Historically, tensions in West Asian regions have provided support to gold prices.
India's gold demand rose 8 per cent annually to 136.6 tonne in the March quarter helped by a strong economic environment despite prices touching historic highs, according to the World Gold Council. The aggressive gold buying by the Reserve Bank of India (RBI) also contributed to the rise in demand. India's gold demand in value terms rose 20 per cent on an annual basis to Rs 75,470 crore during the January-March period of this year on volume growth as well as a rise in quarterly average prices by 11 per cent.
S&P Global Ratings on Wednesday said the second wave of COVID infections poses downside risks to India's GDP and heightens the possibility of business disruptions. The second wave brings in uncertainty and a drawn-out COVID outbreak will impede India's recovery, it said.
There is a significant risk that advanced economies could experience another downturn, said the World Economic Outlook report released on Thursday.
While the US-Iran conflict leading to a spike in global oil prices and trade war between the US and the EU topped the chart with 25 per cent, other major risks to the global economy include coronavirus, debt burdens causing a recess across emerging markets and Hong Kong protests causing an exodus from Asia's biggest financial centre.
'As China's reopening euphoria fizzled out on the back of some disappointing economic data, we saw inflows coming back to India with full force in the past 3-4 months.'
"Growth is expected to moderate gradually in China... pick up in India, and remain broadly stable in the Asean-5 region."
In a drastic measure to stem any major disruption to the US economy as a result of the coronavirus outbreak, the Federal Reserve has cut its benchmark interest rate to almost zero and said it would buy USD700 billion in bonds. The covid-19 pandemic has sickened more than 156,000 people worldwide and left more than 5,800 dead. The death toll in the US stands at 68, while infections neared 3,700.
Moody's Investors Service on Friday projected India's growth at zero per cent for the current fiscal and said the negative outlook on sovereign rating reflects increasing risks that GDP growth will remain significantly lower than in the past. The outlook also partly shows weaker policy effectiveness to address economic and institutional issues, it noted in the update to its November 2019 rating forecast.
The S&P BSE Sensex plunged 461 points to end at 25,603.
Global rating agency Standard & Poor's on Friday reaffirmed investment grade ratings 'BBB-'long-term and 'A-3' short-term on India, saying the country's economic growth prospects and debt markets are strong. The 'BBB' rating category means an entity has adequate capacity to meet its financial commitments in the long-term.
India's services sector activity eased in August but growth rates for new orders remain elevated, as services firms indicated the sharpest upturn in new export business which acted as a catalyst for firms to expand their workforces as well as output, a monthly survey said on Tuesday. Despite falling from 62.3 in July to 60.1 in August, the seasonally adjusted S&P Global India Services PMI Business Activity Index indicated one of the strongest increases in output seen since mid-2010. For the 25th straight month, the headline figure was above the neutral 50 threshold.
Benchmark indices continued their downtrend on Monday, with the Sensex falling 84.88 points, tracking selling in index majors Infosys and Reliance Industries along with weak global equities. The 30-share BSE benchmark went lower by 84.88 points or 0.15 per cent to settle at 56,975.99 after recovering some lost ground during the fag-end of trade. During the day, it tanked 648.25 points or 1.13 per cent to 56,412.62. The NSE Nifty declined 33.45 points or 0.20 per cent to close at 17,069.10.
Have the markets already played out their dynamics before the economy has even properly taken off? Are we now destined for a period of mediocre returns despite a strong economy? asks Akash Prakash.
'We like certain stocks from banking, insurance, retail, hospitals and capital goods.' 'Though some of these stocks may seem expensive, they will compound well over the long term, thus justifying their current multiples.'
Kotak Bank was the top loser in the Sensex pack, cracking around 6 per cent, followed by Hero MotoCorp, Bajaj Finance, Maruti and HDFC twins. On the other hand, HUL, HCL Tech, ITC and Nestle India were among the gainers.
India's growth in the last three financial years has averaged just 1.9%. It is natural to project rapid growth from this low base. Crucial to that would be the assumption that the economy has suffered no lasting damage from the pandemic, observes T N Ninan.
Prospective buyers must make a well-considered decision regarding whether this is the right time to buy a house, particularly with home loan rates at near-peak levels, and the risk of job losses looming in many sectors.
India's manufacturing sector activity rose to a 13-month high in December, supported by healthy inflows of new business and strong demand conditions, according to a monthly survey. The seasonally adjusted S&P Global India Manufacturing Purchasing Managers' Index (PMI) stood at 57.8 in December, up from 55.7 in November, as business conditions improved to the greatest extent in over two years. The December PMI data pointed to an improvement in overall operating conditions for the 18th straight month.
Singh emphasised that the Indo-Pacific is no more a maritime construct, but a full-fledged geo-strategic issue, and that the region is facing "a complex web" of security challenges, including boundary disputes and piracy.
The services sector growth in India rose to a 13-year high in September on sharp increase in new business amid strong demand conditions, and job numbers continued to increase as overall business mood improved, a monthly survey said on Thursday. The seasonally adjusted S&P Global India Services PMI Business Activity Index rose from 60.1 in August to 61 in September, signalling a sharp upturn in output. In Purchasing Managers' Index (PMI) parlance, a print above 50 means expansion while a score below 50 denotes contraction.
Prime Minister Narendra Modi on Thursday said his government is using all channels including diplomatic to bring back high-profile economic offenders, leaving them with no option but to return to the country. Speaking at a symposium on credit flow and economic growth, he asked banks to support wealth and job creators with proactive lending while promising to stand by any loans given in right earnest. "In our attempt to bring back fugitive (economic offenders), we relied on policies and law and also used diplomatic channels.
The Indian stock market does not present attractive prospects for investors in the near term amid sluggish domestic and global economic growth outlook, according to Goldman Sachs.
The global recovery is expected to be asynchronous and divergent between advanced and emerging market economies, the IMF said on Tuesday, noting that policymakers should take early action and tighten selected macroprudential policy tools while avoiding a broad tightening of financial conditions. "Extraordinary policy measures have eased financial conditions and supported the economy, helping to contain financial stability risks," the International Monetary Fund (IMF) said in its Global Financial Stability report released ahead of the Spring meeting of the global lender and the World Bank. However, actions taken during the pandemic may have unintended consequences such as stretched valuations and rising financial vulnerabilities, it said.
'We need to do more to accelerate growth.'
It said the money supply recovered to its pre-demonetisation level in mid-2017 and is now increasing steadily, similar to the previous trend.
Indian equity markets have a limited upside potential in the near-term as they negotiate the ensuing cyclical slowdown, wrote analysts at Nomura in a recent coauthored report led by Saion Mukherjee, their managing director and head of equity research for India. He, however, believes that the foundations are in place for sustainable growth over the medium-to-long term, and hence suggests a 'buy on dips' strategy to equity investors. As an investment strategy, Nomura prefers domestic-oriented sectors and companies over exporters, and prefers stocks that provide valuation comfort. Industrials and banks are their overweight sectors, while IT services and consumer discretionary are their underweight sectors.
Moody's on Friday slashed India's GDP growth projections for 2022 to 7 per cent from 7.7 per cent earlier as the global slowdown and rising domestic interest rates will dampen economic momentum. This is the second time that Moody's Investors Service has cut India's growth estimates. In September, it had cut projections for the current year to 7.7 per cent from 8.8 per cent estimated in May. "For India, the 2022 real GDP growth projections have been lowered to 7 per cent from 7.7 per cent.
India appears poised to sustain its growth in a more durable way than before with the economy carrying the momentum from FY23 into the current fiscal year, the Annual Economic Review for 2022-23 released by the finance ministry on Thursday said. However, the report cautioned that escalation of geopolitical stress, enhanced volatility in global financial systems, sharp price correction in global stock markets, a high magnitude of El-Nino impact, and modest trade activity and FDI inflows, are factors that could constrain the pace of growth. "Should these developments deepen and dampen growth in the subsequent quarters, the external sector may challenge India's growth outlook for FY24," the finance ministry said.
The International Monetary Fund expects India's economic growth rate to moderate to 7.5-7.75 per cent this fiscal, from 8.5 per cent in 2010-11, on account slowing investments and sluggish global recovery.
S&P Global Ratings has upgraded its long-term ratings on Tata Motors to speculative grade 'BB' with stable outlook on earnings improvements and potential deleveraging. The ratings agency had earlier placed Tata Motors in 'BB-'. As per S&P ratings, a BB grade is less vulnerable in the near-term but faces major ongoing uncertainties to adverse business, financial and economic conditions.
'Given the worries about sluggish growth, rising interest rates and likely volatility, it's quite logical to infer that the SIP route could be the preferred way of investing.'
India's CLI has been on the rise since October 2014.
The uncertainty created by the jump in COVID-19 infections and localised lockdowns prompted RBI Governor Shaktikanta Das and other members of the rating setting panel MPC to unanimously vote for status quo in interest rates and an accommodative policy stance to support growth, as per minutes of the meeting released on Thursday. "The need of the hour is to effectively secure the economic recovery underway so that it becomes broad-based and durable," the Governor said during the three-day meeting of the Monetary Policy Committee (MPC) which ended on April 7. The renewed jump in COVID-19 infections in several parts of the country and the associated localised and regional lockdowns add uncertainty to the growth outlook, he observed, as per the minutes of the meeting released by the central bank.
Silver, which is currently trading at Rs 68,453 per kilogram, has appreciated 21.7 per cent over the past three months. Investors, however, shouldn't get carried away by its recent performance and put their money in it. Instead, they should evaluate its pros and cons and then take a considered decision based on their risk appetite.
India is expected to grow at 7.8 per cent in 2015, surpassing China's growth rate.
Global rating agency Fitch has revised upwards India's growth projection to 6 from 5 per cent for the current fiscal and said the recent election results should provide additional confidence and spur growth.
The Reserve Bank on Wednesday projected retail inflation to ease to 5.3 per cent in next fiscal from 6.5 per cent this year on assumptions of lower imported inflation, even though core inflation remains sticky. The RBI's inflation outlook for current fiscal has improved from 6.8 per cent projected earlier, to 6.5 per cent, on the back of steeper than expected decline in vegetable prices and Indian basket of crude at $95 a barrel. "Looking ahead, while inflation is expected to moderate in 2023-24, it is likely to rule above the 4 per cent target.
Among the Sensex firms, Larsen & Toubro, UltraTech Cement, JSW Steel, Titan, Bajaj Finance, Wipro, Tech Mahindra and Nestle were the major laggards. Maruti, Power Grid, Axis Bank, State Bank of India, NTPC, HDFC Bank, ITC and IndusInd Bank were the gainers.
Sensex ended strong, Tata Steel, HUL climb higher.
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