just yet.

The rupee hit a new low on Friday as Asian currencies were being hurt by a rise in U.S. Treasury yields. The rupee hit a new all-time low of 83.42, breaking through its old all-time low of 83.2950, on November 1. However, traders expect that the rupee may not see further sharp declines as the RBI may intervene and halt further fall.

Global Markets Last Week:

US stocks surged, led by big tech companies, as treasury yields eased. Investors were looking forward to next week's reports on inflation and other economic data. On Friday, stocks recovered from the fall previous trading session. On Thursday, shares were down after the Federal Reserve Chair Jerome Powell said that they are not confident if the central bank is done with rate hikes just yet.

Treasury yields ended up on a weekly basis with long-term yields slightly down as investors consolidated positions after significant advances in the prior session on hawkish Federal Reserve Chair Jerome Powell's comments. Yields climbed dramatically on Thursday after a weaker-than-expected 30-year bond auction with low demand after strong sales of three- and 10-year notes earlier in the week.

The US dollar strengthened against major currencies last week on views that the Federal Reserve is likely to maintain its interest rates stance. The dollar was near a one-year high against the yen on Friday tracking the rise in US treasury yields.

Corporate Bonds

Secondary Market

Yields rose marginally last week tracking the rise in the US treasuries and an ample supply of bonds in the primary market. Mutual funds were active traders for shorter tenure bonds. Investors await a fresh supply of bonds in the next few weeks.

Outlook For This Week

Stocks are expected to remain rangebound in this truncated week as stock markets will remain shut on Tuesday for Diwali Balipratipada. Traders will track the movement of the rupee, crude oil prices, and India's inflation rate for October to decide on the market direction.

Bond markets will take fresh cues from the US inflation report to be released on Wednesday and US retail sales data to be announced on Thursday.

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