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Market Movers: US tariffs against China likely today; Govt steps to check rupee fall & more

Market Movers: US tariffs against China likely today; Govt steps to check rupee fall & more
Issue Time:2018-09-17
US Tariffs Against China Today, Dollar Firm, Oil Down 
US President Donald Trump is likely to announce the new levies as early as Monday, reports Reuters quoting sources. The tariff level will probably be about 10%, The Wall Street Journal reported, below the 25%, US had been said to be considering. The WSJ also reported that China may decline to attend trade talks due next week as Beijing won’t negotiate under threat. The dollar index .DXY against a basket of major currencies, held at 94.965, well above Friday’s 94.35. Global oil prices eased in early Asian trading on additional tariff concerns, outweighing supply fears from upcoming sanctions on Iran. Brent crude oil futures dipped 16 cents to $77.93 a barrel. WTI futures fell 20 cents to $68.79 a barrel. 

Funding of farm loan waivers, poll-related spending and other populist measures are likely to ensure that states are set to miss their fiscal consolidation targets budgeted at the beginning of the year, says a report by ICRA. The states' fiscal deficit is primarily financed by issuing state development loans (SDLs). In April-August of FY19, gross issuance of SDL contracted by 3.4% to Rs 1.32 trillion, primarily led by a sharp decline in issuance by UP, Maharashtra and Gujarat. 

Govt Steps to Check CAD, Rupee fall 
The Indian government on Friday indicated that it may curb non-essential imports in the weeks ahead and take steps to boost exports besides announcing a number of measures to shore up the rupee and control the current account deficit. Analysts, however, have said the steps may not be adequate and even negative from longer-term perspective. 

Banks & Power NPAs
Banks have decided to go ahead with their resolution plans for power plants without seeking any advice from the Reserve Bank of India. The decision follows a favourable legal advice in the interpretation of the Supreme Court’s September 11 interim order that directed status-quo on the matter. 

WPI Eases, Trade Deficit Narrows 
India’s wholesale inflation moderated to 4.53% in August from 5.09% in July while trade deficit for August was at $17.39 billion, narrowing a little from preceding month's $18.02 billion. The Wholesale Price Index (WPI) based inflation eased on softening of prices of food articles, especially vegetables. WPI based inflation stood at 5.09% in July and 3.24% in August last year. 

No Cut in Budgeted Spending: FM 
Finance minister Arun Jaitley has said the government will end the current fiscal year without any cuts in the budgeted expenditure as it is extremely necessary for economic growth. He said that the government has spent 44% of the budgeted expenditure till August 31 and will end the year without any cuts. 

Strategic Sale of 4 AI Subsidiaries Soon 
The government plans to soon initiate the strategic sale process for at least four subsidiaries of loss-making Air India, including Airline Allied Services Ltd, Hotel Corporation of India, Air India Air Transport Service Ltd and Air India Engineering Service Ltd.Besides, plans are on the anvil for selling the headquarter building of Air India in the national capital as well as various other land assets and buildings of the airline in different parts of the country. 

ET Poll
The rupee may retrace up to 3% of its lost ground by the end of the calendar year. 

POLICIES & MORE 
The commerce ministry's foreign trade arm DGFT has simplified the procedure for traders to avail export incentives under the MEIS scheme, a move aimed at promoting ease of doing business for exporters.
The revenue department has instructed its field formations to collect safeguard duty on imported solar cells, withdrawing its earlier direction issued a month ago regarding suspension of the levy.

Private sector HDFC BankNSE -1.39 % has become India's most valuable brand for the fifth year in a row with a 21% rise in its brand value to $21.7 billion over the previous year. HDFC Bank retained its top spot in the "WPP and Kantar Millward Brown's BrandZ 75 Most Valuable Indian Brands" ranking that was started in 2014.
India climbed one spot to 130 among 189 countries in the latest human development index released last Friday by the United Nations Development Programme. Within South Asia, India's human development index (HDI) value is above the average of 0.638 for the region. 

Rupee Up: The rupee on Friday surged by 34 paise to close at a one-week high of 71.84 against the US dollar on positive macro data and hopes of policy intervention by the government to defend the volatile currency. 

Long-term G-Sec Yields Mixed: Government bonds (G-Secs) surged following rising demand from corporates and banks. The 7.17% G-Secs maturing in 2028 went-up to Rs 93.8200 from Rs 93.7700, while, its yield held stable at 8.13%. The 6.68% G-Secs maturing in 2031 climbed to Rs 87.7400 from Rs 87.6400, while, its yield softened to 8.23% from 8.25%. 

Shorter-term G-Sec Yields Down: The 6.84% G-Secs maturing in 2022 rose to Rs 95.2900 from Rs 95.2200, while, its yield went down to 8.17% from 8.19%. The 7.59% G-Secs maturing in 2026 and the 8.33% G-Secs maturing in 2036 were also quoted higher to Rs 96.4625 and Rs 99.6200 respectively. 

Call Rates Steady: The overnight call money rates ended steady at its Wednesday's level of 6.30%, It resumed higher at 6.50% and moved in a range of 6.50% and 6.25%. 

Liquidity: The Reserve Bank of India (RBI), under the Liquidity Adjustment Facility (LAF), purchased securities worth Rs 39.56 billion in 7-bids at the 3-day repo opertion at a fixed rate of 6.50% as on today, while its sold securities worth Rs 216.12 billion in 37-bids at the overnight reverse repo auction at a fixed rate of 6.25% as on September 13. 

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