Market drops for fourth day in a row
Stocks of public sector banks and index heavyweights HDFC and Infosys led losses for the two key benchmark indices. The barometer index, the S&P BSE Sensex, fell 71.54 points or 0.28% to settle at 25,230.36. The Nifty 50 index fell 18.65 points or 0.24% to settle at 7,731.05. High volatility was witnessed during the second half of the trading session. After extending gains in mid-afternoon trade after a sudden surge, the two key benchmark indices slipped into the red later. Volatility in European stocks triggered volatility on the domestic bourses. European stocks edged lower in volatile trade after the latest data showed slowdown in economic activity in the eurozone in this month.
With losses for the fourth straight trading session, the Nifty hit its lowest closing level in almost three weeks. The Sensex hit its lowest closing level in more than two weeks.
Shares of pharma major Lupin extended previous session's steep losses triggered by concerns surrounding its Goa facility as it has yet to resolve concerns raised by US Food and Drug Administrator's (USFDA) observations on the manufacturing unit.
Index heavyweight and cigarette major ITC extended previous trading session's gains triggered by the company announcing a 1:2 bonus share issue at the fag end of the trading session at the time of the announcement of its Q4 March 2016 results. Multi Commodity Exchange of India (MCX) surged after the Reserve Bank of India (RBI) after trading hours on Friday, 20 May 2016, announced the removal of the restrictions placed on purchase of the company's shares by foreign institutional investors (FIIs) with immediate effect.
Bharat Heavy Electricals (Bhel) edged lower and Power Grid Corporation of India edged higher after the Bombay Stock Exchange (BSE) announced changes in the constituents of its indices as part a semi-annual reconstitution of the indices.
National Aluminium Company (Nalco) egged higher after the company said that a meeting of the board of directors of the company will be held on 25 May 2016 to consider the proposal for buyback of equity shares of the company.
The Sensex fell 71.54 points or 0.28% to settle at 25,230.36, its lowest closing level since 6 May 2016. The Sensex fell 94.12 points, or 0.37% at the day's low of 25,207.78. The barometer index jumped 217.36 points, or 0.86% at the day's high of 25,519.26.
The Nifty fell 18.65 points or 0.24% to settle at 7,731.05, its lowest closing level since 4 May 2016. The Nifty fell 27.50 points, or 0.35% at the day's low of 7,722.20. The index rose 70.90 points, or 0.91% at the day's high of 7,820.60.
Among the sectoral indices on BSE, the S&P BSE Capital Goods index (down 0.91%), the S&P BSE Healthcare index (down 0.84%), the S&P BSE IT index (down 0.83%), the S&P BSE Realty index (down 0.71%), the S&P BSE Oil & Gas index (down 0.68%), the S&P BSE Auto index (down 0.64%), the S&P BSE Teck index (down 0.61%), the S&P BSE Consumer Discretionary Goods & Services index (down 0.58%), the S&P BSE Energy index (down 0.53%), the S&P BSE Finance index (down 0.51%), the S&P BSE Industrials index (down 0.48%), the S&P BSE Bankex (down 0.47%), the S&P BSE Metal index (down 0.38%), the S&P BSE Basic Materials index (down 0.33%) underperformed the Sensex. The S&P BSE Consumer Durables index (down up 0.25%), the S&P BSE Power index (up 0.3%), the S&P BSE Utilities index (up 0.39%), the S&P BSE Telecom index (up 0.82%) and the S&P BSE FMCG index (up 2.12%) outperformed the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,513 shares fell and 1,075 shares rose. A total of 171 shares were unchanged. The BSE Mid-Cap index fell 0.29%. The BSE Small-Cap index fell 0.38%. The fall in both these indices was higher than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 2075 crore, lower than turnover of Rs 2495.19 crore registered during the previous trading session.
Index heavyweight and IT major Infosys fell 1.06% to Rs 1,189. The stock hit a high of Rs 1,204.40 and a low of Rs 1,185.55 in intraday trade.
Index heavyweight and cigarette major ITC rose 5.53% to Rs 348.20, with the stock extending previous trading session's gains triggered by the company announcing a 1:2 bonus share issue at the fag end of the trading session at the time of the announcement of its Q4 March 2016 results. The stock was volatile. The scrip hit high of Rs 354.75 and low of Rs 339.75 in intraday trade. ITC's net profit rose 5.67% to Rs 2495.20 crore on 9.49% rise in total income to Rs 10580.33 crore in Q4 March 2016 over Q4 March 2015. A foreign brokerage has reportedly raised its price target while retaining its outperform rating on the ITC stock as it views the turnaround in ITC's cigarette volume growth as a significant positive.
Bank stocks fell. Among public sector bank stocks, Bank of Baroda (down 2.62%), Syndicate Bank (down 2.92%), Dena Bank (down 0.7%), Andhra Bank (down 2%), State Bank of India (down 1.43%), Canara Bank (down 1.8%), Union Bank of India (down 0.61%), Punjab National Bank (down 1.84%), Allahabad Bank (down 0.1%) and Bank of India (down 0.8%), edged lower. Vijaya Bank (up 0.66%) and IDBI Bank (up 0.31%) edged higher.
Among private sector bank stocks, Yes Bank (down 0.55%), Federal Bank (down 1.78%), Axis Bank (down 0.89%) and HDFC Bank (down 0.55%) edged lower. ICICI Bank (up 0.34%) and Kotak Mahindra Bank (up 0.22%) rose.
IndusInd Bank fell 1.98%. IndusInd Bank during market hours today, 23 May 2016, announced that it has recently signed a corporate agency agreement with Reliance General Insurance with objective to distribute multiple options of general insurance products to its customers. Reliance General Insurance will distribute its insurance products across all the branches of IndusInd Bank, the two companies said in a joint statement. This is the first tie-up on bancassurance post the recent multi bank partner guidelines by Insurance Regulatory and Development Authority (IRDAI).
Index heavyweight and housing finance major HDFC fell 1.86% to Rs 1,158.10. The stock hit a high of Rs 1,184 and a low of Rs 1,158.10 in intraday trade.
Bharat Heavy Electricals (Bhel) edged lower and Power Grid Corporation of India edged higher after the Bombay Stock Exchange (BSE) announced changes in the constituents of its indices as part a semi-annual reconstitution of the indices. Bhel fell 0.42%. Power Grid Corporation of India rose 2.63%. Power Grid Corporation of India will replace Bhel in Sensex with effect from 20 June 2016.
Shares of pharma major Lupin extended previous session's steep losses triggered by concerns surrounding its Goa facility as it has yet to resolve concerns raised by US Food and Drug Administrator's (USFDA) observations on the manufacturing unit. The stock lost 3.27%. The scrip had plunged 9.1% to settle at Rs 1,505.15 during the previous trading session on Friday, 20 May 2016. Lupin received USFDA Form 483 for Goa facility with 9 observations during March 2016. The inspections of Lupin's Goa facility were on aspects such as inadequacy and adherence to standard operating procedures (SOP). Lupin reportedly depends on Goa facility for about 40% of its US sales.
Realty stocks declined. DLF (down 1.1%), Indiabulls Real Estate (down 1.92%), Godrej Properties (down 3.39%), Omaxe (down 0.5%), Unitech (down 0.25%), Sobha (down 0.32%), Hubtown (down 2.56%) declined. D B Realty (up 9.09%), Oberoi Realty (up 0.39%) and Housing Development and Infrastructure (up 0.43%) rose.
Multi Commodity Exchange of India (MCX) surged after the Reserve Bank of India (RBI) after trading hours on Friday, 20 May 2016, announced the removal of the restrictions placed on purchase of the company's shares by foreign institutional investors (FIIs) with immediate effect. The stock gained 6.62%. The RBI said that the aggregate shareholding of FIIs in MCX has gone below the prescribed threshold caution limit stipulated as per the current FDI policy.
National Aluminium Company (Nalco) rose 3.58% to Rs 41.90 after the company said that a meeting of the board of directors of the company will be held on 25 May 2016 to consider the proposal for buyback of equity shares of the company. The announcement was made after market hours on Friday, 20 May 2016.
Britannia Industries slumped after announcing fourth quarter results. The stock dropped 8.58%. Britannia's consolidated net profit rose 13.7% to Rs 190.23 crore on 7.8% growth in net sales to Rs 2189.83 crore in Q4 March 2016 over Q4 March 2015. Britannia Industries' revenue growth during the quarter was impacted due to phasing out of excise duty incentives available to the company. The result was announced after market hours on Friday, 20 May 2016.
Patel Engineering surged 9.62% after the company said its joint venture firm AGE-PATEL has secured orders for two projects totalling Rs 2376.85 crore. The company's share in the joint venture is 49%. Both the contracts are required to be completed within 36 months from the date of issue of letter of acceptance (LOA). The announcement was made after market hours on Friday, 20 May 2016.
TTK Prestige rose 5.78% after net profit jumped 121.51% to Rs 21.62 crore on 8.16% growth in total income to Rs 310.70 crore in Q4 March 2016 over Q4 March 2015. The result was announced during market hours today, 23 May 2016.
Cox & Kings slumped 13.81% after the company reported consolidated net loss of Rs 305.53 crore in Q4 March 2016 compared with net profit of Rs 64.56 crore in Q4 March 2015. Cox & Kings' total income fell 3.86% to Rs 482.71 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours on Friday, 20 May 2016. Peter Kerkar, Director, Cox & Kings said that the company focussed on re-aligning its various businesses in the year ended 31 March 2016 (FY 2016). He further said that the company has sharpened its focus on its core businesses, which have robust revenue and profitability.
Dish TV India edged lower in volatile trade after the company announced its Q4 March 2016 results. The stock fell 5.82% to Rs 88.25. Dish TV India's (Dish TV) consolidated net profit rose 1281.71% to Rs 482.77 crore on 10.08% growth in total income to Rs 821.15 crore in Q4 March 2016 over Q4 March 2015. The company's subscription revenue rose 12.6% to Rs 741 crore in Q4 March 2016 over Q4 March 2015. Earnings before interest, taxation, depreciation and amortization (EBITDA) rose 18.1% at Rs 260.80 crore in Q4 March 2016 over Q4 March 2015. The results for Q4 March 2016 and the financial year ended 31 March 2016 (FY 2016) are not comparable with their corresponding previous periods due to the impact of increase in service tax to 14.5% from 12.36% with effect from August 2015.
The Sensex and the Nifty edged lower for the fourth day in a row. The Sensex has fallen 542.25 points or 2.1% in four trading sessions from its close of 25,773.61 on 17 May 2016. The Sensex has fallen 371.26 points or 1.44% in this month so far (till 23 May 2016). The Sensex has fallen 883.18 points or 3.38% in calendar year 2016 so far (till 23 May 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 2,738.75 points or 12.17%. The Sensex is off 3,345.97 points or 11.7% from a 52-week high of 28,578.33 hit on 23 July 2015. The Sensex is off 4,788.38 points or 15.94% from a record high of 30,024.74 hit on 4 March 2015.
In overseas stock markets, European stocks edged lower in volatile trade after the latest data showed slowdown in economic activity in the eurozone in this month. Data provider Markit said a headline measure of activity based on surveys of 5,000 companies around the eurozone, known as the composite purchasing managers index, fell to 52.9 in May from 53 in April. A reading above 50 indicates an increase in activity, while a reading below that level indicates a decline. Earlier during the global day, Asian stocks ended on a mixed note.
US stocks edged higher during the previous trading session on Friday, 20 May 2016, after strong housing data for April 2016. Existing-home sales rose 1.7% in April 2016 to a seasonally adjusted annual rate of 5.45 million, the National Association of Realtors said. Meanwhile, Boston Fed President Eric Rosengren said in an interview to a newspaper published yesterday, 22 May 2016, that the US economy is close to displaying most of the conditions needed for an interest-rate rise next month. Two weeks ago, he said rate increases should resume.
The minutes from the US Federal Reserve's April policy meeting released last week showed that Fed policy setters discussed the possibility of a June rate increase if the economy continued to strengthen. The Federal Open Market Committee next undertakes monetary policy review on 14-15 June 2016. The US central bank had lifted rates in December 2015 for the first time in nearly a decade.
Meanwhile, Reserve Bank of India Governor Dr. Raghuram Rajan said in a speech on Saturday, 21 May 2016, that with a view to limit external vulnerabilities arising from the easy and unconventional monetary policy in industrial countries, India is taking measures to control capital inflows, intervening in the foreign exchange market as a macro prudential measure to reduce volatility and maintaining sufficient foreign exchange reserves to be able to withstand a sudden stop in capital inflows. Rajan said that good economic policy is the first line of defence – including the focus on controlling fiscal deficit, reforms like the Bankruptcy Code and Aadhaar and the steady fight against inflation.
Given great uncertainty about global growth outlook, a country like India should try to take sensible measures without getting too ambitious, Rajan said. This will serve as a sound basis for strong and sustainable Indian growth as the world economy picks up, he said.
With losses for the fourth straight trading session, the Nifty hit its lowest closing level in almost three weeks. The Sensex hit its lowest closing level in more than two weeks.
Shares of pharma major Lupin extended previous session's steep losses triggered by concerns surrounding its Goa facility as it has yet to resolve concerns raised by US Food and Drug Administrator's (USFDA) observations on the manufacturing unit.
Index heavyweight and cigarette major ITC extended previous trading session's gains triggered by the company announcing a 1:2 bonus share issue at the fag end of the trading session at the time of the announcement of its Q4 March 2016 results. Multi Commodity Exchange of India (MCX) surged after the Reserve Bank of India (RBI) after trading hours on Friday, 20 May 2016, announced the removal of the restrictions placed on purchase of the company's shares by foreign institutional investors (FIIs) with immediate effect.
Bharat Heavy Electricals (Bhel) edged lower and Power Grid Corporation of India edged higher after the Bombay Stock Exchange (BSE) announced changes in the constituents of its indices as part a semi-annual reconstitution of the indices.
National Aluminium Company (Nalco) egged higher after the company said that a meeting of the board of directors of the company will be held on 25 May 2016 to consider the proposal for buyback of equity shares of the company.
The Sensex fell 71.54 points or 0.28% to settle at 25,230.36, its lowest closing level since 6 May 2016. The Sensex fell 94.12 points, or 0.37% at the day's low of 25,207.78. The barometer index jumped 217.36 points, or 0.86% at the day's high of 25,519.26.
The Nifty fell 18.65 points or 0.24% to settle at 7,731.05, its lowest closing level since 4 May 2016. The Nifty fell 27.50 points, or 0.35% at the day's low of 7,722.20. The index rose 70.90 points, or 0.91% at the day's high of 7,820.60.
Among the sectoral indices on BSE, the S&P BSE Capital Goods index (down 0.91%), the S&P BSE Healthcare index (down 0.84%), the S&P BSE IT index (down 0.83%), the S&P BSE Realty index (down 0.71%), the S&P BSE Oil & Gas index (down 0.68%), the S&P BSE Auto index (down 0.64%), the S&P BSE Teck index (down 0.61%), the S&P BSE Consumer Discretionary Goods & Services index (down 0.58%), the S&P BSE Energy index (down 0.53%), the S&P BSE Finance index (down 0.51%), the S&P BSE Industrials index (down 0.48%), the S&P BSE Bankex (down 0.47%), the S&P BSE Metal index (down 0.38%), the S&P BSE Basic Materials index (down 0.33%) underperformed the Sensex. The S&P BSE Consumer Durables index (down up 0.25%), the S&P BSE Power index (up 0.3%), the S&P BSE Utilities index (up 0.39%), the S&P BSE Telecom index (up 0.82%) and the S&P BSE FMCG index (up 2.12%) outperformed the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,513 shares fell and 1,075 shares rose. A total of 171 shares were unchanged. The BSE Mid-Cap index fell 0.29%. The BSE Small-Cap index fell 0.38%. The fall in both these indices was higher than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 2075 crore, lower than turnover of Rs 2495.19 crore registered during the previous trading session.
Index heavyweight and IT major Infosys fell 1.06% to Rs 1,189. The stock hit a high of Rs 1,204.40 and a low of Rs 1,185.55 in intraday trade.
Index heavyweight and cigarette major ITC rose 5.53% to Rs 348.20, with the stock extending previous trading session's gains triggered by the company announcing a 1:2 bonus share issue at the fag end of the trading session at the time of the announcement of its Q4 March 2016 results. The stock was volatile. The scrip hit high of Rs 354.75 and low of Rs 339.75 in intraday trade. ITC's net profit rose 5.67% to Rs 2495.20 crore on 9.49% rise in total income to Rs 10580.33 crore in Q4 March 2016 over Q4 March 2015. A foreign brokerage has reportedly raised its price target while retaining its outperform rating on the ITC stock as it views the turnaround in ITC's cigarette volume growth as a significant positive.
Bank stocks fell. Among public sector bank stocks, Bank of Baroda (down 2.62%), Syndicate Bank (down 2.92%), Dena Bank (down 0.7%), Andhra Bank (down 2%), State Bank of India (down 1.43%), Canara Bank (down 1.8%), Union Bank of India (down 0.61%), Punjab National Bank (down 1.84%), Allahabad Bank (down 0.1%) and Bank of India (down 0.8%), edged lower. Vijaya Bank (up 0.66%) and IDBI Bank (up 0.31%) edged higher.
Among private sector bank stocks, Yes Bank (down 0.55%), Federal Bank (down 1.78%), Axis Bank (down 0.89%) and HDFC Bank (down 0.55%) edged lower. ICICI Bank (up 0.34%) and Kotak Mahindra Bank (up 0.22%) rose.
IndusInd Bank fell 1.98%. IndusInd Bank during market hours today, 23 May 2016, announced that it has recently signed a corporate agency agreement with Reliance General Insurance with objective to distribute multiple options of general insurance products to its customers. Reliance General Insurance will distribute its insurance products across all the branches of IndusInd Bank, the two companies said in a joint statement. This is the first tie-up on bancassurance post the recent multi bank partner guidelines by Insurance Regulatory and Development Authority (IRDAI).
Index heavyweight and housing finance major HDFC fell 1.86% to Rs 1,158.10. The stock hit a high of Rs 1,184 and a low of Rs 1,158.10 in intraday trade.
Bharat Heavy Electricals (Bhel) edged lower and Power Grid Corporation of India edged higher after the Bombay Stock Exchange (BSE) announced changes in the constituents of its indices as part a semi-annual reconstitution of the indices. Bhel fell 0.42%. Power Grid Corporation of India rose 2.63%. Power Grid Corporation of India will replace Bhel in Sensex with effect from 20 June 2016.
Shares of pharma major Lupin extended previous session's steep losses triggered by concerns surrounding its Goa facility as it has yet to resolve concerns raised by US Food and Drug Administrator's (USFDA) observations on the manufacturing unit. The stock lost 3.27%. The scrip had plunged 9.1% to settle at Rs 1,505.15 during the previous trading session on Friday, 20 May 2016. Lupin received USFDA Form 483 for Goa facility with 9 observations during March 2016. The inspections of Lupin's Goa facility were on aspects such as inadequacy and adherence to standard operating procedures (SOP). Lupin reportedly depends on Goa facility for about 40% of its US sales.
Realty stocks declined. DLF (down 1.1%), Indiabulls Real Estate (down 1.92%), Godrej Properties (down 3.39%), Omaxe (down 0.5%), Unitech (down 0.25%), Sobha (down 0.32%), Hubtown (down 2.56%) declined. D B Realty (up 9.09%), Oberoi Realty (up 0.39%) and Housing Development and Infrastructure (up 0.43%) rose.
Multi Commodity Exchange of India (MCX) surged after the Reserve Bank of India (RBI) after trading hours on Friday, 20 May 2016, announced the removal of the restrictions placed on purchase of the company's shares by foreign institutional investors (FIIs) with immediate effect. The stock gained 6.62%. The RBI said that the aggregate shareholding of FIIs in MCX has gone below the prescribed threshold caution limit stipulated as per the current FDI policy.
National Aluminium Company (Nalco) rose 3.58% to Rs 41.90 after the company said that a meeting of the board of directors of the company will be held on 25 May 2016 to consider the proposal for buyback of equity shares of the company. The announcement was made after market hours on Friday, 20 May 2016.
Britannia Industries slumped after announcing fourth quarter results. The stock dropped 8.58%. Britannia's consolidated net profit rose 13.7% to Rs 190.23 crore on 7.8% growth in net sales to Rs 2189.83 crore in Q4 March 2016 over Q4 March 2015. Britannia Industries' revenue growth during the quarter was impacted due to phasing out of excise duty incentives available to the company. The result was announced after market hours on Friday, 20 May 2016.
Patel Engineering surged 9.62% after the company said its joint venture firm AGE-PATEL has secured orders for two projects totalling Rs 2376.85 crore. The company's share in the joint venture is 49%. Both the contracts are required to be completed within 36 months from the date of issue of letter of acceptance (LOA). The announcement was made after market hours on Friday, 20 May 2016.
TTK Prestige rose 5.78% after net profit jumped 121.51% to Rs 21.62 crore on 8.16% growth in total income to Rs 310.70 crore in Q4 March 2016 over Q4 March 2015. The result was announced during market hours today, 23 May 2016.
Cox & Kings slumped 13.81% after the company reported consolidated net loss of Rs 305.53 crore in Q4 March 2016 compared with net profit of Rs 64.56 crore in Q4 March 2015. Cox & Kings' total income fell 3.86% to Rs 482.71 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours on Friday, 20 May 2016. Peter Kerkar, Director, Cox & Kings said that the company focussed on re-aligning its various businesses in the year ended 31 March 2016 (FY 2016). He further said that the company has sharpened its focus on its core businesses, which have robust revenue and profitability.
Dish TV India edged lower in volatile trade after the company announced its Q4 March 2016 results. The stock fell 5.82% to Rs 88.25. Dish TV India's (Dish TV) consolidated net profit rose 1281.71% to Rs 482.77 crore on 10.08% growth in total income to Rs 821.15 crore in Q4 March 2016 over Q4 March 2015. The company's subscription revenue rose 12.6% to Rs 741 crore in Q4 March 2016 over Q4 March 2015. Earnings before interest, taxation, depreciation and amortization (EBITDA) rose 18.1% at Rs 260.80 crore in Q4 March 2016 over Q4 March 2015. The results for Q4 March 2016 and the financial year ended 31 March 2016 (FY 2016) are not comparable with their corresponding previous periods due to the impact of increase in service tax to 14.5% from 12.36% with effect from August 2015.
The Sensex and the Nifty edged lower for the fourth day in a row. The Sensex has fallen 542.25 points or 2.1% in four trading sessions from its close of 25,773.61 on 17 May 2016. The Sensex has fallen 371.26 points or 1.44% in this month so far (till 23 May 2016). The Sensex has fallen 883.18 points or 3.38% in calendar year 2016 so far (till 23 May 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 2,738.75 points or 12.17%. The Sensex is off 3,345.97 points or 11.7% from a 52-week high of 28,578.33 hit on 23 July 2015. The Sensex is off 4,788.38 points or 15.94% from a record high of 30,024.74 hit on 4 March 2015.
In overseas stock markets, European stocks edged lower in volatile trade after the latest data showed slowdown in economic activity in the eurozone in this month. Data provider Markit said a headline measure of activity based on surveys of 5,000 companies around the eurozone, known as the composite purchasing managers index, fell to 52.9 in May from 53 in April. A reading above 50 indicates an increase in activity, while a reading below that level indicates a decline. Earlier during the global day, Asian stocks ended on a mixed note.
US stocks edged higher during the previous trading session on Friday, 20 May 2016, after strong housing data for April 2016. Existing-home sales rose 1.7% in April 2016 to a seasonally adjusted annual rate of 5.45 million, the National Association of Realtors said. Meanwhile, Boston Fed President Eric Rosengren said in an interview to a newspaper published yesterday, 22 May 2016, that the US economy is close to displaying most of the conditions needed for an interest-rate rise next month. Two weeks ago, he said rate increases should resume.
The minutes from the US Federal Reserve's April policy meeting released last week showed that Fed policy setters discussed the possibility of a June rate increase if the economy continued to strengthen. The Federal Open Market Committee next undertakes monetary policy review on 14-15 June 2016. The US central bank had lifted rates in December 2015 for the first time in nearly a decade.
Meanwhile, Reserve Bank of India Governor Dr. Raghuram Rajan said in a speech on Saturday, 21 May 2016, that with a view to limit external vulnerabilities arising from the easy and unconventional monetary policy in industrial countries, India is taking measures to control capital inflows, intervening in the foreign exchange market as a macro prudential measure to reduce volatility and maintaining sufficient foreign exchange reserves to be able to withstand a sudden stop in capital inflows. Rajan said that good economic policy is the first line of defence – including the focus on controlling fiscal deficit, reforms like the Bankruptcy Code and Aadhaar and the steady fight against inflation.
Given great uncertainty about global growth outlook, a country like India should try to take sensible measures without getting too ambitious, Rajan said. This will serve as a sound basis for strong and sustainable Indian growth as the world economy picks up, he said.
No comments:
Post a Comment