Remember Ben Bernanke's 'taper tantrum' shock for Indian markets in 2013? Exactly 10 years after the global financial crisis, US Fed's policy changes have ceased to matter for the rupee, RBI policy or other key financial matrix, says a Crisil study. The only Indian variables where US money policy still has some bearing are short-term capital flows, overseas borrowings and credit spreads. This must be a comforting decoupling!
STREET PULSE: Where we stand Nifty futures on Singapore Exchange traded some 32 points higher at 7 am (IST), promising a solid start to trade on Dalal Street. Elsewhere in Asia, shares gained, but a lack of detail about the Sino-US trade deal tempered some of the exuberance.
HERE'S WHAT TO WATCH  | MSCI index for Asia-Pacific shares outside Japan rose 0.1%. Japan's Nikkei gained half a per cent to its highest in more than year. Australia's S&P/ASX 200 eked out a tiny extension to Monday's big gains. |
| On Wall Street, the three major US stock indices rose modestly in overnight trade, but posted record closing highs. Dow rose 0.4%, the S&P 500 0.7% and the Nasdaq almost one percentage point |
| Oil prices trickled a fraction lower on Tuesday but remained near a three-month high as investors kept the faith with hopes that a fully-fledged US-China trade deal is in the pipeline and set to stoke oil demand in the world's biggest economies. Brent futures slipped by three cents to $65.31 a barrel, while WTI crude fell 4 cents to $60.17 |
| The rupee reversed all its early gains and settled 17 paise down at 71.00 against the US currency on Monday, following rising crude oil prices and fag-end selling in domestic equities. |
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Gung-Ho on IT… IT firms may find the going rather tough in 2020, but their stocks could find buyers in an environment that is turning increasingly averse to risks. And among the biggest drawcards for technology stocks is their average dividend yield — north of 3.5%, or higher than the returns on savings deposits. Robust dividend yield, willingness of companies to return capital from the balance sheet to shareholders, and reasonable valuations should draw investors to IT stocks.
Read More India Clout in MSCI Index… India's weightage in the MSCI Emerging Market index is set to rise as the Finance Minister on Friday confirmed implementation of the Budget announcement for increasing the statutory foreign portfolio investment limit in a company from 24% to sectoral foreign investment limit effective April next year, said Morgan Stanley. The foreign brokerage said MSCI India's weightage in MSCI EM will go up to 9.6 per cent from 8.9 per cent.
Read More Look Who's Chasing India Story… The appetite for Indian equities is growing among investors from the middle-weight developed economics such as Norway, Iceland, Canada, and the Netherlands. The assets under management (AUM) of investors in these countries grew by 15-27% in India since the beginning of the current year. The total AUM by foreign portfolio investors (FPIs) grew 11% in India.
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Bleak Growth Outlook… Moody's Investor Service has said fiscal measures including corporate tax cut, farmer income support and the monetary policy easing, taken by the Indian government and central bank, will have limited effect in stimulating consumption demand. The agency slashed its forecast for the country's FY20 growth rate to 4.9%, down from a previous downgrade to 5.8% and cautioned that slower growth dims prospects for significant fiscal consolidation, which will weigh on the sovereign's credit profile.
Read More Loan Diversion at HDIL… ED has charged HDIL promoters Rakesh and Sarang Wadhawan with laundering more than Rs 2,500 crore of the Rs 6,700 crore that the company had allegedly taken as loans from PMC Bank between 2007 and 2013. The central agency has accused the father-son duo of using the money for either purchasing real estate or for the "evergreening" of other loans, officials privy to the matter said.
Read More Meanwhile... The upcoming Union Budget could see another rejig of basic customs duties on select products as the government attempts to push local manufacturing. The commerce and revenue departments are in discussions on the matter and will take a final call closer to the budget, which is likely to be presented on February 1. Metals including aluminium, copper and steel, select chemicals and plastics are some areas in focus, as are certain consumption goods.
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