Near the end of US tightening cycle: The FED has increased interest rate by 25bps in recent meeting to 5-5.25% in order to fight inflation which is near term worry for the global economy. The interest rate hike was sharpest in a span of last 1 year; however, FED is now signalling that we are near the end of tightening cycle. We believe inflation is likely to moderate post multiple rate hikes but continue to remain higher for some time as rate hike start to show its effect.

Resilient domestic economy; inflation is monitorable: RBI’s recent decision to keep the policy rate unchanged at 6.5% shows the strength in the domestic economy. However, medium term focus would continue to remain on controlling the inflation.

All time high GST collection: The gross GST collection stood all time high at Rs1.87 tn in the month of April. The collection has crossed Rs1.5 tn mark for eight months in a row. GST collection target has been pegged at Rs9.57 tn for FY24 by the central government. The number of E-way bill generated in recent months has also been very strong.

US Banking concern: The recent failure of few US regional banks, due to high interest rates have raised concerns in the US banking system and had weakened investor’s sentiments. However, with US government and the Fed stepping in to calm the situation & stakeholders and ensuring safety of their depositors, have restricted further escalation of the concerns.