| News Announcement |
Impact Analysis |
| Global markets rally after US and China agree to resume trade talks |
- Despite the recent round of tariff hikes by the US, both the US and China agreed to sit across the table for trade talks
- This news was positively received by the global markets and even oil prices rallied on this news
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| China gives a big push to liquidity by cutting Bank Reserve Ratio (BRR) |
- BRR is the equivalent of the CRR in India and the BRR cut by China is likely to give a big boost to liquidity
- The BRR cut is expected to increase the lendable resources of Chinese banks by nearly $126 billion in a big push
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| Auto stocks saw aggressive short covering during the week |
- The short covering in auto stocks was driven on the hopes of the FM announcing a cut in GST rates
- However FM office has confirmed that the matter will only be referred to the GST Council for a final decision
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| Financial stocks take a hit this week on external benchmarking worries |
- External benchmarking of loans to retail borrowers and SMEs kicks off from October 01st onwards
- This will impel the banks to cut rates in line with repo rate cuts and is likely to pressure bank margins in a serious way
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| Metal stocks see a pick up during the week on China revival hopes |
- Metal stocks saw a mix of short covering and selective buying at lower levels after China started stimulus measures
- The stimulus is likely to give a boost to Chinese demand, which accounts for 50% of global metal consumption
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| Prabhat Dairy may look to delist the shares of the company |
- Delisting involves an offer to existing shareholders wherein they can tender the shares at a said price
- The company can delist the shares only if more than 90% of the shares are offered for buyback by the shareholders
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| FPIs continue to be net sellers in Indian equities in September |
- FPIs have sold nearly $1 billion in the first week of September as global risk-off trading has been the underlying theme
- Despite the cut in surcharge on tax last week, FPIs have not been too excited about investing in India
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| P Chidambaram taken into 14-day judicial custody in INX Media case |
- The Supreme Court refused bail to Chidambaram after the CBI lawyer claimed that he could tamper with evidence
- He has been accused of taking kickbacks in the INX Media case for facilitating their FIPB approval to bring in foreign funds
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| Bank of Japan hints at cutting interest rates deeper into negative zone |
- Japan is already in negative rates and this cut would only take rates deeper into negative zone
- Negative yield are a major issue with nearly $16 trillion worth of bonds carrying negative yields in the global market
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| US sees an increase in jobless claims in the latest week |
- The jobless claims represents the number of persons applying for unemployment benefits each week
- The increase is being attributed to job losses in the aftermath of the trade war between the US and China
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| US trade deficit falls but trade deficit with China widens |
- The US trade deficit with China was actually higher by 9.3% for the month of July, while overall trade deficit fell
- That is largely an indication that the trade war and higher tariffs have not made any significant progress
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| Indian rupee takes support around the Rs.72/$ level on RBI dollar selling |
- After the rupee weakened to Rs.72.39/$ in August, the central bank intervened to keep the rupee below 72/$
- The sharp fall in the INR in August was largely driven by consistent FPI selling post the Union Budget announcement
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| Subhash Chandra repays 1/3rd of Essel Group debt due in September |
- There is still 2/3rd to go for Chandra to honour his side of the standstill agreement with the mutual funds
- Zee had recently sold a major stake in the company to Oppenheimer to raise funds for the repayment
|
| Canara Bank will once again attempt to sell its housing finance arm |
- With a view to getting out of non-core businesses, Canara will look to sell its stake in the home finance business
- Canara Bank was recently merged with Syndicate to create a south based banking power house
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| NBFCs could be up against another Rs.35,000 crore time bomb |
- According to Prime Database, NBFCs overall have repayments of Rs.34,869 crore in the current month towards loans
- With chances of refinance or rollovers slim, repayment would put real pressure on the NBFC cash flows
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| Government fixes Rs.3890/gram as the price for the gold bond issue |
- The SGB issue opens on Monday and the issue will be open till 13th, and this excludes digital discount of Rs.50/gram
- The scheme has a maximum limit of 500 grams of gold per individual and also offers 2.5% interest payout
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| Reuters hints at FPI caution on India flows and also on rupee value |
- This was based on a survey of equity and currency strategists at various foreign broking houses
- Risk off sentiments are expected to keep FPI flows into India tepid and that would also mean rupee gains could be capped
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| China chooses to go easy on Hong Kong and withdraws Extradition Bill |
- With student protests very strong, China did not want to take chances in an era of information and social media
- Hong Kong chief, Carrie Lam, announced that China would respect the sovereignty of the Hong Kong SAR
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| Services PMI for August falls to 52.4 hinting at loss of momentum |
- This lower services PMI was driven by reduction in hiring and also in fresh service sector order flows
- The weaker services PMI comes in the background of weak manufacturing PMI and also weak GDP growth
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| RBI task force makes secondary market for corporate loans easier |
- FPIs will be allowed to directly participate in distressed debt to ease foreign fund flows into this segment
- In addition, the RBI will also allow mutual funds and insurers to participate in the distressed debt market
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| Jet Airways left with just 3 suitors after Volcan backed out |
- Finally, Jet has three suitors from Panama, Russia and one from Latin America for the final round of bidding
- It remains to be seen how much haircut the funds will now demand from the banks before the take over
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