need2know: Six macro triggers that market would watch today

With protectionist trend emerging in developed economies, Finance Minister Arun Jaitley has warned that economies will become more inefficient and GDP will shrink if such a move were to impact trade and movement of goods and people. Globally, the world is moving in an unpredictable and slow pace and a prolonged slowdown can pose big problems, he said.

Meanwhile, after the Tata group, it is Infosys which is hurtling towards a faceoff between the founders led by NR Narayanamurthy and the professional management. Murthy has spoken out about the fall of corporate governance at Infosys and has questioned the actions of chairman R Seshasayee and independent director Jeffrey Lehman, Infosys CEO Vishal Sikka has dug in his heels and told employees to not be distracted by speculation about the company's commitment to governance, integrity and values.

Here's a look at six macro-economic triggers that may impact the market today


Policy to scrap old vehicles gets in-principle nod: The Committee of Secretaries (CoS) has given an inprinciple approval to the roads transport and highways ministry’s proposal to provide a package of incentives to remove old and polluting trucks, buses and other commercial vehicles from the roads. The policy will be voluntary and applicable to commercial vehicles older than 15 years.

Two-wheeler sales down: The domestic two-wheeler market showed a drop in volumes last month, the third such since demonetisation. A drop of a little more than seven% in two-wheelers reflected in a five% hit in total automobile (passenger and commercial vehicles, two and three-wheeler) sales by companies to dealerships last month. This was in spite of a strong comeback in passenger vehicles (PVs), of 14% growth.

Consumer lending benefited from note ban: Consumer lending was the surprise beneficiary of the November 8 currency swap as Indians borrowed more to spend on high-value items and travel, upending conventional financial wisdom that only basic needs and staples make up the typical shopping list during periods of economic stress. Central bank data at the end of November showed that demand for white goods — such as refrigerators or automatic washing machines — drove credit expansion in India.

India unwilling to bend to WTO’s demand: India will send an expert team to Geneva in March to expedite negotiations on food security and a global agreement on services at the World Trade Organization (WTO) before its ministerial meeting in Argentina in December. India is unwilling to bend or yield on WTO’s demand for a discussion on food security, commerce and industry minister Nirmala Sitharaman said after meeting WTO director general Roberto Azevedo on Thursday.

Govt mulls raising EPFO's investment in ETF to 15%: The government is looking at raising retirement fund body EPFO's investment in exchange traded funds (ETFs) to 15% from existing 10%, Union Labour Minister Bandaru Dattatreya said yesterday. The Minister further said the Employee Provident Fund Organisation (EPFO) has already invested Rs 3,000 crore in the first tranche of the Central Public Sector Enterprise ETF and returns on EPFO investment into equities are coming around 8.7-8.8% annually.

India to be world's fastest growing economy in next 5 years: India will be the world's fastest growing economy during the next five years, a top US intelligence think-tank has said while underlining that Pakistan, unable to match India's economic prowess, will seek "other methods" to maintain even a semblance of balance. In its report, the National Intelligence Council said that Pakistan will seek to maintain a diverse set of foreign partners, from which it can draw economic and security assistance, and to develop a credible nuclear deterrent by expanding its nuclear arsenal and delivery means, including "battlefield" nuclear weapons and sea-based options.

...and in financial markets yesterday

Rupee up: The rupee soared by 34 paise to end at a fresh 3-month high of 66.85 against the US dollar on frantic selling of the American currency by exporters and banks.

Bonds down: Government bonds (G-Secs) dropped further on selling pressure from banks and corporates, and the overnight call money also turned lower due to lack of demand from borrowing banks amid comfortable liquidity situation in the banking system. The 6.97% 10-year benchmark bond maturing in 2026 declined to Rs 100.79 from Rs 101.5450, while its yield gained to 6.86% from 6.75%. The 7.59% G-Secs maturing in 2026 dipped to Rs 103.76 from Rs 104.5875, while its yield moved up to 7.01% from 6.89%. The 7.61% G-Secs maturing in 2030 eased to Rs 102.76 from Rs 104.20, while its yield rose to 7.28% from 7.11%. The 7.68% G-Secs maturing in 2023, the 6.79% G-Secs maturing in 2029 and the 8.27% G-Secs maturing in 2020 were also quoted lower to Rs 103.7250, Rs 97.03 and Rs 104.7450 respectively.

Call rates down: The overnight call money rates finished lower at 6.20% from Wednesday's level of 6.24%. It opened at 6.25% and moved in a range of 6.25% and 6.05%.

Liquidity: The Reserve Bank of India, under the Liquidity Adjustment Facility, purchased securities worth Rs 1400 crore in 2-bids at the overnight repo auction at a fixed rate of 6.25% Thursday morning, while it sold securities worth Rs 3321 crore in 22-bids at the overnight reverse repo auction at a fixed rate of 5.75% as on February 08.