The Indian stocks rallied last week, with auto and oil marketing companies' shares leading the surge. Government bond yields remained flat, while the rupee held steady amidst demand from importers, notably oil companies, despite supportive global trends. US stocks experienced a downturn, ending five consecutive weekly gains, amid expectations of a delayed rate cut by the US Federal Reserve. Treasury yields surged for a second consecutive week on inflation concerns fuelled by stronger-than-expected increases in the US producer price index and consumer price index data. Hopes of rate cuts by the Fed as early as March diminished.

Domestic Markets Last Week

• Indian stocks gained for the fourth consecutive session on Friday, led by auto shares and oil marketing companies. Both benchmark indices were up over 1 percent for the week. Auto shares rallied after better-than-expected quarterly results from Mahindra and Mahindra, while stable crude oil prices led to a surge in oil marketing companies' shares. Eleven of the 13 key sector indexes rose this week.
• Government bond yields ended the week almost flat. On Friday, bond yields were marginally up after the last debt auction for the current fiscal year added to the supply. Yields rose also in line with their US counterparts. Yields in the US consolidated after a significant surge earlier last week in response to higher-than-expected inflation data.
• The rupee held steady in a tight range on Friday after dollar demand from importers, notably from oil companies, offset supportive global trends. The local unit altered little during the week.

Global Markets Last Week:

• US stocks slumped last week, ending their five consecutive weekly gains on expectations that the US Federal Reserve will be in no hurry to start rate cuts soon this year. The major indices fall was led by mega-cap shares, with Meta Platforms falling over 2 percent.
• Treasury yields surged for a second straight week on fears that inflation may spike in the coming months after The US producer price index and consumer price index data released last week showed a stronger-than-expected increase. Market participants expect that the US Fed will start cutting rates during the later part of the year.
• The US dollar strengthened last week against a major basket of currencies after the producer price index data gained 0.3 percent in January and 0.9 percent on a year-on-year basis. The US data reaffirmed the belief that the US Federal Reserve will be in no hurry to cut its key interest rates soon. The dollar posted its fifth weekly gain last week.

Corporate Bonds

Secondary Market

Yields were steady across the curve, with muted trading activity in the secondary market as investors lapped up fresh supplies of corporate bonds in the primary market. Few mutual funds were trading in shorter-tenure bonds last week.

Outlook For This Week

Domestic shares may open firm on Monday and will track global markets for further cues. Government bonds and the Foreign Exchange market will remain closed on Monday because of Shivaji Jayanti.

In Other news

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• Ashima Goyal says stance unchanged as MPC aims for disinflation, 4 percent CPI
• Global rating agencies need to relook their metrics, says Nageswaran.
• Get sleepless nights from tech-related risks to market, says SEBI's Narayan
• PSUs also need to plow back cash on new projects, says disinvestment secretary.
• NASSCOM pegs Indian IT industry growth at 3.8 percent for FY24 vs 8.4 percent FY23.
• FTSE announces inclusion of 16 Indian stocks to All-World Index.
• Trump was hit with a $354.9 million penalty and a 3-year ban.
• US producer prices rose more than expected in January.
• Fed's Barr says supervisors are more aggressive, honing in on interest rate risk.
• Amazon joins companies arguing the US labor board is unconstitutional.
• German direct investment in China rose to a record in 2023.