Economic Indicators (as on January 31, 2023)

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Inflation in India (%)

Consumer Price Index dropped to 12-month low, 5.72% in Dec’22 from 5.88% in Nov’22 due to decline in prices of vegetables, fruits, and onions. Wholesale Price Index (WPI) decreased to 4.95% in Dec’22 from 5.85% in Nov’22, lowest since Mar'21, primarily contributed by fall in the price of basic metals, chemical and chemical products, and paper and paper products. The current level of inflation has dropped below RBI upper limit of 6% for the 2nd time since Feb’21.

Index of Industrial Production (%)

Index of Industrial Production (IIP) dropped to 7.1% in Nov’22 from -4% in Oct’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 12.7% and 9.7% respectively, whereas the manufacturing sector increased by 6.1 respectively in Nov'22.

Indian Business Indicators - Purchasing Managers' Index (PMI)

S&P Global India Manufacturing Purchasing Managers' Index (PMI) declined to 3-months low, 55.4 in Jan’23 from 57.8 in Dec’22 as output and new orders grew at softer paces. PMI Services dropped from 6 months high, 58.5 in Dec’22 to 57.2 in Jan’23 due to softening orders. 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$ 84.49 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 81.92 against Greenback as on Jan'23.

Equity Markets - India & US

Bellwether indices, Nifty 50 and S&P BSE Sensex decreased by 2.45% and 2.12% respectively on m-o-m basis amid huge sell off in some of the index heavyweights. Further there were concerns over recession and slowdown in global growth. Market participants worried about higher borrowing by the Indian government in the next fiscal. Market sentiments were dampened after major central banks across the globe advocated for continued rise in interest rates to put a check on inflation which continues to remain at elevated levels. Goods and Services Tax (GST) collection stood at ₹1.55 lakh crore in Jan’23, which is 24% more than the corresponding period of last year. Foreign Institutional Investors (FIIs) were net sellers in Indian equities to the tune of ₹28851.97 crore this month. Dow Jones increased by 2.83% from previous month.

Interest Rate Movement (%) - India & US

Yield on the 10-Year benchmark paper increased slightly, closing at 7.344% on 31st Jan'23 vs 7.328% on 30th Dec'22 following Reserve Bank of India's (RBI) commentary on inflation. 3.87% on Dec’22. Bond yields rose on concerns over higher borrowing by the Indian government in the next financial year. 10-year U.S. Treasury bond closed lower at 3.51% on Jan’23 vs 3.87% on Dec’22.