current macroeconomic trend indicators in india

8/11/2019 Current Macroeconomic Trend Indicators in India

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CURRENT MACROECONOMIC TREND

INDICATORS IN INDIA & ITS IMPACT

ON STOCK MARKET

Presented by:-

Amrita Das

Khushboo Jain

Nishant Singh


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Meaning of macroeconomic indicators

Macroeconomic indicators are statistics thatindicate the current status of the economy of astate depending on a particular area of theeconomy .


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Various macroeconomic indicators

GDP

FII

Interest Rate & Inflation

Oil price

Political news

Government announcements Fiscal deficit


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GDPA bad year for mining andmanufacturingBelow is a breakdown of growth rates invarious sectors for the full 2013-14financial year:

Agriculture, forestry and fishing: +6.3%Mining and quarrying: -0.4%Manufacturing: -1.4%Electricity, gas and water supply: +7.2%Construction: +0.7%Trade, hotels, transport and

communication: +3.9%Financial, insurance, real estate andbusiness services: +12.4%Community, social and personal services:+3.3%


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Impacts of GDP on stock market


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Government raised fares for passengers by 14.6 per cent while

freight rates were raised by 6.5 per cent Railway stocks were up 0.38 per cent on average. In comparison, the

benchmark Sensex was down 0.3 per cent

Push up costs for multiple sectors which rely on the rail network fortransportation of raw materials and other goods

Coal sector Cement

Power sector Infrastructure

Real Estate

GOVERNMENT ANNOUNCEMENTS

a)Interim railway budget


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Contd Railway stocks have been on an upmove since last week after news

that government is considering 100 per cent FDI in severalsegments of the railway sector


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b)Export duty The general excise duty on all machinery & equipment, appliances

etc has been reduced from 12% to 10%.

The excise duty on small cars, motor cycles, scooters, commercialvehicles and trailers has been reduced from 12% to 8% and on SUVsfrom 30% to 24%. The excise duties on large and mid segment carshave been reduced from 27% and 24% to 24% and 20%respectively.


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c) Sugar policy

Government announced additional interest-freeloan of Rs 4400 crore for sugar mills.

Shree Renuka Sugar saw its share price soar bynearly 9%.

Balrampur China gained 8%.

Bajaj Hindustan rose 8.6%.


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FII


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FII contd

FIIs have been putting in money for past 22years pushing up sensex from 2000 to 21000

Net inflow of overseas funds since the beginningof 2014 have reached Rs. 1.23 lakh crorespushing up the sensex by 6% since January

Companies such as Alembic Pharmaceuticals,Finolex Industries, PI Industries and Mindtreehave risen over 100% on the back of FII inflows


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CRUDE OIL Crude oil plays a major role on Indian economy. Recently crude oil slipped below $114 a barrel.

Sensex snapped 4-day losing streak, zoomed by 287points. This was a result of emergence of buyingfunds and retail investors.

An increase poses negative impact on industries likepower, petroleum, transportation, manufacturing,

etc while banking, software and financial firms arebetter place to invest. Currently, BPCL, HPCL, IOC & GAIL India are

trading at 1-2% after largest one-day decline in 7weeks.


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POLITICAL NEWS In most election years, the market has actually

fallen just before the elections-2004, by more

than 10%. In 2004, first three months the Sensex was down

6% though over the year it was 16%. Political news related to any particular state will

have major impact on companies located in thatstate.

With BJB in 1999, Sensex jumped 17%, but oneyear after elections Sensex dropped 13%.


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FISCAL DEFICIT

Revised fiscal deficit in 2013-14 was 4.5% of theGDP

Widening of this gap puts pressure on the govt.to spend more on subsidies and generation oflower tax revenues

Due to this govt. attracts less investments insectors like power, infrastructure, education,health care projects, thereby affectingproductivity and GDP growth


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INTEREST RATE

On June 4, 2014 RBI reduced the SLR by 50basis points and decided to infuse Rs. 35000crores liquidity in the banking system to controlprices and push growth

This had a direct effect on sensex which was upby 51.12 points or 0.21%

The share prices of ICICI Bank, HDFC Bank,Axis Bank and other psu bank stocks like SBI,Canara Bank and PNB gained

On 28thJan, 2014 RBI increased its repo ratefrom 7.5% to 8% in order to lower inflation


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INFLATION To control inflation govt. hiked interest rates which

make debt instruments more attractive than equities as

they carry lower risk When interest rates rise the borrowing cost of firms rises

which lowers demand, effect growth and revenues andimpact stock market

On June 24, 2014 fall in the global crude oil prices eased

inflation and sensex rose about 338 point causing apositive turn in sectors like realty,consumer durables,power, banking and metal.

Major Sensex gainers were GAIL, HDFC, BHEL, SBI,Axis Bank, ITC.


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current macroeconomic trend indicators in india

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