Good morning!
This is the daily morning update from NDTV Profit. Over the next few minutes, we’ll bring you up to speed with everything you need to know to start your day ahead of the curve.
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Let’s start with what’s happening overseas first. Globally, investors are still waiting to understand the implications of US President Donald Trump’s actions on tariffs. With China having reciprocated with higher tariffs, which will kick in on Feb. 10, investors are uncertain whether a larger trade war will erupt.
In fact, that is having a bearing on officials that will determine the course of the US monetary policy too. Federal Reserve officials have said that they’re uncertain about the inflationary impact of Trump’s tariffs. For one, Chicago Fed President Austan Goolsbee warned that ignoring the potential inflationary impact of tariffs would be a mistake, whereas Richmond Fed President Thomas Barkin said it remains impossible at this early stage to know where cost increases from any tariffs might be absorbed or passed along to consumers. That’s based on a Reuters report.
Meanwhile, US services sector activity unexpectedly slowed in January amid cooling demand, and that’s having a cooling effect on inflation. The Institute for Supply Management said its nonmanufacturing purchasing managers index slipped to 52.8 last month from 54.0 in December. It was pegged at 54.3 by economists.
Overnight, Wall Street ended with gains. The Dow Jones Industrial Average climbed over 300 points, while the S&P 500 and the Nasdaq had more modest upticks. Google-parent Alphabet dropped 7.3% after posting downbeat cloud revenue growth on Tuesday and earmarking a higher-than-expected $75 billion investment for its AI buildout this year.
Going forward, investors will wait for cues on jobs in the non-farm payrolls report for January, that will be released tomorrow. Indications on jobs will likely affect the Federal Reserve’s decision on interest rate cuts going forward.
Across the ocean, in England, the central bank is set to cut interest rates later today for only the third time since just after the start of the pandemic. This, as it tries to bolster a flagging economy that is still contending with inflation.
Markets in the Asia Pacific region have started positive, with all three early risers starting in the green.
In the commodity space, oil prices have fallen more than 2% overnight, as a large increase in US crude and gasoline stockpiles indicated weaker demand, while worries about a new China-US trade war are raising fears of slower economic growth. The Energy Information Administration has said that US crude oil inventories rose sharply last week, as refiners facing soft petrol demand did maintenance work.
In news back home, today could be the day you see the first glimpse of a new Income Tax Bill — something that Finance Minister Nirmala Sitharaman had alluded to in her Budget speech. Sources had told NDTV Profit that the first draft of the bill may be made public today. The bill is expected to simplify the old tax law, reducing the length and complication.
In politics, the Bharatiya Janata Party could be headed for a victory in the Delhi assembly elections, which would end its 27-year absence from power in the national capital, as per the exit polls that have emerged so far. Out of 10 notable exit polls released so far, nine predict a BJP win, whereas only one projects the ruling Aam Aadmi Party will retain power.
In other news, gold investments in India soared by 60% in value terms to $18 billion, or approximately Rs 1.5 lakh crore in 2024, as compared to 2023, according to a report released by the World Gold Council on Wednesday. In absolute terms, the demand for gold as investment stood at 239 tonnes in India, which is the “highest since 2013”, WGC stated. This is 29% higher than the figure in 2023.
India’s annual demand for gold as an instrument of investment accounted for 20% of the global demand in this segment, at 1,180 tonnes. The global investment demand for gold is up 25% in absolute terms, as compared to 945.5 tonnes in 2023.
Moving on, there are continued concerns about urban consumption demand. The latest trigger is a warning from Page Industries, Jockey’s licensee in India. The company said the Indian apparel retail sector faces short-term headwinds due to dampened consumer sentiment. But, the demand for athleisure remains strong, primarily driven by instant delivery apps, as quick commerce is increasingly becoming a preferred option even for non-grocery and larger items.
It’s going to be a busy day today on the earnings front with six Nifty 50 companies reporting numbers. Bharti Airtel Ltd., Britannia Industries Ltd., Hero MotoCorp Ltd., ITC Ltd., State Bank of India and Trent Ltd. will report their earnings today. Other major names announcing their quarterly results include Aurobindo Pharma Ltd. and Apollo Tyres.
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