What was in the world of reasonable oil prices a sunny economy slips into gloom and doom.
Noting that the country could 'well experience the effects of an oil-price shock,' Deloitte said that political instability in West Asia and a payment crisis with Iran are causes for concern.
Crude oil has fallen about 40 per cent since mid June and the price on Monday touched its lowest level since mid 2009 before US oil prices posted their biggest one-day gain in two years overnight.
Soft oil prices are expected to persist in 2015 and will be accompanied by significant real income shifts from oil-exporting to oil-importing countries.
The Reserve Bank on Wednesday said that global crude oil prices, which are nearing the $100 a barrel mark, could impact inflation in India. "High and volatile crude oil prices in the international markets pose a major risk to domestic price stability," the RBI said in its report on 'Trend and Progress in Banking'.
The spurt in rates, caused by the rally in international oil prices, has led to the oil ministry asking the finance ministry for a cut in excise duty in the Union Budget 2018-19, to be presented in Parliament next week.
India's net oil import bill could widen to $101-104 billion in current fiscal from $96.1 billion in 2023-24 and any escalation in the Iran-Israel conflict could impart an upward pressure on the value of imports, ICRA said on Tuesday. The domestic rating agency said based on its analysis, lower value of Russian oil imports is estimated to have led to savings of $7.9 billion in 11 months (April-February) of 2023-24, up from $5.1 billion in 2022-23.
From February to mid-March, oil prices receded rapidly.
India's fast-moving consumer goods (FMCG) sector grew 5.7 per cent by value and 4.1 per cent by volume in the July-September quarter driven by rural demand, consumer intelligence firm NielsenIQ said in its quarterly update on Thursday. Price-led growth stood at 1.5 per cent. According to NielsenIQ data, rural volume growth outpaced urban markets for the third straight quarter despite consumption softening in both regions.
High crude oil prices, widening current account gap and political uncertainty may keep the rupee weak in the near term.
Global trends, trading activity of foreign investors and domestic macroeconomic data announcements would dictate terms in the equity market in a holiday-shortened week ahead, analysts said. Equity markets would remain closed on Wednesday for Gandhi Jayanti. "Looking ahead, it will be interesting to monitor Foreign Institutional Investors (FIIs) and their flow into India.
Equity investors will track the trading activity of foreign investors, global trends and ongoing earnings results for further cues, and benchmark indices may continue to witness consolidation in a holiday-shortened week amid the monthly derivatives expiry, analysts said. Markets fell sharply last week amid massive foreign capital outflows and dismal Q2 earnings so far. Weakness in the markets might continue in the near term amid cautiousness among investors ahead of the US presidential election early next month, an expert said.
Oil and LNG prices are likely to shoot up if Iran is to block Strait of Hormuz, through which countries like India import crude oil from Saudi Arabia, Iraq and UAE, leading to a spike in inflation, analysts said on the Iran-Israel conflict. The Iran and Israel conflict has escalated over the last few days. Iran first launched drone and rocket attacks on Israel, which retaliated by firing a missile. Crude oil prices have hovered around USD 90 per barrel since the conflict.
Retail investors have become a force to reckon with in the last 10 years with their ownership of Indian equities rising 800 basis points, or 8 per cent, to 23.4 per cent during this period, suggests a recent note from Morgan Stanley. This number, Morgan Stanley said, is set to rise in the next few years as Indian households are still underinvested in equities. India's demographics, policy framework, investor education and modest positive real rates, it said, will fuel the 'equity cult' in India.
For the current fiscal, the import bill has been pegged at $66 billion at an average import price of $48 per barrel
Rising oil prices, sharp slowdown in mutual fund inflows and steep valuations remain the key risks for Indian investors going ahead.
India is the world's fourth-largest importer of natural gas, accounting for six per cent of the global market.
The current trend in crude oil prices gives cause for much concern and if this persists, many of the calculations indicating further recovery and improved growth for the economy can be nullified.
Petroleum Minister Ram Naik on Wednesday hoped the high international crude oil prices will ease as soon as the winter season demand for oil in western countries is over.
Global brokerage firm CLSA has reversed its early tactical shift from Indian equities to Chinese stocks, and has decided to raise India allocation while cutting exposure to China. In its report titled 'Pouncing Tiger, Prevaricating Dragon', CLSA cited challenges facing Chinese markets in the aftermath of Donald Trump's victory in the US elections as the reason for the move. "Misfortune can happen in threes. So it has played out for Chinese equities over the past week.
Retail inflation softened to 6.71 per cent in July due to moderation in food prices but remained above the Reserve Bank's comfort level of 6 per cent for the seventh consecutive month. With retail inflation continuing to remain high despite a fall in prices of vegetables and edible oils, among other commodities in July, the Reserve Bank of India (RBI) might go for another rate hike in September. The Consumer Price Index (CPI) based retail inflation was at 7.01 per cent in June and 5.59 per cent in July 2021. It was above 7 per cent from April to June this fiscal.
Global crude oil prices slipped below $45 a barrel in early Asian trade on Monday after the Organization of Petroleum Exporting Countries cartel decided not to cut production.
The year is not yet over and a few more duty hikes are not ruled out.
Maintaining that the Indian economy was resilient to oil price shocks, Reserve Bank of India Governor Y V Reddy on Wednesday said the oil prices needed to be closely monitored, though it is not a disturbing factor.
From the 30 Sensex firms, Larsen & Toubro, Reliance Industries, Axis Bank, Asian Paints, Tata Motors, Bajaj Finance, Maruti, Bajaj Finserv, Kotak Mahindra Bank, Titan, Adani Ports and HDFC Bank were the major laggards. JSW Steel emerged as the only gainer.
Macroeconomic data announcements, the last batch of Q1 earnings and global trends are the major factors that would influence trading sentiments in the equity market in a holiday-shortened week ahead, analysts said. Besides, trading activity of foreign investors would also be a crucial factor in dictating movement in the market. Equity markets would remain closed on Thursday for Independence Day.
Global financial markets are wrong in hoping that the worst is over in geopolitical crises such as the Iran-Israel conflict and the Russia-Ukraine war, wrote Christopher Wood, global head of equity strategy at Jefferies, in a recent note to investors called 'GREED & fear'. While most investors and the media are focused on United States (US) Federal Reserve policy and the "endless chatter" of Fed governors, Wood believes the news flow in the financial sphere "pales into complete insignificance" compared with the "tectonic shifts" going on in geopolitics.
This means lower losses on fuel sales by Indian oil companies and a shrinking oil subsidy bill for the government.
If the global economy slows down or slips into a recession due to high oil prices, that will eventually hurt all of us.
Suddenly, demand-supply mismatch is no longer offered as the standard plausible explanation.
Government will review fuel pricing scenario in October, Petroleum Secretary M S Srinivasan said on Thursday. The petroleum secretary further said, "Situation will be revisited in October when we will take stock of the scenario emerging out of international oil prices." Global crude prices touched a record $145 a barrel, which is expected to push India's oil import bill this year higher by nearly 76 per cent to $110-120 billion.
Carter was in politics, but not a politician, certainly not a transactional politician, points out Shreekant Sambrani.
The Reserve Bank on Wednesday retained the retail inflation projection at 4.5 per cent for fiscal 2024-25, with Governor Shaktikanta Das stressing that the central bank will have to closely monitor the price situation and keep the "inflation horse" under tight leash lest it may bolt again. Unveiling the October bi-monthly monetary policy, the Governor also said the flexible inflation targeting (FIT) framework has completed 8 years since its introduction in 2016 and is a major structural reform of the 21st century in India.
The interest of the poor can be protected by providing targeted subsidy, Planning Commission's Deputy Chairman Montek Singh Ahluwalia said, adding that increased energy cost would have to be shared by the consumers as the burden is currently being largely borne by public sector oil companies.
Among the 30 Sensex firms, Bharti Airtel, Infosys, IndusInd Bank, Sun Pharma, Tech Mahindra, Mahindra & Mahindra, Bajaj Finance and JSW Steel were the biggest gainers. Asian Paints, Maruti, Nestle, Kotak Mahindra Bank, Axis Bank and UltraTech Cement were among the laggards.
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