Retail inflation fell to a 15-month low of 5.66 per cent in March, mainly due to a decline in food prices, government data showed on Wednesday. The inflation figure in March is within the RBI's comfort zone as it is below 6 per cent. The retail inflation based on Consumer Price Index (CPI) was 6.44 per cent in February 2023 and 6.95 per cent in the year-ago period.
'We have seen a host of businesses across sectors generate economic value and wealth for investors.'
All-out efforts are needed to mitigate the adverse impact of the Covid-19 pandemic, and the RBI will use any instrument necessary to revive growth and preserve financial stability, according to the minutes of the central bank's policy meeting.
The ongoing consolidation in equities would improve return prospects during the second half of 2021, an American brokerage said on Tuesday. Leading indicators relating to fundamentals including growth, stability, government policy and RBI policy, and corporate earnings are "generally positive" about equity returns, analysts at Morgan Stanley said. It can be noted that since the start of the second wave of COVID-19 infections, which also coincided with inflation worries in the US, there has been an uneasiness within investors. From its levels on March 10, the markets are down by nearly 3 per cent despite the late surge over the last two trading sessions.
'Equities are likely to be range-bound with a downward bias for the remaining part of the year.'
Overseas investors had put in a net sum of Rs 45,981 crore in March and Rs 11,182 crore in February in the capital markets
'For equities, inflation trending upwards but within the range of expectations can actually be a big positive as it helps earnings and may shift flows from bonds to equities.'
Private equity and venture capital investments more than halved to $3.6 billion in May 2021 when compared to the preceding April's $7.5 billion and a third lower than the year-ago period's $5.4 billion, a report said on Monday. However, on a year to date basis, the venture investments by these two categories of investors have doubled to $20 billion for the first five months of 2021, the report by industry lobby IVCA and consultancy firm EY said, stressing that investors continue to remain bullish. It can be noted that the country underwent the ravages of the second wave of the pandemic since April this year.
'Q1 is going to bear the brunt of the second wave, exposing full-year GDP forecasts to downward revisions, unless phase-3 of vaccination is executed quickly.'
Market players said the sell-off was triggered by pessimism that the government may not be able to balance growth with macro-stability.
'They can shift to dynamic asset allocation funds to automatically rebalance their equity exposure.'
Finance Ministry is expecting a rating upgrade by credit agencies by the year-end on the back of policy initiatives.
The derivatives expiry on Thursday is also expected to add to the volatility.
Inflation at 6 per cent was a matter of concern in the evolving macro-economic outlook and the Reserve Bank of India fears that consumer prices could be even higher at 7 to 8 per cent.
The report said inflation is expected to remain below 5 per cent over the two years.
Nasscom said growth for the current financial year (2016-17) was expected to be 8.6%
A weak margin outlook in the near term and lack of fresh triggers may keep the Godrej Consumer Products (GCPL) stock under pressure. The stock, after tepid September quarter (Q2) results and marginal downward revision in earnings estimates, declined 3.5 per cent in trade on Friday. Though consolidated sales of the company, which owns the Goodknight and Cinthol brands, grew 8.5 per cent year-on-year (YoY), its operating profit declined because of the sharp contraction in margins.
Given the macro setting, the outlook remains positive for each of the four key parameters - inflation, current account deficit, fiscal deficit and currency stability, says Rahul Bhushkute.
A gradual increase works best for the US, as well as global markets, says Nizam Idris managing director, head of strategy (fixed income and currencies), Macquarie Bank.
'Quality of management, corporate governance, allocation of capital, full disclosures should form the basis to decide investing in a particular stock.'
After staging a strong recovery from COVID-induced slowdown in 2021, India's exports are likely to extend the growth story to the New Year also on increased demand in the global markets, boost in domestic manufacturing due to production-linked incentive schemes and implementation of some interim trade pacts. Expectations of positive growth in the country's exports are also backed up by the outlook of the World Trade Organisation (WTO) which predicts a 4.7 per cent expansion in the global merchandise trade volume in 2022. Exporters believe that the outbound shipments would cross $400 billion mark in this fiscal going by the current momentum and may reach $475 billion in 2022-23.
'We expect the bull run to continue until economic growth continues.'
'We would advise investors to invest in a disciplined way in equities for the long term.'
Spread investments in equities, bonds, gold and cash to tackle volatility advise Nitin Singh, MD and head, and Vinay Joseph, director, investment strategy, Standard Chartered Wealth Management, India.
There has been a stellar rise for the Indian markets this far in calendar year 2021 (CY21) with the S&P BSE Sensex surging over 19 per cent. The gain in mid-and small-cap indices on the BSE has been sharper with both these indexes surging around 38 per cent and 54 per cent, respectively during this period. Rampant spread of Covid pandemic's Delta variant and the ensuing lockdown and mobility curbs across India, rising prices key commodities, including crude oil and its impact on inflation, possibility of tightening of policy stance by major global central banks, especially the US Federal Reserve (US Fed) have been some of the key headwinds that the markets successfully negotiated during this period.
The country has been clocking a sub-5 per cent growth for the past two financial years, mainly on account of slowdown in investments.
Indian funds did better than Asian ones in only four of the 10 months -- till October. Despite much market optimism, presumably around policy interventions and guided by buoyant flows, India's macro backdrop may be turning for the worse.
Moody's assigns a 'Baa3' rating on India, with a stable outlook.
The rally was led by IT stocks, with TCS and Infosys rising up to 5 per cent. Yes Bank, on the other hand, was the biggest loser on both the bourses, cracking nearly 12 per cent
Will 2022 be a year of contrasting narratives -- one filled with caution and the other with continued optimism?
'Internet, healthcare and life insurance are a few sectors which offer solid long-term decadal potential.'
The Indian government will present the annual budget for 2016-17 on February 29.
Ravi Gopalakrishnan, head-equities, Canara Robeco Mutual Fund, tells Ashley Coutinho that earnings growth will pick up once the benefits of reform initiatives accrue.
HSBC on Monday lowered India's GDP forecast for the current financial year to 4 per cent from 5.5 per cent earlier saying economic uncertainty is likely to weigh on the growth forecast in the coming months.
Amid sustained weakness across categories, the Indian stock market remained below the trillion-dollar mark for the third consecutive day today, as the total valuation of all listed companies slipped further to $944 billion.
As the reform process is expected to gain further momentum, the Indian rupee will continue to outperform its Asian peers, which are likely to weaken further against the US dollar in 2015, says an HSBC report.
'Slower-than-anticipated recovery can be a bigger risk this time than a liquidity-driven event -- at least for India.'
Many analysts find market expensive, even at current levels.
'The market won't wait for earnings to recover.'
With the new Indian government showing signs of economic reforms and brings in transparency in governance, the World Bank feels that the world's third-largest economy could achieve a growth rate of 5.5 per cent this year as compared to 4.7 per cent last year.
