Indian and global market news and impact analysis India 1) Reserve Bank Governor Raghuram Rajan is widely expected to hold the key rates citing high inflation at the fourth bi-monthly monetary policy announcement today, even though the pro-growth lobby has been wishing for a rate cut. The RBI is targeting to ease the CPI number to 8 percent by January 2015, but it is the January 2016 target of 6 percent, which the RBI had voiced concerns about in the last policy review held in August, saying there are upside risks to the number. Credit rating agency Care said RBI has less room to cut policy rates on September 30 as there remains an upward threat to inflation going ahead. Rajan has hiked the rates thrice since assuming charge as the Governor in September last year and the repo rate, at which RBI lends to the banks, stands at 8 percent at present. The industry has for long been asking for a rate cut to boost the growth, which came in at 5.7 percent for first quarter. 2) As Prime Minister Narendra Modi reached the White House for the private dinner hosted by President Barack Obama, India and the US today issued a vision statement Chalein Saath Saath: Forward Together We Go that called for a joint endeavor for prosperity and peace. Together, they will combat terrorist threats and keep our homelands and citizens safe from attacks, while we respond expeditiously to humanitarian disasters and crises. Global 1) US consumer spending rose 0.5 percent last month after being unchanged in July, the Commerce Department said. The housing sector remains an exception, however, with a separate report showing Americans signed fewer contracts in August to purchase previously owned homes. Mondays report also offered the latest evidence that inflation remains tame. The Federal Reserves preferred inflation gauge, the personal consumption expenditures price index, rose 1.5% in August from a year earlier, slipping from a 1.6% annual gain in July. Inflation has undershot the Feds 2% target for 28 consecutive months, potentially giving central-bank policy makers more leeway to keep short-term interest rates pinned near zero to stimulate economic growth. 2) The final HSBC/Markit Manufacturing Purchasing Managers Index(PMI) of China hovered at 50.2 in September, unchanged from the August reading which was a three-month low, but lower than a preliminary reading of 50.5. Chinas vast factory sector showed signs of steadying in September as export orders climbed, a private survey showed on Tuesday, easing fears of a hard landing but pointing to a still-sluggish economy facing considerable risks. Despite the strong surge in export orders, the overall output level fell to its lowest in four months, but managed to hold above the 50-point level. Policymakers will have to roll out more stimulus measures in coming months to meet the governments 2014 growth target of around 7.5 percent as property market expected to cool further. 3) Japans manufacturing output fell 1.5% in August from a month earlier. Economists had estimated a 0.2% gain. Japans weak manufacturing figures come as the countrys Prime Minister, Shinzo Abe, weighs a second increase to the unpopular sales tax, adding to worries about the state of the economy. The sales tax increase led Japanese consumers and business to pull back from spending, causing economic growth to shrink sharply.
Posted on: Tue, 30 Sep 2014 05:58:06 +0000
Trending Topics
Recently Viewed Topics
© 2015