“Because, earlier on, there was a sense that liquidity can be withdrawn if necessary, or trapped by the Fed paying interest on its reserves, so those reserves would not necessarily go out to be free money that would pump up inflation”. This is the fifth rate cut announced by China since November 2014. China’s stock markets are shaky and its recent poor trade figures confirm that the days of double-digit export-led growth rates are over.
The PBOC had injected a net 150 billion yuan into the financial system last week, marking its biggest pump priming exercise since the week of February 7-13, when it injected a net 205 billion yuan. The Indian rupee had fallen about 0.4 percent to about 66.5 rupees against the dollar. Strategists forecast the rupee will hand dollar-based investors a 13 per cent gain, including interest, by the end of 2016, the second highest in Asia.
Stating that China was responsible for nearly half of the global growth in the last few years, the Finance Minister said India is now the only major economy to grow at 7-8 per cent and “everybody else is far below”. So the INDY should give us a good idea of how Indian equities have fared in YTD (year-to-date) 2015.
“Participation is best enhanced not through subventions and subsidies but by creating supporting frameworks that improve transparency, contract enforcement and protection for market participants against abusive practices”.
The BSE’s 30-share index closed the day at 25,741.56 points, down 5.94 per cent (1624.51 points), as stocks across all sectors including energy, banking, auto, IT, infrastructure and real estate saw massive selling as investors turned jittery amid a global carnage.
According to the RBI governor, the economy has come a long way since the difficulties in 2012-13 though three areas are still “works-in-progress” from the RBI’s perspective.
He further tried to assuage the market wounds saying “we have always been telling that we are at a stage where we can not be disconnected from the global events”.
“I have been a little concerned about the vast burden for action that is falling on central banks and I think it is quite legitimate for central banks to say at some point we can’t carry the burden ourselves”, he said in answer to a question about what he would do if he was running China’s central bank. “The Nifty should find support around the current levels”, said P. Phani Sekhar of Karvy Stock Broking.
India’s central bank governor Raghuram Rajan said he was ready to deploy foreign exchange reserves to curb volatility in the currency as turmoil in global markets sent domestic shares down more than 4 percent and the rupee to its lowest since late 2013.