DSP TATHYA - May 2023

Consumer sentiments continue to be strong. However, some moderation is seen in data such as POL consumption, non-oil imports, e-toll collections etc. Robustness in 2-wheeler sales along with rural wage points at coming back of the rural’/unorganized space

Inflation eased significantly in Apr-23 aided by the base. However, the major drivers of inflation are fast easing and FY24 is likely to see a marked reduction

Manufacturing PMI continues to show sharp expansion. Eight core data is also reasonably healthy. Producer prices have contracted aiding margins.

Services PMI shows unprecedented strength. Clearly, the exports uptick is keeping the sentiment high. Other indicators are robust too

10- year Gsec yields eased after the April MPC as RBI opted for a pause. This is getting strengthened by surplus dividend from RBI and discontinuation of INR 2000 notes, along with lower inflation

FY23 fiscal numbers were on track. FY24 has started on good note but potential slowdown in growth, tax buoyancy etc need to be watched

External headwinds have eased and RBI has started to re-build the reserves., with accretion of USD 28 bn in past 2 months. Services surplus mutes the effect of goods deficit

India saw FII inflows in both equity and debt. We re-iterate that given India is appearing a steady ship in choppy waters, it is likely to get its fair share of FII flows, MF equity flows slowed though the SIP book remained robust