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Rajan exit from RBI, likely Brexit to weigh heavy on equity markets

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Mumbai, June 19 : The likely exit of Britain from the European Union (EU) and Reserve Bank of India (RBI) Governor Raghuram Rajan’s decision not to seek a second term might flare up volatility in the Indian equity markets in the upcoming week.

Investors will also be concerned over an initial deficit in monsoon rains, fluctuations in rupee value and food prices.

According to market observers, come Monday, June 20, a dour mood is expected to engulf investors, after Rajan said in a letter to his colleagues that he was not seeking a second term and will return to academia when his tenure ends in September.

After Rajan’s letter, Finance Minister Arun Jaitley said a successor would be named soon.

“The RBI Governor’s exit news could prompt investors to recheck their bullish convictions,” Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services.

But the biggest risk to the key equity indices stems from the possible exit of Britain from the EU. The decision on the issue is subject to a referendum which will be conducted on June 23.

There might be far-reaching effects on global stock markets, as well as the international currencies, if Britain decides to exit the EU.

Besides, domestic investors will be concerned about the direct negative impact that some of the India-based companies and sectors that have investments and exposure to Britain will suffer.

The possible British exit will also lead to greater investments into less risky assets like gold and increase the overall outflows from the domestic equity markets.

“It is expected that the market would remain a little volatile due to the global events. Brexit is expected to heighten global volatility, thereby impacting capital flows at home,” D.K. Aggarwal, Chairman and Managing Director, SMC Investments and Advisors.

According to Vaibhav Agrawal, Vice President and Research Head at Angel Broking, the possibility that Britain will vote to leave the EU has already rattled the global markets.

“US stock markets could see increased volatility as investors position for next week’s referendum,” Agrawal pointed out.

Other key global data points such as US homes sales, US crude oil inventory and employment data are expected to impact the general sentiments.

In addition, the US Federal Reserve Chairwoman Janet Yellen’s testimony to the US Congress might give further cues towards the next phase of the key lending rate hikes.

“The testimony can provide some insights into — when the next rate hike decision can come, as there are just three more monetary policy reviews left in the US,” explained James.

“A further extension to the US Fed rate hike will provide relief to the emerging markets (EM) like India.”

In its two-day policy meet last week, the US FOMC (Federal Open Market Committee) decided to maintain its key lending rates. The US Fed signalled its intention to limit the times it might increase key lending rates due to weak domestic jobs market.

A hike in the US interest rates can potentially lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India.

Devendra Nevgi, Chief Executive of ZyFin Advisors, expects domestic developments to drive the markets after the global economic events conclude.

“The global risk appetite would drive the market sentiments. After the outcome, the markets will continue to focus on the domestic developments,” Nevgi said.

On the domestic front, strong economic fundamentals and recent economic announcements on major economic policy initiatives and debt recast plans are expected to attract investors.

“The factors such as prospects of better economic growth, expectations of a normal monsoon, double-digit earnings growth by the end of FY17 would continue to attract the foreign participants,” Aggarwal said.

“Besides these, the likely passage of the GST (Goods and Services Tax) Bill will continue to boost the confidence of the market participants.”

However, an initial deficit in monsoon rains will be closely followed by investors.

“Apart from the Brexit turmoil, the monsoon rainfall and passage of GST are the key triggers for the Indian markets,” Dhruv Desai, Director and Chief Operating Officer of Tradebulls.

Investors were seen cautious last week after reports emerged that monsoon rains so far have been below average by around 25 per cent.

A weak monsoon, coupled with recent uptrend in macro-economic inflation data points could lead to a build-up in price pressure and reduce chances of a future rate cut.

Rohit Vaid 

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Delhi Riots: Jamia student released on parole to sit for exams

The court said that clearing the exams is necessary for Tanha to pursue M.A. in Persian, and that leniency must be shown to the accused by allowing him to appear for the said exams.

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Asif Iqbal Tanha

New Delhi: A Delhi court on Friday released Jamia Millia Islamia student Asif Iqbal Tanha — who was arrested under the stringent Unlawful Activities (Prevention) Act for allegedly hatching a conspiracy to organise riots in North-East Delhi in February this year — on three-day custody parole to appear for his compartmental examination in December.

Tanha, who is pursuing his B.A. (Hons) in Persian, had moved the court seeking interim bail from November 30 to December 7 to prepare for three backlog exams scheduled to be held on December 4, 5 and 7.

“The court deems it fit to allow the accused on custody parole for appearing in the said examinations. Accordingly, custody parole is granted to accused Asif Iqbal Tanha on December 4, 5 and 7,” Additional Sessions Judge Amitabh Rawat ordered.

The court said that clearing the exams is necessary for Tanha to pursue M.A. in Persian, and that leniency must be shown to the accused by allowing him to appear for the said exams.

After advocate Sowjhanya Shankaran, representing Tanha, submitted that her client didn’t not have the required reading material to prepare for the exams, the judge directed the Tihar Jail superintendent to provide necessary assistance, provided it is within the permissibility of the jail rules.

Tanha was arrested on May 19 in connection with the case and has been in the custody since then. On October 21, he was granted one-day interim bail for taking the entrance examination for M.A Persian at the Jamia Milia Islamia University.

In September, his named figured in the chargesheet filed by the Delhi Police in connection with the riots that broke out in North-East Delhi in February after clashes between pro and anti-Citizenship Amendment Act supporters spiralled out of control, leaving 53 people dead and 748 injured.

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India enters recession: GDP drops by 7.5% in July-September quarter

The National Statistical Office (NSO) data on Friday showed that the Q2FY21 GDP on a year-on-year basis contracted by (-) 7.5 per cent from (-) 23.9 per cent in the preceding quarter.

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National debt under Modi govt surges

New Delhi: Even though India’s economic recovery accelerated in Q2FY21 from the lows of the pandemic-induced lockdown, the country for the very first time since Independence entered into a technical recession.

The National Statistical Office (NSO) data on Friday showed that the Q2FY21 GDP on a year-on-year basis contracted by (-) 7.5 per cent from (-) 23.9 per cent in the preceding quarter.

Though not comparable, the GDP had grown by 4.4 per cent in the corresponding quarter of FY2019-20.

In financial parlance, an economy is said to have entered a technical recession after it consistently remains in the negative output territory for two subsequent quarters.

This trend underscores the reduction in purchasing power along with lower tax collection for the government, likely defaults on debt and falling Capex spends.

According to the NSO, the GDP at ‘Constant (2011-12) Prices’ in Q2FY21 is estimated at Rs 33.14 lakh crore as against Rs 35.84 lakh crore in Q2FY20, showing a contraction of 7.5 per cent as compared to 4.4 per cent growth in Q2FY21.

“Quarterly ‘GVA at Basic Prices at Constant (2011-12) Prices’ for Q2 of 2020-21 is estimated at Rs 30.49 lakh crore, as against Rs 32.78 lakh crore in Q2 of 2019-20, showing a contraction of 7 per cent,” the NSO said in the estimates of Q2FY21 GDP.

“With a view to contain the spread of the Covid-19 pandemic, restrictions were imposed on the economic activities not deemed essential during Q1. Though the restrictions have been gradually lifted, there has been an impact on the economic activities,” it added.

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Black Friday Deals: Realme to bring offers on Realme X3 Superzoom, X50 Pro, Buds Air Neo and more

The Black Friday sale will take place on Realme’s online store, Flipkart and Amazon.

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Realme X2 Pro

Over the last few years, online and offline retailers have been offering their Black Friday deals for almost an entire week ahead of Thanksgiving, and some of these deals and offers last well after the Cyber Monday sale.

Black Friday Sale is here!!

After Xiaomi, handset maker Realme on Thursday announced a Black Friday Sale that would arrive with several offers and discounts on a range of its products. The Black Friday Sale would be live for 24 hours and would start November 27, 12:00 AM. The sale would see massive discounts on a range of Realme smartphones including Realme 6i, Realme 6, Realme X3 Superzoom and X50 Pro, and various AIoT products such as Realme Buds Classic, Realme Smart Watch, Realme Buds Air Neo and Realme Smart Cam 360°.

“Realme would also be hosting the ‘Realme Days’ sale offering similar discounts on its own website Realme.com, Flipkart and Amazon.in,” the company said in a statement.

The Black Friday sale will take place on Realme’s online store, Flipkart and Amazon. In addition to the discounts, SBI credit cardholders can avail of 5% cashback on EMI transactions.

  • Realme is offering discounts from Rs 1,000 up to Rs 7,000 for its Black Friday sale. Realme X50 Pro has received the biggest discount of Rs 7,000 bringing its price down to Rs 34,999 from Rs 41,999. Realme X50 Pro with 12GB RAM and 256GB storage also gets a discount making its offer price Rs 40,999.
  • Realme X3 SuperZoom will be available with a Rs 4,000 discount on all three variants. Realme X3 has also received a Rs 3,000 discount on both its variants. Realme C3, Realme 6, Realme 6i, and Narzo 20 Pro can be purchased with a discount of Rs 1,000.
  • In the AIoT portfolio, Realme Buds Air Neo would be available at a discounted price of Rs 1999, along with the Realme Buds Wireless Pro for Rs 3199 and Realme Buds Air Pro at a special price of Rs 4299. These offers would be applicable on all purchases made through Realme’s official website Realme.com.
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