Bond

Indian government bond yields are anticipated to experience a slight decline in opening trade this week, driven by a confluence of factors. The recent easing of oil prices and US yields, coupled with a shift in expectations regarding potential Federal Reserve rate cuts, are contributing to a more relaxed market environment.

Indian stock markets are poised for a positive start to the week on Monday, April 29, 2024, fueled by robust Q4 earnings and a generally optimistic global market sentiment. The benchmark indices, Nifty and Sensex, are expected to trade within the range of 22,000 – 22,800 and 72,500 – 75,000, respectively, with a potential upside of over 50 points for the Nifty.

Fidelity International believes that the Indian rupee's appeal for carry trades has been enhanced by the Reserve Bank of India's control over the currency's value, higher yield compared to regional counterparts, and low volatility. Despite risks associated with sudden policy changes, the rupee has proven to be a lucrative option for investors, boasting stability and performance even amid global economic challenges.

The week's top stories were dominated by economic concerns, with Senator Heitkamp expressing skepticism about Biden's tax proposal, the Fed's inflation indicator exceeding expectations, and rising Treasury yields putting pressure on the mortgage market. Additionally, the US economy experienced slower growth than anticipated in the first quarter.

The Federal Reserve is expected to hold borrowing costs steady at a high level this week, with Chair Jerome Powell's press conference being closely watched for any hawkish signals. Meanwhile, the eurozone may have stopped slowing and started growing again, while China's manufacturing activity is expected to have expanded for a second month in April.