Dear All,

Please click here for Highlights of RBI’s Monetary Policy | June 2022.

Key Highlights:

• MPC votes unanimously to hike repo rate by 50bps to 4.90%
• The MPC has dropped the phrase “remain accommodative” from the stance
• RBI increases FY23 inflation forecast by 100 bps to 6.7%
• RBI retains FY23 GDP outlook at 7.2%
• RBI is likely continue to withdraw excess liquidity in a calibrated manner over a multi-year time frame

Please click here for Monthly Equity & Debt Outlook Presentation – January 2022.

Key Events:

• Nifty (+2.18%) gained 2% in the final week of 2021 after remaining under pressure in December due to incessant FII selling in India.
• The MPC unanimously voted to keep the repo rate on hold, while maintaining the “accommodative stance” with a 5-1 vote. It reiterated its growth bias in policy as the Omicron variant poses risks for the global outlook.
• India’s manufacturing PMI hit 10-month high in Nov at 57.6, a jump from 55.9 in October. However, PMI for services dropped moderately to 58.1 in November from a ten-and-a-half-year high of 58.4 in October.
• GST revenue collected in December was over ? 1.29 lakh crore, 13 per cent higher than the same month last year.
• Headline CPI print for November came at 4.91%. The surprise was driven by weaker than expected Food & Bev ex Vegetable inflation.
• The central government’s fiscal deficit as of Nov end was 46.2% of the annual budget. Total receipts at November end were Rs13.78 trn
• FIIs recorded the longest selling streak in last 10Y (26 days) with them being net sellers to the tune of -$1.7bn in Dec (YTD +$3.8bn) even as DII buying continued +$4.3bn (YTD +$12.7bn), driven by both MFs ($2.5bn) and Insurance (+$1.2bn)

Please click here for Monthly Equity & Debt Outlook Presentation – Dec 2020 

Key Events:

• Nifty (+11.4%) rallied sharply in November, as a global risk-on triggered by a Biden victory, positive vaccine developments and dollar weakness (DXY fell by ~2.3% in Nov) led to strong inflows into EM markets
• FIIs pumped in ~$9.4bn into India equities (highest ever monthly net inflows) partly driven by MSCI rebalance, as >$2bn of passive inflows were expected due to increase in Foreign Ownership Limits in various stocks
• DIIs on the other hand, continued to remain net sellers including Domestic MFs as equity funds witnessed fourth consecutive month of net outflow in October as redemptions grew 20% vs September
• Deceleration in real GDP growth moderated to -7.5% y/y in 2Q (vs -23.9% in 1Q). Rebound was led by manufacturing (+0.6% y/y vs -39.3% in 1Q) while subdued govt. spending dragged growth
• CPI spiked to 7.6% in October, highest print since May’14 while core CPI also rose slightly to 5.8%. While inflationary pressures were broad based, food items led the sharp jump, partly due to unseasonal rains
• Govt’s latest measures focused on urban consumption, infrastructure and Covid-affected sectors. Moreover, loan guarantee scheme was extended to 26 stressed sectors and healthcare
• RBI released a pro-growth monetary policy decision. Kept Repo and Reverse Repo rate unchanged