The climate for 'doing business' remains forbidding, taxtortion is still rife, corruption at state and district levels has increased, oil prices remain extortive with high taxation, and the continued red tape has kept the enterprise system as stifled as before, points out Debashis Basu.
Stock markets would take cues from the biggest event of the week -- the US Fed interest rate decision, besides tracking the trends in global markets and trading activity of foreign investors, analysts said. Last week, a heavy decline in smallcap, midcap firms, foreign fund outflows and elevated crude oil prices in the international market dented investors' sentiments. Experts said equity markets may remain volatile in the near-term amid a host of global central bank's monetary policy decisions lined up during the week.
Fears of an economic slowdown in the US, and a consequent spread of the crisis to Europe and other parts of the world, resulted in oil prices falling over 12 per cent since Monday, the largest weekly fall since early 2004.
"The prime minister is thinking of having a meeting of all political leaders and it could take place in the second week of next month," sources in the government said. While the agriculture scenario was comfortable spiralling crude oil prices in the international market was causing a concern, they said. Crude oil reached $96 a barrel mark early this month. However, it has come a notch lower now.
'The real repo rate is very high in terms of core inflation.'
As it is, a great deal of oil is produced in countries with little to underpin their economies besides oil, so pricing the black stuff in an international currency makes sense, especially when that currency is that of the primary buyer of the oil concerned. It makes things simple for the buyer and lets the seller take its revenue in a major currency.
Exports of 19 major commodities, including petroleum products, coal and marine items, saw growth in terms of volume during April 2023-February 2024, even as they witnessed contraction in value terms during the same period. Government officials said the rise in export volume despite a decline in value implies that these commodities show a stronger market demand.
The bias for the BSE benchmark index, technical charts suggest, is likely to remain bullish as long as the index holds above 75,600 levels for the rest of the year.
With an eye on the adverse fallout of rising oil prices, the Reserve Bank of India (RBI) on Monday said the government's subsidy bill for petroleum products and fertilisers might cross the projections for 2011-12 and put fiscal consolidation plans under strain.
Petrol and diesel prices were cut by Rs 2 per litre each as state-owned oil companies ended a nearly two-year-long hiatus in rate revision, just hours before the general election schedule was announced.
From the Sensex basket, Tata Steel jumped over 5 per cent. Mahindra & Mahindra, JSW Steel, Tata Motors, Axis Bank, Sun Pharma, Reliance Industries and Maruti were the other biggest gainers. Infosys, Tata Consultancy Services, Titan, Wipro, Hindustan Unilever and Nestle were among the laggards.
Arab Gulf economies are set to benefit from large government spending programmes and high oil prices in the second half of the year, despite concerns over political turmoil in the Middle East and Europe's sovereign debt crisis, a senior bank official has said.
Domestic macroeconomic data announcements, global trends and trading activity of foreign investors would guide market sentiments this week, analysts said. After a record rally, markets may face volatile trends this week amid elevated valuations and investors would also keep a track of global oil benchmark Brent crude and rupee-dollar movement for further cues. "Potential volatility in the stock market is anticipated this week. Elevated valuations remain a concern, with investors now focusing on monsoon progress and its impact on the rural economy.
Demand has fallen significantly in the US, which accounts for around 30 per cent of crude oil consumption and meets 60 per cent of its demand through imports.
The US Fed interest rate decision, domestic inflation data and global trends would be key driving factors in dictating movement in the market this week, as the Lok Sabha elections outcome and the RBI policy decision are behind us, analysts said. The past week was a roller-coaster ride for investors as markets swung sharply in both directions before closing with strong gains.
Palm oil prices are rising to record levels these days because China and India are stepping up purchases.
As far as US growth is concerned, he says that the first half of next year is expected to be better than the second half of this year.\n\n
Bank shares were the top gainer in early trades with Bank of Baroda up over 4%.
From the Sensex basket, Bajaj Finance, Mahindra & Mahindra, HDFC Bank, JSW Steel, Maruti, Wipro, Bharti Airtel, Bajaj Finserv, ICICI Bank and ITC were the major gainers. Nestle India, HCL Technologies, Larsen & Toubro, Tata Consultancy Services, Tata Motors and Infosys were among the laggards.
The Reserve Bank of India on Friday retained its projection for retail inflation at 4.5 per cent for the current fiscal assuming a normal monsoon, while emphasising that uncertainties related to food price outlook warrant a close monitoring. Consumer Price Index (CPI)-based retail inflation has been projected at 4.5 per cent with quarter-wise projections at 4.9 per cent in Q1 (April-June), 3.8 per cent in Q2, 4.6 per cent in Q3, and 4.5 per cent in Q4.
Replying to questions on losses to Air India, civil aviation minister Praful Patel said the rally in international crude oil prices that touched $147 a barrel in July 2008, hit Indian carriers by Rs 10,000 crore (Rs 100 billion) in jet fuel bill. Air India loses are a result of high jet fuel prices and fall in air traffic following global economic slowdown, he said. "There are (also) systematic issues which need to be corrected."
Volumes remain a concern because people still do not have confidence in the market.
According to a RBS report, 'the impact on India's current account deficit should be significant, cumulatively amounting to 1.9 per cent of GDP' provided for the full year FY14 prices for both oil and gold remain at current levels and aggregate volume gold demand remains stable.
Fiscal pressure for the Indian economy is gradually rising, suggested analysts at Jefferies in a recent note, as oil prices (Brent) - which are close to the $100 a barrel mark - continue to climb ahead of a busy election calendar. They added that the sharp rally in the equity markets during the last few months has made valuations costly. As a result, Jefferies expects the Indian markets to remain choppy in the near term.
When oil prices collapse from $110 to $45, economic agents in India experience a large income windfall.
There has been a dramatic decline in oil prices from the high of $147 a barrel in July, to less than a third of that today. However, it is too early to say if this is a fundamental change in the direction of oil prices, resulting from the announced cuts in production by the oil-exporting countries, or a blip in a falling market. The government seems to be assuming (or hoping that it is) the latter and is rushing ahead with its price cut plan.
Projecting that global oil prices would stabilise at around $30-35 and help ease pressures on consumers, Reliance Industries Chairman Mukesh Ambani on Wednesday sought deregulation of natural gas, terming it as an alternate fuel in the medium term.
Closely watched by the world for any escalation, the Iran-Israel conflict is already showing early signs of stress for India Inc - longer deliveries, doubling freight rates, extended working capital cycles, and higher costs. For those yet to feel the heat, there is growing apprehension and nervousness over future developments, observed industry executives.
Oil prices dipped on Wednesday as the market prepared for a gradual increase of Iranian exports into an already oversupplied market from 2016.
CAD, which is the difference between outflow and inflow of foreign currency, touched a historic high of 6.7 per cent in the third quarter.
Expressing concern over the impact of rising crude oil prices on Indian economy, Prime Minister Manmohan Singh on Monday said it can have adverse consequences for the economy. "We cannot allow the subsidy bill to rise any further," Singh said and appealed to all the political parties to adopt a wider consensus on the pricing issue.
The country's fiscal deficit, as a percentage of GDP, would be wiped out if the crude oil price, as measured with the Indian basket, touch $80 per barrel.
The Indian industry wants the government adopt a multi-pronged approach to de-risk the country's oil needs by conserving energy, promoting alternative sources and building strategic reserves, a Federation of Indian Chamber of Commerce and Industry su
It is a testament to some of the policies that were put in place to raise fuel-efficiency standards
'2019 was fought on delivery. But in 2024, you can see the before and after effects.'
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