December 22, 2016 / 3:20 AM / 7 months ago

Morning News Call - India, December 22

7 Min Read

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    (India Morning Newsletter will not be published through the year-end holiday
season from December 26, 2016 to December 30, 2016. Normal service will resume
from January 2, 2017. Season's Greetings and Happy New Year.)
    
    
    FACTORS TO WATCH
    
    LIVECHAT-BONDS UPDATE with  Richard Leong 
    Reuters interest rate reporter Richard Leong delves into government bond
markets at 07:00 pm. To join the conversation, click on the link: here
    
    
    INDIA TOP NEWS
     India's crackdown on cash imperils pivotal national tax reform
    Indian Prime Minister Narendra Modi's crackdown on the cash economy has
shattered the consensus needed for a new national sales tax, plunging his
boldest reform into limbo and threatening to entrench an economic
slowdown. 
     RBI retracts directive for lenders to question depositors 
    The Reserve Bank of India on Wednesday retracted a directive for banks to
question individuals depositing more than 5000 rupees in discontinued currency,
just two days after issuing the order. 
     India rate panel focuses more on inflation, plays down growth worry
    Indian central bank's monetary policy committee (MPC) has shifted its focus
towards inflation while playing down concern about economic growth, minutes from
its meeting this month showed on Wednesday. 
     Indian finance panel to grill RBI's Patel later on cash crunch 
    Indian central bank Governor Urjit Patel will not appear on Thursday before
parliament's finance committee to brief it on the government's decision to scrap
high-value bank notes, the panel's chairman said on Wednesday. 
     Cyrus Mistry petition seeks ouster of Tata Sons board
    Tata Sons' ousted chairman Cyrus Mistry, in his first legal salvo against
the conglomerate, has appealed to a quasi-judicial body to either replace the
company's current board, or appoint a retired Supreme Court judge as
non-executive chairman. 
     Reliance Communications signs binding pact with Brookfield for $1.6
billion tower stake sale
    Indian telecommunications carrier Reliance Communications Ltd said on
Wednesday it had signed a binding pact with Canada's Brookfield Infrastructure
for selling a stake in its mobile phone tower business. 
     Ride-hailing firms welcome liberal Indian taxi policy blueprint
    Leading ride-hailing firms have praised an Indian policy blueprint on
regulating the taxi industry, saying it would offer their app-based services a
chance to flourish despite their concerns about price caps. 

    GLOBAL TOP NEWS
     Japan plans record $830 billion spending in FY2017/18, budget-balancing
goal elusive
    Japan's cabinet approved on Thursday a record $830 billion spending budget
for fiscal 2017 that counts on low interest rates and a weak yen to limit
borrowing, underscoring the challenge Tokyo faces in curbing the industrial
world's heaviest debt burden. 
     Trump picks 'Death by China' author for trade advisory role
    U.S. President-elect Donald Trump named Peter Navarro, an economist who has
urged a hard line on trade with China, to head a newly formed White House
National Trade Council, the transition team said on Wednesday. 
     U.S.-supplied drones disappoint Ukraine at the front lines
    Millions of dollars' worth of U.S.-supplied drones that Kiev had hoped would
help in its war against Russian-backed separatists have proven ineffective
against jamming and hacking, Ukrainian officials say. 

   
    LOCAL MARKETS OUTLOOK
    (As reported by NewsRise)
     The SGX Nifty Futures were trading at 8,050.00, down 0.30 pct from its
previous close.
     The Indian rupee will likely open higher against the dollar, as
profit-taking dragged the greenback away from 14-year highs ahead of the
upcoming holidays.
     Indian government bonds are likely to trade lower in the early session, as
the minutes of the Monetary Policy Committee released yesterday showed members
believed retail inflation, excluding food and fuel, remained 'sticky', raising
concerns of a delay in rate cut. The yield on the benchmark 6.97 pct bond
maturing in 2026 is likely to trade in a 6.45 pct - 6.50 pct band.
    
    
    GLOBAL MARKETS
     U.S. stocks fell on Wednesday, with healthcare and real estate shares
losing ground a day after the Nasdaq Composite and the Dow Jones Industrial
Average hit record highs. 
     Asian shares struggled, taking their cues from a lacklustre day on Wall
Street as investors locked in gains in thin trade ahead of the upcoming
holidays. 
     The dollar slipped from its 14-year-high against a basket of currencies as
investors took profits ahead of holidays and a big batch of U.S. economic data
due later in the day. 
     U.S. Treasury debt prices gained slightly in light trading volumes before
the Christmas holiday with no major economic data on Wednesday, as investors
evaluated how many times the Federal Reserve is likely to raise interest rates
next year. 
     Oil prices nudged higher, supported by a weaker dollar and optimism crude
producers would abide by an agreement to curb output to prop up markets. 
     Gold edged higher, after ending the prior session nearly flat as the U.S.
dollar retreated from 14-year highs touched earlier this week. 
    
                   CLOSE        FII INVESTMENTS  EQUITIES      DEBT
 PNDF spot         67.82/67.85  December 21      -$173.68 mln  $146.66 mln
 10-yr bond yield  6.72 pct     Month-to-date    -$250.28 mln  -$2.72 bln
                                Year-to-date     $3.90 bln     -$5.86 bln
 
    
    For additional data:
    India govt bond market volumes       
    Stock market reports                 
    Non-deliverable forwards data        
    Corporate debt stories               [IN CORPD]
    Local market closing/intraday levels [IN SNAPSHOT]
    Monthly inflows                      [INFLOWS RTRS TABLE IN]
 
($1 = 67.91 Indian rupees)

 (Compiled by Shradha Singh in Bengaluru)
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