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Five things to know as trading begins on Dalal Street

Snapping previous session's gains, the market opened on a weaker note reacting to unfavourable key macroeconomic data. Globally dollar strength is having a blow on black and yellow metal, while Asian markets also sank in red.

BT Online | May 13, 2016 | Updated 15:57 IST
Five things to know as trading begins on Dalal Street
Photo: Reuters

Snapping previous session's gains, the market opened on a weaker note reacting to unfavourable key macroeconomic data. Globally dollar strength is having a blow on black and yellow metal, while Asian markets also sank in red.

Read on to know all important updates that are driving the market movement today:

1) Double blow: IIP falls, CPI inflation surges

In a double whammy to the economy, industrial output growth plunged to 0.1 per cent in March while retail inflation soared to 5.39 per cent in April. The factory output growth decelerated mainly due to poor performance of manufacturing and mining sectors coupled with contraction in capital goods production, while higher food prices pushed the inflation higher, reversing the recent downward trend.

The unfavourable IIP and CPI numbers have spoiled chances of RBI considering any immediate interest rate cut.

2) Boston Fed Prez's comments push dollar up

Boston Federal Reserve President Eric Rosengren said the Fed should raise interest rates if data confirms a stronger jobs market and inflation outlook in the second quarter. A batch of data will be released later in the day to gauge the underlying strength of the US economy. April retail sales data will be key to watch out for.

3) Brent spills on stronger dollar

Brent prices dipped below $48 as a stronger dollar weighed and Russia warned that a global crude supply overhang could last into next year. A stronger dollar, in which oil is traded, makes fuel imports more expensive for countries using other currencies, potentially hitting demand.

4) Gold eyes worst week

Gold edged higher on Friday, but was on track for its biggest weekly decline since March as a firmer US dollar cut the metal's appeal. The dollar was up for a fourth week in five against a basket of major currencies, making dollar-denominated assets such as gold more costly for holders of other currencies.

5) RBI plans to tighten rules for large corporate borrowers

Concerned over "very high" exposure of banks to some large corporates, RBI proposed tighter norms to mitigate the risk posed to the banking system on account of large aggregate lending to a single borrower. Now, banks would have to make higher provisions for lending to large corporate borrowers above a certain level. The new norms will be applicable from next financial year.

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