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Indian Economic Update
India’s GDP grew 6.2% YoY in Q3FY25, up from the 5.4% YoY in Q2FY25. Growth estimate for FY25 has been revised higher by CSO at 6.5% YoY (6.4% YoY earlier) led by much higher consumption demand in Q4 along with expected capital spending by the Government
Core sector growth eased to 4.6% YoY in January, a moderation from the 4.8% YoY recorded for December. Despite this moderation, cement output growth came in at a 15-month high of 14.5% YoY in January 2025
India Services PMI jumped to 59 in February, a sharp expansion from January’s 26-month low driven by an increase in new orders both domestically and internationally. Service providers ramped up hiring, leading to substantial job creation
India's manufacturing PMI fell to 56.3 in February 2025 driven by weaker growth in output and sales
Foreign direct investment in India fell by 5.6% to USD 10.9 billion in Q3FY2024-25 from USD 11.6 billion a year ago, Government data showed. The decline was due to global economic uncertainties
The GST collection for February 2025 stood at INR 1.8 trillion up 9.1% YoY
Households seeking work under the MGNREGA scheme rose by 3% YoY to 21.8 million in February 2025, marking the fourth consecutive month of higher demand
Global Update
The J.P. Morgan Global Manufacturing PMI rose to an 8-month high of 50.6 in February while the Global Composite PMI Output Index fell to a 14-month low of 51.5 driven by a continued fall in services momentum. The Global Services PMI Business Activity Index posted 51.6, its lowest reading for 14 months
US exempted Mexican and Canadian goods covered by the North American trade agreement known as USMCA from the 25% tariffs announced, offering major reprieve to the US’s two largest trading partners
The ECB cut interest rates by 25 basis points and updated the language in its decision to say monetary policy was becoming ‘meaningfully less restrictive’
China raised its general budget deficit to the highest level in more than 3-decades, ramping up spending to counter the effects of rising US tariffs. Chinese administration is set to increase its defence spending by about 7.2% in 2025 reflecting China’s ambition to build a military that can challenge the US
Equity
- The benchmark indices opened lower but traded upward through the week mirroring the global markets. The upturn was aided by latest domestic GDP growth numbers which met expectations. Going ahead a sustained market recovery would be largely dependent on global development around the US tariffs as well as continued buying interest in the domestic market.
- During the week, the Sensex gained 1.55% to close at 74332.58 while the NIFTY advanced 1.93% to close at 22552.5
Debt
- Indian G-Sec yields traded upwards through the week tracking the increase in UST yields. The surge was also driven by the liquidity deficit in the market which is improving through RBI intervention. Investors are now eyeing the upcoming MPC meeting, anticipating a rate cut.
- The 10Y benchmark G-Sec was trading at a yield 6.69% of on March 07, 2025 at 15:49 IST
Oil
- Oil prices traded negative through the week breaching the USD 70 mark. The fall was driven by the planned output increase by OPEC+ in April combined with weakened oil demand globally. The ongoing trade tensions further supported a bearish sentiment on demand pushing prices lower.
- Brent was trading at USD 70.37 on March 07, 2025 at 15:49 IST
Gold
- Gold prices traded positive through the week surpassing the USD 2900 mark early in the week. Weaker US macroeconomic data increased expectation of a Fed rate cut supporting gold prices. The escalating trade tensions, market uncertainty and geopolitical risks continue supporting gold’s appeal as a safe haven for investment.
- Gold was trading at USD 2918.51 Per Ounce on March 07, 2025 at 15:49 IST
Currency
- The USD/INR pair traded with a negative bias early in the week, as the Indian Rupee strengthened. The strengthening was driven by the lowering in the dollar index. The RBI continues to intervene and stabilise the currency by limiting the fall in the Indian Rupee.
- USD/INR was trading at 86.88 on March 07, 2025 at 15:49 IST
March 7, 2025
Source: ICICI Bank Research, Private Banking Investment Strategy Team, Bloomberg and CRISIL.
Disclaimer
The information set out herein has been prepared by ICICI Bank in good faith and from sources deemed reliable. ICICI Bank does not provide any assurance as regards the accuracy of such information. ICICI Bank does not accept any responsibility for any errors whether caused by negligence or otherwise or for any direct or indirect loss / claim/ damage caused to any person, arising out of or in relation to the use of information communicated herein.
