Low inflation and falling GDP do not make a great recipe for corporate earnings. They essentially signal weak nominal GDP growth, a synonym for weaker earnings expansion. This is why analysts are not expecting a rally in stocks anytime soon. The demand side of the economy needs to move the needle, but government's hands are tied by self-imposed fiscal barriers. So, it's waiting for Godot on Dalal Street!
STREET PULSE: Where we stand Global stocks barely moved this morning as soft US retail sales data raised concerns about the health of the world's largest economy and risk of global recession.
Read More  | SGX Nifty traded flat at 7 am (IST), signalling indecisiveness ahead on Dalal Street. MSCI index for Asia-Pacific shares outside Japan and Japan's Nikkei were little changed in early trade, while US stock futures lost 0.15%. |
| Main US stock indices slipped overnight amid mixed headlines. Dow fell 22.82 points, S&P 500 dipped 5.99 points and the Nasdaq 24.52 points |
Oil prices slid after industry data showed a larger-than-expected build-up in stocks in the US, adding to concerns over oil demand. Brent crude futures traded 40 cents lower at $59.02 a barrel while WTI futures were down 46 cents at $52.90.
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Bullish CEA… Chief Economic Adviser KV Subramanian has called upon the industry to start making investments, stressing that the fundamentals of the economy are "very-very strong." He said it is the right time to invest in the country as labour cost and other expenditure would be lower owing to the slowing economy. "Fundamentals of the economy have not changed, and it would be back on the 7-8% growth path," Subramanian said.
Read More Loaded Exit… Beginning October 20, liquid funds will levy a graded exit load for redemptions made by investors within seven days of investment. Banks, insurance companies, corporate treasuries, stock brokers and HNIs use liquid funds to park money for as short a time as a day.
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P-Note Tweak… Sebi is planning to further tighten rules for P-notes, the offshore derivative instrument issued by brokers to foreign investors not registered in the country. It has found instances where foreign brokers have issued P-notes against Indian derivative contracts to overseas clients, who don't own the underlying local shares by showing shares that they owned as the underlying. As per regulations, P-notes in derivatives can only be issued for hedging, which means clients need to own the shares if they wish to buy the instrument.
Read More DHFL Under a Cloud… DHFL has emerged as the mysterious lender that gave loans worth Rs 2,186 crore to Sunblink Real Estate, the firm at the centre of investigations into the financial operations of late Dubai-based gangster Iqbal Memon. ED investigations have revealed that an NBFC had started giving loans to Sunblink from 2010. The agency believes this money was routed overseas by Sunblink into the accounts of Iqbal Memon, also known as Iqbal Mirchi.
Read More PMC Distress… Thousands of customers who service loans through accounts in PMC Bank are unable to pay EMIs due to an RBI-imposed cap on withdrawals. They are likely to be classified as defaulters by credit information bureaus, which will make it difficult for them to get fresh loans.
Read More Meanwhile... Finance Minister Nirmala Sitharaman says Indian PSU banks saw their "worst phase" under the "combination" of former Prime Minister Manmohan Singh and former RBI governor Raghuram Rajan, and giving the ailing banks a "lifeline" was her primary duty now. "While economists can take a view of what prevails today or prevailed years ago, but I will also want answers for the time when Rajan was at the governor's post. Today giving a lifeline to the PSU banks is the primary duty of the finance minister," she said.
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