Market Movers: RBI steps to improve liquidity; Moody's warns on fiscal front & more
Here’s a lowdown on top macro triggers that may move market on Wednesday. This report was compiled from agency feeds.
RBI to Inject Rs 12,000 Cr Into System The Reserve Bank announced on Tuesday that it will inject Rs 12,000 crore liquidity into the system through purchase of government bonds on October 11 to meet the festival season demand for funds. The government will purchase bonds with maturity ranging between 2020 to 2030, the RBI said in a statement. This move is part of the Open Market Operations (OMO) to manage liquidity in the system which seems to be facing liquidity tightness.
Trump Repeats Threat of More Tariffs on China President Donald Trump on Tuesday repeated his threat to impose tariffs on $267 billion worth of additional Chinese imports if China retaliates for the recent levies and other measures the United States has taken in the countries’ escalating trade war. Citing the growing trade war, the International Monetary Fund on Tuesday cut its global economic growth forecasts for 2018 and 2019.
Moody's Warning to Govt on Fiscal Front Global financial services firm Moody's Investors Service has warned against the government slipping on the fiscal front and the deficit rising to 3.4% of GDP in FY19 following the cut in excise duty on fuel. The government plans to reduce fiscal deficit to 3.3% in 2018-19 from 3.53% a year ago. “There is a material risk to FY19 fiscal deficit,” said Gene Fang, associate managing director - Sovereign Risk Group at Moody's Investors Service in an interaction with ETNow.
Oil Down, Gold Up Oil prices edged lower on Wednesday after the IMF lowered its global growth forecasts but prices were supported as Hurricane Michael churned towards Florida, causing the shutdown of nearly 40 percent of US Gulf of Mexico crude output. Brent crude LCOc1 futures were down 2 cents at $84.98 a barrel by 0049 GMT. US WTI crude CLc1 was down by 16 cents, or 0.2 percent at $74.8 a barrel. Gold prices crawled higher as long-dated US Treasury yields retreated from multi-year highs, pressuring the dollar.
Domestic Oil Output Drops Domestic oil production has contracted this year, increasing the country’s dependence on imports and making it more vulnerable to soaring crude prices. Local output declined 3.3% from a year earlier to 14.6 million metric tonnes in the April-August period this year, raising dependence on imports for 83.2% of the country’s oil requirement.
India to Export Raw Sugar for First Time in 3 Years Indian sugar mills have signed deals to export raw sugar for the first time in three years as a rally in New York prices to seven-month highs along with government subsidies made exports lucrative, five dealers and two industry officials told Reuters. More Indian exports could weigh on global prices and trim the market share of rivals Brazil and Thailand, the world's top two sugar suppliers.
FPIs may Get Easier Access to Indian Markets Foreign portfolio investors (FPIs) could soon have easier access to Indian markets, reports ET. A Securities and Exchange Board of India (Sebi) expert panel is set to propose liberalised rules establishing a fast-track registration process for FPIs besides allowing them to invest in different classes of securities having more flexible structures, said a person close to the development.
Dividend Cut from Oil Cos Unlikely The finance ministry Tuesday said it does not expect a cut in dividend from oil marketing companies despite these retailers absorbing Re 1 per litre from last week.
Economic Affairs Secretary in a tweet said there is no plan for reduction in subsidy and disinvestment target will also be met.
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