Monday December 10, 2018
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Reforms, rate cut and rupee movement to propel markets


By Rohit Vaid

Mumbai, Hopes of further economic reforms, rate cuts, range-bound commodity prices and stabilisation of the yuan and rupee are expected to propel the Indian equity markets during the upcoming week, experts said.



“Investors have appreciated the government’s effort in trying to pass key economic legislation in the (just-concluded) monsoon session (of parliament). Markets believe that the government will be able to meet the GST (Goods and Services Tax) roll-out deadline,” Devendra Nevgi, chief executive of ZyFin Advisors, told IANS.
“There are solid hopes that the government will either call a special or joint session of parliament to get the GST bill passed. If this happens then it will send in a very positive signal to the world that India is serious about reforms and ease of doing business,” he added.

Lately, investors have been reluctant to place bets given the possibility that the whole reforms process might be stalled due to the government’s inability to conduct business in parliament.

Nevertheless, the key macro-economic data points released last week is expected to keep the investors solely focused on the apex bank’s moves on a rate cut.

Investors are hopeful of a rate-cut based on healthy macro-economic data points including the Consumer Price Index (CPI), the Index of Industrial Production (IIP) and the Wholesale Price Index (WPI).

The macro-economic data points showed a fall in India’s annual retail inflation rate to 3.78 percent in July, the annual wholesale inflation to (-) 4.05 percent, there was a rise in the factory output to 3.8 percent in June.

The WPI, coupled with the CPI, have pointed out at a gradual reining in of prices. The RBI has set a target for CPI inflation at 6 percent by January 2016.

“The double of joy of growth and inflation numbers have stoked optimism for an inter-policy rate cut, which could support banks’ run in the week ahead,” Anand James, co-head, technical research desk, Geojit BNP Paribas.

Banks will be at the centre of the markets attention, especially in the light of government’s announcements on recapitalisation of public sector banks and setting-up of a Banks Board Bureau.

“The announcements by the finance ministry on the PSU banks should have positive impact on the PSU banks’ functioning over the medium to long term perspective,” Dipen Shah, head of private client group research, Kotak Securities.

The government on August 14 announced its plans to provide Rs.25,000 crore capital in the current and next fiscals to banks, while Rs.20,000 crore would be provided during 2017-18 and 2018-19.

The Rs.25,000 crore this year will be provided in three tranches.

At the same time, Indian markets will be impacted by global trend in commodity prices, rupee and yuan movements.

The yuan’s surprise devaluation last week had stroked fears of competitive devaluation across Asia, especially before the (US) Fed’s monetary policy decision due in September.

The yuan has fallen by 4.6 percent since August 11, its biggest devaluation since 1994.

The devaluation, intended to boost exports, has made investment in China cheaper, thereby leading foreign funds away from India.

This also impacted the rupee, which on August 13 fell to its lowest level against the US dollar in 24 months at Rs.65.23.

However, relief came to the global markets when yuan rose 0.05 percent on August 14. This helped stabilised rupee which stood at Rs.64.99 against the dollar.

“The trend in commodity prices globally, rupee movement and the sharp bounce back on Friday seems to continue in the week ahead,” Vineeta Mahnot, equity research analyst, Hem Securities.


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Protecting The World, The Hindu Way

As Mahatma Gandhi once said, “The rich must live more simply so the poor may simply live.”

Climate change, california, economic
Climate Change Fuels California Fires. Flickr

By Vijai Singhal

Īśāvāsyam idaṁsarvaṁyatkiñcajagatyāṁjagat;

Tena tyaktenabhuñjīthā,

mā gdha kasya svid dhanam.

 – (Isa Upanishad, Verse 1)

“Everything animate or inanimate in this universe is pervaded by God. Take whatever you need for your sustenance without the sense of ownership. Do not covet the wealth of anyone.”

Consumerism is the basic cause of climate change. Our economic model is demand based. We are constantly pushed to buy more as we have a system of planned obsolescence which results in excesswaste. We can see in our Hindu literature that the emphasis is on need and not on demand. Mahatma Gandhi said: “The world has enough for everyone’s need, but not enough for everyone’s greed.”Greed is the root cause of all our problems – environmental or economic.

Hurricane, climate change, disasters, U.S., economic
Floodwaters from Tropical Storm Harvey overflow from Buffalo Bayou in downtown Houston, Texas, VOA

Gross domestic product (GDP) is a common measure of economic growth. However, GDP fails to account fully for the ecological damage that growth causes. By prioritizing economic growth, societies based on capitalism permit excessive consumption and with it comes excess waste. In 2012, the tiny Himalayan nation of Bhutan adopted the Gross National Happiness Index as their main development indicator.  This index measured‘Well-being and Happiness’ as a new economic paradigm. The United Nations Sustainable Development Solutions Network which contains rankings of national happiness and analysis of the data from various perspectives, publishes an annual World Happiness Report.

In their report, Finland ranks 1st, Australia ranks 10th, whereas India ranks 133rd. New Delhi is one of the most polluted cities in the world. The Prime Minister of India, Mr Narendra Modi had launched Swachh Bharat Abhiyan (Clean India Mission) on 2nd Oct 2014, with the aim to clean up the streets, roads and infrastructure of India. The objectives of Swachh Bharat include eliminating open defecation through the construction of nearly 73 million household and community toilets since the launch of the plan. The Indian government is also pushing the use of renewable energy, particularly solar energy.

Hurricane, climate change, disasters, U.S., economic
Traffic moves as smoke emits from the chimney of a factory on the outskirts of Gauhati, India. VOA

Indian government is actively pushing the use of renewable energy. The International Solar Alliance, an alliance of over 121 countries with an aim to reducing dependence on fossil fuels and to promote use of solar energy was launched by the Indian Prime Minister Mr Modi at the India Africa Summit, ahead of the 2015 UN Climate Change Conference in Paris. India has built the World’s largest solar farm of 2GW capacity in Karnataka State and the Energy Minister, Mr PiyushGoel has declared that there will be no new coal-fired power stations planned in India beyond 2018. In Australia also the rooftop solar installations is edging to 2 million households mark but unfortunately the Australian government is dragging its feet in support of the coal-fired power stations.

There is a proposal that has been put forward to the United Nations for declaring 2018 InternationalYear of Clean and Healthy Planet aiming to mobilize millions of people worldwide in a single day event to clean up illegal waste on World Clean-up Day on 8th of September, 2018.  Last year, ABC TV produced a three-part series – War on Waste, highlighting the amount of waste we are producing in Australia. We are wasting a massive 40% of food items. With persuasion by the program producer and public reaction to waste, both Woolworths and Coles have declared that they would be cutting down on the use of throw away plastic and reducing the food wastage. This is a positive development.

Australia, Meat free,Hurricane, climate change, economic
Tire tracks left by a truck can be seen in a drought-stricken paddock on Kahmoo Station property, located on the outskirts of the southwestern Queensland town of Cunnamulla in outback Australia, Aug. 10, 2017. (VOA)

Healthy living and a healthy planet go hand-in-hand. Choosing a plant-based diet is the single most important thing one can do for the environment and for our own health. There is a strong push for using vegan or plant-based diet in countries like Australia, United Kingdom and the USA, where meat consumption has traditionally been very high. Australia has become the third fastest growing vegan market in the world witha recent survey showing there are 2.1 million vegan/ nearly vegetarian people in Australia. This is another positive development for the health of our planet.

Also Read: Climate Change To Get Worse In The Future: Study

The world’s poor people are the worst sufferers of the environmental pollution. As responsible members of the society it is our duty to live a simple and ecologically sustainable life style. As Mahatma Gandhi once said, “The rich must live more simply so the poor may simply live.” (Hindu Council Of Australia)