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Indian Economic Update
Inflation fell to 3.61% YoY in February from 4.26% YoY in January. Core inflation increased to 3.95% YoY in February from 3.67% YoY in January
The Centre is projected to collect a record INR 660-670 billion in dividends from its non-financial entities this fiscal year, driven by strong profitability of state-run firms
The Government has sought the Parliament’s approval to spend a net additional INR 514.6 billion in the current financial year ending March 2025, with major allocations for pensions and fertilizer subsidies
The share of personal income tax in GDP surged to 3.5% in FY24 compared to 2.1% in FY15, informed the Finance Minister
The finance minister announced that GST rates will be further reduced, with the process of rationalising tax rates and slabs nearing completion, further emphasising India’s ambition to secure a good trade agreement with the US to drive economic growth and ensure stable supply chains
Record funding of INR 2.7 trillion was approved for the Railways for FY26 with the Government funding over 95% of the capex
More than 306.8 million unorganised workers have registered on the e-Shram portal as of March 3, 2025, with women accounting for 53.7% according to the Ministry of Labour and Employment
Global Update
US payrolls for February came in at a steady pace of 151K with the unemployment rate up to 4.1% from 4%. Overall, the US labour market showed signs of remaining in balance
The US FOMC Chairman stated that the Central Bank is waiting to see how the recent policy regime changes impact the economy before any decision on policy rates
The US President reversed the course on a pledge to double tariffs on steel and aluminium from Canada to 50%, just hours after announcing the higher tariffs, after Canadian officials also backed off from their plans for a 25% surcharge on electricity.
Equity
- The benchmark indices opened lower but traded with upward bias through the week mirroring the Global markets. The upturn was aided by the latest domestic GDP growth number 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 lost 0.65% to close at 73849.76 while the NIFTY declined 0.69% to close at 22397.15
Debt
- Indian G-Sec yield 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% on March 13th, 2025 at 15:30 IST.
Oil
- Oil prices traded with a negative bias 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 70.53 on March 13th, 2025 at 15:43 IST.
Gold
- Gold prices traded positive through the week surpassing the USD 2900 mark early in the week. Weaker US macro-economic data increased the 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 2945.17 per ounce on March 13th, 2025 at 15:43 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 87.01 on March 13th, 2025 at 15:43 IST.
March 13, 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.
