Key Market insights - Altifi Weekly Bulletin | 14 August 2025

Source: Crisil Fixed Income Database; *Weighted Average Yield

Economy and regulatory updates

·        India’s retail inflation eased to an over 8-year low of 1.55% in July from 2.1% in June.

·        India’s Wholesale Price Index was -0.58% in July vs -0.13% in June.

·        Merchandise trade deficit widened sharply to $27.35 billion in July from $18.78 billion in June.

·        Also, Moody's said that India's gross domestic product (GDP) growth is likely to slow down by ~30 basis points to 6% in the current fiscal if the US implements 50% tariffs from August 27.

·        The Chief Economic Advisor, V Anantha Nageswaran, said that the momentum of the Indian economy has not slowed despite the possibility of the US imposing a 50% tariff on India. He also said that it was too early to assess the impact of US tariffs on the GDP.

·        The central government will release the installment of Rs 3,200 crore towards the Pradhan Mantri Fasal Bima Yojana on August 18.

·        The Lok Sabha approved the Taxation Laws (Amendment) Bill, 2025, extending tax exemptions to subscribers of the Unified Pension Scheme.

·        Finance Minister Nirmala Sitharaman said that there is no proposal under consideration for the restoration of the Old Pension Scheme with respect to central government employees covered under the National Pension System.

·        The finance minister also said that the proposed raising of the foreign direct investment limit in Indian insurance companies to 100% will attract more players into the space and generate employment.

·        The finance ministry notified a corrigendum to the Income Tax Bill with regard to interest to be charged on short payment of advance tax.

·        The Reserve Bank of India (RBI) plans to standardise forms to process claims with regard to deceased customers' bank accounts and lockers within a 15-day timeframe and provide compensation to nominees for any delays in settlement.

·        The Securities and Exchange Board of India (SEBI) proposed to include new market practices such as algorithmic trading and proprietary trading in its master regulations.

Indian debt market update

·        The interbank call money rate ended higher at 5.10% in the shortened week-ended August 14 vs 5.00% on August 8, 2025.

·        During the week, the RBI conducted variable rate repo auctions for a total notified amount of Rs 2.5 lakh crore, against which it received offers of ~Rs 2.3 lakh crore.

·        Government bond prices ended flat in the week-ended August 14. The yield of the 10-year benchmark 6.33% 2035 paper closed at 6.40% unchanged on August 8.

·        Bond prices fell, as weaker direct tax receipts and previously announced oil subsidies triggered fiscal concerns.

·        However, further rise in the yield was arrested after S&P Global Ratings upgraded the country's long-term sovereign credit rating to ‘BBB’ from ‘BBB-‘, reviving sentiment in an otherwise subdued market.

·        In the weekly debt sale held on August 14, the RBI auctioned 6.01% Government Security (GS) 2030 and New GS 2055 for a total notified amount of Rs 28,000 crore.

Indian equity Indices

Source: BSE, NSE

Source: SEBI, NSE

Global equity benchmark indices’ returns

Source: Websites of respective stock exchanges; *Data as on Aug 13

Indian equity market updates

·        Indian equities ended higher in the Independence Day-shortened week, as a better-than-expected inflation print raised hopes of a rate cut by the RBI’s Monetary Policy Committee. Markets also gained after the US inflation data buoyed expectations of a rate cut by the US Federal Reserve (Fed). The BSE Sensex and Nifty 50 rose 0.93% and 1.10%, respectively.

·        Almost all sectors ended higher, with healthcare and auto gaining the most. BSE Healthcare, BSE Auto and BSE IT rose 2.99%, 2.79% and 1.06%, respectively, over the week.

·        The domestic market bought Rs 26,296 crores worth of equities till August 14, 2025, compared with Rs 33,916 crores worth of equities till August 8, 2025.

·        Foreign institutional investors sold equities worth Rs 9138 cr till August 14, 2025 compared with selling of Rs 15,169 crores till August 8, 2025.

Global Equity market summary

·        US stocks ended higher on August 13, as inflation reading for July boosted expectations that the Fed may start its monetary easing cycle in September. A rise in technology stocks led to further gains.

·        Britain's FTSE index ended higher on August 13, buoyed by upbeat earnings of major companies and easing global trade tension, after the US extended its pause on higher tariffs for Chinese goods until November 10. And stock-specific buying led to further gains.

·        Japan's Nikkei index ended higher, owing to upbeat earnings report, tariff optimism and hopes of a rate cut by the Fed.

·        However, there were some losses, on investor caution over a potential shift in the Bank of Japan’s policy and a stronger yen.

·        Hong Kong's Hang Seng Index ended higher, as the US and China extended the trade truce by another 90 days and on optimism of fresh Chinese government support to the mainland property market.

·        China's Shanghai Composite Index closed higher on account of the extension of the tariff truce between the US and China. Also, prospects of a Fed interest rate cut next month lifted investor sentiment. 

Major global bond yields

Source: Financial Websites *As of Aug 13  

Commodity prices

* Data as on Aug 13, 2025   

Source: Respective commodity exchanges, ibjarates.com

Other currencies vs the rupee

Source: Financial websites

Macro indicators

Global Yield

·        US Treasury prices are higher this week amid rising hopes of a September Fed rate cut.

·        Fed rate cut hopes rose post weak nonfarm payroll and inflation numbers for July, which also intensified the US President’s call for the Fed to lower borrowing costs. Treasury Secretary Scott Bessent added to that, suggesting that a 50 bps cut in December could be appropriate. He added that rates “should probably be 150, 175 basis points lower”.

·        The yield on the 10-year benchmark Treasury bond traded at 4.24% on August 13 vs 4.27% on August 8.

Commodities and Currency

·        Crude oil prices have fallen this week, as concerns over a potential OPEC+ output increase and the US President’s comments on talks with Russia have raised doubts over new sanctions.

·        Gold prices are trending lower as well, after the US President’s assurance that gold will not be subject to tariffs.

·        The rupee closed higher against the dollar this week, owing to a weak US dollar index and recovery in the non-deliverable forward market. It rose further after S&P Global upgraded India's long-term unsolicited sovereign credit rating to 'BBB' from 'BBB-'.

Global Economic

·        US annual inflation rate remained at 2.7% in in July 2025, the same as in June.

·        The US budget deficit in July climbed 20% this fiscal year compared to the last despite the US taking in record income from President Donald Trump's tariffs.

·        US PPI surged by 3.3% from a year ago in July 2025, after an upwardly revised 2.4% rise in June while core PPI increased 3.7% from 2.6%.

·        Eurozone Industrial Production increased 0.20% on year in June from revised 3.1% in May.

·        Eurozone ZEW Indicator of Economic Sentiment fell by 11 points from the prior month to 25.1 in August 2025.

·        UK unemployment rate stood at 4.7% in the three months to June 2025, unchanged from the previous period as the market expected.

·        The UK Residential Market Survey from RICS showed the house price balance declined to -13% in July 2025, down from -7% in each of the previous two months.

·        UK GDP grew 1.2% on year in Q2 2025 easing slightly from 1.3% in Q1 while it grew 0.3% on quarter from 0.7% in earlier quarter.

·        UK industrial production increased 0.2% on year in June compared to 0.2% drop in the previous month.

·        UK manufacturing production came in flat on year in June compared to 1% gain in the previous month.

·        China’s consumer price inflation came in flat at 0.0% in July following 0.1% growth in the previous month.

·        Japan Economy Watchers Survey edged up to 45.2 in July 2025 compared to 45.0 in June 2025 while the Economy Watchers Survey Outlook increased to 47.30 from 45.90.

·        Japan PPI rose 2.6% on year in July 2025, slowing from a 2.9% growth in the prior month.