Business News at 10:00 am on 1st April, 2024

Let’s begin with the major update, The Monetary Policy Committee (MPC), which is slated to meet on April 3-5 to discuss the financial year’s first monetary policy, is unlikely to spring any positive surprises both on interest rates or policy stance, said 13 economists polled by FE. The repo rate is likely to be kept unchanged at 6.5% for the seventh time in a row. And with the inflation staying above the Reserve Bank of India’s (RBI) comfort zone of 4%, the stance of withdrawn of accommodation is also likely to continue. The committee will get a lot of comfort that growth has remained strong despite its hawkish stance, giving the apex bank ample space to focus on core inflation. Moving on, To instill greater competition in the telecom sector, the department of telecommunications (DoT) is working on a new structure for virtual network operators (VNOs). Virtual network operators, who function as resellers of bandwidth and services of licensed telecom operators, are currently permitted. However, their operations have not been successful. Therefore, the DoT is looking at easing certain restrictions so that they are able to find more takers among the telecom operators. For instance, the DoT wants to allow VNOs to market services of more than one operator, which is currently not allowed. The government believes, this way, weaker operators like BSNL and Vodafone Idea will be able to better market their services and compete in the market. In other news, After two years of being sellers, FPIs turned buyers and infused a whopping Rs 2.06 trillion in Indian equities in FY24. FPIs were net sellers to the tune of Rs 1.7 trillion in FY22 and FY23, when high valuations and rising interest rates forced them to take the money out of the world’s fastest growing big economy. With money flowing in from FPIs as well as domestic investors, Indian equity market reached new highs in FY24, with key indices registering their best returns in over a decade, excluding the unusually high returns seen in FY21 on the back of bargain buying post COVID-induced sell-off. The benchmark Nifty 50 and Sensex hit a lifetime high of 22,526.60 points and 74,245.17, respectively, in March.

Meanwhile, The ministry of electronics and information technology will come out with a new production-linked incentive scheme for component manufacturing after the elections. As a result, the current Rs 3,285-crore scheme for promotion of manufacturing of electronic components and semiconductors (SPECS), which came to an end on Sunday, will not be renewed. Officials said that while no fresh applications will be accepted under SPECS, disbursement of incentives for the companies which were selected will continue. The new component scheme, which will be announced after a new government assumes office, will be designed like other PLI schemes where incentives will be given on achieving the laid down incremental production and sales target. Up next, At a time when the global economy is still facing uncertainties, with growth decelerating in some of the most advanced economies, India’s economy has exhibited resilience and has been able to grow at a rate much higher than market expectations. Key macro-indicators such as CPI inflation, WPI inflation, trade and current account deficit (CAD) are benign, and are expected to remain range-bound in the near-term as well. In the first three quarters of FY24, the country’s GDP expanded sharply by 8.2%, with the growth in Q3 coming in at a six-quarter high of 8.4%. This is way higher than the market consensus of 6.7%. Ofcourse, the base effect helped, but largely the push to growth came from investments. Moving ahead, The last-quarter spurt would see India’s merchandise exports to be around $445 billion in the financial year 2023-24, about 1.3% lower than previous year’s level of $451 billion. The new year is challenging and growth from hereon will depend on inflation-interest rate dynamics in the key markets of the US and Europe, trade experts said. Before exports started looking up from October 2023 onwards, there was a 9% year-on-year decline in April-September. Services exports are up 6.7% on year till February to $314.8 billion. They are expected to end the year at around $345 billion. For 2023-24 overall exports are expected to touch $ 790 billion, up from $ 777.6 billion last year. Lastly, let’s take a look at stocks to watch today. GIFT Nifty indicated that Indian equity indices BSE Sensex and NSE Nifty 50 may see a positive opening on Monday. GIFT Nifty traded up by 42.50 points or 0.19% at 22,524 indicating a positive opening for domestic indices NSE Nifty 50 and BSE Sensex on Monday. Previously, on Thursday, the NSE Nifty 50 ended up by 203.25 points or 0.92% to settle at 22,326.90, while the BSE gained 655.04 points or 0.90% to 73,651.35. Here’s a look at the key stocks to watch in trade today — HDFC Bank, Infosys, IOCL, RVNL, Asian Paints, JM Financial, Adani Total Gas, Pharma Stocks.