Minutes of the MPC meeting show Das felt economy needs more monetary stimulus as inflation outlook remains uncertain.
Manufacturing companies have been outperformers on the bourses in the current year, leading to a rise in their weighting in the benchmark index. Companies in sectors such as FMCG, automobile, pharmaceuticals, metals, cement, and agrochemicals now account for 25.43 per cent of the Nifty 50 index, up 88 basis points from 24.55 per cent at the end of December last year and a record low of 23.1 per cent at the end of CY20. The manufacturing sector is now dominated by FMCG majors such as Hindustan Unilever, ITC, Asian Paints, Nestle, and Britannia, accounting for 45 per cent of the combined market cap of all manufacturing companies in the index.
The repo rate has been left unchanged at 4 per cent, Governor Shaktikanta Das said while announcing the decisions taken by the central bank's MPC.
D-Street is hoping RBI policy review meeting on Tuesday will uphold its stand on easing of interest rates
In the context of RBI's view that the real interest rate, defined as the repo rate less "look forward" CPI, should be around 150-200 basis points.
The central bank, however, warned that the downside risks to growth could play out if global recovery slows.
Improved credit profile may make you eligible to transfer your existing home loan to another lender at a much lower rate.
'The finance ministry and the RBI will never admit to the difficulties in the economy because if they do so, it will adversely impact the financial markets, etc.' 'They like to present a rosy picture that everything is fine and under control.'
Key macroeconomic indicators suggest softening industrial growth.
The statement said the food inflation stood at 7.56 per cent in February, 2014, against 8.94 per cent of the previous month and 14.98 per cent during the corresponding month of the previous year.
There is a significant amount of dispersion in the growth rates across different industries.
Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan may have found the Reserve Bank of India (RBI)'s inflation projections on the higher side, but independent experts agree with the central bank and expect both wholesale and retail prices to remain high.
Price rise in services sector after the goods and services tax (GST) gets implemented and the pay hike of central government employees will make inflation control a tough job for the central bank
The economic survey for 2020-21 has suggested revision in the weightage of food items to gauge the true picture of inflation in the country, and said new sources of price data also need to be incorporated in the wake of increasing retail e-commerce transactions. As per the survey, the current spike in consumer price-based retail inflation of food prices is mainly a supply-side phenomenon. The survey noted that the weights of all items in retail inflation are based on the NSO household consumption expenditure survey of 2011-12, adding the weight of food items in the index might have significantly decreased over the decade since then.
The median forecast for wholesale price index-based inflation in the first quarter of 2010/11 is at 10.4 per cent, according to Reserve Bank of India's survey, higher than 9.5 per cent in the previous survey.
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Bank stocks have underperformed in the second quarter of FY'14 with the BSE Bankex declining 18 per cent compared to fall of 1 per cent in the BSE 30-stock index, Sensex, during this period.
The "asset-right" strategy, reiterated by ITC chairman Sanjiv Puri during the company's 112th annual general meeting (AGM) on August 11, received a thumbs up from the analysts. They, however, believe that sustained earnings growth and synergies with the demerged hotel's vertical will help the stock break out from the ongoing consolidation. "The stock is expected to consolidate between Rs 420 and Rs 450 in the near future.
The RBI, which has been keeping rates at an elevated level citing the high inflation, wants to bring it down to 6 per cent by January 2016.
MMFs are a good option for the current environment, observes Sarbajeet K Sen.
CPI-based inflation on a (year-on-year) basis has come down from 8.59 per cent in April 2014 to 7.80 per cent in August 2014.
On India achieving higher growth, Rajan said 9 per cent, which is the widely believed potential growth rate of the economy, is still some time away.
The RBI expects non-food credit growth to pick up marginally to 15 per cent in 2013-14 from 14 per cent achieved in the previous fiscal and deposit mobilisation to be flat at 14 per cent.
If you invest for the shorter-term now, you will be able to roll over to higher rates when the interest-rate cycle turns, advises Sarbajeet K Sen.
The common man's main grouse is high inflation numbers. But there are other anomalies as well that need to be addressed.
A majority of the Indian consumers are bullish about their financial situation in the next one year, but have raised concerns over rising cost of goods and services, which is affecting their purchasing decisions, according to an EY report. Moreover, uncertainty around managing rising living costs is driving over 80 per cent in India to save more money, said the findings of the ninth edition of the EY Future Consumer Index for India. The Index for India reaffirms the "positive outlook" of the Indian consumers as 77 per cent expect positive changes in the financial situation, in the next one year.
The decline in inflation was broad-based across major commodity groups except housing and fuel and light.
In the mid-quarter review on December 18, the Reserve Bank left key policy rates unchanged but said it will hike interest rates if inflation does not subside.
A pick-up in farmer income could have a cascading impact on the rural economy, though agriculture is becoming a smaller part of India's overall rural incomes.
The recent sell-off in IT stocks such as Infosys and Tata Consultancy Services (TCS) has resulted in a sharp decline in the IT sector weighting in the Nifty50 index. The sector's weighting in the index has slipped to a five-year low of 12.2 per cent, down from the 17.7 per cent at the end of March 2022. The top IT companies - TCS, Infosys, Wipro, HCL Technologies, and Tech Mahindra - accounted for 13.6 per cent of the index at the end of March this year.
Rajan had cautioned against any deviation from the fiscal discipline path.
The report said efforts to stabilise the economy through monetary policy interventions need to be complemented by appropriate fiscal policy measures.
WPI inflation even breached psychological level of 0% in Nov.
What came to the rescue of the IIP numbers in February were mining and electricity.
While existing investments pipelines are on course, newer projects, which are at conceptual stage, may be affected; companies are concerned that high inflation (the wholesale price index is above 12.6 per cent, a 16-year high) and high interest rates would dampen consumer demand growth, Confederation of Indian Industry President K V Kamath said after a meeting of industry leaders with Finance Minister P Chidambaram.
Industrial production (IIP) grew to a three-year high of 6.4 per cent in August, up from 4.1 per cent in July.
The third-quarter financials didn't excite market watchers. But equity investors can still make money if they invest in the right stocks.
The 30-share Sensex ended up 165 points at 29,044 and the 50-share Nifty gained 54 points to close at 8,834.
The S&P BSE Realty Index has emerged as one of the top-performing sectors, yielding a remarkable 45 per cent return over the past six months. The three leading players, listed by market capitalisation, have substantially enriched investor wealth by 43-70 per cent during this period. If the second quarter (Q2) of 2023-24 (FY24) updates from Macrotech Developers (Lodha) and Sobha, along with industry data for the quarter, serve as any indication, the trend of strong bookings for larger players is expected to continue.
The repo rate could be reduced by 50 bps in the current year.
Rate cuts are unlikely to be aggressive, in our view.
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