Weekly Market Wrap, News and

Developments

May 15, 2023

Key Macro Events and Impact on Market (for the week ending 12th May’23)

Snapshot of Major Indicators

Particulars 04 May'23 (Thursday) 12 May'23 (Friday)

Closing Closing
India 5 Years G- Sec (7.38% GS 2027) 6.95% 6.95%
RBI Repo Rate 6.50% 6.50%
India 5 Years AAA PSU 7.38% 7.40%
Nifty 18255.80 18314.80
USD/INR 81.80 82.17
5 Year SBI FD Rate 6.50% 6.50%
US 10-Year Treasury 3.38% 3.41%
Brent Crude Oil (USD/barrel) 72.50 75.21
Gold Price (USD/Oz) 2039.98 2004.87

Fitch retains India's rating at 'BBB-' as growth potential fights high deficit concerns
Fitch Ratings has affirmed India's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BBB-' with a stable
outlook. India's rating reflects strengths from a robust growth outlook compared with peers and resilient external
finances, which have supported the country in navigating the large external shocks over the past year. These ratings
are crucial as they are used to decide on a country's creditworthiness, which often impact its lending costs.

India's forex reserves rise USD4.53 billion to USD588.78 billion

India's foreign exchange reserves increased by USD 4.53 billion to USD 588.78 billion on a weekly basis as of 28th
April’23. India's foreign currency assets, the biggest component of the forex reserves, rose by USD 4.99 billion to USD
519.48 billion. Gold reserves during the latest week fell by USD 4.94 million to USD 45.65 billion. The Special Drawing
Rights (SDRs) were up USD 35 million to USD 18.466 billion. The country's reserve position with the IMF was down USD
4 million to USD 5.172 billion in the reporting week.

NFCSF revises down sugar output estimate to 32.7 million tons for 2022-23
The National Federation of Cooperative Sugar Federation (NFCSF) has revised its sugar production estimate lower to
32.7 million tonnes in the ongoing 2022-23 marketing year ending September’23 from its earlier estimate of 35.5 million
tonnes. The revised sugar production estimate is, however, down by 8.88% from the actual production of 35.92 million
tonnes in the 2021-22 marketing year (Oct-Sept’23).

India funding costs surge to one-month high on cash squeeze

Overnight funding costs in India have surged above the central bank’s policy rate, a sign that the excess cash in the
banking system has dried up. The weighted average call rate, an overnight funding cost rate that the central bank
monitors, has climbed almost 30 bps since the start of the year. At 6.78% on 10th May’23, it’s just hovering above the
upper band of the Reserve Bank of India’s interest-rate corridor of 6.75%.

www.indiabonds.com
 Weekly Market Wrap, News and
Developments

Paddy area falls 7%, oilseeds down 7.5%

The sowing area under summer crops — rice, pulses, millets, and oilseeds — is marginally down so far at 6.77 million
hectares (MH) compared to the previous year, according to the Agriculture Ministry. The sowing area under rice and
oilseeds (groundnut, sunflower, and sesame) has declined by 7% and 7.5%, respectively year-on-year. The area under
coverage for rice was 2.75 MH so far against 2.97 MH in the year-ago period.

US CPI inflation data declines to 4.9% in April vs. 5% expected

US CPI inflation slowed to 4.9% in April’23 from a 5.0% advance in March’23 on Y-o-Y basis. This is the smallest year-
on-year rise since April’21. Core inflation stood at 5.5% in April’23. On a monthly basis, the CPI inflation gained 0.4% in
April’23 compared to a 0.1% increase in March’23.

U.S. Jobless Claims Climb To Highest Level Since October 2021

US non-farm payroll rose by 253,000 in April’23 compared to revised reading of 236,000 in March’23. The
Unemployment Rate edged lower to 3.4% from 3.5% and the annual wage inflation, as measured by the Average Hourly
Earnings, rose to 4.4% in April’23 from 4.3% in March’23.

U.S. April producer prices rise 2.3% over past year, smallest increase since January 2021
US PPI inflation data printed a welcomed decline on both the core and headline figures. The year-on-year prints for
April’23 revealed a 2.3% increase compared to expectations of 2.5% and down from last month’s 2.7%. Likewise, Core
PPI printed 3.2% against expectations of 3.3% and is down from the prior 3.4%.

Bank of England hikes key rate by 25 basis points to 4.5%

BoE has raised interest rates by 25 bps to 4.5% - the highest level since late 2008 as it continues to combat high
inflation in the UK. The decision on 11th May’23 by the bank's nine-member Monetary Policy Committee to lift its main
interest rate by a quarter of a percentage point to 4.5% was the 12 consecutive rate rise in a row.

China's CPI rises 0.1%, PPI down 3.6% in April

China’s CPI inflation in Apr’23 rose 0.1% year-on-year, the lowest rate since Febr’21, and cooling from the 0.7% annual
gain seen in Mar’23. The producer price index (PPI) fell at the fastest clip since May’20 and was down for a seventh
consecutive month, declining 3.6% year-on-year after a 2.5% drop the previous month.

Japan Services Sector PMI Improves To 55.4 In April

Japan’s services PMI rose to 55.4 in April’23 from 55.0 in March’23. Strong increases in travel, leisure and tourism
spending underpinned another month of swift recovery for the Japanese economy as the impact of COVID-19
continued to fade.

Nifty closes above 18,300, Sensex gains 123.28 points

In the week ended 12th May 2023, the S&P BSE Sensex surged 123.38 points or 0.20% to settle at 62,027.90. The Nifty
50 index gain 17.80 points or 0.10% to settle at 18,314.80. This week market was highly volatile as metals, oil & gas, PSU
Banks and IT shares declined while Private Banks, auto & financial stocks edged higher. FIIs continue to net buyer while
domestic institutions are seen booking profit at higher level. On a weekly basis market traded in a narrow range while
broader market continues to outperform. However, global market continues to underperform with Dow Jones gaining
only in one trading session out of last 9 trading session. Next week market is expected to react on Karnataka state
election result.

www.indiabonds.com
 Weekly Market Wrap, News and
Developments

Upcoming Events:

Date Major Events Data Month

20-May-23 Japan Inflation Rate April'23
24-May-23 US FOMC Minutes -
24-May-23 UK Inflation Rate April'23

DISCLAIMER: This document has been prepared by A. K. Capital Services Limited and/or its subsidiary/ affiliate/ group/ associate company(ies)
(together referred to as “A.K. Group”) and the contents of this disclaimer are applicable to this document and to any and all written or oral
communication(s) made by A.K. Group or its directors, employees, associates, representatives and agents. The information contained in this
document is strictly confidential and solely for the information of the recipients. The information should not be reproduced or redistributed or
passed on, directly or indirectly in any form, to any other person/ entity or published, in whole or in part, for any purpose whatsoever. This
document is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality,
state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would
subject A.K. Group to any registration or licensing requirements within such jurisdiction. This document is meant for assistance purpose only and
does not constitute an offer or recommendation to buy or sell any products or services of A.K. Group or any of its third party client(s). The
recipients should act and rely on the information/ data contained in this document only after understanding all associated risk parameters. Any
action/ decision taken by the recipients on the basis of the information contained in this document shall be the sole responsibility of the
recipients and neither A.K. Group nor its directors, employees, associates, representatives or agents shall be liable for any damages whether
direct, indirect, special or consequential including lost revenue or lost profits that may arise to the recipients from or in connection with the use
of the information/ data contained in this document.

www.indiabonds.com