BackGerman elections, oil price spike and dip in GST collections
Angela Merkel wins fourth term as German Chancellor; Brent oil prices rise near a 26-month high; government collects lower amount in GST in August than it did in July
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1. Monsoon woes
The monsoon rains started withdrawing from the northwest on Wednesday. The withdrawal comes with a three-week delay. Seven states are facing deficient rainfall, shows data from the India Meteorological Department. Among the larger states, Uttar Pradesh has a 28% deficit; Madhya Pradesh’s deficit stands at 20%; Punjab’s is at 21%.
2. ICICI Lombard’s weak debut
ICICI Lombard General Insurance Co. Ltd had a weak debut on the bourses on Wednesday. It fell 1.66%, opening at Rs650, compared to an issue price of Rs661.The shares touched a high of Rs694 and a low of Rs638.15 during the day. The company is the largest private insurance player in the country.
3. India’s growth forecast lowered
The Asian Development Bank said that India is likely to grow at 7% instead of 7.4%, as it had earlier predicted. Problems such as demonetisation and the disruption associated with the introduction of the goods and services tax (GST) is expected to be a drag on the economy, it said in a Tuesday update. These are, however, expected to have less of an impact in the days ahead.
4. GST collections dip in August
The government collected a lower amount in the form of goods and services tax (GST) in August than it did the previous month. State and central governments collected Rs90,669 crore as GST. This is 3.6% lower than the amount collected in July. The finance ministry said on Tuesday that many have opted to pay on a quarterly basis.
5. Angela Merkel wins fourth term
German Chancellor Angela Merkel won a fourth term as Germany’s head of state, according to election results declared on Sunday. However, the country’s two main parties lost support even as the populist Alternative for Germany (AfD) gained ground. Votes for both Merkel’s Christian Democrat-led bloc and rival Martin Schulz’s Social Democrats fell to historic lows. The AfD has taken an anti-immigration stance, which appears to have proved popular with voters.
6. Shoppers Stop spikes on Amazon buy
The shares of Shoppers Stop Ltd jumped 20% on Monday. The jump came even as the Sensex fell 300 points. The company had announced that Amazon.com NV Investment Holdings Inc. would be buying a 5% stake in the company. The move is seen as a bid to strengthen the online retailer’s India presence through Shoppers Stop’s network of physical stores.
7. India ranked 40th on competitiveness ranking
India was ranked behind China and Russia—but ahead of Brazil and South Africa—in the World Economic Forum’s global competitiveness ranking of 137 countries released on Wednesday. Switzerland remains on top, followed by the US and Singapore. Corruption continued to be a problem for businesses in the country, according to the survey.
8. Rupee falls
The Indian rupee dropped to its lowest in six months against the dollar on Wednesday. The fall came after the fifth consecutive session of decline for the currency, and equity markets fell for seven sessions in a row. The rupee closed at 65.71 on Wednesday, though it recovered marginally on Thursday. Concerns over foreign outflows and the fiscal deficit contributed to the decline.
9. Oil prices surge
Brent oil prices rose near a 26-month high on Tuesday. Turkey had repeated a threat to cut crude exports from Iraq’s Kurdistan region. Turkish President Tayyip Erdogan had said he may cut off a pipeline from the region to Ceyhan, a Turkish port. The threat comes in light of an independence referendum in the region.
10. Foreign investors sell in India
Foreign investors have sold over a billion dollars worth of India stocks so far in September. The first three days of the week accounted for more than a third of this selling. Poor earnings growth, coupled with negative global cues including North Korea’s weapon’s programme, have affected sentiment. The US Federal Reserve has also announced the end of its quantitative easing programme, a move which is expected to have a negative impact on global liquidity. Domestic investors have been big buyers so far this month.
Graphics by Prajakta Patil
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