Sensex crosses 30,000 mark, Nifty ends at record 9,351.85

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The bull run was driven by hopes of earnings growth and continued buying by domestic investors. Rising global optimism on French elections results and likely announcement of tax reforms by Donald Trump in the US also pushed the markets higher.

With mixed positive sentiments among investors and unabated funds inflows in both global and domestic rallies, markets created yet another milestone in the stock trading history on Wednesday. The benchmark Sensex ended with new and all-time high of 30,133.35 for the first time, while the broader Nifty scaled a new peak at 9,351.85 points.

Similarly, energised by positive global cues in line with a spectacular rally in equities, the rupee also surged by another 15 paise to close near a fresh 21-month high of 64.11, the third straight session of gains. This is the highest closing for the rupee since August 10, 2015, when it had ended at 63.87.

The market momentum also got an additional push on growing expectations for robust foreign inflows to India sparked by a renewed optimism about the US economy and waning anxiety over the European political landscape. Besides, stocks also saw frenzied buying, in line with global shares, which have been on a high after the first round victory of centrist Emmanuel Macron in French presidential elections. Investors are also keeping an eye on US President Donald Trump’s much-awaited tax reforms.

However, traders and market insiders have a different view on this unusual rally, saying that the impressive show by the ruling BJP in Delhi civic polls added to the positivity in the share market.

Keeping the upward trend of the markets, the BSE, however, cautioned the investors not to be carried away by the ‘euphoria’ and refrain from investing in penny stocks. BSE Chief Executive Ashish Chauhan appealed to investors to invest only in good companies or opt for the mutual funds’ route to invest in the markets. “As an exchange, we advice investors not to be carried by the 30,000 mark euphoria and they should not invest in penny stocks nor do they fall prey to fly-by- night operators,” Chauhan said after celebrating the milestone at the Dalal Street towards the end of the trading hours in Mumbai.

As far as Sensex is concerned, the BSE 30-share index opened on a strong footing and surged to a lifetime high of 30,167.09 points in intra-day trade, before settling at 30,133.35, up 190.11 points, or 0.63 per cent. This surpassed its previous record close of 29,974.24, reached on April 5. The gauge had hit its previous intra-day high of 30,024.74 on March 4, 2015. The Sensex has gained 768.05 points or 2.62 per cent in three days.

Similarly, the broader 50-issue NSE Nifty scaled a new high of 9,367 before finally settling 45.25 points, or 0.49 per cent higher at 9,351.85, a new record closing.

Its previous closing high of 9,306.60 was hit in Tuesday’s trade. It also broke the previous intra-day record of 9,309.20. “Market has made a higher high on account of rising global optimism due to ease in political risk in Eurozone and expectation of tax reform in the US. “Volatility emerged during the late hours due to profit booking but short covering ahead the expiry navigated the direction back to north. Optimism on earnings and continued buying by local investors is directing the recent rally in the market,” said Vinod Nair, Head of Research, Geojit Financial Services.

Overseas, Asian indices also ended higher following overnight rally in US stocks on strong earnings announcements and expectations surrounding US President Donald Trump’s impending tax reforms. Tokyo’s Nikkei ended up 1.1 per cent, while Hong Kong’s Hang Seng rose 0.5 per cent, its fifth straight day of gains. Shanghai Composite Index edged up 0.2 per cent.

Key indices in Europe, however, were mixed in their morning deals, with Paris CAC 40 rising 0.1 per cent, London’s FTSE slipping 0.06 per cent and Frankfurt’s DAX 30 declining 0.03 per cent. Back home, of the 30-share Sensex pack, 18 scrips ended higher while 12 closed lower.

Major gainers were ITC 3.36 per cent, M&M 3.29 per cent, HDFC 2.36 per cent, HUL 1.78 per cent, ICICI Bank 1.61 per cent, Tata Motors 1.17 per cent, Bharti Airtel 1.14 per cent, Maruti 0.88 per cent, HDFC Bank 0.73 per cent and Asian Paints 0.73 per cent.

The total turnover on BSE amounted to Rs 5,021.73 crore, higher than Rs 4,006.89 crore registered during the previous trading session.

Source: http://www.timesnow.tv/business-economy/video/sensex-crosses-30000-mark-nifty-ends-at-record-935185/59996

Japan logs biggest current account surplus since 2007

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Donald Trump and Japanese Prime Minister Shinzo Abe are scheduled to meet for talks later this week.

Japan attained its second-biggest current account surplus on record in 2016, Ministry of Finance data showed on Wednesday, just days before the US and Japanese leaders meet for talks with trade surpluses and currency valuations expected to be high on the agenda.

The 20.6 trillion yen ($183.63 billion) surplus reflected the trade balance swinging into surplus on cheaper oil, rising foreign tourists arrivals creating a record travel surplus, and hefty foreign income from overseas investments.

Trade surpluses and currency valuations are in focus as US President Donald Trump pursues an “America First” campaign in which he has accused big exporters such China, Germany and Japan of deliberately weakening their currencies to gain a competitive advantage.

For the whole of 2016, Japan posted a trade surplus of 6.8 trillion yen ($59.95 billion) with the United States, down 4.6 percent from 2015, with U.S.-bound car shipments rising for a second straight year, the Ministry of Finance said.

Trump and Japanese Prime Minister Shinzo Abe are scheduled to meet for talks later this week. Trump said he and Abe would play a round of golf, with Abe as his partner in the game, rather than a competitor.

Wednesday’s data showed the vast bulk of Japan’s current account surplus was generated by Japanese direct and portfolio investment abroad, accounting for 18.1 trillion yen of the 20.6 trillion current account surplus for 2016.

The trade surplus was 5.6 trillion yen in 2016, from the 630 billion yen deficit seen in 2015, earned in part as declining oil prices curbed import costs.

The travel balance logged a record 1.3 trillion yen surplus last year as a record number of foreign tourist visits took Japan’s services deficit to the smallest on record.

Japan’s current account surplus was 1.11 trillion yen in December, a seventh straight month of annual increases, the ministry data showed.

That compared with economists’ median forecast for a surplus of 1.29 trillion yen seen in a Reuters poll.

Source: http://economictimes.indiatimes.com/articleshow/57034126.cms

US Inc faces uneasy test of doing business

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President Donald Trump vowed to end business as usual in Washington. Global companies are now learning just what that means.

 

What began before his inauguration, with attempts to cajole corporations like Toyota Motor into keeping jobs in the US with critical tweets, is now escalating into a crucial test for business leaders trying to maintain cross-border flows of people and goods that underpin commerce in the 21st century.

 

Trump’s Friday signing of an executive order barring the citizens of seven Muslim-majority countries from entering the US, on the heels of his war of words with Mexico over trade, alarmed executives from big employers including General Electric (GE), Google and Microsoft.

 

GE Chief Executive Officer  (CEO) Jeff Immelt’s response underscored the delicate balance business will have to strike. “We have many employees from the named countries and we do business all over the region,” he said in an internal e-mail. While he called his staff “critical to our success,” he avoided direct criticism of Trump’s policy. GE “will continue to make our voice heard with the new administration and congress and reiterate the importance of this issue,” he said.

 

Trump’s order shut the door to nationals of Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen — including refugees, visiting scholars and even permanent American residents who happened to be abroad for work or holidays.

 

“We would never think this would become any kind of an issue,” Ludwig Willisch, chief executive officer of North American operations at Bayerische Motoren Werke, said at an automotive conference on Saturday. “This country is a melting pot, freedom of speech, everybody gets together and creates this great country. So, we were not prepared for this kind of thing.”

 

In a sharply worded message to staff, Lloyd Blankfein, Goldman Sachs’s long-time head, broke with the Trump administration over its controversial attempt to crack down on immigration. The voicemail, sent on Sunday to the firm’s 34,400 employees, pits Blankfein against an administration stocked with Goldman Sachs Group veterans, including his former No. 2, Gary Cohn, and key Trump advisor Steven Bannon. Blankfein told employees that President Donald Trump’s executive order, parts of which were blocked by federal courts, is at odds with the firm’s long-held policies on workforce diversity and could disrupt Goldman Sachs’s business. “This is not a policy we support,” the chief executive officer said. Other Wall Street firms took a softer approach. JPMorgan Chase & Co’s operating committee, led by CEO Jamie Dimon, said in a memo to staff on Sunday that it’s “grateful for the hard work and sacrifices made to keep our country safe,” and that the country was “strengthened by the rich diversity of the world around us.” It didn’t express an opinion on the policy.

 

Wells Fargo & Co and Morgan Stanley said they were monitoring the ban’s impact on employees.

 

Steve Schwarzman, CEO of the world’s largest private equity firm, Blackstone Group, took a pass when asked about the immigrant order’s effect on his business. “I’m not going to comment on that,” he said at a Catholic Charities luncheon on Sunday, where Governor Andrew Cuomo and Senator Charles Schumer, both New York Democrats, used their remarks to about 150 guests to oppose the order.

 

Optimists suggested he would quietly drop pledges to tear up trade deals and reconsider defense commitments to allies.

 

The about-face was epitomized by Tesla Motors Inc. founder Elon Musk; earlier this week he praised Trump’s nominee for secretary of state, former Exxon Mobil Corp. CEO Rex Tillerson, as a potentially “excellent” pick. On Sunday, Musk asked his 6.89 million Twitter followers to read the immigration order and suggest amendments, which he will then take to Trump’s CEO advisory council to develop a consensus and present to the president.

 

On the other hand, US auto companies, whose home state of Michigan has a large Arab community, have yet to make their views known.

 

Wall Street has also largely stayed out of the fray. At some of its biggest banks, executives said they were struggling to understand whether the order will ultimately apply to employees who work in the US with green cards or legal work permits. If it doesn’t hit visa holders, few major companies’ employees will be affected, according to one executive who asked not to be identified because he wasn’t authorized to comment. On Sunday, JPMorgan said it was working to assist affected employees.

 

Starbucks Corp. CEO Howard Schultz said the executive order left him with “deep concern, a heavy heart and a resolute promise.” The coffee chain will redouble efforts to hire as many as 10,000 refugees over five years in 75 countries, he wrote in a note to employees Sunday.

 

Reaction to the ban was sharpest from the technology industry, with Twitter awash in reminders that Apple Inc. co-founder Steve Jobs was the son of a Syrian immigrant. Among the first to speak out was Google CEO Sundar Pichai, himself an immigrant from India, who called the policy “painful.” Another India-born CEO, Microsoft Corp.’s Satya Nadella, took to LinkedIn to highlight “the positive impact that immigration has on our company, for the country, for the world.”

 

Trump should expect sustained challenges from the tech industry in particular, said Ian Bremmer, CEO of political consultancy Eurasia Group, because it differs significantly with him on issues from net neutrality to immigration. “While most every CEO wants to just ‘get back to business’ after Trump’s election, that’s going to prove much harder” for technology leaders, he said. “There’s going to be a fight.”

 

Compounding business leaders’ unease was the order’s confused implementation, which included unclear directives on how border agents should treat lawful permanent residents, and contradictory statements about how it would affect those who hold passports from two countries — for example, a dual citizen of Iran and the UK

 

For now, lawyers are advising such individuals not to travel to the US, or to stay put if they already live there. The new rules came into force with no transition period, leaving carriers like Emirates and American Airlines Group Inc. unsure what to do with passengers booked to fly to US airports, or already in the air.

 

“We are committed to protecting our people and will provide whatever support is necessary to protect them and their families,” Michael Roth, CEO of advertising firm Interpublic Group of Cos., wrote in an e-mail.

 

The most important business stories of the day. Get Bloomberg’s daily newsletter. The move’s implications extended far beyond the business world. On Sunday the British long-distance runner Mo Farah, a four-time Olympic gold medalist who
was born in Somalia, said he may not be able to return to Oregon, where he trains and lives with his children. The Academy of Motion Picture Arts and

 

Sciences said Oscar-winning Iranian director Asghar Farhadi may be unable to attend this year’s awards, for which his film “The Salesman” has been nominated.

 

Trump’s order has “significant commercial implications,” said Allyson Stewart-Allen, CEO of International Marketing Partners in London, who advises European companies on doing business in the US “What do you do with an employee on an executive salary who’s sitting in an airport lounge kind of like Tom Hanks in ‘The Terminal’?”

 

Source: http://www.business-standard.com/article/international/us-inc-faces-uneasy-test-of-doing-business-117013100003_1.html

Demonetisation hits Indian economy; IMF cuts FY18 growth 100bps, 40bps on note ban alone, to 6.6%

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The downward revision, if it translates into reality, will let China temporarily reclaim the fastest growing major economy tag from India

The International Monetary Fund on Monday slashed India’s gross domestic product (GDP) growth forecast by 100 basis points (bps) to 6.6% in FY17 and by 40 bps to 7.2% in FY18, citing a consumption slump after the demonetisation of high-value notes.

The downward revision, if it translates into reality, will let China reclaim, albeit temporarily, the fastest growing major economy tag from India. China’s economy is now expected to grow by 6.7% in 2016, 10 bps higher than the fund’s October 2016 forecast. The communist country is expected to clock 6.5% in 2017, 30 bps higher than estimated earlier, again ceding the fastest growing economy status to India.

graph-10

“In India, the growth forecast for the current and next fiscal year were trimmed by 1 percentage point and 0.4 percentage point, respectively, primarily due to the temporary negative consumption shock induced by cash shortages and payment disruptions associated with the recent currency note withdrawal and exchange initiative,” the IMF said in its latest World Economic Outlook Update.

The revision comes barely four months after it revised upward by 20 bps India’s FY17 GDP growth to 7.6% in October 2016. The IMF’s cut in growth outlook for India is sharper than the recent World Bank’s 60 bps reduction in its India GDP growth outlook to 7% for FY17. In its first advance estimate, India’s Central Statistical Office has projected that the economy will slow to 7.1% in the current financial year from 7.6% in 2015-16. Given the post-demonetisation hit to consumption and investment, many analysts said these might prove to be overestimates.

Global growth for 2016 is now estimated at 3.1%, in line with the IMF’s October 2016 forecast. Economic activity in both advanced economies as well as emerging market and developing economies is forecast to accelerate in 2017-18, with global growth projected to be 3.4% and 3.6%, respectively, again unchanged from the October forecasts.

Advanced economies are now projected to grow by 1.9% in 2017 and 2% percent in 2018, 0.1 and 0.2 percentage point more than in the October forecast, respectively. As noted, this forecast is particularly uncertain in the light of potential changes in the policy stance of the United States under the incoming Donald Trump administration.

Source: http://www.financialexpress.com/economy/demonetisation-hits-indian-economy-imf-cuts-fy18-growth-100bps-40bps-on-note-ban-alone-to-6-6/510822/

Yellen Sees No Serious Short-Term Obstacles for U.S. Economy

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Federal Reserve Chair Janet Yellen said the U.S. economy faces no serious short-term obstacles, though it must deal with important long-term challenges of low productivity and growing inequality.

“Unemployment has now reached a low level, the labor market is generally strong and wage growth is beginning to pick up,” Yellen said Thursday in a meeting with educators. “Inflation has moved up from a very low level, and it’s a little bit under our 2 percent objective, but it’s pretty close.”

The Fed increased interest rates last month for the first time in a year, to a range of 0.5 percent to 0.75 percent, after judging that near-term risks to the outlook “appear roughly balanced.” Policy makers also indicated they expect to hike three times in 2017, according to the median estimate of their quarterly forecast.

Unemployment was 4.7 percent in December, a slight uptick from November when it reached 4.6 percent, its lowest level since 2007. The Fed’s preferred gauge of inflation, minus food and energy components, was 1.6 percent in the 12 months through November.

Yellen said productivity, a “key determinant” of living standards over the long term, remained at historically low levels and economists were struggling to understand why. Related to low productivity, she said a greater share of income gains were going to workers with higher education, causing inequality to rise in the U.S.

Education and workforce development have been frequent topics of discussion for Fed officials in recent years as technology continues to drive changes in the workplace. Yellen told graduating college students in Baltimore last month that career success will increasingly be linked to education.

Yellen on Thursday was speaking to teachers gathered in the board room at the Fed’s headquarters in Washington and, via web cast, to others through the country. She also touted reforms to banking regulation that followed the financial crisis aimed at making the financial sector safer and more resilient.

“These are very important changes,” Yellen said. “I certainly wouldn’t want to see them rolled back.”

Members of the incoming administration of President-elect Donald Trump have said they will seek to dismantle the 2010 Dodd-Frank Act, the principle legislative response to the crisis.

Source: https://www.bloomberg.com/news/articles/2017-01-13/yellen-sees-no-serious-short-term-obstacles-for-u-s-economy

SoftBank to invest $1 billion in US venture OneWeb as part of $50 billion pledge

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SoftBank Group Corp has agreed to invest $1 billion in US. satellite venture OneWeb Ltd, marking the first tranche of a $50 billion US. investment the Japanese telecoms and technology company’s founder Masayoshi Son pledged to President-elect Donald Trump.

 

“Earlier this month, I met with President-Elect Trump and shared my commitment to investing and creating jobs in the United States,” Son said in a joint statement with OneWeb. “This is the first step in that commitment.”

The investment is part of a $1.2 billion fundraising by OneWeb, which is seeking to provide affordable internet access to people around the world with satellites.

The remaining $200 million will be funded by its current investors, which include Qualcomm Inc, Airbus Group and Virgin Group. The transaction is expected to close in the first quarter of 2017.

In making his $50 billion pledge in the meeting with Trump, Son said his investment would create 50,000 new jobs, a move the US. President-elect claimed was a direct result of his election win.

The latest investment will come directly from SoftBank, not from a $100 billion tech fund it is launching with Saudi Arabia, even though Son has said that large-scale investments would be made through the tech fund to avoid a further expansion of its debt.

OneWeb, established in 2012 and based in Arlington, Virginia, plans to use the funds to build a plant in Florida to produce low-cost satellites, creating almost 3,000 new jobs in the United States over the next four years.

Son is steering SoftBank, a diverse company that holds stakes in US carrier Sprint, Chinese e-commerce giant Alibaba and other firms, towards cutting-edge tech investments as the telecoms services markets mature. It purchased U.K. chip design firm Arm Holdings for $32 billion this year in Japan’s largest ever overseas deal.

Source: http://economictimes.indiatimes.com/articleshow/56068014.cms

Philippines fastest-growing economy in developing Asia

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The Philippine economy grew at its fastest pace in three years last quarter, underscoring the nation’s resilience to global risks as investment surged and consumers spent more.

Gross domestic product increased 7.1% from a year earlier, the Philippine Statistics Authority said in Manila on Thursday. The median estimate of 15 economists surveyed by Bloomberg was 6.7%.

Compared with the previous quarter, GDP rose 1.2%, in line with economists’ estimates

Undeterred by risks such as Donald Trump’s protectionist ambitions and President Rodrigo Duterte’s rants against the US, the Philippine economy is set to expand more than 6% until 2018 to rank among the fastest-growing in the world, accordng to economists surveyed by Bloomberg.

Last quarter’s growth exceeded China’s 6.7% and Vietnam’s 6.4% in the same period. India, which posted growth of 7.1% in the second quarter, is yet to publish GDP data for the three months through September.

Gifted with a young population and backed by $50 billion of revenue from remittances and outsourcing, the Philippines is getting an additional boost from Mr Duterte’s $160-billion infrastructure plan aimed at creating jobs. Projects include at least $1 billion of contracts to build an airport and a railway to transform a former US military base into a commercial hub.

Philippine stocks rose a second day, climbing as much as 2.2%. They were up 1.1% as of 1101am in Manila.

The peso was little changed at 49.32 per dollar.

“Philippines will remain an outperformer in the region,” said Rahul Bajoria, a senior economist at Barclays Plc in Singapore. “It is domestically driven, with consumption holding up quite well and the fiscal spending being planned. The global risks we’re seeing including to trade won’t fundamentally alter its prospects.

“In the short term at least, we expect the economy will continue growing at a decent pace,” Gareth Leather, senior Asia economist at Capital Economics Ltd in London, said in a note. “The foundations are in place for growth to remain strong, but recent political events, both in the US and domestically, have made the outlook much less certain.”

“Putting money on infrastructure-related stocks is the smart bet and it’s exactly what I am doing,” said John Padilla, who helps manage about $9.1 billion at Metropolitan Bank & Trust Co, the Philippines third-largest money manager. “This growth poses now more challenge for President Duterte to keep the pace. It supports the view that Philippines needs infrastructure to sustain this growth.”

Household spending, which makes up about 70% of GDP, rose 7.3% from a year earlier. Government spending gained 3.1% and investment surged 20%.

Source: http://www.bangkokpost.com/news/asean/1137576/philippines-fastest-growing-economy-in-developing-asia