Economic Indicators (as on February 29, 2024)

Inflation in India (%)

Consumer Price Index decelerated to a 3-month low of 5.1% in Jan’23 from 5.69% in Dec’23 due to easing food prices. Though, retail inflation is below the Reserve Bank of India’s upper tolerance level of 6%. Wholesale Price Index (WPI) eases to 0.27% in Jan’24 from 0.73% in Dec’23, at a 3-month low. Positive rate of inflation in Jan'24 is primarily due to increase in prices of food articles, machinery & equipment, other manufacturing, minerals, other transport equipment etc. It stepped out of the deflationary zone for the third time in row.

Index of Industrial Production (%)

Index of Industrial Production (IIP) slumps to 8-month low of 3.8% in Dec’23 from 2.4% in Nov’23, with key sectors namely manufacturing sector growing by 3.9%, mining sector growing by 5.1% and electricity growing by 1.2%.

Indian Business Indicators - Purchasing Managers' Index (PMI)

S&P Global India Manufacturing Purchasing Managers' Index (PMI) grew to 56.9 in Feb’24 from 56.5 in Jan’24, to 5-month high led by accelerated global demand and lower inflationary pressures. Health of manufacturing sector improved substantially on the back of fast growth in new orders and production. Current output expanded on robust demand, with domestic orders growing at a faster pace than export orders. The manufacturing PMI has now spent 32 consecutive months above the key level of 50. PMI Services increased to 62 in Feb’24 from 61.8 in Jan’24. New business expanded at a faster pace and managers’ expectation for future activity was strong. The new export business index accelerated, signalling that India’s services exports remained robust. Though 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$ 83.62 y as OPEC+ is expected to continue its production cuts and the most recent U.S. inflation data was in line with expectations. The increase in the prices was because U.S. crude inventories decreased more than expected and the uncertainty of the Middle East's geopolitical situation. The Rupee closed the month on 82.9138 against Greenback as on Feb'24.

Equity Markets - India & US

Bellwether indices, Nifty 50 and S&P BSE Sensex increased marginally during the month by 1.18% and 1.04% respectively on m-o-m basis as retail inflation eased and U.S. Federal Reserve’s decision to keep the interest rate unchanged that caused ease in U.S. Treasury yields improved the sentiments. Foreign Institutional Investors (FIIs) were net buyers in Indian equities to the tune of `₹1538.97 crores this month. Domestic retail inflation is within the Reserve Bank of India’s upper tolerance level of 6% in Jan’24. Goods and Services Tax (GST) collection stood at `₹1.68 lakh crore for Feb’24, 12.5% more than the corresponding period of last year and this points towards the growing trajectory of the Indian economy. Dow Jones increased by 2.22% from previous month.

Interest Rate Movement (%) - India & US

Yield on the 10-Year benchmark paper remained range-bound, closing at 7.078% on Jan'24 vs 7.144% on Jan'24 as market participants went for value buying after a recent fall in bond prices. 10-year U.S. Treasury bond closed lower at 4.2502% on Feb’24 vs 3.9124% on Jan’24.