macro-economic Archives

India’s economic fundamentals stable, says Council chaired by Jaitley

by admin | May 25, 2021 | Corporate, Corporate finance, Corporate Governance, Economy, News, Politics

New Delhi : India has macro-economic stability on the back of structural reforms like GST and the long term positive impact of demonetisation, with the financial markets expressing confidence through high-stock valuations, the Financial Stability and Development Council (FSDC) noted in its meeting held on Tuesday.

The 17th meeting of the FSDC was held here under the chairmanship of Finance Minister Arun Jaitley.

“The Council noted that India has macro-economic stability today on the back of improvements in its macro-economic fundamentals, structural reforms with the launch of the Goods and Services Tax (GST), action being taken to address the Twin Balance Sheet (TBS) challenge, extraordinary financial market confidence, reflected in high and rising bond and especially stock valuations and long-term positive consequences of demonetisation,” the Finance Ministry said in a statement.

It also deliberated on strengthening the regulation of the Credit Rating Agencies (CRAs).

The Council also discussed the issues and challenges facing the Indian economy and the members agreed on the need to keep constant vigil and be in a state of preparedness for managing any external and internal vulnerabilities.

It also took note of the progress of financial sector assessment programme for India, jointly conducted by the International Monetary Fund and the World Bank.

“The Council directed that the assessment report should be finalised by the end of this year,” it said.

A presentation on the state of economy was made by Chief Economic Adviser (CEA) Arvind Subramanian.

The meeting was attended by Reserve Bank of India Governor Urjit R. Patel, Finance Secretary Ashok Lavasa, Economic Affairs Secretary Subhash Chandra Garg, Financial Services Secretary Anjuly Chib Duggal, Ministry of Corporate Affairs Secretary Tapan Ray, Ministry of Electronics and Information Technology Secretary Ajay Prakash Sawhney, Securities and Exchange Board of India (Sebi) Chairman Ajay Tyagi, Insurance Regulatory and Development Authority of India (IRDAI) Chairman T.S. Vijayan, Pension Fund Regulatory and Development Authority (PFRDA) Chairman Hemant G. Contractor and other senior officers of the government and financial sector regulators.

FSDC took note of the developments and progress made in setting up of Computer Emergency Response Team in the Financial Sector (CERT-Fin) and Financial Data Management Centre and discussed measures for time bound implementation of the institution building initiative.

A brief report on the activities undertaken by the FSDC sub-committee chaired by the RBI Governor was placed before the Council.

It also undertook a comprehensive review of the action taken by members on the decisions taken in earlier meetings of the Council.

The Central KYC Registry (CKYCR) system was also discussed and the Council took note of the initiatives taken in this regard by the members and discussed the issues/suggestions in respect of its operationalisation.

—IANS

Key macro-economic data to drive the equity markets

by admin | May 25, 2021 | Investing

By Rohit Vaid Mumbai (IANS) Key macro-economic data, combined with quarterly earnings’ results and the progress in parliament, are expected to flare-up volatility in the Indian equity markets during the upcoming week.

“In the coming week the market may remain volatile as macro-economic data, global markets and the movement of crude oil prices will dictate trends in the near term,” said Vaibhav Agarwal, vice president and research head at Angel Broking.

Key domestic macro-economic data such as the consumer price index (CPI) and IIP (index of industrial production) are slated to be released next week.

Besides, global macro-economic data on US retail sales and consumer sentiment, along with inflation figure from China and Eurozone GDP will influence the equity markets.

According to Anand James, chief market strategist, Geojit BNP Paribas Financial Services, the equity markets’ tone for the next week will be set by the Bank of Japan (BoJ), which is expected to release its March meeting minutes on Monday.

James elaborated that the dismal US non-farm payroll figures have fuelled talk about a possible recession and reduced the potential for a June rate hike.

“In this backdrop the possibilities of a RBI (Reserve Bank of India) rate cut would be played up, especially with IIP and CPI data scheduled for release on May 12,” James said.

The US data for last month showed that the economy created 160,000 jobs, against 215,000 in March.

Devendra Nevgi, chief executive of ZyFin Advisors said that the parliament session closing May 13 would be closely followed next week.

“The parliament session would be closely watched on the reforms and action on bills, some of which will need the upper house nod,” Nevgi said.

Further, market observers pointed out that the next batch of fourth quarter (Q4) results will also guide the equity markets.

“Investors will closely track the next batch of Q4 results,” Agarwal added.

Sector-wise, Pankaj Sharma, head of equities for Equirus Securities said that IT stocks will be influenced by Cognizant’s results which were declared on Friday.

“The performance and guidance is a bit disappointing from one of the largest IT companies which has similar model as other large cap Indian IT names,” Sharma said.

“And, this doesn’t inspire a lot of confidence on how this year would look like on growth for the Indian IT sector.”

The equity markets closed the previous week in the red, as negative global cues, along with disappointing Q4 results and profit booking, dented the equity markets.

During the week ended May 6, the wider 51-scrip Nifty of the National Stock Exchange (NSE) slipped by 116.35 points or 1.48 percent to 7,733.45 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE declined by 378.12 points or 1.47 percent to 25,228.50 points.

(Rohit Vaid can be contacted at rohit.v@ians.in)