Economist Swaminathan Aiyar has a word of caution for Finance Minister: it would be a bad idea to abandon fiscal prudence and go for big-bang stimulus in Budget 2020. According to him, there is no one silver bullet that can solve the current problem when the global economy is slowing. A huge spending spree at this point might be a dangerous thing to do as it's not clear if printing more money will stimulate growth or fuel inflation, which has already topped 6%. The better thing, he says, would be to keep a steady hand on the tiller.
STREET PULSE: Where we stand Nifty futures on Singapore Exchange traded flat at 7 am (IST), signalling indecisiveness on Dalal Street ahead of Jan F&O expiry. Asian stocks declined and sovereign bonds rallied amid the increasing evidence of a hit to economic growth from the deadly coronavirus.
HERE'S WHAT TO WATCH  | Shares fell in Japan, Hong Kong, South Korea, and to a lesser extent Australia, as retailers, travel providers and manufacturers alike curb operations tied to China, the world's second biggest economy. Toyota Motor Corp halted production and a host of airlines enacted further restrictions. |
| US stocks closed little changed on Wednesday even after the Fed kept interest rates steady and struck an upbeat tone on the health of the US economy. Dow ended up 11.60 points at 28,734, S&P500 fell less than 0.1% to 3,273 while the Nasdaq advanced less than 0.1% to 9,275. |
| Oil prices fell as the death toll from the new virus in China climbed to 170 and more airlines canceled flights to the country's major cities, while rising U.S. crude inventories added to the negative tone. Brent slipped 24 cents, or 0.4%, to $59.57 a barrel, after having risen 0.5% on Wednesday. US crude slipped 26 cents, or 0.5%, to $53.07 a barrel. |
| The rupee appreciated by 7 paise on Wednesday to settle at 71.24 against the US dollar following gains in the domestic equity market. |
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Advantage Chemicals Stocks… India's chemical manufacturers are likely to benefit if the coronavirus crisis continues to spread and impacts production in Hubei region of China, said JM Financial. The brokerage said dye intermediate companies like Aksharchem, Meghmani, Kiri Industries and Bhageria Industries could benefit. Some of these stocks have already started gaining on expectation of such benefits.
Read More Fed On Hold… The US Federal Reserve held interest rates steady on Wednesday at its first policy meeting of the year, with the head of the US central bank pointing to continued moderate economic growth and a "strong" job market, and giving no sign of any imminent changes in borrowing costs. Fed Chair Jerome Powell said there were signs that global economic growth was stabilizing and uncertainties around trade policy diminishing.
Read More Big Agri Push in Budget?… The government is likely to announce two mega agricultural initiatives — one on crop diversification and another on financial assistance to create Farmer Producer Organisations — in the Budget. The Rs 7,000 crore programme is expected to help nurture 10,000 organised groups of small and marginal farmers to improve incomes through better market access and collective bargaining power.
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IndiGo Hits Air Pocket… InterGlobe Aviation shareholders led by Rahul Bhatia rejected a proposal by co-founder Rakesh Gangwal that would have made it easier for either of the two promoters to exit, signalling that their dispute isn't over. The resolution aimed to free Gangwal and Bhatia from the right of first refusal and so-called tag-along rights in the country's biggest carrier IndiGo. The vote was 51.4% against and 48.6% in favour at the extraordinary general meeting, IGA informed BSE.
Read More Look, Who is Sneezing… China's coronavirus pandemic is threatening to disrupt India's $39-billion drug production by halting or severely affecting the flow of imports of bulk drugs and intermediates from the country. India, the world's third-largest drug producer by volume, imports 70% of its raw materials from the Middle Kingdom.
Read More Meanwhile... Electronics firms feel the chill!… Smartphone and consumer electronics companies in India said they were staring at production cuts and possible delays in launch of new products due to the coronavirus outbreak in China that has disrupted component supplies. China accounts for 75% of total value of TV components and almost 85% in case of smartphones.
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