Economic Roundup, September 13, 2019

Economic Environment

  • Index of Industrial Production (IIP) and  inflation
  • Oil price

How are the Indian and global economic environments affecting the financial markets?

IIP has grown but at a slower rate indicating slowdown in the manufacturing sector. Inflation is lower than the Reserve Bank of India target of 4%. But developments over the weekend in Saudi Arabia suggest that until the issue of attacks on Saudi oil facilities is resolved, global oil prices could see a spike and any upside price persistence could transmit to inflation and pressure on India’s foreign exchange reserves further pressuring an economy already under stress. The uptick in the Indian financial markets because of efforts by the central government to restore growth could be short lived.

What to expect from the markets next week?

Selling pressure will be persistent on the financial markets especially given the situation in Saudi Arabia. Still, despite slowing growth, on a relative basis, India continues to be the destination for foreign institutional investors as it is remains the world’s fastest growing major economy.

Leave a Reply

Your email address will not be published. Required fields are marked *