German Factory Orders Surge In May, Reversing Trend-The Total Investment & Insurance Solutions

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5 July 2018

Germany (The Total Investment & Insurance Solutions)

German factory orders surged in May, beating economists' expectations and ending a string of declines. The Total Investment & Insurance Solutions

The Federal Statistical Office reported Thursday that industrial orders rose 2.6 percent in May over the previous month in Europe's largest economy when adjusted for seasonal and calendar effects.

The increase was driven by a 6.7 percent rise in orders from within the eurozone and 4.3 percent increase in domestic orders. The last time factory orders increased was in December 2017, and the succession of monthly declines had raised concerns that the German economy may be cooling.

Economists had predicted a 1.1 percent increase in May.

The Economy Ministry says industrial growth should continue in a gradual upward trend in the coming months.The Total Investment & Insurance Solutions

Global Stocks Rise As Investors Watch Trade Tensions-The Total Investment & Insurance Solutions

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5 July 2018

Japan financial markets (The Total Investment & Insurance Solutions)

European shares rose Thursday following a German report that the U.S. may propose reducing suggested auto tariffs to zero. But in Asia markets were overshadowed by concern over trade tensions between Washington and Beijing.

KEEPING SCORE: Germany's DAX jumped 1.5 percent to 12,499 and France's CAC 40 added 1.2 percent to 5,384. Britain's FTSE 100 gained 0.6 percent to 7,620. Wall Street was poised to open higher after Wednesday's Independence Day holiday. The S&P 500 and Dow Jones Industrial Average futures both rose 0.6 percent. The Total Investment & Insurance Solutions

ASIA'S DAY: Asian markets were subdued after China reiterated its determination to protect its interests in a rancorous trade dispute with Washington. Japan's Nikkei 225 index fell 0.8 percent to 21,546.99 and the Shanghai Composite index dropped 0.9 percent to 2,733.88. Hong Kong's Hang Seng index closed 0.2 percent lower at 28,182.09, after tumbling more than 1 percent earlier in the day. South Korea's Kospi lost 0.4 percent to 2,257.55. Australia's S&P ASX/200 bucked the regional trend, adding 0.5 percent to 6,215.50.

AUTO STOCKS RALLY: German newspaper Handelsblatt reported that a U.S. official has met with German carmakers to discuss impending American tariffs on auto imports from the European Union. Ambassador Richard Grenell reportedly told representatives from Volkswagen, Daimler and BMW about a U.S. proposal to reduce all auto tariffs. The report said the U.S. was seeking talks with the EU and the German government. Analysts note a deal could be difficult, however, as key EU member France does not export cars to the U.S. and could resist a drop in tariffs on U.S. cars in Europe. Auto stocks nevertheless rebounded on the news. Volkswagen stocks added 4.5 percent. BMW rose 5.4 percent and Daimler was up 4.5 percent. The Total Investment & Insurance Solutions

U.S.-CHINA TARIFFS: The Trump administration is set to impose a 25 percent tariff on $34 billion worth of Chinese imports starting Friday. China has said that it won't make the first move. But it is expected to quickly retaliate with a similar amount of tariffs on American goods, including soybeans, electric cars and whiskey. On Thursday, Commerce Ministry spokesman Gao Feng hit back at "threats and blackmail" ahead of the planned U.S. tariff hike. He added that China would be forced to fight back to protect its own interests.

ANALYST'S TAKE: "We are now two steps removed from the worries of trade tensions as the tariffs deadline looms, locking equity markets in a lackluster trading tone," said Jingyi Pan of IG.

ENERGY: Benchmark U.S. crude picked up 36 cents to $74.50 per barrel in electronic trading on the New York Mercantile Exchange. The contract settled at $74.14 a barrel on Tuesday, after rising to over $75 a barrel in early trading. Brent crude, used to price international oils, rose 8 cents to $78.32 per barrel.

CURRENCIES: The dollar ticked up to 110.63 yen from 110.51 yen on Wednesday. The euro rose to $1.1698 from $1.1641.The Total Investment & Insurance Solutions

Nifty, Sensex continues to be on an uptrend – Wednesday closing report-The Total Investment & Insurance Solutions

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4 July 2018

I had mentioned in Wednesday’s closing report that Nifty, Sensex might move up further. The major indices of the Indian stock markets rallied on Wednesday and closed with gains over Tuesday’s close. On the NSE, there were 826 advances, 903 declines and 336 unchanged. The trends of the major indices in the course of Wednesday’s trading are given in the table below: The Total Investment & Insurance Solutions

Healthy rise in new businesses accelerated the growth of India's service sector in June, a key economic data point showed on Wednesday. Accordingly, the seasonally adjusted Nikkei India Services Business Activity Index rose at the fastest pace since last June, despite the input cost inflation at overall high level.  The index rose from 49.6 in May to 52.6 in June. An index reading of above 50 indicates an overall increase in economic activity and below 50 an overall decrease. "The service economy returned to expansion territory in June. Encouragingly, the latest performance was the strongest seen in a year, against a backdrop of improving demand conditions, as evidenced by the fastest gain in new business since last June," Aashna Dodhia, Economist at IHS Markit, and author of the report, was quoted as saying in a statement. Consequently, the seasonally adjusted Nikkei India Composite PMI Output Index rose from 50.4 in May to 53.3 in June, supported by output growth in both the manufacturing and service sectors. As per the report, the latest reading was the strongest seen since October 2016 and indicative of a solid rate of expansion. "The PMI data signalled the best improvement in the overall health of the economy since October 2016, propelled by solid growth in both the manufacturing and service economies, with the sharper rise in the former," Dodhia said.

ICICI Bank announced that it has crossed the milestone of disbursing mortgage loans of over Rs1.5 trillion. It aims to grow its pan-India mortgage book to Rs2 trillion by end of FY20, a company statement said. ICICI Bank shares closed at Rs273.25, up 0.13% on the NSE. Fortis Healthcare (FHL) on Tuesday said that its Board has received "Binding Bids" from suitors under the new transaction process. "The 'Binding Bids' will be evaluated by the Board of Directors of the company in consultation with its advisors," FHL said in a BSE filing on Tuesday. On June 29, FHL had extended the deadline for submission of binding bids to July 3. FHL had earlier said that it will consider the bids of four suitors -- Hero Enterprise Investment Office and Burman Family Office, IHH Healthcare Berhand, Radiant Life Care and TPG Asia and Manipal Health Enterprises -- in the new transaction process. The earlier date of bid submission was June 28. Fortis Healthcare shares closed at Rs144.60, up 1.76% on the NSE.

The top gainers and top losers of the major indices are given in the table below:

The closing values of the major Asian indices are given in the table below: The Total Investment & Insurance Solutions

Major Indices (The Total Investment & Insurance Solutions)

India may not be directly affected directly by US-China global war: McKinsey global head -The Total Investment & Insurance Solutions

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4 July 2018

 

US China (The Total Investment & Insurance Solutions)

India will not directly be affected in case of a global trade war but the second order effects could impact the economy, said Kevin Sneader, global CEO of McKinsey in an interview with ET. While restrictive tariffs might not hurt the economy as much, factors like rising commodity prices could hurt the trade more. The Total Investment & Insurance Solutions 

The newly elected CEO of the white-show consulting firm chose to visit India in his first overseas trip after taking over the corner office on July 1, 2018. “I wanted to be in Asia and I wanted to be somewhere that matters to the world in terms of size and importance. I have been coming to India regularly. This opportunity was find out what’s happening in India,” said Sneader, who was the firm’s Asia chairman before being elected to the top job on February 24 ^th 2018. 

In his first interaction to any media after taking over as the firm’s managing partner Sneader said India’s growth rate at 7.5 percent, fastest for any major economy is encouraging. “Global CEOs I speak to feel that GST and demonetisation might have created minor short-term hiccups but overall there is a general sense of optimism. Investors are looking at opportunities in India that weren’t there a few years ago,” he said. 

But the fact remains that dark clouds of a trade war hover over the horizon as countries like US and China harden their stances. “I think it's worth putting this in context. If you take the US-China trade relationship, US exports to China are about $125 billion while imports from China amounted to $500 billion. If we go by the first round of tariffs announced in mid-June, then business worth $100 billion out of a $635 billion trade relation was affected and that wasn’t much. That wasn’t a trade war but the real issue is the escalation after the June 18 announcement of tariffs on $200 billion of China’s exports and that changes the game. That would mean tariffs on nearly half of China’s exports to the US and that’s a big issue. At the moment we aren’t in one but we definitely are on the brink of a trade war,” said Sneader. The Total Investment & Insurance Solutions 

Given the rising uncertainty in the business environment, is it time for Indian CEOs to re-look at their strategic plans? “I think it’s a bit late if they are starting now. All CEOs have to plan for different economic environments. We are in an unprecedented period of synchronous growth; the whole world is growing. IMF had a forecast of 3.5% growth in January, revised to 3.7% in April. 

We were seeing that steady uptick but our surveys show that sentiment has started to flatten. It's not bad, it's just more cautious. I think everyone should be prepared for all eventualities. Because the other side of this, of course, is that if the unexpected happens--trade war clouds disappear--that will give a big boost to the global economy. You should be prepared for that too,” he said. The Total Investment & Insurance Solutions

Government hikes paddy MSP by Rs 200 per quintal-The Total Investment & Insurance Solutions

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4 July 2018

Crop (The Total Investment & Insurance Solutions)

Government on Wednesday made a sharp increase in the minimum support price (MSP) of paddy– the key kharif crop, by 13 percent to Rs 1,750 per quintal for the 2018-19 crop year. The Total Investment & Insurance Solutions

To woo distressed farmers ahead of 2019 general polls, the government has also accepted the MSP of the 14 kharif crops.

The Cabinet Committee on Economic Affairs (CCEA) at its meeting approved the MSP of 14 Kharif (summer-sown) crops.

The MSP of paddy (common grade) has been increased by Rs 200 to Rs 1,750 per quintal, while that of Grade A variety by Rs 160 per quintal to Rs 1,750.

The MSP of cotton (medium staple) has been increased to Rs 5,150 from Rs 4,020 and that of cotton (long staple) to Rs 5,450 from 4,320 per quintal.

In pulses, tur MSP has been raised to Rs 5,675 per quintal from Rs 5,450, and that of moong to Rs 6,975 per quintal from Rs 5,575. Urad MSP has been hiked to Rs 5,600 from Rs 5,400 per quintal. The Total Investment & Insurance Solutions

Prime Minister Narendra Modi had last week announced that the the Cabinet will approve the hike in MSP to at least 1.5 times of the production cost in the forthcoming meeting. The Total Investment & Insurance Solutions

In this year's general budget, the government had announced that it would fix a support price at least 1.5 times of the cost of the production. This was the BJP's poll promise in 2014 general elections.

Normally, the MSP is announced just before the start of the sowing to help farmers choose the crop they want to sow. Sowing of kharif crops begins with the onset of southwest monsoon and harvesting from October.

Farm experts are of the view that the sharp increase in the paddy MSP could further boost India's rice production, which touched an all-time high of 111 million tonnes in 2017-18 crop year and the output is much more than the domestic demand. The Total Investment & Insurance Solutions

The cultivation of paddy, which is a water guzzling crop, needs to be discouraged and not promoted, they said, adding that higher rice production will lead to increase in government procurement and swelling of the food subsidy bill.The Total Investment & Insurance Solutions

Suresh Prabhu expects 20 per cent growth in exports -The Total Investment & Insurance Solutions

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4 July 2018

 

Growth in exports (The Total Investment & Insurance Solutions)

Commerce Minister Suresh Prabhu today said he is expecting around 20 per cent growth in exports in June. The Total Investment & Insurance Solutions

In May, exports recorded over 20 per cent growth and it looks like June will also be the same, he said. The Total Investment & Insurance Solutions 

The minister was addressing exporters on preparing strategy to add 100 billion dollar to India's exports. The Total Investment & Insurance Solutions 

The official figures for June will be released by Commerce Ministry on July 15. 

Prabhu also said banks should lend exporters as part of priority sector lending so that they do not face credit-related issues. 

He said the government is providing support to boost exports and India will not be affected by the headwinds at global trade level. 

 Exports grew 20.18 per cent to USD 28.86 billion in May - the highest in six months. The Total Investment & Insurance Solutions

The previous high growth of exports was recorded at 30.55 per cent in November 2017. The Total Investment & Insurance Solutions

Stocks Mostly Lower As China-US Tariffs Moves Loom-The Total Investment & Insurance Solutions

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4 July 2018

Hong kong financial markets (The Total Investment & Insurance Solutions)

World stocks were mostly lower Wednesday as tech shares in particular were hit by worries over trade tensions between China and the U.S. Trading volumes were subdued as U.S. markets were due to remain closed.

KEEPING SCORE: Germany's DAX lost 0.1 percent to 12,337 while the CAC 40 of France rose 0.3 percent to 5,329. Britain's FTSE 100 fell 0.2 percent to 7,580. Wall Street was due to remain closed for Independence Day.

ASIA'S DAY: Japan's Nikkei 225 index fell 0.3 percent to 21,717.04 and the Shanghai Composite index dropped 0.1 percent to 2,759.13. Hong Kong's Hang Seng index fell 1.1 percent to 28,241.67 and the Kospi in South Korea lost 0.2 percent to 2,265.46. Australia's S&P ASX/200 gave up 0.4 percent to 6,183.40.

CHINA-U.S. TRADE: On Friday the U.S. is set to impose a 25 percent tariff on $34 billion worth of Chinese imports. And China is expected to strike back with tariffs on a similar amount of U.S. exports. The big question is how far the two countries will go in their dispute over trade. The Trump administration has said it won't target an additional $16 billion worth of Chinese goods until it gathers further public comments. It's also identifying an additional $200 billion in Chinese goods for 10 percent tariffs, which could take effect if Beijing retaliates.

EUROPE TRADE: German Chancellor Angela Merkel said Tuesday the European Union will strive to avoid a trade war with the United States. But Washington needs to join in that effort, Merkel said. President Donald Trump's administration has imposed tariffs on EU steel and aluminum imports and is mulling whether to add tariffs on cars, trucks and auto parts.

CHINESE CURRENCY: Reported comments by the head of China's central bank saying he's closely watching the recent slide in the value of the yuan against the dollar have helped reassure investors. People's Bank of China Governor Yi Gang said financial risks were under control and the China's international balance of payments and currency flows were stable.

ANALYST VIEWPOINT: "The statement puts paid to any fears that the PBOC could be engineering a depreciation to cushion the economy," Chang Weiliang of Mizuho Bank said in a commentary. The yuan ended trading Wednesday at 6.66 to the dollar. The Total Investment & Insurance Solutions

ENERGY: Benchmark U.S. crude fell back, losing 30 cents to $73.84 per barrel in electronic trading on the New York Mercantile Exchange. It added 20 cents to $74.14 a barrel on Tuesday, reaching more than $75 a barrel in early trading. Brent crude, used to price international oils, rose 33 cents to $78.09 per barrel.

CURRENCIES: The dollar fell to 110.51 yen from 110.59 yen on Tuesday. The euro dropped to $1.1641 from $1.1657.The Total Investment & Insurance Solutions

Nifty, Sensex May Move Up Further- Tuesday closing report-The Total Investment & Insurance Solutions

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3 July 2018

After opening on a negative note, the key Indian equity indices ended higher on Tuesday, supported by healthy buying in auto, healthcare and oil and gas stocks. On the NSE, there were 895 advances, 819 declines while no change in 353 scrips. The trends of the major indices in the course of Monday’s trading are given in the table below:

The top gainers on the Sensex were Maruti Suzuki, Infosys, Sun Pharma, ONGC and Kotak Mahindra Bank whereas Vedanta, ICICI Bank, State Bank Of India, Yes Bank and Tata Motors (DVR) were the major losers. Pharma stocks continued to head higher after their sharp upturn last month.

On the NSE, Cipla, Bajaj Finserv and Maruti Suzuki were the highest gainers while Vedanta, Bharti Infratel and ICICI Bank lost the most.

In a research report, Nomura says it expects Indian stock market to remain volatile in the run-up to the general elections next year and the political uncertainty will limit valuations in the near term.  The Japanese financial services provider has a Nifty target of 11,380 for this year end based on a forward multiple of 16x December 2018F earnings. “The Lok Sabha elections due in 2019 are likely to influence market sentiment through mid-2019. A loss for the BJP and the formation of an unstable coalition would hurt valuations, in our view,” Nomura says.

The Vodafone-Idea Cellular merger will be completed after all processes stipulated in merger and acquisition regulations are duly followed, Communications Minister Manoj Sinha had said. He said, “"Every merger and acquisition needs to follow a set of rules and regulations. Once DoT completes all statutory formalities, Vodafone-Idea merger will be cleared immediately".

Lower steel production decelerate India's May core factory output, shows official data. Unfavourable base effect, along with lower production of steel, crude oil and cement decelerated India's eight major industries' output in May 2018.

The top gainers and top losers of the major indices are given in the table below:

The closing values of the major Asian indices are given in the table below:

Major Indices (The Total Investment & Insurance Solutions)

FY19 growth will be higher than estimates: Arun Jaitley -The Total Investment & Insurance Solutions

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3 July 2018

Union Minister Arun Jaitley (The Total Investment & Insurance Solutions)

Union Minister Arun Jaitley today said that India's GDP growth rate in FY19 will be more than the conventional estimates. 

Speaking at SBI conclave, Jaitley said that consumption has gone up because up higher investments in rural areas. He also claimed that the private sector capital expenditure has also gone up. Sales across sectors are also increasing, Jaitley claimed. 

Jaitley, who is on medical leave following a kidney transplant, said that the Modi government will try to stick to fiscal targets. 

"A good monsoon will have a direct impact on the Indian economy. Our growth this year is probably going to higher than what conventional thinkers believe despite all challenges," he said. 

Talking about the ongoing trade war among nations, Jaitley said: "A trade war is being thrust on us...We have to concentrate on making our domestic fundamentals stronger." 

He also conceded that the rising oil prices is a challenge for the economy. The Total Investment & Insurance Solutions

GST collections may help beat deficit target: Piyush Goyal -The Total Investment & Insurance Solutions

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3 July 2018

 

Finance minister Piyush Goyal (The Total Investment & Insurance Solutions)

India is likely to improve upon the fiscal deficit target this fiscal year thanks to rising goods and services tax (GST) collections, finance minister Piyush Goyal said. 

“There is a perception that the fiscal deficit will not be met, but I feel that we will actually do better than our budgeted fiscal deficit,” Goyal told reporters in the capital on Monday. The fiscal deficit target was revised in the February budget to 3.3% for FY19 against the 3% that it had been pegged at previously. 

The government has already run up 55% of the budgeted fiscal deficit in the first two months of the financial year, raising worries in some quarters about a breach. The fiscal deficit stood at Rs 3.45 lakh crore in April-May. In the year-ago period, this was at 68.3% of the budget estimate as the government frontloaded spending. 

Goyal’s optimism stems from improved GST collections. He expects them to cross Rs 13 lakh crore on the back of the successful e-way bill implementation. GST collections stood at Rs 95,610 crore in June, having touched a record Rs 1.03 lakh crore in April, followed by Rs 94,016 crore in May. 

“By the time the year ends, GST revenues would cross Rs 13 lakh crore,” Goyal said. “We have not yet got the full benefits of e-way bills. I feel there will be more improvement in revenues and some relief in taxes can be given.” The Total Investment & Insurance Solutions