Towing the Mid-line
The Securities Exchange Board of India (SEBI) in its board meeting during the week, made it mandatory for all listed companies to make public disclosures on loans defaults. It stated that any default on payments of interest or principal on loans taken from financial institutions, including banks, will have to be disclosed if it continues beyond 30 days. At a time when defaults have threatened the stability of the financial markets, steps taken to improve transparency in the system were welcomed by the markets. Additionally, the government has categorically stated that it does not intend to revise its fiscal deficit target of 3.3% of GDP for FY2019-20 notwithstanding a slowdown in economic activities. Minister of State for Finance Anurag Thakur said that expenditure of various ministries and departments of the government is as per the estimates approved by Parliament.
India’s economic growth is likely to touch a new low last quarter, with early forecasts showing expansion below 5%. Economists at State Bank of India, Nomura Holdings Inc. and Capital Economics Ltd. lowered their growth forecasts for the quarter ended Sep’19 to between 4.2% to 4.7%.
The Organisation for Economic Co-operation and Development (OECD) has estimated that business activity around the world will expand by 2.9 % in 2020. It also forecast that the US economy, the world's biggest, is expected to slow to 2.0 % by 2021, while growth in Japan and the European region is expected to be around 0.7% and 1.2%, respectively. Global growth concerns continue to plague markets and impact investor sentiment. Trade conflict between two of the world’s largest economies, a weak business environment and persistent political uncertainty are weighing on the work economy.
Institutional activity during the week was mixed. While foreign portfolio investors (FPIs) showed tepid activity for the first three trading sessions of the week starting 18th November 2019, they turned large buyers of Indian equities on 22nd November, shoring up stocks worth INR 5023 crore, on the day. So far this month, FPIs have been net buyers of Indian equities and have net bought equities worth INR 7821 crore. For the period 15th November 2019 to 21st November 2019, FPIs have bought Indian equities worth INR 3386 crore. Domestic institutional investors also turned net buyers for the week and have net bought Indian equities worth INR 1040 crore, in the same time period.
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