Stock markets always move ahead of the economy, and analysts say this time gap could be as high as nine months to a year. Dalal Street's repeated rebounds from dips show inherent strength in the market, which some analysts attribute to 'hope trade'. There is hope of demand-side sops in Union Budget, read tax cuts; there is a hope GDP growth bottomed out in September quarter, notwithstanding the fact that everybody now agrees India will do just about 5% this year; and there is hope of an earnings rebound in March quarter, if not December quarter. That's a play on a low base. That pretty much explains India's low growth-market high conundrum.
STREET PULSE: Where we stand Nifty futures on Singapore Exchange traded some 50 points higher at 7 am (IST), signalling positivity on Dalal Street. Elsewhere in Asia, shares were set for a mixed start after the Federal Reserve signalled that US interest rates will remain unchanged throughout 2020.
HERE'S WHAT TO WATCH  | Stocks in Hong Kong and Seoul outperformed, while they were flat in Tokyo and Shanghai and slipped in Sydney. |
| The Fed indication of a hold on interest rates for sometime lifted Wall Street stocks in overnight trade. Dow rose 29.58 points to 27,911, the S&P500 gained 9.11 points to 3,141 and the Nasdaq added 37.87 points to 8,654. |
| Oil prices steadied on Thursday with the market mood switching to relief as OPEC forecast a supply deficit next year. Brent futures rose 19 cents to 63.61 a barrel while WTI crude fell 9 cents to $58.85 |
| The rupee appreciated by 7 paise to settle at a fresh one-month high of 70.85 against the US dollar on Wednesday on the back of firm domestic equities and easing crude oil prices, extending its winning run for the sixth straight session. |
| LOOK WHO'S |  |
Fed Stays Put... The US Federal Reserve left interest rates unchanged and signaled it would keep them on hold through 2020 amid a solid economy, sticking to the sidelines during an election year. "The committee judges that the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation near the committee's symmetric 2% objective,'' the Federal Open Market Committee said in a statement on Wednesday following a two-day meeting.
Read More HDB Financial Flies High... Aditya Puri-chaired HDB Financial Services is trading at a valuation of Rs 90,000 crore in the secondary market for unlisted shares at a time when valuations of listed non-bank lenders are near their yearly lows, reflecting the premium the HDFC group commands in an industry otherwise struggling to generate sufficient liquidity. Investors have bought HDB Financial shares over the past year on expectations that Puri will actively steer the company once he leaves the executive cornerroom role at HDFC Bank, the financier's parent company.
Read More Aramco Gets $1.88t Valuation... Saudi Arabia's oil company Aramco gained 10% in its first moments on the stock market Wednesday in a dramatic debut that held until closing and pushed its value up to $1.88 trillion, surpassing Apple as the largest listed company in the world.Trading on the Saudi Tadawul stock exchange came after a mammoth $25.6 billion IPO that set the record as the biggest in history, overtaking the $25 billion raised by Alibaba in 2014.
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Bleak Growth... Asian Development Bank has slashed India's GDP growth forecast to 5.1% for the ongoing fiscal year, down from 6.5% earlier. It has also cut the country's growth prediction for the next fiscal to 6.5%, down from 7.2%, according to a supplement in its Asian Development Outlook 2019 Update. The downward revision comes on the back of risk aversion and a credit crunch in the economy following last year's IL&FS liquidity crisis . Meanwhile, S&P Global Ratings has said it will downgrade India's sovereign rating if economic growth does not recover.
Read More No Two to Tango... Bharti Airtel chairman Sunil Mittal called on the government to ensure that the Indian telecom market continues to have three private carriers. He also urged the Centre and the judiciary to give "sympathetic consideration" to the industry's appeal for relief after the Supreme Court's order on adjusted gross revenue (AGR) left companies struggling. Mittal also said the telecom regulator needs to urgently intervene to fix a floor price for tariffs.
Read More Soaring Yields... Yields on government's 10-year treasury bill surged yet again on Wednesday to close at a 12-week high, as traders, partly spooked by global rating agency S&P's warning over a possible downgrade of India's sovereign rating, continued their selling spree. The yields gained five basis points on Wednesday to close at 6.76 basis points. The benchmark yield has now surged 27 basis points in five trading sessions since the MPC unanimously decided to keep repo rates on hold Thursday.
Read More Meanwhile... Global digital giants are scrambling to explore and find ways for tax arbitrage to get around India's personal data protection bill that requires them to have their servers and data in India, said four people close to the development. The fear for companies such as Google, Facebook, Netflix, Amazon and LinkedIn is that if the servers sit in India, it would be seen as a permanent establishment (PE) and will eventually attract higher tax. PE is a concept in taxation that determines which country has the right to tax a multinational's income and to what extent.
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