The Weekly Business Digest

09 TH October 2016

STORY OF THE WEEK

Markets

RBI cuts repo rate by 25 basis points echoing Govt roadmap

EQUITIES

Amid easing food inflation and projections of a global slowdown, the Reserve
Bank of India (RBI) cut its key policy rate
the repo rate by 25 basis points to
6.25 per cent, fuelling hopes of cheaper
loans for home buyers and corporates.
This takes the rate to its lowest since
January 2011.

NIFTY

8,697.6

+1.0%

SENSEX

28,061.1

+0.7%

S&P 500

2,153.7

-0.7%

NASDAQ

4,864.5

-0.2%

FTSE

7,044.4

+2.1%

DAX

10,490.9

-0.2%

NIKKEI 225

16,860.1

+2.5%

WORLD ECONOMY

HANG SENG

23,851.8

+2.4%

Pounds two-minute mystery crash puts spotlight on robot traders

KOSPI 200

260.06

+1.0%

During two chaotic minutes of Asian trading, the pound plunged the most
since the Brexit referendum in June, with traders saying computerinitiated sell orders exacerbated the slump.

FX
USD

66.69

+0.1%

EUR

74.30

-0.2%

GBP

82.30

-4.8%

JPY

0.644

-2.4%

The unanimous decision to reduce rates

was taken by the new six-member Monetary Policy Committee (MPC) under a framework agreement signed with the government, marking a decisive shift in the approach to interest -rate setting in India.
Source The Indian Express

The 6.1 percent drop drove sterling to a 31 -year low of $1.1841, according
to composite prices compiled by Bloomberg of contributions from dealers.
Traders speculated the crash might have been sparked by human error, or
a so-called fat finger, with algorithms adding to selling pressure at a
time of day when liquidity is relatively low with falling investment, lead to
a further economic contraction.
Source Bloomberg News

Globalization, global markets and trade facing tough times ahead

COMMODITIES
BRENT
CRUDE

51.93

+5.9%

GOLD MCX

29,783

-4.5%

SILVER MCX

41,865

-8.3%

INTEREST RATES

Weak global trade, fears that the U.K. is marching towards a hard Brexit,
and polls indicating that the U.S. election remains a tighter call than markets are pricing in have led a bevy of analysts to redouble their warnings
that a backlash over globalization is poised to roil global financial marketswith profound consequences for the real economy and investment
strategies.
Source Bloomberg News

Julian Assange threatens with October Surprise

INDIA 10-YR
BOND

6.735%

-8 bps

US 10-YR
BOND

1.720%

12 bps

Wikileaks declaration to reveal shocking secrets in what has been charged

as an October Surprise is anticipated to contain archives that will relate
to Google, the US presidential race, arms exchanging, war, and oil and
mass reconnaissance. Set to be released on a week by week premise
throughout the following 10 weeks, all data identified with the US presidential race will be distributed before race day on November 8.
Source Morning Ledger

ANSWER TO THE PREVIOUS QUIZ Monetary policy is primarily concerned with the management
of interest rates and the total supply of money in circulation and is generally carried out
by central banks such as the Reserve Bank of India. Fiscal policy is the collective term for the taxing and spending actions of governments.

11

The Weekly Business Digest

09 TH October 2016

INDIAN ECONOMY

NIFTY 50
WEEKLY TOP GAINERS

Rs. 65,250 crore declared as black money in IDS

In the largest-ever declaration of black

GAIL India

414.05

+10.5% money, Rs 65,250 crore was declared as

Tata Steel

406.55

+8.6%

BPCL

663.55

+8.3%

WEEKLY TOP LOSERS

TCS

2,367.8

-2.6%

Infosys

1,012.55

-2.3%

Mahindra &

1,374.0

-2.3%

unaccounted income and assets under the

governments four-month-long Income Declaration Scheme (IDS) 2016, by a total of
64,275 persons declared their unaccounted
wealth under the window.
Out of the total amount of Rs 29,362 crore
as tax and penalty from these declarations,
around Rs 14,681 crore will flow into central government coffers in the
current financial year, while the remaining amount will be collected in
2017-18.
Source The Indian Express

Government raises $9.9 billion by telecom spectrum auction

SECTORAL INDICES
BANK NIFTY

19,400

+0.6%

NIFTY AUTO

10,344

+3.1%

NIFTY IT

10,184

-1.0%

NIFTY FMCG

21,638

+0.4%

NIFTY
MIDCAP 50

4,132

+4.4%

NIFTY
SMALLCAP

6,361

Vodafone was the biggest spender in the mobile phone spectrum auction
that raised a total $9.9 billion for the Indian government, as carriers competed to boost subscribers in the world's fastest -growing internet services
market.
That figure was well below the $84 billion worth of spectrum on offer
however, as carriers shunned the priciest category of airwaves. The Government will consider re-auctioning mobile phone spectrum that remained
unsold in a sale this week when the financial situation of its telecoms companies improves.
Source Reuters India

COMIC OF THE WEEK

+3.7% Automation threatens 69% jobs in India: World Bank

Automation threatens 69 per cent of the jobs in India, while 77 per cent in
China, according to a World Bank research which has said that technology
could fundamentally disrupt the pattern of traditional economic path in
developing countries.
Source Economic Times

RBI releases guidelines for Payments, Small Finance Banks

MACRO IN A NUTSHELL

The Reserve Bank of India has given a fresh nudge to country's financial
inclusion drive by allowing payments banks and small finance banks use
digital banking to open bank accounts while streamlining their risk mitigating norms to make the experiment of differentiated banking a robust
one. The central bank has also permitted mobile phone users to open bank
accounts with the payments banks promoted by telecom companies seamlessly.

Air fares crashed to new lows despite

festive season as Spicejet initiated a Source Economic Times
flash sale leading to price wars among
carriers. This is the quarter airlines
make money in for two lean quarters QUIZ OF THE WEEK What is the significance of Repo and
that come before and after this.
Reverse Repo rates?

Please send your answers and views to Networth@iimb.ernet.in