There is little doubt that the denominator for fiscal deficit, which is nominal GDP, is going to be on the lower side this year because of slower growth and moderate inflation. GST collections have remained below target, the government has some additional cost burden on its books and there is no surprise windfall in sight. So, there is a very real risk that the fiscal deficit for FY20 is going to be much higher than the level the government had projected in the July Budget. Markets have by and large built this in, only that the government is shying away from acknowledging it
STREET PULSE: Where we stand Nifty futures on Singapore Exchange traded flat at 7 am (IST), signalling indecisiveness on Dalal Street. Elsewhere in Asia, shares edged lower ahead of Christmas holidays, as some investors booked profits to cash in on a recent rally sparked by a preliminary US-China trade deal.
HERE'S WHAT TO WATCH  | In Japan Nikkei fell 0.04 per cent to 23,812. In Hong Kong and Korea, Hang Seng and the Kospi index fell 0.3 per cent each. Taiwan's Taipex was down 0.13 per cent. Australian shares inched marginally higher. |
| Wall Street's main indexes posted record closing highs on Monday after President Donald Trump said an initial US-China trade pact would be signed soon. Dow rose 96.44 points to 28,551, the S&P500 gained 2.79 points to 3,224 and the Nasdaq added 20.69 points to 8,945 |
| Oil prices were little changed on Monday as Russia said an Opec-led producer group may consider easing output cuts next year. Brent crude settled 25 cents higher at $66.39 after a day of thin trading ahead of the Christmas holiday. WTI futues ended the session 8 cents up at $60.52 |
| The rupee depreciated by 6 paise to close at 71.18 against the US dollar on Monday amid muted activity in domestic equities and steady rise in crude oil prices. |
| LOOK WHO'S |  |
2020 Belongs to Stocks… India's key equity indices are likely to gain as much as 15% in 2020 as investors bet on revival measures in the February budget and a recovery in the economy to bolster sentiment. The year is also likely to mark a shift in focus to broader market as investors become less risk-averse to mid- and smallcap stocks with a gradual recovery in the economy. The Sensex ended little changed at 41,642.66 points and the Nifty at 12,262.75 on Monday. An ET poll of 26 fund managers and heads of research at brokerages showed that 48% of them see the benchmarks gaining as much as 15% in the New Year while 29% expect them to see more modest gains of around 10%.
Read More Puri Makes Windfall Gain… A family trust of HDFC Bank's managing director Aditya Puri has partly sold its stake in HDB Financial Services, the unlisted NBFC arm of the private lender, people aware of the development said. Vistra ITCL sold shares at Rs 800-825 apiece to a South India-based family office recently for around Rs 200 crore taking advantage of the high demand for the shares and its rising valuation.
Read More Mechanism to Woo Investors... The government has drawn up a roadmap to encourage investments into the country including a mechanism to have authorities from the Centre and states at one place to facilitate investors, along with roadshows next year to attract funds from abroad. The move is aimed at expediting the various approval processes, and also putting in place a mechanism to have the authorities of various departments of central and state governments at one place to facilitate the domestic and foreign investors.
Read More | WHO'S |  |
Twist in Tata Tale… The Registrar of Companies filed a review plea in the National Company Law Appellate Tribunal on Monday, seeking to be a party in the legal tussle between Tata Sons and Cyrus Mistry and requesting an amendment in its order, which allegedly cast "aspersions" on its actions. The RoC, Mumbai, sought a change in the tribunal's December 18 order, which said it had "helped" Tata Sons convert into a 'private company' from a 'public company'.
Read More Zilch Recovery... Banks are staring at negligible recovery in 354 ongoing liquidation cases in 2020. Most stressed assets are sold at throwaway prices and are moving for liquidation despite several measures taken by the government and RBI to resolve growing stress in the financial system. In the 2019 September quarter, as many as eight of the nine companies where liquidation process was closed yielded no value to stakeholders.
Read More Meanwhile... The centre is staring at a Rs 63,200 crore shortfall in goods and services tax compensation cess for FY20 as revenues slow down. Delay in release of compensation to states has already emerged as a bone of contention between Centre and states. As per a presentation made to the GST Council, the compensation requirement for states is expected to be about Rs 1.6 lakh crore for this financial year, at a growth rate of 5%. However, compensation cess collections are expected to be about Rs 96,800 crore, leading to a huge shortfall.
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