What changed for markets while you were sleeping

Good morning, dear reader!

After months of anticipation and speculation, the Budget week is upon us. Will there be a major growth push or will fiscal prudence take precedence over everything else? While that remains an overhang for the market, global cues will still continue to dominate proceedings.

Asian markets opened mixed this morning and Nifty futures on Singapore stock exchange were pointing towards a flat start on Dalal Street.
Among the top headlines this morning, besides the Jat quota stir at Haryana, hot inflation data from the US and the June Brexit referendum, here’s what else may have changed your market when you were sleeping.

Finance minister’s fiscal conundrum
One of the most hotly contested issues this Budget season has been the worry over fiscal deficit. A survey among economists by Reuters suggested that the government may buckle under populist pressures and miss the target. The $16 billion outlay for meeting consumption spending needs such as Seventh Pay Commission award, OROP and food subsidy outlay may curtail the government’s ability to spend on capex. Or will it? The debate will continue till the actual numbers are out on February 29.

Jats have their way, north India breathes easy
The stir in Haryana that crippled life and the economy in the northern part of the country – including Punjab and Delhi NCR for the past three days -- has finally reached its conclusion. Jats will be given reservations in Haryana with a panel being set up to look into the demands for extending the same to the national level. This will bring a sigh of relief to many of the companies which operate from Haryana, such as top automaker Maruti Suzuki which had to stop work for the past few days at its Manesar plant.

Eyeing inflation, economic data & Fed
After the unexpected surge in inflation in the US – core CPI surged most in 4 years - investors’ focus will shift sharply towards the Fed and its comments this week. On top of that, key economic data in Europe and the US will keep markets on their toes, as they try to read into any possible signs of a rate hike and its possible magnitude from the US Fed, as the same is back on the table after Friday’s inflation data.

Cement realisations are on their way down
Cement realisations, or the average revenue that cement companies make are down by 2% as supply glut in the east, low demand and high production costs take their toll. Realisations were solid in south India while prices dropped sharply in the east, where worries over a possible glut are intensifying. Brokerages are hoping for demand revival in the second half of the year. Expect cement companies to have a lukewarm time in the near future, though Budget can still sway things the other way.

Brexit vote soon, pound on roller-coaster ride
June 23 will be the day when the British will vote to decide whether to stay as part of the EU or not. Opinions are divided, politicians are divided and even though a deal has been secured for greater privileges for Britain, nothing is certain. And that goes for the British pound too. Traders expect the currency to see major volatility till the voting day with most expecting it to weaken against the euro.

Wall Street billionaires are feeling the pinch
After the bad selloff seen in the first six weeks of the year, one can expect a lot of the folks on Wall Street to have uneasy nights. Carl Icahn is one of them, Warren Buffet is the other. The billionaire investor, Car Icahn, may see his company’s rating cut to ‘downgrade’ by Standard & Poor’s as it took a heavy beating in the commodity crash of 2015-16. Its stock is already down 11 per cent. Warren Buffet, too, has been facing some pressure; however, S&P may not be in a hurry to downgrade him anytime soon.