Market Movers: Hike in import duties; new tax for builders, steady oil & more
A lowdown on top macro triggers that may move market on Friday.
Import Duties Hiked on Electronics, Communication Equipment
India said on Thursday it will raise import tariffs on several electronic items and communication devices, in another move to rein in imports and bolster a falling rupee. This will be the second round of import duty hikes in a little over a fortnight. The latest set of increased tariffs could ratchet up trade tensions with the United States and China, among other countries and hurt the likes of network equipment makers such as Cisco Systems Inc, Huawei Technologies Co, ZTE Corp, Ericsson, Nokia and Samsung Electronics.
Oil Steadies but Set for 4% Weekly Fall
Oil prices steadied on Friday after a market rout driven by sharp falls in equity markets and indications that supply concerns have been overblown, but were still on track for a fall of more than 4% for the week. Brent crude futures edged up 13 cents to $80.39 a barrel by 0042 GMT. The contract fell 3.4% on Thursday, after hitting a low of $79.80, its weakest since Sept. 24. WTI crude futures were up 11 cents at $71.08 a barrel, after falling 3% to the lowest since September 21.
Dollar Near 2-week Low, Gold Near 2-month High
The US dollar traded near its lowest level in nearly two weeks against its major peers on Friday as declining US treasury yields and further losses on Wall Street soured sentiment. The dollar index, a gauge of its value against six major currencies, traded at 95.07 on Friday, down from its monthly high of 96.16 hit on Tuesday. A weaker than forecast rise in US consumer prices undermined dollar as traders cut back their wagers on the Fed stepping up the pace of planned rate hikes. Gold edged down on Friday but held near an over two-month high hit in the previous session, when prices surged over 2%.
Manufacturing to Record Robust Growth in Q2
India's manufacturing sector output is expected to register robust growth in the July-September quarter on account of higher production even as the hiring outlook for the sector remains subdued, a survey said Thursday. Moreover, half of the participants in the survey expect exports to rise in the second quarter. The estimates are part of Ficci's latest quarterly survey on or 12 major sectors -- automotive, capital goods, cement and ceramics, chemicals, fertilisers and pharma, electronics and electricals, food products, leather and footwear, medical devices and technologies, metal and metal products, paper products, textiles machinery and textiles.
Builders Face New Tax
Builders across the country could soon be saddled with a tax burden that a few, or probably none, of them have accounted for. Developers, according to changes in the law that have gone unnoticed so far, will have to pay tax on the entire fair value — based on the ready reckoner rates — of all properties they lease out in FY19 and later. If a builder, for instance, leases out unsold properties having a combined fair market value of ₹300 crore, he might have to fork out more than ₹90 crore as income tax.
Airlines cut Festive Fares, Risk Margins
Airfares for the upcoming Dussehra season and thereafter are at a five-year low. This may mean a bonanza for flyers, but the soft pricing in the peak festival season could dent margins at Indian carriers that are already battling rising jet-fuel costs, stiff competition, and capacity addition beyond existing demand. The revenue per average seat kilometre (RASK) would be down by as much as a fifth.
CCI Raids Top Brewers in India for Price-fixing
The Competition Commission of India (CCI) has raided offices of three top beer companies as part of an investigation of price-fixing allegations, reports Reuters. Search and seizure operations were conducted at dawn by the CCI at the offices of India's United Breweries, Denmark's Carlsberg and the world's largest brewer Anheuser-Busch InBev (AB InBev) in at least two Indian cities.
- The Reserve Bank of India (RBI) has changed tack in its foreign exchange intervention policy, increasing its participation in the derivatives market in relation to the spot market in an apparent attempt to avoid a cash crunch in the banking system.
- The government has started to compile a list of projects awarded to Anil Ambani’s companies by the United Progressive Alliance (UPA) regime to counter the Congress charge that the Bharatiya Janata Party had favoured the conglomerate in securing offsets from the Rafale contract.
- The Central Bureau of Investigation (CBI) is examining the role of top State Bank of India (SBI) officials in disbursing loans to businessman Vijay Mallya — whose extradition is being sought from the UK —allegedly without conducting due diligence.
Fair Value of Indian markets Still 10-15% away: Saurabh Mukherjea
'Indian Economy is Going to be in Top Three, if Not the Top One'
Rupee Up: The rupee climbed 9 paise to end at 74.12 per dollar on Thursday after tumbling to a fresh lifetime low in intra-day trade amid a sharp sell-off in global markets.
Bonds Down: India 10Y decreased 0.05 percent or 0.05% to 7.99 on Thursday October 11 from 8.03% in the previous trading session.
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