Federal Reserve still sees significant inflation risk that may merit more rate hikes, minutes show
The response in financial markets to Fed minutes was muted, with Treasury yields little changed and U.S. stocks slightly extending earlier losses. Investors in contracts tied to the federal funds rate are betting heavily that the Fed won't raise its policy rate again during the current tightening cycle. Key Points
Economic TimesCharting the global economy: Fed, ECB policies may diverge
The Fed chief said there was strong support for raising rates by 25 basis points. But he suggested officials may pause their tightening campaign in June to assess how the economy is responding to tighter credit conditions. Key Points
Economic TimesRupee gains for second day tracking Asian peers; premiums inch up
The Indian rupee rose for a second straight session against the U.S. dollar on Tuesday, mirroring similar moves in Asian peers, as risk appetite in the region rose on fresh bets of the Federal Reserve nearing the end of its rate tightening cycle. Key Points
ReutersIndian shares set for muted open as US jobs data fuels rate concerns
Indian shares are set for a subdued start on Friday, tracking weakness in global peers, after data indicating strength in the U.S. labour market fuelled concerns of further monetary policy tightening. Key Points
ReutersMorgan Stanley sees India outperforming China in 2024; adds RIL, DMart to focus list
India has delivered strong relative earnings, sustaining the strong market outperformance seen in 2022, while macro-fundamentals have withstood tightening financial conditions in the US. “India is set to establish secular economic and earnings outperformance vs EM,” the investment bank said in its 2024 outlook report. Key Points
Economic Times
Regulatory tightening an opportunity? 6 housing finance stocks with upside potential of up to 41%
First, it was unsecured loans, then it was housing finance companies and in the last two days, it has been micro finance companies. RBI has been taking stock of each segment of the financial service and tightening the norms so that accidents like 2018 can be avoided. Whenever there is tightening of norms, stocks from that sector tend to correct. The question is whether that correction is something which is an opportunity or not. One part of the answer lies in looking at overall market size and the growth. In the case of the housing finance segment, there is hardly any doubt about growth potential. So, if the growth potential then corrections are opportunities. But that is for companies which are able to adapt to the changing regulatory provisions, they will stand to gain in the long term. Key Points
Economic TimesAsian stocks follow Wall Street higher; yields and dollar down
By Xie Yu HONG KONG (Reuters) - Asian stocks broadly rallied on Thursday, after the U.S. Federal Reserve flagged the end of its tightening cycle and struck a dovish tone for the year ahead. U.S. Key Points
ThePrintAsian equities follow Wall Street higher; yields and dollar down
By Xie Yu HONG KONG (Reuters) - Asian stocks broadly rallied on Thursday morning, after the U.S. Federal Reserve flagged the end of its tightening cycle and struck a dovish tone for the year ahead. Key Points
ThePrintTop central bankers see further tightening to counter inflation
Although policy is restrictive, it may not be restrictive enough and it has not been restrictive for long enough, Federal Reserve Chair Jerome Powell said at a conference at the Portuguese resort of Sintra. His comments on inflation were largely echoed by Bank of England Governor Andrew Bailey and European Central Bank President Christine Lagarde, both of whom said they expect more moves. Key Points
Economic TimesRBI may hike rate to 7-year high in next policy review: Economists
Following higher-than-expected January inflation and after the central bank reiterated its tightening bias at its Feb. 8 meeting, economists lifted their forecast for the terminal rate from 6.50% expected in a January poll. Key Points
India Today
Regulatory tightening an opportunity for long-term investors: 6 NBFC stocks with upside potential of up to
Just a day after the biggest wealth creator from the NBFC space witnessed a sharp cut, it might appear that NBFC is not a right sector to look at. But go back to history and one would see that the time to look at a sector is when something which is perceived as negative. In the last three months, whether it is the consumer lending or housing finance segment, the RBI has been tightening the laws and regulations for provisioning. The question is why RBI is doing it and whether it will give a boost to a higher and cleaner growth. By cleaner growth, a growth which is less volatile and less accident prone. Given the fact the NBFC sector has a history of meeting with accidents and creating problems for a lot of sectors. The answer tilts toward yes, this regulatory tightening is good and in long term value accretive. Key Points
Economic TimesUS stocks surge, Treasury yields fall as Fed signals end to tightening cycle
By Stephen Culp NEW YORK (Reuters) -U.S. stocks surged on Wednesday and benchmark Treasury yields slipped to their lowest level since August after the Federal Reserve flagged the end of its tightening Key Points
ThePrintRBI Policy: Brokerages see continued pause, this is when they expect the first rate cut
The Reserve Bank of India's monetary policy committee kept the repo rate unchanged at 6.5%, with brokerages predicting a continued pause in policy rate cuts to assess the impact of tightening measures. Key Points
mintWhy Max Life is overweight on industrial and capital goods stocks? Mihir Vora explains
Max Life Insurance CIO Mihir Vora says that banks and NBFCs are still an attractive investment, while the manufacturing industry is seeing growth boosted by incentives. Though domestic consumption is uncertain, manufacturing presents a silver lining, propelled by private and government development. Plunging TCS of 20% will not significantly affect markets or foreign travel, however, capital goods majors, particularly MNCs, are still recommended as a portfolio strategy. Key Points
Economic TimesBFSI stocks: They shed weight much before others do, time to be contrarian and buy?
The kind of correction the broader market is witnessing in the last few days, the financial services sector had seen that few months ago. Infact, if one looks at the overall picture this phase of correction was led by one private sector bank and the other parts of the BFSI came under pressure at the start of 2024. For two reasons, first is that RBI has been doing a policy tightening and regulatory cleanup excerise, so there were some margin hits coming in earnings. Second, they are heavily owned by foreign portfolio investors who have been sellers in the Indian markets. A large number of times they give an advance indication of what the broader market might look like in near term. Similarly, the other way round, these stocks on a relative basis have performed better than others in the last few days. The first streak of relative outperformance is good enough indication for them to be brought on watchlist. Key Points
Economic Times
World growth likely to decline in 2024 even as US avoids recession, Fitch
Fitch Ratings' Global Economic Outlook forecasts a decline in global growth to 2.1% in 2024 from the robust 2023 performance. While 2023 saw resilient growth fueled by China's consumption uptick and US resurgence, challenges like China's property slump, Eurozone stagnation, and monetary tightening could lead to this slowdown. Key Points
Economic TimesFed holds rates at 22-year high, signals concern on yield rise
The decision left the target range for the benchmark federal funds rate unchanged at 5.25% to 5.5%, the highest since 2001, as part of a strategy to slow the pace of rate increases as the central bank nears the end of its tightening campaign. The S&P 500 index and Treasuries extended their rally while the dollar slipped after the announcement. Key Points
Economic TimesWall Street climbs on signs of easing inflation; chip stocks gain
U.S. annual inflation slowed considerably in June, likely pushing the Federal Reserve closer to ending its fastest interest rate hiking cycle since the 1980s Key Points
Business TodayUS Fed meet outcome: From rate hike to road ahead - Key takeaways from Fed decision
The quarter percentage-point hike, a unanimous decision, lifted the target range for the Fed’s benchmark federal funds rate to 5.25 per cent to 5.5 per cent, the highest level since 2001. It marked the 11th increase since March 2022, when the rate was near zero. Key Points
mintEuropean shares edge higher, but mixed data limit gains
European shares edged higher on Thursday as U.S. inflation data fuelled hopes that the Federal Reserve was on the brink of ending its post-pandemic tightening cycle, although a raft of mixed economic data limited further upside. Key Points
Reuters/cloudfront-us-east-2.images.arcpublishing.com/reuters/5TAKNP3VLVKZ3DONXVKJ3ZMT6Q.jpg)
European shares gain ahead of key US inflation data
European shares edged higher on Wednesday in the run-up to the release of key U.S. inflation data which will determine whether the Federal Reserve is nearing the end of its monetary policy tightening. Key Points
ReutersEurozone in recession at start of 2023, shrunk by 0.1%, says Eurostat
Eurostat slashed its earlier prediction of 0.1 per cent growth in the final quarter of 2022 and 0.2 per cent in the first quarter of 2023 Key Points
mintCrude oil prices steady after surprise build in US crude stocks
In a sign of market tightness, U.S. crude futures have flipped into backwardation, with the front month contract trading 6 cents higher than the second month. Key Points
FinancialexpressUS interest rate likely to peak higher than anticipated: Federal Reserve Chair Jerome Powell
If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes, he said in prepared remarks released ahead of his appearance at a US Senate hearing. The strong employment, consumer spending, manufacturing production and inflation figures in January indicated a partial reversal of earlier softening trends, which was likely due to unseasonably warm weather in January, Powell said. Key Points
Economic Times