The government's mega bank merger plan aimed at creating bigger and healthier lenders may look ambitious, but sectoral analysts say the move is a huge negative for public sector lenders. As these already weak banks get busy with the integration process and navigate challenges related to staff, branch and process overlaps for a prolonged period, private lenders will take the advantage to further consolidate their market share
STREET PULSE: Where we stand Global stocks were hit by US-China trade frictions on Tuesday while the British pound flirted with 2 1/2-year lows as Prime Minister Boris Johnson indicated he could call an election to stymie lawmakers' efforts to avert a no-deal Brexit.
Read More  | SGX Nifty traded flat at 7 am (IST), signalling indecisiveness ahead on Dalal Street. MSCI index for Asia-Pacific shares outside Japan shed 0.2 percent in early trade while Japan's Nikkei was flat. |
| US markets were closed overnight for Labour Day holiday |
Oil prices weakened after new import tariffs imposed by the US and China came into force, raising concerns about a further hit to global economic growth and demand for crude. Brent crude futures settled fell 59 cents to $58.66 a barrel, while WTI crude slipped 33 cents to $54.77.
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Bank on the Best... India announced an extensive consolidation of state-owned banks that will see 10 of them being merged to form four bigger lenders to strengthen a sector struggling with a bad-loan cleanup and aimed at creating lenders of global scale that can support the economy's surge to $5 trillion by 2024. But equity analysts predict the move will slow loan growth, and many brokers advise buying shares of private banks who stand to benefit from the uncertainty.
Read More Going for Moon… India's second lunar mission moved a step closer to the moon after landing module 'Vikram' — along with rover 'Pragyan' — was successfully separated from the orbiter on Monday, five days ahead of the planned touchdown on the unexplored lunar south pole. The milestone event came 42 days after the mission was launched onboard India's most powerful rocket GSLV-MkIII-M1. Isro said all systems of Chandrayaan-2's orbiter and lander were healthy.
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Grim Outlook… Economists have cut their forecasts for India's economic growth and predicted deeper interest-rate cuts after data showed a sharper-than-expected slump in output. Goldman Sachs and Citigroup lowered their growth projections to 6% for the fiscal year through March 2020, while Oxford Economics said there's a risk the expansion could be weaker than that. Data late Friday showed GDP rose 5% in June quarter from a year ago, the slowest pace in six years and lower than all the forecasts in a Bloomberg survey of economists. The weakness was broad-based, with consumption and export growth slowing while investment remained subdued.
Read More Motown Pain... Auto industry body SIAM has sought immediate steps from the government, including a reduction in GST rates and initiation of scrappage policy, as sales continued to plummet with passenger vehicle makers witnessing a decline of 30 per cent offtake in August. SIAM said even commercial vehicles and two-wheeler sales are significantly negative, indicating that various measures initiated by the Finance Minister Nirmala Sitharaman last month have had no effect.
Read More Meanwhile... Manufacturing activity in India slumped to a 15-month low in August as sales slowed, forcing factories to cut back on production, a private survey showed, while separately released government numbers showed muted output rise in the infrastructure sector in July. The twin sets of data indicated the lack of any indications of recovery, both in demand or investment, in the economy in the second quarter from the six-year low it touched in the June quarter.
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