BS Special Lower agriculture input costs to contain food inflation The government’s annual budget for fiscal year 2019 provides support for prices of agricultural produce to be increased to 50% mark-up over costs. That has made the Reserve Bank of India and other market participants wary about the risks to food inflation. Bloomberg Economics’ agriculture input cost index shows that these concerns might be overdone. READ MORE Sectoral Trend Top Sensex gainers and losers Markets at Open At 9:16 am, the S&P BSE Sensex was trading at 34,440, up 95 points while the broader Nifty50 index was ruling at 10,461, up 31 points Emkay Global on Ramco Cements Limited We raise FY19/20E EBITDA estimates by 6.5%/6.7% due to higher volume assumptions. We expect EBITDA CAGR of 12.6% over FY18-FY20E. We upgrade the rating to ACCUMULATE with a target price of Rs864, (15x FY20E EV/EBITDA) MARKET COMMENT The minutes of the May 01-02 meeting of the FOMC, in which the target range for the federal funds rate was left unchanged and only a few tweaks to the monetary policy statement were made, shed some light on why the FOMC decided to emphasize the symmetrical nature of its inflation target. Our interpretation of this remains that the FOMC may eventually see the need for some wiggle room. There is a good chance that inflation will move to above target levels for at least a couple of months due to cost push factors, while wage pressures are most likely to remain modest. We continue to think that the majority within the FOMC is inclined to hike at every quarterly meeting – i.e. March, June, September and December – if market conditions and economic data tolerate. This would mean that there are three more hikes in the pipeline for this year, even though the dot plot currently still points at two. (Source: Rabobank International report) File photo of US Federal Reserve. Photo: Shutterstock
The markets opened higher on Thursday despite weakness in their Asian counterparts.
Meanwhile, stock-specific action will continue on Thursday as more companies release their March quarter results. Among key results, Glaxosmithkline Pharmaceuticals, Goodricke Group, Pidilite Industries and United Breweries are likely to announce their March 2018 quarter earnings later today.
On Wednesday, the rupee dropped 0.6 per cent to a 17-month low of 68.42 against the dollar. The rupee is inching towards its record low of 68.85, touched on August 28, 2013.
In the global markets, Asian shares moved lower on Thursday as investors fretted about new setbacks in US-China trade talks, but negative sentiment was tempered by US Federal Reserve meeting minutes suggesting it would not raise the tempo at which it increases interest rates.
MSCI’s broadest index of Asia-Pacific shares outside Japan was flat, while Japan’s Nikkei stock index was 0.6 per cent lower.
On Wall Street, US stocks ended with small gains on Wednesday after minutes from the Federal Reserve's latest meeting suggested higher inflation may not result in faster interest rate hikes.
Most Fed policymakers thought it likely another rate increase would be warranted "soon" if the US economic outlook remains intact, and many participants saw little evidence of general overheating of the labour market, minutes of the central bank's last policy meeting showed.
The Dow Jones Industrial Average rose 52.4 points, or 0.21 per cent, to 24,886.81, the S&P 500 gained 8.85 points, or 0.32 per cent, to 2,733.29 and the Nasdaq Composite added 47.50 points, or 0.64 per cent, to 7,425.96.
In crude oil, the US crude was flat at $71.83 a barrel. Oil prices fell on Wednesday after an unexpected rise in US crude and gasoline inventories. Brent futures stood at $79.80 a barrel. Last week, the global benchmark rose above $80 for the first time since November 2014.
(with Reuters inputs)
