Economic Indicators (as on February 28, 2023)

Inflation in India (%)

Consumer Price Index increased to 3-month high, 6.52% in Jan’23 from 5.72% in Dec’22 due to increase in prices of food items. Wholesale Price Index (WPI) decreased to 4.73% in Jan’23 from 4.95% in Dec’22, lowest since Mar'21, primarily contributed by fall in the price of mineral oils, crude petroleum & natural gas, textiles chemical and chemical products, and paper and paper products.

Index of Industrial Production (%)

Index of Industrial Production (IIP) dropped to 4.3% in Dec’22 from 7.1% in Nov’22 primarily owing to a double digit growth in electricity output and subdued growth in mining and manufacturing. The electricity and mining sectors rose by 10.4% and 9.8% respectively, whereas the manufacturing sector increased by 2.6 respectively in Dec'22.

Indian Business Indicators - Purchasing Managers' Index (PMI)

S&P Global India Manufacturing Purchasing Managers' Index (PMI) declined to 4-months low, 55.3 in Feb’23 from 55.4 in Jan’23 as input cost inflation accelerated. However, the sector remained relatively strong amid buoyant domestic demand, despite higher inflationary pressures. PMI Services expanded at the strongest rate in 12 years, 59.4 in Feb’23 to 57.2 in Jan’23 due favourable demand conditions and new business gains. The reading remains in the expansion zone as a print above 50 means expansion while a score below 50 denotes contraction.

USD INR & Brent Crude Movement

Brent crude oil stood at ~US$ 83.89 despite the demand supply disruption across the world on concerns over slowdown in global growth, rising inflation and possible output cuts which hit the demand outlook of the commodity. The Rupee closed the month on 82.67 against Greenback as on Feb'23.

Equity Markets - India & US

Bellwether indices, Nifty 50 andS&PBSE Sensex decreased by 2.03% and 0.99% respectively on m-o-m basis majorly led by weak global cues and huge sell off in some of the index heavyweights. Market participants worried about higher borrowing by the Indian government in the next fiscal. Persistent selling by foreign institutional investors and global crude oil prices rising also added negative sentiments in the markets. Goods and Services Tax (GST) collection stood at ₹1.50 lakh crore in Feb’23, which is 12% more than the corresponding period of last year. Foreign Institutional Investors (FIIs) were net sellers in Indian equities to the tune of ₹5294.25 crores this month. Dow Jones decreased by 4.19% from previous month.

Interest Rate Movement (%) - India & US

Yield on the 10-Year benchmark paper increased slightly, closing at 7.433% on 28th Feb'23 vs 7.344% on 31st Jan'23 following Reserve Bank of India's (RBI) commentary on inflation. Bond yields rose on concerns over higher borrowing by the Indian government in the next financial year, rise in the U.S. Treasury yields and government bond auction which saw devolvement on primary dealers. 10- year U.S. Treasury bond closed higher at 3.92% on Jan’23 vs 3.51% on Jan’23..