Mar­ket re­cov­ers at F&O set­tle­ment

Money Times - - Market Review - By Deven­dra A Singh

The Sen­sex wit­nessed a strong cor­rec­tion of 639.96 points to set­tle at 31282.48 while the Nifty closed at 9768.95 los­ing 195.45 points for the week end­ing Thurs­day, 28 Septem­ber 2017. In­dia’s April-June 2017 cur­rent ac­count deficit (CAD) widened to its high­est in four years as im­ports surged but strong cap­i­tal in­flows com­fort­ably fi­nanced the gap. Ex­ports grew 10.29% to $23.81 bil­lion in Au­gust 2017. The In­dian econ­omy will do well with ex­tra fis­cal stim­u­lus and there will be no harm if the cen­tre busts its fis­cal deficit tar­get to cre­ate space for higher cap­i­tal spend­ing, a top gov­ern­ment pol­icy ad­viser said. Such com­ments from Ra­jiv Ku­mar, deputy head of pol­icy think-tank Niti Aayog, come at a time when PM Modi’s ad­min­is­tra­tion is de­lib­er­at­ing on mea­sures to re­vive an econ­omy which recorded its slow­est growth in three years in the June 2017 quar­ter. Ac­cord­ing to HSBC, In­dia is likely to over­take Ja­pan and Ger­many to be­come the third largest econ­omy in the next 10 years in nom­i­nal dol­lar and the tran­si­tion will hap­pen even more quickly on a PPP (pur­chas­ing power par­ity) ba­sis but needs to be con­sis­tent in re­forms and fo­cus more on the so­cial sec­tor. Ac­cord­ing to HSBC, de­mo­graph­ics and macro sta­bil­ity are the key strengths of the coun­try. Its es­ti­mates show that In­dia will be a $7 tril­lion econ­omy in 2028 as com­pared to less than $6 tril­lion and $5 tril­lion for Ger­many and Ja­pan, re­spec­tively.

Cur­rently, In­dia’s GDP is around $2.3 tril­lion (FY17) and stands at the fifth spot in global rank­ings. The bro­ker­age said that the growth rate, which will be lower in FY18 as com­pared to the year-ago’s 7.1% due to the in­tro­duc­tion of GST will re­cover from next year in a sus­tain­able man­ner.

Cit­ing the case of GST, the re­port said that in­for­mal en­ter­prises that cre­ate the bulk of jobs in the coun­try may re­spond to higher tax­a­tion by shut­ting shop or lay­ing off work­men. With con­cerns be­ing raised about job­less growth, it said that the e-com­merce sec­tor will cre­ate 12 mil­lion jobs over the next decade, which is half of the 24 mil­lion short­fall. An­other av­enue of job cre­ation can be the so­cial sec­tor where a lot of work needs to be done on health and ed­u­ca­tion fronts, the re­port added.

The HSBC re­port also said that In­dia will con­tinue to be a ser­vice-ori­ented econ­omy but it needs to pay ex­tra at­ten­tion on man­u­fac­tur­ing and farm sec­tors as well.

“In­dia needs to broaden its spe­cial­i­sa­tion be­yond just IT in business and cricket in sports if it wants to run harder and fly higher”, the HSBC re­port said.

World Eco­nomic Fo­rum (WEF) in its lat­est Global Com­pet­i­tive­ness Re­port shows that In­dia has slipped from the 39th po­si­tion to 40th while neigh­bor­ing China is ranked at 27th. On the list of 137 economies, Switzer­land leads in the first po­si­tion and is fol­lowed by USA and Sin­ga­pore.

“In­dia sta­bilises this year af­ter its big leap for­ward of the pre­vi­ous two years, adding that the score has im­proved across most pil­lars of com­pet­i­tive­ness. These in­clude in­fra­struc­ture (66th rank), higher ed­u­ca­tion and train­ing (75) and tech­no­log­i­cal readi­ness (107), re­flect­ing re­cent pub­lic in­vest­ments in these ar­eas”, the re­port added. Ac­cord­ing to the re­port, In­dia’s per­for­mance also im­proved in ICT (in­for­ma­tion and com­mu­ni­ca­tions tech­nolo­gies) in­di­ca­tors, par­tic­u­larly In­ter­net band­width per user, mo­bile phone and broad­band sub­scrip­tions and In­ter­net ac­cess in schools.

How­ever, the WEF said that the pri­vate sec­tor still con­sid­ers cor­rup­tion to be the most prob­lem­atic fac­tor for do­ing business in In­dia.

A big con­cern for In­dia is the dis­con­nect be­tween its in­no­va­tive strength (29) and its tech­no­log­i­cal readi­ness (up 3 to 107). As long as this gap re­mains large, In­dia will not be able to fully lever­age its tech­no­log­i­cal strengths across the large econ­omy, it noted.

The Global Com­pet­i­tive­ness In­dex (GCI) is pre­pared on the ba­sis of coun­try-level data cover­ing 12 cat­e­gories or pil­lars of com­pet­i­tive­ness - In­sti­tu­tions, in­fra­struc­ture, macroe­co­nomic en­vi­ron­ment, health and pri­mary ed­u­ca­tion, higher ed­u­ca­tion and train­ing, goods mar­ket ef­fi­ciency, labour mar­ket ef­fi­ciency, fi­nan­cial mar­ket devel­op­ment, tech­no­log­i­cal readi­ness, mar­ket size, business so­phis­ti­ca­tion and in­no­va­tion.

Key in­dex plunged on

Mon­day, 25 Septem­ber 2017, on a sell-off by traders due to

North Korea wor­ries. The

Sen­sex dipped 295.81 points

(-0.93%) to close at 31626.63.

Key in­dex ended lower on

Tues­day, 26 Septem­ber 2017, on global cues. The Sen­sex was down 26.87 points (0.08%) to set­tle at 31599.76.

Key in­dex cor­rected on Wed­nes­day, 27 Septem­ber

2017, on ex­tended sell­ing by for­eign funds. The Sen­sex fell

439.95 points (-1.39%) to close at 31159.81.

Key in­dex ad­vanced on Thurs­day, 28 Septem­ber

2017, on fresh mar­ginal buy­ing of eq­ui­ties. The

Sen­sex was up 122.67 points

(+0.39) to close at 31282.48.

Events like na­tional and global macro-eco­nomic fig­ures will dic­tate the move­ment of the global mar­kets and in­flu­ence in­vestor sen­ti­ment in the near fu­ture.

On In­dia’s macro-eco­nomic data, the HSBC Man­u­fac­tur­ing PMI and

Ser­vices PMI for Septem­ber

2017 is sched­uled to be re­leased in the first week of Oc­to­ber 2017.

On the in­fla­tion data, the gov­ern­ment is sched­uled to re­lease data based on WPI and CPI for ur­ban and ru­ral In­dia for Septem­ber 2017 by mid-Oc­to­ber 2017.

USA’s macro-eco­nomic data for Septem­ber 2017 is sched­uled to be re­leased in the first week of Oc­to­ber 2017.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.