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Today’s agenda:

The International Monetaty Fund (IMF) lowered its global growth forecast for 2021 citing supply chain disruptions and health concerns. In its World Economic Outlook report, the fund also raised inflation forecast due to price pressures. Prices from food to vehicles have risen globally, threatening a post-pandemic recovery. 

India was a contrarian. The country’s retail inflation cooled off to a five-month low of 4.35% in September due to a sharp dip in food price inflation. Domestic industrial output growth also accelerated to 11.9% in August, driven largely by a statistical effect of a low base — August 2020 had recorded a 7.1% contraction.

U.S. Treasury Secretary Janet Yellen will host the next round of India Economic and Financial Partnership (EFP) meet with her Indian counterpart Union Finance Minister Nirmala Sitharaman.

Concerns about China’s Evergrande continues. Two board members of embattled developer Fantasia resigned, days after the struggling real-estate company failed to make a $206 million bond payment. Its troubles add to worries that China’s property sector difficulties extend beyond Evergrande.

Reliance is doubling down on its investments in renewable sector. The oil-to-telecom conglomerate has entered into a partnership with German firm NexWafe. The deal will pave way for Reliance to get access to the German company’s proprietary technology as Asia’s richest man plans to build large-scale wafer manufacturing facilities in India. – John Xavier

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1:15 P.M.

Oil falls on inflation and supply fears

Oil prices fell marginally on concerns that demand growth may fall as major economies face inflation and supply chain woes. However, the drop was limited by rising prices of alternative fuels like coal and natural gas.

Brent crude futures fell or 0.1% to $83.31 a barrel, and U.S. West Texas Intermediate (WTI) crude futures shed 11 cents to $80.53 a barrel.

12:45 P.M.

China coal prices hit record high

China is grappling with a growing energy crisis on account of coal shortages and record-high prices. The country bought 32.88 million tonnes of coal in September, up 76% from a year earlier. Now, thermal coal prices have soared to a record as recent floods worsened an already supply-crunched situation in key coal-producing provinces.

The world’s largest coal consumers had ordered coal internally from nearly 200 mines in Shanxi and Inner Mongolia provinces. But incessant rains flooded 60 mines in Shanxi, and four mines, with a combined annual output capacity of 4.8 million tonnes, remained shut.

12:10 P.M.

Rupee rises against U.S. dollar

The Indian rupee rose 26 paise to 75.26 against the U.S. dollar on positive macroeconomic data on Tuesday.

The domestic unit was also supported by lower crude oil prices and a weak greenback in the international market. The dollar index, which gauges greenback’s strength against a basket of six currencies, slipped 0.18% to 94.35.

India’s five-month low retail inflation and a higher Industrial production lifted the domestic unit. Retail inflation stood at 4.35% in September, while Industrial production grew 11.9% in August (mainly due to a low-base effect) and good performance by manufacturing, mining and power sectors that surpassed pre-COVID level.

11:30 A.M.

India needs 5,630 GW installed solar capacity to become net-zero nation by 2070: Report

India should increase its solar power capacity from 40 gigawatt to 5,630 gigawatt to become a net-zero emissions nation by 2070, according to a study released by the Council on Energy, Environment and Water (CEEW).   

The government has set a target to scale up its total renewable energy capacity to 450 GW by 2030. To achieve net-zero target by 2070, usage of coal for power generation would need to peak by 2040 and drop by 99% between 2040 and 2060, the study added.   

According to the CEEW study, in 2070, electric or battery-driven passenger vehicles would comprise 84% of total cars sold in the country and about 79% of all trucks would run on battery-electric technology and rest on hydrogen.

11:00 A.M.

India to grow at 9.5% this year: IMF

The International Monetary Fund (IMF) has projected India to grow at 9.5% this year, after a contraction of 7.3% last year. The Fund estimates Asia’s third-largest economy to grow at 8.5% in the next fiscal year.

According to IMF’s World Economic Outlook (WEO), the world is projected to grow at 5.9 % in 2021, and 4.9% in 2022.

While the United States is projected to grow at 6% this year and 5.2% the next year, IMF said China is projected to grow at 8% in 2021 and 5.6% in 2022.

A principal common factor behind complex challenges is the continued grip of the pandemic on global society, Gita Gopinath, Chief Economist at the IMF said. She added the foremost policy priority is to vaccinate at least 40% of the population in every country by end-2021, and 70% by mid-2022.

10:00 A.M.

Retail inflation in September falls to a five-month low

India’s retail inflation fell to a five-month low of 4.35% in September from 5.3% in August on low prices of vegetables and other items. The Consumer Price Index-based inflation stood at 7.27% in September a year ago.

The easing in CPI inflation is in line with the Reserve Bank of India’s (RBI)assessment, as per the data released by the National Statistical Office (NSO). A major fall was seen in inflation in the food segment which eased to 0.68% in September from 3.11% in the preceding month.

The RBI primarily factors in CPI inflation to arrive at its monetary policy and has to keep it at a 4% level with a tolerance band of 2% on either side. The central bank has projected the CPI inflation at 5.3% for 2021-22.

9:30 A.M.

Asian market opens | Sensex update

The Indian equity indices, Sensex and Nifty, opened at record high. At 9:16 IST, the Sensex rallied 201 points to 60,485.32 and the Nifty rose 0.46% to 18,074.50.

Tata Motors, M&M, and Titan Company were among major gainers while Tata Steel, ONGC and Hindalco faced losses.

Asian shares were muted as rising power prices fuelling inflation weighed on investor sentiments. It led to expectations that the United States would taper its emergency bond-buying programme, holding the dollar at a one-year high.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.1% in early trading. Chinese blue chips were flat, while Australia gained 0.06%. Japan’s Nikkei shed 0.2% and  Hong Kong’s stock market was closed in the morning because of a typhoon.

A number of reports are expected to be released today including Chinese trade figures, U.S. consumer price inflation data, and minutes of the U.S. Federal Reserve’s September policy meeting. Besides, investors were cautious ahead of the company earnings season.

—-  Edited by John Xavier

(With inputs from Reuters, PTI and other news agencies.)