Tag: trade war

US exports to China to nearly double in ‘totally done’ trade deal, says Robert Lighthizer

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The “phase one” US-China trade deal will nearly double US exports to China over the next two years and is “totally done” despite the need for translation and revisions to its text, US Trade Representative Robert Lighthizer said on Sunday.

Lighthizer, speaking on CBS’ “Face the Nation” program, said there would be some routine “scrubs” to the text but “this is totally done, absolutely.”

A date for senior US and Chinese officials to formally sign the agreement is still being determined, Lighthizer said.

The deal, announced on Friday after more than two and a half years of on-and-off negotiations between Washington and Beijing, will reduce some US tariffs on Chinese goods in exchange for increased Chinese purchases of US agricultural, manufactured and energy products by some $200 billion over the next two years.

China has also pledged in the agreement to better protect US intellectual property, to curb the coerced transfer of American technology to Chinese firms, to open its financial services market to US firms and to avoid manipulation of its currency.

Chinese purchases of agricultural goods are expected to increase to $40 billion to $50 billion annually over the next two years, Lighthizer said. The United States exported about $24 billion in farm products to China in 2017, the last full year before the world’s two largest economies launched a tariff war on each others’ goods in July 2018.

TARIFF REDUCTION OFFERS

The deal suspended a threatened round of US tariffs on a $160 billion list of Chinese imports that was scheduled to take effect on Sunday. The United States also agreed to halve the tariff rate, to 7.5 percent, on a $120 billion list of Chinese goods including Bluetooth headphones, smart speakers and flat-panel televisions.

USTR and the US Treasury said reports that US negotiators had offered to cut the tariff rate by half on all $360 billion worth of goods hit by tariffs were “utterly false”.

“No such offer was ever made to China by the United States. There is not a single knowledgeable American negotiator who would support this falsehood,” the agencies said in a joint statement.

The deal ultimately left 25 percent US tariffs on $250 billion worth of Chinese imports, limiting stock market gains on Friday.

Lighthizer said the success of the deal will be up to decisions by officials Beijing.

“Ultimately, whether this whole agreement works is going to be determined by who’s making the decisions in China, not in the United States,” Lighthizer said. “If the hard-liners are making the decisions we’re going to get one outcome, if the reformers are making the decisions — which is what we hope — then we’re going to get another outcome.”

He said it would not solve all of the problems between the United States and China, because integrating China’s state-dominated economic system with America’s private-sector-led system will take years.

USMCA LABOR CONCERNS

Lighthizer called Friday the “most momentous day in trade history” because of the China deal and because the White House sent a revised US-Mexico-Canada Agreement to Congress for approval votes. The two trade deals together cover some $2 trillion in overall trade, he said.

But the USMCA, which would replace the 26-year-old North American Free Trade Agreement, has run into some last-minute snags as Mexico’s chief negotiator, Jesus Seade, has objected to congressional language on implementation of the trade deal that calls for the designation of up to five US labour attaches based in Mexico to monitor Mexico’s compliance with labour reforms.

Seade, who had objected to inspections of Mexican factories by US labor officials, was due to travel to Washington on Sunday to raise his concerns with Lighthizer.

In a series of tweets on Sunday, Seade said the function of the labour attaches is unclear, “but that Mexico will NEVER accept if this is in any measure disguised inspectors, for a simple reason: Mexican law prohibits it.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

China suspends planned tariffs on some US goods

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

China has suspended additional tariffs on some US goods that were meant to be implemented on December 15, the State Council’s customs tariff commission said on Sunday, after the world’s two largest economies agreed a “phase one” trade deal on Friday.

The deal, rumours and leaks over which have gyrated world markets for months, reduces some US tariffs in exchange for what US officials said would be a big jump in Chinese purchases of American farm products and other goods.

China’s retaliatory tariffs, which were due to take effect on December 15, were meant to target goods ranging from corn and wheat to US-made vehicles and auto parts.

Other Chinese tariffs that had already been implemented on US goods would be left in place, the commission said in a statement issued on the websites of government departments including China’s finance ministry.

“China hopes, on the basis of equality and mutual respect, to work with the United States, to properly resolve each other’s core concerns and promote the stable development of US-China economic and trade relations,” it added.

Beijing has agreed to import at least $200 billion in additional US goods and services over the next two years on top of the amount it purchased in 2017, the top US trade negotiator said Friday.

A statement issued by the United States Trade Representative also on Friday said the United States would leave in place 25 percent tariffs on $250 billion worth of Chinese goods.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

US-China trade deal: President Donald Trump offers China tariff rate cut

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The United States has offered to cut existing tariffs on Chinese goods by as much as 50 percent and suspend new tariffs scheduled to go into effect on Sunday in an attempt to secure a “Phase One” trade deal.

U.S. negotiators have offered to reduce tariffs on about $375 billion in Chinese goods by 50 percent across the board, two people familiar with the negotiations said on Thursday, and suspend tariffs on $160 billion in goods scheduled for December 15.

U.S. Trade Representative Robert Lighthizer told senators during a briefing that announcements were possibly “imminent” on U.S. tariffs, Senator John Cornyn told reporters.

U.S. President Donald Trump and Chinese President Xi Jinping have been embroiled in a 17-month trade war that has slowed global growth and dampened profits and investment for companies around the world.

December 15 is a crucial date. If the United States does not suspend the new tariffs, Beijing officials will apply more tariffs on U.S. goods and may suspend talks until after the U.S. presidential election in November 2020, many trade experts believe.

Trump is expected to meet top trade advisers at 2:30 on Thursday afternoon to discuss trade negotiations.

The final percentage of tariff rate reduction the United States might offer Beijing has not been set, and will be proportional to the amount of the Section 301 trade war issues addressed by Chinese concessions, one source said.

Trump said on Thursday the United States was “very close” to nailing down a deal. “Getting VERY close to a BIG DEAL with China,” Trump posted on Twitter. “They want it, and so do we.”

During a regular briefing on Wednesday in Beijing, Gao Feng, spokesman at the Chinese commerce ministry, told reporters: “The two sides’ economic and trade teams are maintaining close communication.”

Stock markets jumped on Trump’s tweet, and the S&P 500  shot to a record high and was trading up 0.5 percent in the afternoon.

Trump, speaking at a White House event on paid parental leave later on Thursday morning, acknowledged the impact. “The stock market’s up very substantially today as some of you may know. And when it goes up I think of 401(k)s,” he said.

The White House had no comment on any tariff reduction offers.

The United States is due to impose tariffs on almost $160 billion of Chinese imports such as video game consoles, computer monitors and toys on December 15.

Trump’s son-in-law, Jared Kushner, has recently taken a larger role in U.S.-China trade negotiations and is among the advisers pushing the 50 percent tariff rollback, one person briefed on the talks said.

A decision to proceed with the December 15 levies could roil financial markets. Gao declined to comment on possible retaliatory steps if Washington imposes more tariffs on Chinese goods this weekend.

Analysts at Capital Alpha Partners said they expect Trump to announce, as soon as Thursday, a delay in the Dec. 15 tariffs for more than 30 days.

China and the United States agreed in October to conclude a preliminary trade agreement, but Beijing is balking at U.S. demands that it promises to buy a specific amount of agricultural goods. Beijing is also demanding rollbacks of all existing tariffs imposed by the United States.

Beijing has said previously it would retaliate if the United States escalates the trade dispute.

In August, China said it would impose 5 percent and 10 percent in additional tariffs on $75 billion of U.S. goods in two batches. Tariffs on the first batch kicked in on September 1, hitting U.S. goods including soybeans, pork, beef, chemicals and crude oil.

The tariffs on the second batch of products are due to be activated on December 15, affecting goods ranging from corn and wheat to small aircraft and rare earth magnets.

China also said it will reinstitute on December 15 an additional 25 percent tariff on U.S.-made vehicles and 5 percent tariffs on auto parts that had been suspended at the beginning of 2019.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

ADB cuts growth views for China, developing Asia as trade war bites

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The Asian Development Bank (ADB) said on Wednesday it has lowered its growth forecasts for developing Asia this year and the next, as a weaker outlook for China and India indicated softer economic activity elsewhere in the region.

The bank trimmed its growth forecast for developing Asia to 5.2 percent in 2019 and 2020, the Manila-based lender said in an updated annual outlook report, from 5.4 percent and 5.5 percent previously.

It cut its growth estimates for China for this year and the next to 6.1 percent and 5.8 percent, respectively, from the 6.2 percent and 6.0 percent forecasts announced in September, on the US-Sino trade tensions and as higher prices of pork cut into consumer spending.

“While growth rates are still solid in developing Asia, persistent trade tensions have taken a toll on the region and are still the biggest risk to the longer-term economic outlook”, ADB Chief Economist Yasuyuki Sawada said.

“Inflation, on the other hand, is ticking up on the back of higher food prices, as African swine fever has raised pork prices significantly”, Sawada added.

China’s third-quarter economic growth slowed more than expected to 6 percent year-on-year, marking its weakest pace in almost three decades, and at the bottom end of the government’s full-year target range of between 6.0 percent and 6.5 percent.

The ADB also lowered its forecast for South Asia’s largest economy India for fiscal years 2019 and 2020 to 5.1 percent and 6.5 percent, from its September estimates of 6.5 percent and 7.2 percent, due to liquidity strains on its non-banking finance companies and slow job growth.

Southeast Asia’s growth this year is expected to be slightly lower than previously expected, as trade reliant economies like Singapore and Thailand are hit hard by the trade war and broader global slowdown.

Developing Asia faces rising food costs, with 2019 and 2020 inflation seen at 2.8 percent in 2019 and 3.1 percent in 2020, up from the lender’s previous estimate of 2.7 percent for both the years.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

World trade without rules? US shuts down WTO appeals court

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Global commerce will lose its ultimate umpire Tuesday, leaving countries unable to reach a final resolution of disputes at the World Trade Organization and instead of facing what critics call “the law of the jungle.’’

The United States, under a president who favours a go-it-alone approach to economics and diplomacy, appears to prefer it that way.

The terms of two of the last three judges on the WTO’s appellate body neared their end at midnight Tuesday. Their departure will deprive the de facto Supreme Court of world trade of its ability to issue rulings.

Among the disputes left in limbo are seven cases that have been brought against Trump’s decision last year to declare foreign steel and aluminium a threat to U.S. national security and to hit them with import taxes.

The WTO’s lower court — its dispute settlement body — can hear cases. But its decisions will go nowhere if the loser appeals to a higher court that is no longer functioning.

Without having to worry about rebukes from the WTO, countries could use tariffs and other sanctions to limit imports. Such rising protectionism could create uncertainty and discourage trade.

“We are in a crisis moment for our global trading system,’’ said U.S. Rep. Stephanie Murphy, D-Fla, who sits on the House Ways and Means subcommittee on trade. “As of tomorrow, the court will cease to exist.’’

The loss of a global trade court of final appeals, Murphy said, is “really dangerous for American businesses.’’

The panel is supposed to have seven judges. But their ranks have dwindled because the United States — under Presidents George W. Bush, Barack Obama and Trump — has blocked new appointments to protest the way the WTO does business.

Trump and his top trade negotiator, Robert Lighthizer, are especially vociferous critics of the WTO. They argue that the trade organization constrains America’s ability to counter unfair trading practices by China and other countries.

Even other countries have complained about the WTO’s system for settling trade disputes. Critics say that cases take too long to resolve, that the panel often overreaches in its rulings and that the Geneva-based agency is ill-equipped to deal with the challenge posed by the Chinese economy’s unconventional blend of capitalism and state control.

Getting the WTO to reform is difficult because it requires consensus from its 164 member countries. Trump is willing to use America’s economic and political clout to shake things up in a way that smaller countries couldn’t.

“Where the United States is completely alone is the approach they’ve taken, (which) is to say: ‘We’re just going to blow this thing up,’ ” said Bernard Hoekman, an economist at the European University Institute.

The impending shutdown was met with dismay by several WTO member countries.

Zhang Xiangchen, China’s ambassador to the WTO, said in a statement that he was marking the occasion by wearing the black-tie his wife had given him for funerals. Letting the “lights go out’’ at the appellate body, at least temporarily, Zhang said, is delivering what is “no doubt the most severe blow to the multilateral trading system since its establishment.’’

The EU’s WTO ambassador, Joao Aguiar Machado, said in a statement, “The very idea of a rules-based multilateral trading system is at stake.” The EU, he said, “will not support, and will not condone, a system slipping into power-based economic relationships.’’

The EU and other countries have been working to set up an ersatz appellate body — including some former members of the existing appeals panel — to arbitrate future trade disputes. But that’s just a stopgap. And it is uncertain how many countries might join in.

The WTO was set up in 1995 to write and regulate the rules of global trade. Earlier, countries had complained that the United States was using its clout as the world’s No. 1 economy to unilaterally impose trade sanctions and to strong-arm other countries into limiting exports to America. (During the Reagan administration, Lighthizer was involved in arranging such “voluntary export restraints.’’)

For its part, the United States wanted more access to foreign markets.

The WTO’s dispute settlement process, including the Appellate Body, was meant to establish that written rules, not arbitrary power, governed global trade.

But the process has proved cumbersome. The appellate panel is notorious for missing deadlines, a problem that worsened as it lost judges. It is supposed to rule within 90 days but last year needed an average of 395 days to issue decisions.

Since 1995, 592 cases have been brought to the WTO (124 by the United States, the No. 1 complainant); the appellate body has issued 120 rulings, covering 162 of those cases. Most of the rest were dropped or resolved outside the WTO process.

Still, a former WTO appellate judge, Peter Van den Bossche, now a professor at Switzerland’s University of Bern, last week called the WTO’s dispute settlement process “a glorious experiment with the rule of law in international relations.’’

Its shut down, he said, would leave countries and companies contending with “the law of the jungle … the law of the strongest … and that will hurt us all.’’

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

China’s trade with US sinks in November amid tariff war

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

China’s trade with the United States sank again in November as negotiators worked on the first stage of a possible deal to end a tariff war.

Customs data on Sunday showed exports to the United States fell 23 percent from a year earlier while imports of American goods were off 2.8 percent.

Exports to some other countries including France rose, helping to offset the loss.

Total Chinese exports were off 2.5 percent from a year earlier despite weakening global demand while imports were up 0.2 per cent.

US President Donald Trump agreed to postpone a planned tariff increase in early October following trade talks but penalties already imposed on billions of dollars of goods stayed in place.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

10 key factors that will keep traders busy this week

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The benchmark indices lost around a percent each in the week ended December 6, dented by economic growth concerns, pause in rate cuts by RBI till Budget 2020 and uncertainty over US-China trade deal. Rising 10-year bond yield due to the expected spike in inflation hit banks. Hence, highly valued stocks also got corrected during the week.

The BSE Sensex was down 348.66 points at 40,445.15 while the Nifty50 closed below the 12,000 mark, falling 134.55 points to 11,921.50. The broader markets underperformed benchmark indices as the BSE Midcap index declined 2.77 percent and Smallcap index lost 1.6 percent.

Profit booking was seen across major sectors with Nifty Auto, Bank, Energy, FMCG, Infra, Metal and Pharma indices falling 1.4-3.4 percent. The IT stocks offered some respite with the index rising 2 percent, thereby, limiting the downside in benchmark indices.

Most experts expect the week ahead to be volatile along with some more correction adding that global factors will take the focus from domestic cues. Also, more stock-specific action could be seen in the coming week, according to them.

“Given weak growth and deteriorating fiscal situation, the current premium valuation is not likely to sustain. Having said that, falling interest rate, easy monetary policy across the globe and liquidity will limit the downside for the market. Considering this, we expect higher volatility and Nifty50 is likely to trade in the range 11,750-12,100,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

According to Jimeet Modi, Founder & CEO at SAMCO Securities & StockNote, markets are expected to remain volatile in the coming week as many factors, global and stock-specific activity will influence the bourses.

“US Fed Meeting outcome, advancement in Trump’s impeachment process will be major international events while listing of Ujjivan Small Finance Bank IPO, fundraising by Yes Bank will be some domestic factors traders can keep an eye on,” he added.

FIIs turned net sellers after several weeks, selling Rs 3,857.81 crore worth of shares during the week which also caused selling pressure in the market, but DIIs remained net buyers to the tune of Rs 2,422.32 crore shares in the same period.

Here are 10 key things that will traders busy in the market week ahead:

US-China Trade Deal

Globally, the focus will remain on US-China trade deal and the Fed meet. The market is expecting the first phase deal between US-China to be signed in December especially before December 15 deadline when the tariffs on $156 billion in Chinese imports is set to take effect.

Hence on the back of rising optimism over trade deal and strong jobs report, all three major US stock indexes gained around a percent each on Friday.

White House economic adviser Larry Kudlow said that while December 15 remains the date when the next round of tariffs on Chinese goods will take effect, the reality is that constructive talks, almost on a daily basis hints that a deal might be in the offing.

In the week gone by, global market turned cautious due to a negative tweet by Trump that he is not in a rush to finalise a deal with China. US also imposed import tariffs on Argentina and Brazil due to accusation of the continuous devaluation of their currencies to USD. There were also vibes that China may retaliate over US support to Hong Kong, impacting the progressing trade deal.

Fed Policy Meet

The last policy meeting of Federal Open Market Committee this year will be held on December 10-11. Experts largely expect the US central bank to keep interest rate unchanged after three rate cuts this year and could turn more hawkish.

Federal Reserve recently hinted about steady interest rate due to the moderate pace of economic growth and low inflation in the US.

“In the last three years, Fed policy meet which is usually held during the second week of December used to attract high weightage since it defines the trend of the global interest rate for next year. Lower interest rate is & was a need of the global financial market which is slowing down. This time the market expects a dovish view with no hike in rates and to maintain the stance in CY20,” Vinod Nair of Geojit said.

Advancement in Donald Trump’s impeachment process will also be another major international event in the coming week.

Brexit

The second national election in less than three years will be conducted in the United Kingdom on December 12. It is the most important event as it will decide the path for Britain’s exit from the European Union.

It has been more than three years now after Britain voted to leave the European Union, but the exit has not happened yet.

So far, the poll suggests that Prime Minister Boris Johnson’s party is well ahead of Labour Party which is lead by Jeremy Corbyn.

In 2016, Britons voted by 52-48 percent for Brexit, but parliament has been stuck in deadlock over the way forward. If Johnson wins the majority, he says Britain will leave the EU by January 31, 2020.

Macro Data

Industrial production data for the month of October and CPI inflation for November will be released on December 12.

The industrial production in September, the closest approximation for measuring economic activity in the country’s business landscape, contracted 4.3 percent against a contraction of 1 percent in the previous month due to subdued performance across segments barring intermediate goods.

Analysts expect the IIP in October to see further contraction (around -5 percent) due to consistent weakness in major segments. Core industries which are 40 percent of IIP declined 5.8 percent in October.

On the other side, retail inflation in November is likely to inch up further over 5 percent against 4.62 percent in the previous month due to higher food inflation.

“Higher CPI numbers due to supply constraints will also act as an impediment for quick economic growth. The sooner the CPI numbers cool down the better it is for economic recovery,” Jimeet Modi said.

After its policy meeting on December 5, RBI raised its CPI inflation projection upwards to 5.1-4.7 percent for second half FY20, but downwards to 4-3.8 percent for the first half of FY21.

Oil Prices

International benchmark Brent crude futures rallied more than 3 percent and WTI over 7 percent during the last week after OPEC members agreed for additional cuts of 5,00,000 bpd for the first quarter of 2020, taking total production cut to 1.7 million barrels per day.

The OPEC nations surprised with additional cuts to avoid the oversupply in the global oil market, but there was a new development after the Friday meet with Russia, wherein Saudi Arabia stated that the total oil production cuts implemented will be 2.1 mbpd. Currently, they were limiting its oil production by 1.2 mbpd as agreed by the members during 2018.

Saudi further said that they will continue to voluntary cut its oil production by 4,00,000 bpd if all producers strictly maintain its full quota.

“The reason behind this move is the group expected the demand slowdown in the first half of 2020 and US continue with its expansion plans. After this move, the global demand-supply picture balanced a little with the market showing a smaller surplus of 0.5mbpd into the first half of 2020,” said Sakina Mandsaurwala, Commodity Analyst at Narnolia Financial Advisors.

She expects this OPEC move to help balance the oil market and keep prices supportive at $55 per barrel on the Nymex. Also, if the US-China signs the phase one trade agreement, it would further boost the investor sentiment and help oil prices rally, she said.

Ujjivan Small Finance Bank Listing

On the domestic front, the key event to watch out for would be the listing of Ujjivan Small Finance Bank scheduled to be on December 12.

Experts told Moneycontrol that the stock could list with a premium of Rs 20-25 over its issue price of Rs 37, considering the hefty subscription of 166 times and earnings growth.

Ujjivan Small Finance Bank is the subsidiary of NBFC Ujjivan Financial Services.

Technical View

The Nifty50 closed with a loss of 0.8 percent on Friday and shed 1.12 percent during the week, forming bearish candle on daily charts and Bearish Engulfing pattern on the weekly scale.

It indicated that there could be more selling pressure in coming days and if the index breaks crucial support of 11,800, which is unlikely, then it could fall to around 11,700-11,600 levels, experts feel.

“The short term trend of Nifty seems to have reversed. The formation of Bearish Engulfing could open up a larger weakness in the market in the next few weeks,” Shrikant Chouhan, Senior Vice-President, Equity Technical Research, Kotak Securities told Moneycontrol.

“A decisive move below 11,800 levels could accelerate the downside momentum in the market. The near term downside targets to be watched at 11,660 in the next few weeks,” he said.

Nagaraj Shetti, Technical Research Analyst at HDFC Securities advised traders and short term investors to be cautious and should try to reduce weak long positions at 11,950 and 12,000 levels.

F&O Cues

Option data suggests there is a shift in the lower trading range for Nifty at 11,700 to 12,100 levels.

On the monthly options front, maximum Put open interest was seen at 12,000 followed by 11,500 strike, while maximum Call open interest was at 12,000 followed by 12,500 strike. Call writing was seen at 12,000 followed by 12,100 strike while Put writing was seen at 11,500 followed by 11,800 strike.

Last two weekly expiries had the highest Call base at 12,100, which finally resulted in the market weakness. The Call writers were active at 12,100 strike.

“The index is coming down to the crucial support zone of 11,800-11,850 where the noticeable Put base is placed. We believe the indices may enter a more prolong consolidation around the psychologically important levels of 12,000,” said Amit Gupta of ICICI Direct.

India VIX fell by 1.87 percent from 13.90 to 13.64 levels on week-on-week basis due to higher options writing seen of late, which has kept indices in a range.

Corporate Action

Here are corporate actions taking place in the coming week:

Global Cues

Apart from US-China trade developments, UK election and Fed meet, here are other key global data points to watch out for in the coming week:

(Source: Moneycontrol.com)

Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Rupee rises 8 paise to 71.58 against US dollar in early trade

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The Indian rupee on Tuesday appreciated by 8 paise to 71.58 against the US dollar, as investors were hopeful that the Reserve Bank will go for another rate cut to boost economic growth.

Forex traders said, the domestic unit is trading in a narrow range ahead of the RBI monetary policy decision on Thursday.

At the interbank foreign exchange, the rupee opened at 71.66, then gained some momentum and touched a high of 71.58 against the dollar, showing a rise of 8 paise over its last close.

The Indian rupee on Monday had closed at 71.66 against the US dollar.

Bankers and experts believe the Reserve Bank may cut interest rates for the sixth straight time on December 5 to support growth that has continued to slip.

The RBI has cut interest rates on every single occasion the monetary policy committee (MPC) has met since Shaktikanta Das took over as the Governor in last December.

Traders said rupee is trading in a narrow range as market is awaiting fresh cues on the potential US-China trade deal.

Meanwhile, brent crude futures, the global oil benchmark, rose 0.20 percent to $ 61.04 per barrel.

Foreign institutional investors remained net sellers in the capital markets, as they sold shares worth Rs 1,731.33 crore on Monday, as per provisional data.

Domestic bourses opened on a cautious note on Tuesday with benchmark indices Sensex trading 66.01 points down at 40,736.16 and Nifty down 23.75 points to 12,024.45.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.05 percent to 97.90.

The 10-year government bond yield was at 6.48 percent in morning trade.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

12 global companies evinced interest to shift base from China to India: Nirmala Sitharaman

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Finance Minister Nirmala Sitharaman on November 30 said about 12 global companies have evinced interest to shift their base from China to India, taking advantage of competitive tax rate of 15 percent announced recently.

In a biggest reduction in 28 years, the government in September reduced corporate tax rate by almost 10 percentage points in a bid to give a boost to sagging economy.

Base corporate tax for existing companies has been reduced to 22 percent from 30 percent, and for new manufacturing firms incorporated after October 1, 2019 and starting operation before March 31, 2023, it was slashed to 15 percent from 25 percent.

“I had said that I will form a task group, which will look into those companies which want to get out of China, and in the meanwhile I announced the corporate tax cut. There were many companies which were showing interest and wanting to come back.

“So, this task force has already started contacting many of these companies. The last count, I came to know was about 12 of them have already been spoken to, their minds understood, their expectation listed out so that the government can come up with a concrete offer for them to shift from where they are now, so that the ecosystems can get built here, new industries can come,” she said.

The minister said the word that was given for bringing newer industries, which are moving out of China, is actively moving forward.

“And I am sure, I will be able to report some progress on that,” she added.

With regard to investment of Rs 100 lakh crore in the next 5 years, she said, the task force will come out with a list 10 major infrastructure projects by December 15 and investment in these projects would be front-loaded.

“We made sure that a set of officers were looking into pipeline that can be readied, so that once the fund is ready and it will be front-loaded…that task is near completion,” Sitharaman said.

Before December 15, she said the government will be able to announce the front-loading of at least a 10 major projects.

The finance ministry in September set up a task force headed by Economic Affairs Secretary to prepare a road map for the “national infrastructure pipeline” from 2019-20 to 2024-25 under a Rs 100 lakh crore infra plan. The task force expected to cover greenfield and brownfield projects costing above Rs 100 crore each.

The finance minister also listed some of the measures taken by the government to boost consumption and liquidity in the system since August this year.

Talking about the GDP growth rates, she expressed hope that the next numbers should be better.

India’s growth falling to a more than six-year low of 4.5 percent in the second quarter of 2019-20 is sub-optimal and below the potential of the economy, the industry pointed out.

During the loan outreach programme in October, public sector banks have disbursed more than Rs 2.5 lakh crore, the finance minister said while outlining various measures taken by the government to revive economy.

“They (banks) reached out to 400 districts, literally the hinterland where the money went. And as a result, now I can see somewhat that kind of spend has helped in somewhat reviving the consumer spirits and purchases have gone up and I also hope that it will lead to improvement in tax collections,” she said.

She, however, said the progress on partial guarantee scheme is not very satisfactory.

“I’d like to draw your attention to the partial guarantee scheme which we brought in, so that all the pooled assets could be bought over by the banks and for which the government would give the partial guarantee with a minor haircut… A lot more is going to be done on that and I admit that things have been a bit slow,” she said at the Economic Times Award event here.

To ensure transparency in the taxation, Sitharaman said that faceless assessment has been introduced in direct tax, and indirect tax too will have this system soon.

“And the last word on GST. The systems are really being worked on so that it becomes as simple as we claim it to be. We would further like to simplify it,” she said.

As regards the rationalisation of the taxation, she said, “We are having a good conversation with all the states and want to make sure that those essential items may be put to the lowest if not exempt, but for the rest of them, we are trying to rationalize”.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow