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Oct 23, 2017 07:44 AM IST IST | Source: Moneycontrol.com
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Japanese Prime Minister Shinzo Abe's ruling coalition secured a two-thirds "super majority" after winning 312 out of 465 seats. Abe's ruling bloc scored a big win in Sunday's election, bolstering his chance of becoming the nation's longest-serving premier and re-energising his push to revise the pacifist constitution, reports CNBC.
Abe said his government will proceed with a scheduled sales tax increase in 2019 unless the economy suffers a shock as big as the 2008 collapse of Lehman Brothers, reports Reuters.
Meanwhile, Japanese shares jumped on a weaker yen on Monday as an election win for Abe’s ruling bloc gave a green light for more super-easy policy stimulus. Japan's Nikkei raced up 1% to its highest since 1996 after Prime Minister Abe looked to have easily won in national elections over the weekend. Investors assumed the victory would allow the Bank of Japan to continue with massive monetary easing that depresses bond yields and the yen. (Picture courtesy: CNBC)
ArcelorMittal, the world's largest steel company, has joined the bidding race for stressed steel assets in the country by expressing interest to acquire Bhushan Steel, reports The Economic Times. The LN Mittal-led ArcelorMittal has submitted an expression of interest (EoI) for Bhushan Steel, which has been referred to National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code. This provides ArcelorMittal, which failed to make much headway in setting up greenfield steel projects in India, an opening to pick up good steel assets in the country at what is widely believed to be reasonable prices, sources said.
Bhushan Steel has a significant presence in auto steel categories with a 5.6-million tonne integrated steel unit, including a cold rolled facility, in Odisha. The company owes nearly Rs 42,000 crore to lender banks and was admitted into NCLT in July 2017. It is one of the two biggest companies to have been admitted under insolvency proceedings this year along with Essar Steel.
RBI clarifies that linking Aadhaar to bank accounts is mandatory
Clearing the air on media reports that suggested the linking of Aadhaar to bank accounts was not mandatory, the central bank on Saturday clarified that such a linkage was mandatory under government laws. "The Reserve Bank clarifies that, in applicable cases, linkage of Aadhaar number to bank account is mandatory under the Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017 published in the Official Gazette on June 1, 2017," RBI said in a statement on its website. "These rules have statutory force and, as such, banks have to implement them without awaiting further instructions," RBI added.
British households’ financial worries have eased to their lowest since June, despite the prospect of higher Bank of England interest rates and a reliance on borrowing to make up for falling employment income, reports Reuters. The IHS Markit Household Finance Index rose to 43.8 in October from 42.8 in September, its highest since June, and marking a recovery from a third quarter which was the weakest since 2014. Since its launch in 2009, the survey has never exceeded the 50 mark that would indicate an improved financial situation.
China's unemployment rate has hit its lowest point in multiple years at 3.95% by the end of September, but employment still face challenges as the economy pushes ahead with structural reforms, China's Labour Ministry said. The Ministry of Human Resources and Social Security said in a statement that 10.97 million new jobs had been created in China from January to September this year, a growth of 300,000 compared with the previous year, reports Reuters.
Oil prices rose on Monday over supply concerns in West Asia and as the US market showed further signs of tightening while demand in Asia keeps rising, reports Reuters. The amount of US oil rigs drilling for new production fell by seven to 736 in the week to October 20, the lowest level since June. Much will depend on demand to guide prices, with the US market tightening, flows from Iraq reduced due to fighting between government forces and Kurdish militant groups, and production still being withheld as part of a pact between the Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC producers to tighten the market. In the main growth areas of Asia, consumption remains strong especially in China and India, the world’s number one and three importers.
Janet Yellen defends legacy amid uncertainty over Fed leadership
Federal Reserve Chair Janet Yellen defended the central bank’s use of unconventional and often unpopular monetary policy tools after the Great Recession, highlighting some of her achievements at the helm as President Donald Trump weighs her reappointment, reports Bloomberg. “The U.S. economy is much stronger today than it would have been without the unconventional monetary policy tools deployed by the Federal Reserve in response to the Great Recession,” Yellen said.
Yellen made the case for preserving policy makers’ ability to confront the next recession with more bond purchases, a strategy known as quantitative easing aimed at lowering borrowing rates. “While I believe that influencing short-term interest rates should continue to be our primary monetary policy lever in normal times, our unconventional policy tools will likely be needed again should some future economic downturn drive short-term interest rates back to their effective lower bound,” Yellen said.
The Spanish government decided on Saturday to sack the secessionist leadership of Catalonia and force the region into a new election, saying it had to take the unprecedented step to prevent the region pushing ahead with independence, reports Reuters. The plan, which still requires the approval of the upper house Senate, seeks to resolve Spain’s worst political crisis in four decades but risks an angry reaction from independence supporters, who plan street protests later in the day. In outlining the cabinet’s decision, Prime Minister Mariano Rajoy said the Catalan economy, which accounts for a fifth of the national economy, was already in worrying shape as a result of the regional’s government push for independence.
Cyclical stocks lifted European shares on Friday, recovering some losses as well-received earnings reports boosted shares in Volvo and Ericsson, though ongoing political malaise held back Spanish equities, reports Reuters. The pan-European STOXX 600 was up 0.1%, rebounding from its lowest closing level so far in October. Spain's benchmark IBEX was in negative territory, down 0.2%. While the IBEX is still up around 9% so far this year, it has lagged the STOXX 600 in October, down around 1.7% since Catalonia’s independence referendum on October 1.
US stocks closed higher on Friday after the Senate took a step toward achieving tax reform, reports CNBC. The Dow Jones Industrial Average rose 165.59 points to 23,328.63, reaching intraday and closing records. The S&P 500 also notched record highs, advancing 0.5% to close at 2,575.21 as financials led advancers by rising 1.2%. The Nasdaq Composite gained 0.4% to 6,629.05 in a record-setting session. The Dow, S&P and Nasdaq also posted weekly gains of 2%, 0.9% and 0.35%, respectively.