The Nifty and the Sensex opened the day on a positive note backed by momentum in automobile and PSU stocks.
Join us as we follow the top business news through the day.
In February, output of core sectors contracts by 4.6%
The output of eight core sectors declined by 4.6% in February, the steepest contraction in the last six months, which, experts said, could drag the overall industrial production in the month into the negative territory.
All the key segments, including coal, crude oil, natural gas, and refinery products, witnessed a decline in production, according to the official data released on Wednesday.
The growth rate of the eight infrastructure sectors — coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity — stood at 6.4% in February 2020.
Last time in August 2020, the sectors had recorded a negative growth of 6.9%. In January this year, the segments have registered a positive growth of 0.9%.
Government withdraws order on rate cut on small savings schemes
Hours after notifying significant cuts in small savings instruments’ returns for this quarter, the government has backtracked on these sharp cuts. This is the first time that the Centre has scrapped the notified interest rates on small savings schemes after switching to a quarterly interest rate setting system in April 2016.
The government appears to have had a rethink owing to a sharp backlash on social media about the middle class being squeezed. Retail inflation has been breaching the 6% mark and the government has also decided to tax Employees PF savings starting this year.
“Interest rates of small savings schemes of GoI shall continue to be at the rates which existed in the last quarter of 2020-2021, ie, rates that prevailed as of March 2021. Orders issued by oversight shall be withdrawn,” Finance Minister Nirmala Sitharaman said in a tweet early Thursday morning.
Indian shares rise as auto, PSU banks gain
The positive momentum continues for stocks.
Reuters reports: "Indian shares edged up on Thursday, led by auto stocks ahead of monthly sales data and gains in public sector banks after capital infusion by the government.
Meanwhile, India has rolled back its decision to lower interest rates on the small savings scheme, Finance Minister Nirmala Sitharaman said on Thursday.
The blue-chip NSE Nifty 50 index rose 0.6% to 14,772 and the benchmark S&P BSE Sensex gained 0.9% to 49,821, by 0417 GMT.
India's government on Wednesday infused a total of 145 billion rupees in four state-run banks including Indian Overseas Bank, Bank of India, Central Bank of India and UCO Bank.
The Nifty public sector bank index rose 1.7%, the IT index gained 1.3% and the Nifty auto index gained 1.2%
Auto companies will post their monthly sales data for March later in the day."
Govt. retains 4% inflation target for RBI’s rate panel for 2021-26
The Centre has decided to retain the inflation target of 4%, with a tolerance band of +/- 2 percentage points for the Monetary Policy Committee of the Reserve Bank of India for the coming five years, a top finance ministry official said on Wednesday.
“The inflation target for the period April 1, 2021, to March 31, 2026, under the Reserve Bank of India Act, 1924, has been kept at the same level as it was for the previous five years,” said Economic Affairs Secretary Tarun Bajaj. “So there’s no change,” he added.
He dismissed queries on whether the focus had shifted to core inflation or any other component of retail inflation and hinted that the framework would remain ‘the same’ as earlier.
Economists welcomed the continuity in the framework, despite the recent spate of high inflation prints beyond the 6% upper threshold of the inflation target.