Morning Alert..
Goyal warns automakers against forcing component makers to import
A few automakers, global as well as Indian, were not letting domestic component manufacturers localise their production and were forcing them to import from suppliers they preferred, Commerce and Industry Minister Piyush Goyal said on Wednesday. “It has been brought to my attention that some auto ancillary companies that have collaboration with other firms around the world are also facing some stress and pressure from their joint venture partners (to import),” he said in his address at the 62nd annual session of the Automotive Component Manufacturers Association. The government views this matter seriously, the minister noted. “I am sure that our Indian companies will be in a position to give them a fair and honourable exit,”he added. His remarks come even as the Indian auto component industry exported parts worth $19 billion in FY22.
IT stocks bleed mirroring Nasdaq plunge; Nifty IT index down 3.4%
Information technology (IT) stocks plunged on Wednesday, mirroring a slide in the tech-heavy Nasdaq Composite of the US a day earlier after hotter-than-expected inflation data triggered risk-off bets. The Nifty IT index fell 3.4 per cent, with all its 10 components ending with losses. A downgrade by Goldman Sachs also dampened sentiment towards tech stocks, which have been reeling from selling pressure this year. On a year-to-date basis, the index is down 27.3 per cent, even as the Nifty50 index is up close to 4 per cent. The sharp underperformance is because of concerns that companies might scale back their IT budgets amid an uncertain global growth outlook.
Expect $470-billion merchandise exports by year-end, says FIEO
With global trade facing headwinds due to the ongoing conflict between Russia and Ukraine, merchandise exports from India are expected to grow at a slower pace during the current fiscal.
It may rise about 11 per cent to over $470 billion, apex body for exporters Federation of Indian Export Organisations (FIEO) said on Wednesday. Exports grew 45 per cent year-on-year (YoY) to $422 billion in 2021-22. Rising inflation and pile up of inventories in all major economies have affected the purchasing power, thus hitting demand. Official data showed that outbound shipments from India hit a 13-month low at $33.92 billion, up 1.62 per cent, in August. Trade deficit fell from a record high of $30 billion in July to $27.98 billion but remained elevated. Export of commodities such as engineering goods, gems and jewellery, and textiles witnessed contraction during August. On the brighter side, exporters are seeing opportunities, since buyers are moving from China to India.
Commodity play
Gold – Rs 50214/10gm, Silver – Rs 56361/kg, Brcrude – Rs 7061/barrel, Degumsyoil – Rs 1296/10kg, Copper – Rs 654/kg.
Corporate News
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Vedanta to create hub to manufacture iPhones, TV equipment in India.
Sector in focus – Banks, Metals, Power and Chemicals.