Novelis' results for the January-March quarter of the 2022-23 financial year (Q4FY23) disappointed investors and as a result, the share price of Hindalco (Novelis is a 100 per cent subsidiary of Hindalco) has slid. The non-ferrous metals major is suffering from the impact of a down-cycle in aluminium and copper, as well as the slowdown imposed in Europe by the Russia-Ukraine war. Prospects for the firm look gloomy, at least for the first half (H1) of FY24.
Amidst all-out efforts by the government and RBI to tame inflation, now hovering around 9 per cent, Finance Minister Pranab Mukherjee on Tuesday said it would be ideal for the economy if it is managed at 5-6 per cent level.
Inflation has risen to 1.51 per cent compared to 1.21 per cent last week.
Though on a downward curve, economists warn of inflationary pressures still existing in the system which might prevent the Reserve Bank from going in for rate cuts over the next three months. "The RBI is targeting an inflation level of 5-5.5 per cent. If, however, it continues to remain in double digits till January, then the tight monetary policy would continue," Crisil Director and Principal Economist D K Joshi said.
The PMI has risen sharply from 52.9 in July, the lowest reading in the 29-month history of the survey.
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According to the global financial services firm, FY16 would be a notable year for India with gradual improvement in economic growth and declining inflationary pressures amid falling global commodity prices and policy initiatives.
The Indian economy is expected to be adversely affected by a surge in inflation fuelled by energy and commodity prices. Despite signs of growth slowing down from the last year, the Reserve Bank of India (RBI) has already hiked interest rates twice in June to deal with inflationary pressures and may well do so again, S&P said in a statement.
As far as the Indian households are concerned, although the leverage ratio in this basket has multiplied nearly 3 times in the past decade, it is still well below not just developed but also most other developing economies.
Challenged by unrelenting inflationary pressures, Reserve Bank on Tuesday announced stringent measures of hiking mandatory cash reserve of the banks and its short-term lending rate to them to suck up an estimated Rs 20,000 crore (Rs 200 billion) -- a move that could make loans dearer for housing, car and personal expenses as also to the industry.
Bond markets, global as well as domestic, are likely headed towards hard times over the next three to six months, as higher vegetable prices, rising fuel costs, and improved wages may keep inflation hot, believe analysts, who expect the yields to hit 7.5 per cent in the near-term from the current 7.234 per cent. In this backdrop, they suggest investors can put in money in funds/instruments with residual maturity of 4 to 6 years, while longer-term investors can allocate cautiously to the longer end in the range beyond 7 years.
The improvement in business conditions promoted job creation, while confidence towards the year-ahead outlook for activity was at a four-month high during March.
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.
India's services sector activities improved further and expanded at strongest rate in over 11 years in May, supported by a substantial pick-up in new business growth, even as input cost inflation climbed to a record high, a monthly survey said on Friday. The seasonally adjusted S&P Global India Services PMI Business Activity Index jumped to 58.9 in May, up from 57.9 in April, amid better underlying demand and strong inflows of new work. For the tenth straight month, the services sector witnessed an expansion in output.
High inflation of 12.14 per cent, recorded last week, has prompted analysts to say that price rise will remain at double digits by the end of this calendar year due to base effect.
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The supply-side driven inflationary pressures, from food or fuel prices, would be mitigated by a neutral stance and a prolonged pause on rates, says Gaurav Kapur.
The 11-member Indian Pharmaceutical Alliance has frozen the prices of all decontrolled medicines until March 31, 2005, in view of high inflation.
Dried up liquidity, interest rate hikes and the resultant slump in consumption may slow down economic growth in the near term, according to the JM Morgan Stanley report for November 2005.
On one hand, the RBI will have to initiate measures to contain inflow of foreign capital -- which is expected to increase as an after effect of the Fed rate cut, on the other it will need to ensure that such inflows do not fuel inflationary pressures.
Finance Minister P Chidambaram on Friday said the government is confident about managing inflationary pressures despite rising crude oil prices.
Vedanta Limited (Vedanta) helping its parent and group holding company Vedanta Resources to deleverage its balance sheet has started to strain its balance sheet. Vedanta's gross debt (consolidated) was up 24.3 per cent year-on-year (YoY) in FY23 and reached a six-year high of Rs 66,628 crore by the end of March. Similarly, its net debt went up 20.3 per cent YoY to Rs 45,706 crore at the end of FY23, up from Rs 38,228 crore a year ago; it was the highest since FY20.
Firms hired additional hands to keep up with the production demand
Inflation in India continues to be within tolerable limits, despite the drought and higher fuel prices, but a major risk to current benign outlook may come from future movements in international oil prices.
The stock of United Spirits, the country's largest liquor company by market capitalisation (mcap), has gained 11 per cent over the past week on double-digit growth guidance, rising premiumisation trend, operationally in-line performance in the March (Q4FY24) quarter and a rally in consumer stocks. The revenue growth of the company came in at 7 per cent year-on-year (Y-o-Y) mirroring the growth of the prestige and above (P&A) segment. This segment comprising premium brands accounts for 88 per cent of the revenues.
The excise duty cuts on diesel and petrol will cost Rs 45,000 crore and lead to a 0.3 percentage point widening on the Centre's fiscal deficit, a foreign brokerage said on Thursday. Going by the overall consumption, the costs of the surprise move - which came after months of concerns over high payouts at filling stations - for the entire fiscal will come at Rs 1 lakh crore or 0.45 per cent of GDP, economists at Japanese brokerage Nomura said in a report. For the remaining months of the ongoing FY22, the cost will come at Rs 45,000 crore, which leads to an upward review of the fiscal deficit target.
If the government were to give heed to its fiscal imprudence, cut down on its 'extravagant' and non-productive expenditures, inflation could be controlled
'While the country has been hit hard from a strong second wave of Covid, we believe the markets are willing to look through that.'
'I think we just got to make the protocol we set out: that if you're flying from China, you got to be tested, and so on'
'Investors should look to incrementally allocate towards equity from a medium-to-long term horizon.'
Concerned over surging inflation, Reserve Bank of India hiked the short-term repo rate on Wednesday by 0.25 per cent to 7.50 per cent while keeping reverse repo, bank rate and cash reserve ratio unchanged.
Deficiency in rainfall and the resultant decline in food grains and oilseeds output would exert inflationary pressures and need to be cushioned against the possible delay in monsoon, an Assocham study said.
India's services sector activity moderated in December as business activity and sales rose at a softer pace, while price pressures and the possibility of new waves of Covid-19 affected business sentiment, a monthly survey said on Wednesday. The seasonally adjusted India Services Business Activity Index fell from 58.1 in November to a three-month low of 55.5 in December. The rates of expansion moderated but were nevertheless "marked" by historical standards, the survey said.
Booming manufacturing and services sector is likely to push up India's GDP growth to 7.7 per cent in 2006-07, but inflationary pressure may lead to hike in interest rates
Escalation of the conflict in West Asia between Israel and Iran has had a direct impact on the energy markets, and more broadly on the financial markets as well as the global economy.
