Oil prices have been pulled in different directions in the last three months. The coming into effect of the sanctions against Russia has been the singular important factor that could have affected oil prices. But prices at this juncture looks well supported at US$ 75-US$ 80 levels. It is quite possible that it could rise […]
Gold has been in a range of 1780-1830 in the last three weeks. What helped gold rise from 1680-1730 levels is the impression that the Fed tightening was probably going to end soon. But that was not to be. The Fed rate action showed the same level of aggression as before re-affirming the earlier stance […]
Gold has been trading in very narrow ranges and it was not able to break above the 1730 level for a long time and at the same time it has been basing at the 1640-1680 levels. This indicates the lack of any fresh factors to trigger a move in either direction. Against an elevated inflation, […]
The equity indexes have been quite buoyant over the recent past with some money from overseas investors tricking in. While this provides a positive anchor to the markets, the future will depend on two critical factors. The first is, one needs to see the inflationary pressures gradually coming down and the same brining in moderation […]
Brent which is currently at around US$ 88 per barrel is at a very critical level. This is because of three reasons. The first is the likely onset of winter very soon and the expectations of a strong winter which would require higher consumption of fuel for heating devices. Second, the holiday season is going […]
Gold has been mostly range-bound, trading between 1620 and 1720, and the last traded level is 1650. It is widely expected that in the near future gold may remain in narrow ranges and the only factor which gives some potential for strength to gold at this point of time is the occasional talk of gold […]
The Banking & Financial Services sector (BFSI), over the years, has emerged as one of the most diverse plays on the India growth story. While the importance of a stable banking industry to support the economic growth cannot be stressed enough, the opportunities available across the financial services segment today make this sector an even […]
One of the means by which a higher yield can be captured for the debt investment portfolio is to invest into mutual fund schemes that have State Development Loans as the underlying asset. These investments have multiple advantages. (a) The SDL portfolios have yields in the range of 7% to 7.7% depending upon the […]
The Real Estate Investment Trust (REIT) is structured like Mutual Funds (MFs), in the sense that it allows pooling of investor money to buy a particular asset. REITs, as the nomenclature suggests, invest in income generating real estate assets. The investors benefit by way of dividend-like income and also by valuations gains in the underlying […]
The Banking & Financial Services sector (BFSI), over the years, has emerged as one of the most diverse plays on the India growth story. While the importance of a stable banking industry to support the economic growth cannot be stressed enough, the opportunities available across the financial services segment today make this sector an even […]
The US Dollar is galloping its way up against all currency majors and it is progressively reflected in the Dollar Index. What lends strength to the US Dollar is the rising interest rates occasioned by the tight money policy followed by the Fed. With an affirmation from the Fed that the same policy will be […]
Yields have been stable to lower but maintaining a range which is 7.15 % to 7.35 % on the ten-year benchmark. One of the encouraging factors is the inflows into bonds from the overseas investors in the last one month which has instilled some confidence in the market participants. A second factor that has brought […]
One of the means by which a higher yield can be captured for the debt investment portfolio is to invest into mutual fund schemes that have State Development Loans as the underlying asset. These investments have multiple advantages. (a) The SDL portfolios have yields in the range of 7.40% to 7.80% depending upon the state […]
The government borrowing program is completed to the extent of a little more than a third of the total primary issue planned for the year. While the average issue of securities continues to be around Rs.32,000 Crs per week, the liquidity in the system has come down drastically to Rs.1.50 lakh Crs. The overnight rate […]
The many pains which enveloped the equity markets seems to be waning although at a sluggish pace. The obvious factors that triggered a fall in the markets were the uncertainties around the economy and the markets. These uncertainties were due to high commodity prices, the trajectory of inflation, the liquidity normalization policies of the central […]
In June the US retail prices rose by 9.10%, the highest level in almost four decades. This rise is despite the last three hikes in the base rate. Therefore, the objective of countering the rising inflation, and bringing it back to the Fed’s target level of 2% remains uppermost in the Fed’s mind. It was […]
Oil price still reflects the premium which got priced in at the start of the Russian invasion of Ukraine. Recently, there has been some moderation in oil prices of about 15 % in the last two weeks. This fall in prices is occasioned by a record increase in US crude production which touched 12 million […]
The Dollar index was at 104.85 on May 12 22, and thereafter, it pulled back to 102.08 level later in the month. But the index surged thereafter touching 104.28 by June 20, 2022. The movement in the Dollar Index demonstrates the strength in the US unit, and the likely trajectory in the coming months. The […]
Gold is trading at US$ 1840, and for almost a period of four weeks it has been hovering around this level. It has not moved much having been pulled in two directions by two powerful forces – the persistent inflationary pressures, and the rising rates. The rise in US rates has been much faster and […]
The lockdown in Shanghai has hit the oil demand in China. This is the fourth consecutive month when the demand for crude oil has declined in China. The trend is set to remain intact till Shanghai is re-opened after the pandemic fear subsides. There is rising inventory of jet fuel, and the refinery output is […]
The US Dollar put up a splendid show of strength in the last few months, and it accelerated further in the last three weeks. The Dollar Index moved up to 104.85 on May 12 22, and thereafter, retreated a bit to the 103.40 level. This surge was from the lowest level seen in two months, […]
Gold price in international market has slumped to US$ 1815. While the surging inflation in the major economies of the world makes it an appropriate choice for some amount of value preservation, the strength in the US Dollar and the rising US rates are putting pressure on gold price. There is a clear positioning from […]
The headline WPI inflation for April 22 came in at 15.10%, and it is the highest reading so far indicating the likelihood of more inflation being priced in the future retail inflation numbers. The persistently high oil prices in global markets and the weak Rupee will exert pressure on the domestic price level which has […]
The rate of inflation indicated by Consumer Price Index (CPI) surged to 7.79 % in the month of April 2022, from 6.95 % in March 2022. This is the highest inflation rate in almost eight years, and the fourth consecutive month during which inflation remained above the ceiling of the RBI’s policy target range. This […]
All eyes are on the next meeting of the FOMC due on 14th and 15th of June, almost three weeks from now. It is not without reason that this attention is given to the event. The Fed’s decision on rates affects everything around the world. That is the perception and the reality. It is almost […]
The CPI based inflation stayed above RBI’s target range of 2% to 6% for the third consecutive month and touched a 17-month high. The headline inflation for the month of Mar’22 came in at 6.95% as compared to 6.07% in the preceding month, and 5.52% during the year ago period. The surge in inflation was […]
Brent remains in a broad range between US$ 95 and US$ 115, and the likelihood of oil prices remaining elevated is high mainly due to the Russian invasion of Ukraine and the related developments. The central value towards which the price has been showing a tendency to converge is US$ 100. While the price has […]
The equities markets had seen the last major fall to the tune of about 15 % and after the subsequent revival, looks set to test lower levels in the coming weeks. The local market often mirrors the US market developments. The recent gains in the market have been the result of a kind of moderation […]
The Banking & Financial Services sector (BFSI), over the years, has emerged as one of the most diverse plays on the India growth story. While the importance of a stable banking industry to support the economic growth cannot be stressed enough, the opportunities available across the financial services segment today makes this sector an even […]
Retail inflation indicated by the CPI for the month of February has touched 6.07 %, and it has come up from 6.02 % for January, and in the last two months inflation has been above the ceiling of the threshold set by the RBI, which is 6 %. The primary factor that has contributed to […]
The Fed has acted finally to revise the target fed funds rate by 0.25%, taking the rate to the range of 0.25% to 0.50%. The last such hike was in December 2018. This move by the Fed is exactly on expected lines and there is no surprise element in this at all. The actual rate […]
In our last update on oil prices, it was mentioned that “those who promote this view (oil at US$ 100) pin their hopes on the limited capacity which OPEC + may have in expanding the supply, and this dead end may trigger a surge in prices. There is also a talk of structurally bullish phase […]
The trend is intact. The US Dollar is stronger. There is no reason to expect this to soften anytime given the several factors that lend strength to the US unit. The likely hike in the base rate by the Fed in a month or two, and the rising US yields have added strength to the […]
Gold has maintained a broad range of US$ 1760 – US$ 1860. Whie it is technically still within the range, there are two factors that have provided some sheen to the yellow metal. The first factor is the inflationary situation prevailing in many large economies, and the second and probably more transient factor is the […]
While the budget with its massive borrowing program, and a long-drawn-out fiscal glide path, was not entirely to the liking of the fixed income market. These were obvious reasons why the market rates went up, as expected by the market participants. Immediately after the budget the rates moved up and the benchmark ten year touched […]
The CPI based inflation continued to harden and breached the RBI’s target range of 2% to 6%. The headline inflation for the month of Jan’22 came in at 6.01% as compared to 5.66% in the preceding month and 4.06% during the year ago period. The rise in inflation was mostly attributable to an unfavourable base […]
The policy rates have been left unchanged and the policy stance remains accommodative. The Governor opened his statement like this – economic growth is good and better than other countries, inflation is still within the threshold set by the RBI, and the pandemic is still a threat, and therefore, the need to protect lives and […]
A marked divergence between countries is visible in their approach to post pandemic fiscal and monetary policy. The UK has hiked the base rate twice in the last two months to contain inflation despite being one of the worst affected in the last wave of the pandemic. In contrast to this, the approach of the […]
Brent is back at higher levels, US$ 86.50, and the forecasts have come up that it may now touch US$ 100. Those who promote this view pin their hopes on the limited capacity which OPEC + may have in expanding the supply, and this dead end may trigger a surge in prices. There is also […]
While the trend of US Dollar strength was intact against a number of global currencies, it received a temporary set- back against the Euro and Pound Sterling. The Bank of England hiked the base rate in its last meeting, and this has given a push to the positive perceptions about the UK economy. Not only […]
Gold price which is currently at US$ 1820 is attempting a break upwards after remaining subdued for almost three months in narrow ranges. The main reasons for gold being inert is the developments around US interest rates. The high rate of growth and the high level of inflation contributed to the visible change in the […]
The normalization of liquidity initiated by the central bank gathered pace in the last two months with an aggressive approach towards variable rate reverse repos. This has obviously resulted in market rates moving higher. The normalization of liquidity is expected to normalize the returns from various asset classes including equities too over a period of […]
The third wave of the pandemic is sweeping the US and Europe, and most other parts of the world including China and India. But it is not expected to cause any major disruptions to economic life and activity as the level of infection is reported to be milder, requiring no hospitalization in most cases. But […]
Estate and succession planning is the process of anticipating and arranging for the disposal of estate during and after one’s lifetime. In absence of a succession plan, the assets of the deceased would be distributed as per the applicable religious laws amongst the legal heirs. 1.Drafting a will Will is a legal document that comes […]
The dominant trend in currency markets is the strength of the US Dollar, and this is founded on strong ground that the US rates are rising no matter what happens. The factors that are likely to facilitate this are the stronger than expected economic recovery and the high inflation. The Fed’s decision to start the […]
Gold has been in a broad range of 1760 level to 1860 level during the last one month. The only factor that is supporting gold at this juncture is the rise in inflation and the consequent erosion of purchasing power. There has been a significant moderation in commodity prices, and this is due to the […]
The equity markets are going through a phase of higher volatility, mainly reflecting to a large extent, the developments abroad, especially in the US. The normalization of liquidity is going to bring with it the normalization of returns, as the markets go through some correction in response to liquidity normalization, higher inflation, and rising interest […]
As far as surplus liquidity is concerned, the normalization process has accelerated in the US with the Fed initiating the tapering of bond purchases by US$ 15 billion. This amount has been subsequently enhanced to US $30 billion due to high inflation. In India, the RBI intensified the process of liquidity normalization by announcing Variable […]
The RBI policy announcement has retained the policy rates unchanged, with Repo Rate and Reverse Repo Rate at 4.00% and 3.35% respectively. The policy underlines the commitment to pursue an accommodative stance for an extended period of time to support economic growth, while pursuing the liquidity normalization. As expected, the liquidity management aspects get more […]
The GDP growth number for Q2FY22 was reported at 8.4% as compared to a contraction of 7.4% in the first quarter of FY21. The GVA number for Q2FY22 came in at 8.5% as compared to -7.3% during the year ago comparable period. The GDP and GVA growth rates for the preceding quarter was 20.1% and […]
The Fed Chairman, in his testimony to the Senate Committee, made some meaningful observations, which point towards a potential Fed action in the near future. First, there is a realization that inflation is not transitory or transient anymore. Inflation is going to stay high, and policy needs to address this emerging requirement. Second, there is […]
Brent remains elevated above the US$ 80 level and looks exceptionally well supported at the current levels. Oil was not that important for almost two years in the general scheme of things. But suddenly it has become a matter that calls for the maximum attention. This has many reasons. The first and foremost is the […]
The US Dollar, as expected, maintains its sway over the currency markets, with the strength against the majors remaining unchallenged. While the strength of the Dollar has been mainly due to the change in the Fed’s stance starting with the soon to be implemented normalization of liquidity by tapering of bond purchases. The end result […]
The gold ETFs had seen an outflow equivalent to US$ 1.40 billion in the last month, accelerating a trend seen in the last three months. But the prices edged higher to 1860 levels in a swift bounce-back from the 1760 levels. This bounce- back has been occasioned by the only factor that could be in […]
The equities have turned more volatile in the past one month and it is grappling with a number of factors both internal and external which makes the onward journey slightly more uneven. The earnings season is coming to a close and the complete picture of the Q2 FY22 earnings would emerge in the coming days. […]
The fixed income market faces a number of challenges as it transforms itself from the pandemic-affected period, the high liquidity situation, to the post-pandemic normalization. The challenges pertain to the gradual normalization of liquidity and rising interest rates. The RBI had initiated the liquidity normalisation process way back in January this year. The hike in […]
A formidable challenge facing the financial markets is the need to align themselves to the inevitable process of normalization which the major economies are going through in the post-pandemic time. The unprecedented expansion of liquidity was intended to combat the potential negative effects of the pandemic-led disruption. Liquidity which was injected into the financial system […]
Brent at US$ 83.00 per barrel, oil is at multi- year highs. Price of oil and gas has gone up as consumption remains robust and gradually moving up to the pre-pandemic levels. It is expected that the global consumption will touch the pre-pandemic levels and cross it by the first quarter of 2022. Oil consumption […]
The US Dollar after a brief spell of sluggishness re-established its position of strength against all currency majors. This will continue well into the future mainly as the Fed starts preparing for the tapering of the bond purchases in the next two or three months. While tapering will reduce the liquidity in the system it […]
Gold is at 1760 level, a kind of support for gold prices in the immediate term. In our update in September 2021, we had indicated 1720 and 1760 as the probable support levels for gold prices. There has been a slowdown in central bank purchases of gold in the last three months, and to add […]
The equity markets have scaled new highs, with the outlook for the domestic economy quite stable and robust, given the state of the key macroeconomic indicators. The domestic investor interest has been high with the net inflows into equities through funds, in the phased investments mode, has been going up. What is giving support to […]
The yields may be set to rise further, with the current ten- year benchmark already at the first target 6.35%, we may see further upside towards the 6.50 % – 6.60% levels. The Central Government’s borrowing programme for the Second Half of the financial year was announced a couple of weeks back. The borrowing schedule […]
The RBI policy announced today leaves all the base rates unchanged with continuation of the existing accommodative policy. The accommodation is to continue so long as it is required, that is, economic growth should become sustainable. That the policy would be quiet on rates and active on liquidity has been the expectation by majority of […]
The markets were not in for a surprise. The Federal Open Market Committee Meeting (FOMC) left the base rate unchanged, at 0% to 0.25%, leaving room for a slightly extended period of accommodative policy. But how long would this be? The language of the Fed statement is more reflective of the thinking of the majority […]
While planning for succession one needs to identify each class of asset that a person owns or holds; identify the applicable law of succession for each asset class and accordingly take necessary steps to plan for its succession. The succession laws for various types of assetsis discussed below. I. Immovable Property 1. Sole Ownership – […]
Brent is in a narrow range, and it is set to go nowhere at least for the immediate future. The one distinguishing feature of the recent past is that there is very little to push the prices and equally so to take it lower. The major challenge to rising prices was the rising number of […]
The US Dollar is thriving on the safe-haven status, and the prospects of higher rates in the US consequent to the higher rate of economic growth and higher price level. With the probability of the bond purchases coming down with likely tapering coming up towards the end of this year, the US Dollar is going […]
Gold has not moved at all in the last one or two months, and it may stay where it is and may move in very narrow trading ranges. There are no fresh triggers for the gold price to move up or down. Currently at 1790, gold faces tough resistance at 1830 and 1870, and the […]
The equity market has furthered its good run with a surge in the large cap indexes in the recent past. But something that may be seen from the action in the last two to three fortnights is that the process of normalization of returns to lower levels has started happening. The correction seen in mid […]
The domestic system wide liquidity is currently at Rs.8.50 Lakh Crs, and the interbank has a surplus of Rs.5.50 Lakh Crs on an average in the last three months. This is more or less the same amount that is tendered at the overnight fixed rate reverse repos. The liquidity overhang is demonstrated by the low […]
The Jackson Hole address of the Fed Chairman raised enormous amount of interest among the investors, and the markets too. This was due to the fact that many expected the Fed Chairman to elaborate on the Fed’s plans for the future, that is about the easy money policy and the quantitative expansion through asset purchases. […]
The GDP growth number for Q1FY22 was reported at 20.1% as compared to contraction of 24.4% in the first quarter of FY21. The GVA number for Q1FY22 came in at 18.8% as compared to -22.4% during the year ago comparable period. The record growth rates have largely been a function of a low base effect. […]
Brent has come down below the US$ 70 mark after a long while. The main reason that has caused this fall is the emerging demand conditions which may not be favourable as China faces one of the worst outbreaks of the pandemic since the first wave in late 2019. Transport services and movement of people […]
In the absence of any fresh positive triggers gold price remains subdued. There was some uptick in prices when the Fed stated that they may continue the accommodative stance till growth re appears. The resurgence of the pandemic also helped gold move up but that was short lived. The fall came after very strong US […]
The latest jobs report presents a stronger US economy, and the number of jobs added is 943,000 as against the market expectations of 870,000. This has lent good amount of support to the Dollar as the Fed had indicated earlier that it would be monitoring the improvements in the job market for possible direction to […]
The Pandemic & After The equity markets have rallied beyond expectations with higher levels being attained with each passing trading day. And quite in step with that some questions on the expensiveness of valuation too. The liquidity conditions and the low interest rates formed the basis for P/E expansion to a significant extent. The pandemic […]
First, the factor that has always been the friend of the markets, the ample liquidity, is still available to the markets. The average liquidity has been to the tune of about Rs.5.50 Lakh Crs for almost a year now. The stance of the RBI that the growth factor precedes the inflation factor at this juncture […]
Is Retail Inflation Transient? The inflation in the US has been edging higher during the last few months, and the latest data indicates that it is stable at higher levels. The US CPI registered a rise in July to the tune of 0.50 % on a month-on-month basis, the annual inflation rate at 5.40 %, […]
In the monetary policy review by the RBI, all the key rates have been left unchanged. This is on expected lines, and RBI continues to lay accent on the need to sustain growth in preference to price stability, and therefore, an accommodative policy. Inflation is still very close to the RBI’s target range, though a […]
In the context of housing policies in India, the need for a uniform rental housing law in the country was felt despite some states already having different versions of the Rent Control Act. r, there are many states where the Rent Control Act continues to be in force with some amendments. The Rent Control Act […]
Oil prices have sustained above the US$ 75 per barrel mark and it seems to be poised to touch the US$ 80 level at this juncture. While the view that it may moderate is based on two factors, that there will be an Iran nuclear deal between the US and Iran, and that may bring […]
The US Dollar has been strengthening over the last two months and the main reason behind this strength is the performance of the US economy. After the pandemic, the recovery of the US economy has been faster that expected. This invested the economy with two extremely fast paced variables, a high rate of economic growth, […]
Gold is like a light cork tossed up and down by the waves of news emanating from the US on the shape of the economy and the prospects of the interest rates. The fierce rise in economic growth and the resultant prospects for a rise in interest rates pushed gold prices down back to the […]
The level of inflation has gone beyond the threshold set by the RBI, CPI is above 6%, and that is a reason for concern. The moderation in the price level is dependent on various endogenous and exogenous factors, and prominent among these factors are the price of Brent in the international markets, and the level […]
The focus of the equity markets is singularly on one thing at this point in time – when are we going to be fully open both in India as also elsewhere. A very pertinent question, as that alone would determine the extent to which economic growth can rise and inflation could also. There is another […]
UK has delayed the withdrawal of the final phase of easing of restrictions on account of the pandemic raising its head again. The May inflation rose to 2.10 % as against the Bank of England’s threshold of 2 % creating talks of policy modifications by the Old Lady of the Threadneedle Street. But the Bank […]
Time and gain, with a greater amount of accuracy and consistency, the data flows from the US presents the picture of an economy that is in rapid transformation after the pandemic, both in terms of the prospects of growth and the pace of inflation. While the Fed is quite happy about the explosion of growth, […]
One major factor that dominated oil markets is the possibility of a nuclear deal between the US and Iran, and also better relations between the two countries, based on the reported talks between the two parties. This would mean that the supply from Iran will be in the markets as soon as such a pact […]
The US Dollar remained range-bound against major currencies, as it came out of a stark weakening phase, though the unit remained weak against the Euro and the Pound Sterling. The Euro and the Yuan gained over the last couple of months against the Dollar, to the extent to 3 % to 4 %. The likelihood […]
Gold is trading at 1885 against the dollar, though it attempted breaking the resistance level 1910 unsuccessfully. What has been giving life to gold is the concerns on recovery after the second and third wave of the pandemic, inflation concerns, and also falling yields in the very recent past. Global gold ETFs lost US$1.10 billion […]
The focus of attention is gradually shifting again to the US recovery, away from the impact of the second and third wave of the pandemic. While growth is happening in the US, and the improvements in employment are good, the job gains are not entirely matching up to the estimates or expectations. With major spends […]
The GDP numbers present a picture of revival in economic activity from the depths to which it had fallen during the first wave of the pandemic. GDP growth Q4 FY 21 is at 1.60%, compared to just 0.50% in Q3. For the whole year the GDP growth is at -7.3%, which amply reflects the stress […]
The fixed income markets continue to remain more or less range-bound, eagerly waiting to factor in the probability of any future rise in interest rates. There is more or less agreement among the market participants that rates should rise at some point in time during the course of this year, but the question is when? […]
The GDP growth number for Q4FY21 was reported at 1.6% as compared to 0.5% in the preceding quarter. The GDP for FY21 was reported at -7.3%, largely reflecting the pandemic driven impact to the economy. The GVA number for Q4FY21 came in at 3.7% as compared to 1% in the preceding quarter. The yearly growth […]
The policy announcement from the RBI, after the MPC meeting, has left all the key policy rates unchanged. It has reaffirmed the commitment to continue with the accommodative stance. It was expected that the RBI may not bring about any changes in the policy as such due to two factors, (i) there was an interim […]
Succession planning for minor children is a must. In an unfortunate event of demise of both the parents, a properly drafted Will would ensure that the parents appoint a guardian of their choice for the minor children. In absence of a will or if the will is silent with respect to guardianship, the court will […]
The equity markets have been volatile with movements on both sides, mainly occasioned by developments abroad. The prospects of the US recovery, the rise in inflationary expectations, the rise in bond yields, have all been factors that influenced the markets in the last two months. One factor which has attracted attention of the markets has […]
Brent is perched on the US$ 68 level per barrel for a long time now, and it has been unusually range-bound. But its ability to rise cannot be easily ignored. This is because, if you go by the indications from the market, buying of petroleum futures contracts has accelerated in the last three weeks, and […]
The US Dollar has given up much of the gains after it rose against all the majors in the last three months. The rise in the Dollar was facilitated to a large extent by the expectations of high inflation and the consequent rise in interest rates especially the bond yields. The bond yields shot up […]
Consumer Price Index for the month of April, came at 4.29 % quite on the lines expected by many market participants mainly due to the fall in the food inflation and the favourable base effect. This is quite a bit of a pull back from the 5.52% level seen in March. Last year, for the […]
