BFSI Sector December Quarter Earnings in Focus This Week

Weekly Market Highlights:

1. The 10-year 2034 G-sec yield remained stable close to 6.79% for the week.
2. 3M and 6M T-bill auction data yields were at 6.56% and 6.72% respectively compared to 6.55% and 6.70% last week.
3. The INR Bonds High Yield Retail Index stood at 9.79%, up 2 bps fortnightly.
4. India’s manufacturing activity hit a 12-month low in December, with the PMI dropping to 56.4 from 56.5 in November, marking the weakest growth of 2024, according to S&P Global. Despite softer increases in output, new orders, and stocks, the PMI remained above its long-term average of 54.1, signaling growth amid easing cost pressures and strong job creation.
5. Ahead of the Union Budget 2025-26 on 1st February, the CII urged measures to boost consumption, such as cutting fuel excise duty, raising the daily minimum wage, and increasing PM-KISAN payouts. Banks also called for tax incentives on fixed deposits to encourage savings.
6. Oil climbed 3.43% this week due to expectations of more stimulus in China and increased heating oil demand in Europe and the US.
7. The dollar index was close to 109, its highest level in 2 years as markets await key labor data that will impact FOMC’s outlook. UST to be driven by FOMC meeting minutes and job data this week.
8. The 10Y UST closed at 4.61% as markets awaited Trump assuming office. Global markets brace for Trump sanctions with significant sanctions expected on oil exporting nations like Iran, Russia and Venezuela.