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| Indian Economic Update
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The ongoing Russia-Ukraine war will certainly have an impact on the Indian economy, Union Finance Minister Niramala Sitaraman said on Tuesday. Crude oil prices... are rising due to the Ukraine crisis and the Central government is looking up parallel sources. The Minister also said, Russia and Ukraine export 30 per cent of wheat, which has been stopped after the war began, however, Indian farmers are producing wheat in large quantities. "We have to take up the challenge with a global dimension. We will achieve 'Atma Nirbharta' and fulfill demands of the world in terms of providing wheat
Commerce and Industry Minister Piyush Goyal is to hold the fifth Ministerial Dialogue on Trade and Investment with Canadian Minister of International Trade, Export Promotion, Small Business and Economic Development
PM Modi, addressing a webinar on 'Financing for Growth & Aspirational Economy' organised by the Ministry of Finance said that, the government and private sector should join hands to identify at least 8-10 sectors and work on them, to boost growth
MPC member Jayanth Varma, in an interview said that, the Russia-Ukraine conflict is likely to have adverse effects on both economic growth as well as inflation, stressing on the need for policy makers to remain alert and ready to respond rapidly to the emerging situation
India's wheat exports pick up as Russia-Ukraine war impacts global wheat supply, says Food Secretary Sudhanshu Pandey, and has touched 6.6 million tonnes in FY22, crossing the previous high of 6.5 million tonnes in FY13
DIPAM Secretary Tuhin Pandey said that the government has been watching the market situation and hopes to bring out the LIC IPO soon. He also said that the divestment of BPCL, BEML, Pavan Hans, is in advance stage
As per PFRDA data, the number of subscribers under the various schemes of National Pension System increased by 22% YoY in February, to 50.7 million
The Union Cabinet approved setting up a special purpose vehicle - National Land Monetization Corp - to help monetise surplus land of state-owned companies and government agencies
DCGI approves emergency use authorisation of Serum Institute of India's vaccine Covovax, for immunisation of children aged 12-17 years
RBI should use other instruments to handle external shocks without tightening the domestic policy and must respond to developments in the local economic cycle, rather than global triggers, MPC member Ashima Goyal said, while speaking at a panel discussion on 'Policy for Financial Stability', at the Skoch India Economic LITFest
Member of the Economic Advisory Council to the Prime Minister, Sanjeev Sanyal, said that, India ideally needs lower tax rates and more taxpayers, for a more robust ecosystem of tax collection in comparison to the country's GDP
GoI to re-open the application window for PLI scheme for white goods from Mar 10 to Apr 25, to give a second chance to prospective investors, to avail benefits of the scheme, as per official statements.
RBI Governor Das, speaking at an event commented that, the market assessment of unwinding of some steps may not be in sync with RBI and that unwinding of open-ended policies need nuanced communication, while stressing on the need to recognise actions needed to build policy credibility, instill confidence in policy and that policy communication must be backed by actions.
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| Global Update
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In the first high-level talks since the invasion began, Foreign Ministers of Ukraine and Russia, made little progress. Russia for its part, maintained that,... it will continue its attacks, until its goals are met
The ECB maintained status quo on policy rates on expected lines. While the announcement to end the Pandemic Emergency Purchases Programme (PEPP) by end of this month was expected, the guidance on the Asset Purchases Programme was that, it would reduce it rapidly through Q2-2022 by EUR 40 billion in April, EUR 30 billion in May and EUR 20 billion in June, which was perceived as a hawkish surprise. During the press conference however, President Lagarde noted that such a move does not mean an acceleration or tightening, but a normalisation process due to high inflation
Russia announced an export ban for more than 200 products, after the economy was hit by sanctions, over the invasion of Ukraine. It stopped short of curbing sales of energy and raw materials, the country’s biggest contribution to global trade. It also said that it might cease assets of foreign companies that have either been suspended, or left Russia
Brent dropped more than 17%, falling to nearly USD 105/bbl as UAE's ambassador to Washington said that his country will be encouraging OPEC, to consider higher output to fill the supply gap, due to sanctions on Russia, after it invaded Ukraine. But oil prices have recovered as UAE Energy Minister Suhail al-Mazrouei said his country is committed to the agreement by OPEC+, to ramp up oil supply gradually following sharp cuts in 2020
President Joe Biden said the US will ban imports of Russian fossil fuels including oil. The US move, will be matched in part by the UK, which announced a ban on Russian oil imports, though it will continue to allow natural gas and coal from the country. Other European nations that rely more heavily on Russian fuels, will not participate. In retaliation to the US/UK measures, Russia issued an order, saying it would restrict trade in some goods and raw materials and said that details would follow, as to which products would be affected
The PBOC said that it will hand over more than CNY 1 trillion (USD 158 billion) in profits to the Finance Ministry, to help pay for extra fiscal spending this year, as the economy comes under increasing pressure
Russia’s top energy official threatened to cut off natural gas flows via the Nord Stream 1 pipeline, as Europe drew up plans to limit its reliance on Russian energy, while the US edged closer to banning oil imports. Key lawmakers in the US announced the outline of bipartisan legislation to bar imports of Russian oil into the US, which relies on Russia for about 3% of its crude imports and 8% of all petroleum product imports. The House of Representatives could vote on the proposal as soon as Wednesday
Fresh talks on Monday, between Ukrainian and Russian officials, made only limited progress on negotiating a cease-fire. Both sides said the talks would continue, though Russian President Vladimir Putin says Kyiv must agree to his demands if fighting is to end
China warned the US against trying to build, what it called a Pacific version of NATO, while declaring that security disputes over Taiwan and Ukraine were “not comparable at all”
President Vladimir Putin reiterated that the war will continue until Ukraine accepts his demands and halts resistance, dimming hopes for a negotiated settlement. Putin says Ukraine must “demilitarise” and he has made clear, that his goal is to remove the current government
Russia and Russian companies will be allowed to pay foreign creditors in RUB, according to a decree signed by President Vladimir Putin on Saturday, as a way to service debt, while capital controls remain in place
China’s government signaled that, more stimulus is on the cards by setting an aggressive economic growth target of 5.5%. Premier Li Keqiang vowed at the opening of the National People’s Congress to “step up implementation”, of monetary policy and stabilise house prices.
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| Equity
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Benchmark indices are trading lower after a three-day winning streak amid weak global cues, as concerns over soaring inflation and global Central Banks'... actions to tame it, aggravated by the Russia-Ukraine conflict, are likely to keep the sentiment negative.
During the week Sensex gained 2.23% to close at 55550.30 while Nifty advanced 2.37% to close at 16630.45
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| Debt
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Government bond prices are likely to open steady, as participants may avoid placing large bets amid a lack of significant cues. Market to focus on new... developments on the geo-political fronts.
10Y benchmark yield ended at 6.86% as compared to 6.81% of previous week.
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| Oil
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Global crude oil prices are trading lower as Russia pledged to fulfil contractual obligations on energy supplies. Brent crude prices are trading at USD 107/bbl.... |
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| Gold
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Gold prices are trading lower, but remain steady near USD 2000/oz, as its safe-haven appeal was supported by a lack of progress in talks between Russia and Ukraine.... Gold is trading at USD 1998/oz |
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| Currency
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Rupee may open steady against the USD, as the DXY is trading flat in today’s session. However, RBI’s intervention may curb any sharp movement in the pair.... The Indian Rupee appreciated to 76.31 level against the US dollar, in the previous trading session. |
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| Sensex |
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During the week Sensex gained 2.23% to close at 55550.30 while Nifty advanced 2.37% to close at 16630.45
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| Bond Yields |
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10Y benchmark yield ended at 6.86% as compared to 6.81% of previous week.
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Source: ICICI Bank Research, Private Banking Investment Strategy Team, Bloomberg and CRISIL.
Disclaimer:
The information set out herein has been prepared by ICICI Bank in good
faith and from sources deemed reliable. ICICI Bank does not provide any
assurance as regards the accuracy of such information. ICICI Bank does
not accept any responsibility for any errors whether caused by
negligence or otherwise or for any direct or indirect loss / claim/
damage caused to any person, arising out of or in relation to the use of
information communicated herein.
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