ADB cuts India's FY20 GDP growth forecast to 7% on fiscal shortfall worries

Asian Development Bank on Thursday lowered India's GDP growth forecast to 7 per cent for the current year on the back of fiscal shortfall concerns.
"India is expected to grow by 7 per cent in 2019 (FY20) and 7.2 per cent in 2020 (FY21), slightly slower than projected in April because the fiscal 2018 outturn fell short," ADB said in its supplement to the Asian Development Outlook 2019.

For the south Asian region, ADB said the outlook remains robust, with growth projected at 6.6 per cent in 2019 and 6.7 per cent in 2020.
Earlier in April this year too, the Manila-based multi-lateral funding agency had lowered India's growth forecast for FY20 to 7.2 per cent from 7.6 per cent estimated previously due to moderation in global demand and likely shortfall in revenue on the domestic front.

Indian gold flips to premium as demand picks up pace in major Asian hubs

Physical gold demand picked up pace in major Asian hubs this week, with bullion being sold at a premium for the first time in more than three months in India, while China saw improved appetite for jewellery.
In India, the world's second biggest consumer of the metal after China, dealers were charging a premium of up to $1 an ounce over official domestic prices this week, up from last week's discount of up to $2. The domestic price includes a 10 per cent import tax.

"Right now, demand is good. The price correction is giving jewellers an opportunity to replenish inventory at lower levels," said Mukesh Kothari, director at Mumbai bullion dealer RiddiSiddhi Bullions.
Gold futures in India fell to Rs 31,777 per 10 grams on Thursday, the lowest level since January 9.
Jewellers have been making healthy purchases as retail demand for weddings is expected to improve if prices remain at the current level, said a Mumbai-based dealer with a bullion importing bank.
The yellow metal is considered an essential part of weddings in India.
The gold market in China also saw increased demand, pushing premiums higher to $9-$13 over the global benchmark from the previous week's $8-$11.
"Since March 8 is also a festival in China, this week's jewellery demand has also been slightly better compared to normal days," said Samson Li, a Hong Kong-based precious metals analyst at Refinitiv GFMS.
However, consumption had dried up a bit with consumers having already exhausted their spending during the Lunar New Year holiday, Li added.
Singapore witnessed slight demand as well, mostly due to a dip in global prices earlier this week, said Brian Lan, managing director at dealer GoldSilver Central in Singapore.
Benchmark spot gold prices touched an over five-week low of $1,280.70 this week.
Premiums of around 60-80 cents were being charged over the benchmark in Singapore, traders said, little changed from 50-80 cents previously.
"Gold prices in the local currency are also stagnant, which has not excited investors much," said a Singapore-based trader.
Hong Kong markets were, however, relatively quiet, with premiums unchanged at 50 cents to $1.30 an ounce.
In Japan, the metal was sold at par with the global benchmark, compared with a discount of about 50 cents last week, a Tokyo-based trader said.
The fallout from the US-China trade war has led to slower industrial demand for the metal, he added.

Asian shares soften as investors look to G20 summit

By Andrew Galbraith
SHANGHAI (Reuters) - Share markets ticked slightly lower in early Asian trade on Friday as investors await a closely watched meeting between the Chinese and U.S. presidents in Argentina this weekend for signs of a trade war detente.

MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> was down 0.1 percent. In Japan, the Nikkei <.N225> was up 0.2 percent.
The mostly muted market moves followed a mixed day on Wall Street, where stocks swung between losses and gains to ultimately end lower, amid conflicting signals on the outlook for trade talks.
The Dow Jones Industrial Average <.DJI> fell 0.11 percent, to 25,338.84, the S&P 500 <.SPX> lost 0.22 percent to 2,737.8 and the Nasdaq Composite <.IXIC> dropped 0.25 percent to 7,273.08 at Thursday's close.
U.S. stock market futures pointed to more weakness on Friday, with S&P e-mini futures ticking down 0.14 percent to 2,740.5.
Investors are waiting for a meeting between Chinese President Xi Jinping and U.S. President Donald Trump, at which the leaders are expected to discuss the countries' bruising trade war.
Adding to apprehension ahead of the weekend meeting were comments from a U.S. official, who said White House trade adviser Peter Navarro, who has advocated a tougher trade stance with China, would attend.
Mixed signals from Washington about the prospects for a rapprochement with China on trade have led many investors to sit on the sidelines.
"Rather than jump at headlines, the market has taken a laid-back approach and prices are treading water until we see the outcome," analysts at National Australia Bank said in a morning note.
Defying the subdued mood, Australian shares <.AXJO> were 1.1 percent weaker, dragged lower by maker Coca-Cola Amatil Ltd , which fell 12.1 percent on a weak outlook for 2019.
"They billed it as another transformational year, which fund managers think means profit growth is not going to be that good," said William O'Loughlin, investment analyst at Rivkin Securities in Sydney.
Global investors also remain hesitant to shift positions significantly as they seek clarity on Federal Reserve policy direction.
Minutes of the latest Fed policy meeting showed that almost all officials agreed another interest rate increase was "likely to be warranted fairly soon," but opened debate on when to pause further hikes and how to relay those plans to the public.
The minutes follow comments from Federal Chairman Jerome Powell earlier this week that some took as indicating a dovish shift.
The yield on two-year U.S. Treasury notes , seen as sensitive to expectations of higher Fed fund rates, was at 2.8066 percent on Friday, down from a U.S. close of 2.813 percent.
Benchmark 10-year Treasury notes yielded 3.0261 percent, compared with a U.S. close of 3.035 percent on Thursday.
The dollar dropped 0.08 percent against the yen to 113.38 , while the euro was flat at $1.1391.
In commodities markets, U.S. crude prices retreated after rising on news that Russia is increasingly convinced it needs to reduce oil output along with the Organization of the Petroleum Exporting Countries (OPEC). OPEC and its allies are meeting in Vienna on Dec. 6-7.
U.S. crude dipped 0.1 percent at $51.41 a barrel.
Spot gold rose 0.06 percent to $1,224.38 per ounce. [GOL/]
(Editing by Sam Holmes)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

That $4.3 trn wipeout in Asian stocks is getting deeper as dollar soars

It was looking like a week of wound-licking for Asian stocks. Then crude oil entered a bear market and alarm bells rang on China’s slowdown as tech stocks plunged.
Just like that, the region’s equity benchmark erased weekly gains and posted its sixth slide in seven weeks. The MSCI Asia Pacific Index slumped 1.2 percent Friday, worsening the wipeout that already erased $4.3 trillion of market value this year.

It’s anyone’s guess how regional stock markets will do on Monday but it isn’t looking good right now: the S&P 500 Index dropped 0.9 percent Friday and futures contracts on the Nikkei 225 fell.
Of note: energy companies were, by far, the biggest decliners, followed by tech shares as Tencent Holdings sank almost 5 percent. Watch for its quarterly results next week -- analysts expect the giant will report its slowest revenue increase in more than three years.
One thing that might be worth keeping an eye on is data around China’s consumption -- car sales fell for a fifth month and and Ctrip.com International joined the likes of Baidu and Alibaba Group Holding in being unable to avoid the economic slowdown.
Also throwing cold water on the recovery is the U.S. dollar, which resumed its appreciation as the Federal Reserve signaled it’s still ready to increase rates in December. The strong greenback has been a key concern for investors in the region, as it’s weakened local currencies and triggered massive outflows from emerging-market assets.
There are also some country-specific news to keep in mind:
China’s factory inflation slowed for a fourth month while consumer prices steadied amid sluggish demand.
The nation is also aiming to boost large banks’ loans to private companies to at least one-third of new corporate lending, said Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission.
Australia’s central bank said it expects stronger growth and hiring to help lift inflation, but warned of risks to the global outlook from a worsening trade war and weaker China.
Malaysia’s industrial production rose 2.3 percent in September from a year earlier, matching projections, while data on Indonesia’s current-account balance is due later.
Hong Kong and Chinese shares tanked more than 1 percent on Friday, with the Hang Seng China Enterprises Index showing a familiar look that doesn’t inspire any good -- just see this chart by Mark Cranfield, a Bloomberg M-Live strategist:
Indonesia’s Jakarta Composite Index also slumped amid concerns that a rebalancing of indexes will lead to the lower weighting of some companies.
Here are some of Friday’s big movers:
Nexon, one of the biggest foreign video-game publishers in China, sank after saying profits in the mainland will drop by about a fifth in the current quarter.
Lenovo rallied 4.5 percent. The company’s quarterly profit beat estimates after the Chinese reclaiming the top spot in the global PC market.
Two Hong Kong-listed online gaming companies that lost more than 60 percent of their value Thursday saw big gains in early trading Friday, another example of wild moves in the world’s fourth-biggest stock market.
Beijing-based developers and construction firms rose after a newspaper reported a development plan for the capital’s Tongzhou district -- which could involve investment of up to 1 trillion yuan ($144 billion) over the next three years -- will be released soon.
Stock-Market Summary
Japan’s Topix index down 0.5%; Nikkei 225 down 1.1%
Hong Kong’s Hang Seng Index down 2.4%; Hang Seng China Enterprises down 2.5%; Shanghai Composite down 1.4%
Taiwan’s Taiex index down 1.2%
South Korea’s Kospi index down 0.3%; Kospi 200 down 0.3%
Australia’s S&P/ASX 200 down 0.1 percent; New Zealand’s S&P/NZX 50 up 0.4%
India’s S&P BSE Sensex Index down 0.2%; NSE Nifty 50 down 0.1%
Singapore’s Straits Times Index down 0.5%; Malaysia’s KLCI down 0.8%; Philippine Stock Exchange down 1%; Jakarta Composite down 1.7%; Thailand’s SET down 0.8%;
Vietnam’s VN Index down 1.3%

World's biggest trading bloc a step closer to reality after Tokyo meeting

Asian trade ministers took another step toward creating what could be the world’s biggest trading bloc on Sunday, expressing hope that a deal could be signed by the end of this year.

Ministers from the 16-nation Regional Comprehensive Economic Partnership, which includes China, Japan and India but not the US, met in Tokyo on Sunday to try and thrash out remaining differences.
“The path toward a year-end agreement is now clearer,” said Hiroshige Seko, Japan’s Trade Minister during the joint-press conference held Sunday. “As protectionism concerns increase globally, it’s important that the Asian region flies the flag of free trade.”
If ever fully achieved, the partnership would also include the 10 members of the Association of Southeast Asian Nations as well as South Korea, Australia and New Zealand, and cover one third of the world’s economy and almost half its population.
While the pact doesn’t seek to impose higher standards in areas such as labor and environmental protection, like the 11-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership signed earlier this year, consensus continues to prove elusive.
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Major obstacles include India’s requirement that any agreement to reduce tariffs on goods and services should allow for free movement of people, something India wants for its highly skilled information technology sector.
“There are great challenges to the global trading system at this point in time,” said Chan Chun Sing, Singapore’s Trade Minister Sunday. “It serves as added impetus for us to try and achieve a substantive conclusion to the RCEP process.”
Any further progress on RCEP could put pressure on the US to consider rejoining the TPP, as the US-China trade war continues. US President Donald Trump’s tariffs on $34 billion of Chinese goods are scheduled to kick in on July 6, a move that China has vowed to retaliate against.