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Indian Indices Pare Earlier Gains; Auto Sector Down 1.2%

After opening the day on a positive note, stock markets in India witnessed selling pressure and are presently trading marginally lower. Sectoral indices are trading in the red with stocks in the auto sector and telecom sector witnessing maximum selling pressure.

The BSE Sensex is trading down 120 points (down 0.4%) and the NSE Nifty is trading down 44 points (down 0.4%). The BSE Mid Cap index is trading down by 0.8%, while the BSE Small Cap index is trading down by 0.9%. The rupee is trading at 63.91 to the US dollar.

In the news from global financial markets, Japan's government reappointed Bank of Japan (BOJ) Governor Haruhiko Kuroda for another term. The government nominated Kuroda to serve another five-year term when the current one ends in April.

The development comes as a sign that the BOJ will be in no rush to dial back its massive stimulus programme.

The reappointment also comes amid the ongoing volatility where Japanese and global markets have been rattled in recent weeks on expectations major central banks will ease their stimulus.

Note that Kuroda has said to maintain the BOJ's ultra-easy policy. However, he has also refuted arguments that the stimulus programme needs to be expanded and has signaled the possibility of raising interest rates.

The BoJ has pushed back the timing to reach its price target six times since it deployed its massive stimulus programme in 2013. It now hopes that consumer inflation will achieve its 2% target by March 2020, as signs of strength in the economy and a tight job market boost wages giving households higher purchasing power, allowing firms to hike prices.

What remains are many issues that can hamper Japan's economic growth going forward.

Also, the recent win of Japanese Prime Minister Shinzo Abe in elections also signals the continuation of Abenomics - the ultra-loose monetary and fiscal policies. These policies have influenced excessive money printing, too much debt, and too much government intervention in Japan.

As Ankit writes in a recent edition of Equitymaster Insider... "With Abenomics, Japan has gone overboard trying to revive its economy. The Bank of Japan is a Top 10 holder in over 90% of Japanese stocks. And it remains one of the biggest buyer of Japanese stocks."

It would be interesting to see the impact central bank's ultra-easy money policies will have on the economy going forward. Meanwhile, we'll keep you updated on all the recent developments in this space.

In the news from commodity markets, gold is witnessing buying interest this week, as can be seen from the chart below:

Gold Trades on a Positive Note

(Click on image to enlarge)

Most of the gains are seen on the back of a weaker dollar overseas and also due to a firm trend in precious metals.

Apart from the above, increased buying by jewelers and investors also aided the uptrend in gold this week.

To keep a tab on the movements in gold and other commodities, you can read the stock market commentary from the Daily Profit Hunter team. Their commentary tracks the developments in the global economy as well as stock, currency, and commodity markets.