Business in the Week Ahead:- The RBI’s balancing act has been successful, and the upcoming general elections present numerous opportunities for investors.
The Reserve Bank of India (RBI) has maintained a steady policy rate of 6.5%, despite core inflation declining, to avoid surprises on seasonal food inflation. The pivot for the policy depends on inflation staying close to RBI’s medium-term target of 4%.
The central bank is also concerned about India’s growth, with official estimates suggesting a 7% plus growth rate for 2023-24, potentially making it the fastest-growing major economy.
India is experiencing a surge in foreign direct investment (FIIs) due to its long-term growth story and earnings optimism. This has led to a premium in market valuation.
The second highest GST revenue since 2016 reflects the strength of manufacturing and broad-based expansion. With the next earnings season and general elections approaching, market permutations are at their peak. However, experts are available to help navigate the potential challenges.
Monday – April 08
US consumer inflation expectations for the year ahead remain steady at 3.3% in February, marking three-year lows. Gas prices are expected to increase slightly to 4.3%, while food and homes inflation expectations remain unchanged at 4.9% and 3.5%, respectively.
Tuesday – April 09
The US Small Business Optimism Index dropped to 89.4 in February, the lowest in nine months, with 23% of small business owners identifying inflation as their primary business issue, with March’s relief uncertain.
Wednesday – April 10
The US Consumer Price Index increased by 0.4% in February, the largest increase in five months, driven by shelter and gasoline prices, with the March print due on Wednesday.
Thursday – April 11
European Central Bank (ECB) maintained high interest rates in March to balance recession concerns with inflationary pressures. Expect a better decision on Thursday.
US unemployment claims fell to 210,000 for the week to March 23, compared to market expectations of 215,000. This follows a relatively low claim count since February, with numbers expected to rise through April 6.
Friday – April 12
Retail inflation remained steady at 5.09% in February, slightly higher than January’s 5.1%, and food inflation remained at 8.66%, slightly higher than January’s 8.3%, with market expectations focusing on March figures.
Factory output increased 3.8% YoY in January, slightly below market expectations. Manufacturing output, accounting for 78% of total output, rose by 3.2%, easing from the earlier 4.5% gain.