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RBI s draft guidelines on partial credit enhancement (PCE) are poised to revolutionize corporate financing, particularly for infrastructure projects. By reducing capital requirements and increasing the PCE limit to 50%, the move will enable companies to access bond markets at lower rates.

About 60% of commercial bank s loans are pegged to external benchmarks, like the policy repo rate that was lowered the second time in as many months to 6%. For private sector banks, the share of external benchmarks lending rate (EBLR) loans-or advances linked to repo rate-is 85.9%, while for public sector banks it is 44.6%. Effectively, the margins of private banks are expected to be impacted more than PSU banks.

The Sensex returns in rupee terms have been between 190% and 1,500% in past three bullish eight-year cycles since 1984. In bearish periods, their returns dropped to the range of 20-50%

Some expect a slightly deeper cycle, with expectations of a terminal rate at 5% by December 2025 as the Reserve Bank of India surprised the market with a change in its stance to accommodative from neutral , along with a downgrade in growth forecasts, "decisive improvement" in the inflation outlook and commitment to surplus liquidity.

Private sector companies have seen their spreads widen, whereas government-owned banks and state-owned companies have largely remained steady, with yields on their dollar bonds remaining flat over the past week following the tariff announcement. However, relief came from tariff pause for some issuers like Biocon Biologics 6.67% due 2029 rising 4 points today, though still lower by over 8 points from start of the month.

The selloff is the latest sign of the power of government bond markets to act as a restraint on policymakers, while talk of a return of so-called bond vigilantes has risen in recent years.

Gold prices rose as investors sought safety amid President Trump s tariff escalation on China, despite his decision to ease duties on other countries.

Donald Trump s latest shift on Nippon Steel s $14 billion bid for U.S. Steel sent shares of the 124-year-old American company down 7% on Thursday, after Trump said a day earlier that he does not want the steel producer to "go to Japan."

Gold prices jumped nearly 3% to an all-time high on Thursday, as a drop in the dollar and an escalating trade war between the U.S. and China drove investors towards the safe-haven allure of the precious metal.

Wall Street s main indexes fell on Thursday on concerns over the impact of high tariffs on global economy, with stocks pulling back from the sharp gains a day ago when U.S. President Donald Trump moved to temporarily lower the levies on some countries.