Markets not impressed with government’s measures
Markets have coldshouldered government’s various measures to contain and limit the damage caused by macro-economic headwinds in recent weeks. Measures designed to reduce impact of fuel price hike and curb the widening current account deficit have so far been received negatively or met with a lukewarm response at best. ET gives a snapshot of what is working for the government and what is not from the markets’ perspective.
OCTOBER 4
MEASURE: Excise duties on petrol/diesel cut by `2.5. Some states follow suit.
MARKET REACTION: Sensex, which was already weak, fell further. Bond markets reacted badly on worries of lower revenue. Oil stocks crashed as they were told to absorb `1 hike. Bonds recouped some of the losses after FM Arun Jaitley said fiscal deficit target of 3.3 per cent will be maintained.
OCTOBER 3
MEASURE: RBI eases norms for foreign borrowings of oil companies.Aimed at relieving pressure on rupee.
REACTION: Stocks and rupee fell further as markets focused on other concerns. The rupee fell to a new low!
OCTOBER 1
MEASURE: RBI announced open market operation (purchase) early in the morning for `36,000 crore.
REACTION: Bond yields immediately dipped 11 basis points to 7.92 per cent and prices went up. Stocks did not react. Bond gains could not be sustained due to fiscal deficit fears.
SEPTEMBER 26
MEASURE: India raised import duty on range of items including air-conditioners, refrigerators, washing machines, footwear, jewellery, furniture fittings.
REACTION: Stocks and rupee gained but global and other local worries soon pulled them down.
OCTOBER 4
MEASURE: Excise duties on petrol/diesel cut by `2.5. Some states follow suit.
MARKET REACTION: Sensex, which was already weak, fell further. Bond markets reacted badly on worries of lower revenue. Oil stocks crashed as they were told to absorb `1 hike. Bonds recouped some of the losses after FM Arun Jaitley said fiscal deficit target of 3.3 per cent will be maintained.
OCTOBER 3
MEASURE: RBI eases norms for foreign borrowings of oil companies.Aimed at relieving pressure on rupee.
REACTION: Stocks and rupee fell further as markets focused on other concerns. The rupee fell to a new low!
OCTOBER 1
MEASURE: RBI announced open market operation (purchase) early in the morning for `36,000 crore.
REACTION: Bond yields immediately dipped 11 basis points to 7.92 per cent and prices went up. Stocks did not react. Bond gains could not be sustained due to fiscal deficit fears.
SEPTEMBER 26
MEASURE: India raised import duty on range of items including air-conditioners, refrigerators, washing machines, footwear, jewellery, furniture fittings.
REACTION: Stocks and rupee gained but global and other local worries soon pulled them down.