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Impact Analysis |
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- India shifts to the new GDP series from Feb-26 with 2022-23 as base year
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- Among other changes, the new series will use Supply User Tables to align the output and expenditure approach to GDP
- Apart from wider inclusion of informal sector, the GDP deflator will combine inputs and output for a vivid picture
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- US economy grows GDP at 4.4% for the third quarter ended September 2025
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- The sharp spike in GDP growth in Q3 was led by a surge in exports from the US and lower drag on the inventories
- However, the 4.4% GDP growth; combined with 2.9% PCE inflation for Q3, raises doubts over further rate cuts by Fed
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- Silver ETF prices crash 25% even as spot silver prices fell by just about 4%
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- This big discrepancy was due to the massive speculative froth built up in silver ETFs due to excess investor demand
- The sharp correction in the ETFs is a healthy move as it aligns the price of ETFs to the spot price, which is how it should be
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- The EU puts the proposed US-EU trade deal on hold over Greenland overtures
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- Trump has made overt plans to forcibly take over Greenland, something that has not gone down well with EU members
- The EU was already facing pressure over accepting the harsh terms of the trade deal, and now this offers an escape route
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- Indian rupee sank to a new low of ₹91.95/$ during the current week
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- The sharp fall in the rupee was amidst growing geopolitical event risk as Trump made overt attempts on Greenland
- At the same time, delays in the trade deal between India and the US has also led to FPI selling, leading to a run on the INR
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- India core sector output for December 2025 saw a sharp rebound to 3.72%
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- This is a sharp bounce from negative core sector growth in October and 2.06% core sector expansion in November
- While the oil sector continued to be a drag on core sector; the rally was led by steel, cement, coal, and electricity
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- Bond markets in India are seeing a big spike in market borrowings in FY27
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- While the budget will put out estimates, bond markets peg FY27 borrowings at closer to ₹17 trillion on debt redemptions
- However, with the change in GDP base year, the fiscal deficit is expected at stay under 4.4% of GDP for fiscal year FY27
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- India and the UAE target $200 billion in trade in a high-level leader meet
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- India and UAE have signed a Comprehensive Economic Partnership Pact and a Bilateral Investment Treaty
- The target is to scale Indo-UAE trade to $200 billion by 2032, while their sovereign funds will also invest in Indian infra
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- Shapoorji Pallonji group is raising debt in private credit market at 18%-21%
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- The pressure of high-cost debt comes from a liquidity crunch caused by their inability to monetize their Tata Sons stake
- Mistry family owns 18.4% in Tata Sons, but despite valuation at ₹3 trillion, it is illiquid, being a private limited company
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- AMFI has submitted its budget wish list to the Finance Minister for FY27 budget
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- AMFI wants restoration of indexation benefits for debt funds, favourable tax treatment and introduction of DLSS facility
- AMFI also wants phased taxation on equity funds, where funds held beyond 5 years are tax-free to reduce offloading
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- Eternal outshines revenue and EBITDA estimates but fall short on profits
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- For Q3FY26, Eternal reported revenues of ₹16,692 crore and EBITDA of ₹364 crore; both bettering street estimates
- Interestingly, its B2B Hyper Pure business as well as its quick commerce Blinkit business turned EBITDA positive in Q3
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- General Atlantic picks up a 7% minority stake in Balaji Wafers for ₹2,500 crore
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- The deal values Balaji Wafers at around ₹35,000 crore, which is about one-third of the valuations got by Haldiram
- Balaji Wafers remains a very profitable business for the Virani group with sales of ₹6,500 crore and profits of ₹1,000 crore
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- Indian airlines are running full aircraft, but are bleeding on the bottom line
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- It clearly means that high passenger load factor (PLF) is not enough for profits, the RASK and CASK are what really matter
- Apart from rupee weakness, the large number of grounded aircraft is also reducing fixed cost absorption for airlines
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- Government to target 4.2% to 4.3% fiscal deficit to GDP ratio for FY27
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- CareEdge Ratings has opined that the Indian government will not give up on its fiscal prudence, despite growth push
- While that appears to be good on paper, it remains to be seen how the government will address the shortfalls in tax flows
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- BPCL plans to buy $780 million of crude oil from Brazil, to cut reliance on Russia
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- With the US sanctioning Rosneft and Lukoil of Russia, the pressure is mounting on Indian companies to cut Russian oil
- With crude prices hovering around $60/bbl, there is not much need for India to scout for Russian discounts in this market
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- Adani stocks saw market cap of ₹1.15 trillion wiped out during trading hours
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- The correction of nearly 15% in Adani stocks after SEC decided to directly email the summons to Gautam and Sagar Adani
- The summons is pertaining to a $265 million bribery case, but the Law Ministry had refused to service the SEC summons
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- SEBI approves public issues of Hella Infra and Sify Infinit, among others
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- While Hella Infra will be a ₹5,000 crore IPO; Sify Infinit will be a ₹3,700 crore IPO; both combining fresh issue and OFS
- In addition, other IPOs of Transline Tech, UKB Electronics, BVG India, CMR Green, Commtel Net, Pride Hotels got approval
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- Indian bonds fell sharply this week on concerns over rising state debt
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- With fears that markets may struggle to absorb state debt, the bond yields jumped from 6.48% to 6.66% on Friday
- State governments are slated to issue bonds worth ₹39,800 crore on 27-Jan, but traders are sceptical about appetite
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- RBI to infuse $23 billion of liquidity into money markets to ease funds crunch
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- This will include ₹25,000 crore by way of VRR and open market (OMO) purchases of ₹1,00,000 crore in 2 tranches
- In addition, the RBI will also carry out a USD/INR buy/sell swap auction of $10 billion; taking total infusion to $23 billion in all
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- Indian forex reserves surged by $14.17 billion to $701.36 billion for 16-Jan
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- The boost came from a rise in foreign currency holdings as well as a spike in the value of gold holdings of the RBI
- There has been a strong rally in non-dollar currency holdings of the RBI, which has added to the rally in gold holdings
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- DIIs have raised their stake in 10 large cap stocks for 4 consecutive quarters
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- On the consumption side, the stocks include Eternal, Varun Beverages, Trent, Godrej Consumer Products, TCPL, and ITC
- In the industrials space, the stocks added include Bajaj Auto, Adani Energy Solutions, CG Power & Industrial, and others
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