Weak earnings might not change in the next three months and rather, it would take another six-to-nine months for the earnings to come back. ‘Maybe it would take six months for the earnings to come back, but they will come. We need fiscal or monetary help. And it will come. Have patience and wait,’ says Agrawal.
Interest rates slashed by another 25 basis points; Federal Reserve chair Jay Powell affirms US economy resilience and data-focused decision making amid ongoing political changes, rules out resignation until end of term
A Trump presidency could benefit India through increased foreign investments, enhanced trade opportunities, and lower energy costs. However, challenges include immigration restrictions, currency fluctuations, and geopolitical instability.
In a Bloomberg interview, Ryan Air CEO Michael O’Leary criticized the UK Labour government’s travel tax hike, calling it a growth barrier. Ryan Air plans to redirect five million UK-bound seats to tax-friendly markets like Italy and Sweden. O’Leary warned of potential economic setbacks from these policies.
Foreign investors have recently begun selling Indian bonds due to rising U.S. yields and inflation concerns. However, high yields and upcoming inclusion in global indices like JPMorgan and FTSE Russell are expected to renew interest in India’s bond market.
Australia’s housing market spirals as surging demand outpaces dwindling supply; Soaring prices and rents leave many struggling to find a place to call home.
Inflation’s Ripple Effect: How Income, Spending, and Location Shape Household Experiences Across India
Repo rate at 6.5% for the 9th consecutive year, RBI indicates strong credence in real estate, focuses on inflation control signaling economic stability In a widely anticipated move, the RBI has kept the Repo rate unchanged at 6.5% in its latest monetary policy review meeting. 60% of the MPC, led by RBI governor Shaktikanta Das voted in favor to maintain the status quo. It reflects the central bank’s commitment to achieving the inflation target while also signaling economic stability. In India, Repo Rate is a rate at which the Reserve Bank of India (RBI) lends money to commercial banks. The repo rate is associated with a repurchase option or the same as an alternative ‘repurchase agreement’ prevailing in banking. In case there is a shortage of funds, commercial banks may borrow from the central bank and they can repay such loans at the applicable repo rate. The central bank provides temporary loans in exchange for safety and securities, such as government bonds or treasury bills. This monetary policy is used to control inflation and improve bank liquidity. Read more: Impact of RBI Policy Change on India’s Financial Markets Inflation and Economic Growth Outlook: India’s moderate rates of inflation have made it possible for the RBI to maintain the current repo rate. The central bank has embraced a data-driven strategy, scrutinizing economic conditions and price patterns to prevent too strict or loosening monetary policy. Recent inflationary pressures, mainly driven by food and fuel prices, have been viewed as temporary, allowing the central bank to focus on growth. The central bank also ensures availability of affordable credit to businesses and consumers with this move. Market Reactions Financial markets generally respond swiftly to these factors. If the repo rate is kept steady, the RBI may be opting for stability and reliability instead of stimulating market demand. Investors or financial institutions can plan their investments and manage financial risks as the rate fluctuation would stay stable. With stability, businesses will be able to plan their borrowing costs to help finance expansion and operational requirements.For consumers, this would come in the form of stable loan and mortgage rates that can also directly help influence spending and saving behaviors.The flat rate is considered as a good development for the equities markets. The RBI’s move is probably going to help industries that are quite susceptible to swings in interest rates, such as banking, real estate, and consumer goods. Companies may more easily finance operations and expansion thanks to lower borrowing costs, which increases investor confidence. Future Outlook While the repo rate remains unchanged for now, the central bank will continue to keep a careful eye on inflation trends, the state of the world economy, and indicators of domestic growth before making any decisions on future monetary policy adjustments.The RBI might have to raise the repo rate in order to tighten monetary policy if inflation gets out of control. Alternatively, the central bank can think about cutting rates to boost demand if outside variables like rising oil costs or falling exports impede economic development. The RBI’s adaptability will be essential in overcoming obstacles down the road in either case.As the global economic environment remains uncertain, the RBI’s emphasis on stability provides much-needed reassurance, while leaving room for adjustments should economic conditions evolve.
Rethinking Insurance: Is it merely an expense, or a vital tool for securing our financial future and peace of mind? Despite its vital role in mitigating risk, insurance continues to be perceived by many as an unnecessary expense rather than an essential investment. This misconception often stems from the variety of complex products available today, which blur the lines between insurance and investment, leading to debates about whether insurance is merely a cost or a valuable asset. Chenthil Iyer, a SEBI-registered financial advisor, firmly believes that insurance should primarily be viewed as an expense. He states, “While it provides security for your loved ones in the event of your demise, it is fundamentally a risk mitigation tool, not an investment vehicle.” The cost structure of insurance policies, especially life insurance, includes mortality charges and administrative expenses. Mortality charges fund claims, while premiums cover operational costs. Iyer points out that the inclusion of investment components often complicates the cost structure, rendering insurance less effective as an investment. For example, in traditional products like endowment and money-back policies, the lack of transparency regarding premium allocation creates confusion about the true costs involved. The Investment Perspective While insurance is mainly an expense, some advisors argue it can serve as an investment under specific conditions. Deepsh Rawat, another SEBI-registered advisor, insists that while insurance is necessary, it should not be seen as a primary investment. “Such products tend to be costly and less flexible than other financial instruments,” he explains. Financial planner Raghaw acknowledges exceptions where insurance might be viewed as an investment, particularly for those seeking tax-efficient returns. “In cases where fixed deposits and debt funds face heavy taxation, tax-free insurance returns can be appealing as part of a broader financial strategy,” he adds. Making the Right Choice Both Iyer and Raghaw recommend steering clear of traditional insurance products that lack transparency. Iyer emphasizes the importance of understanding how premiums are allocated, while Raghaw notes that unit-linked insurance products (ULIPs) offer greater clarity and may serve as a more suitable investment option. For those seeking fixed income, traditional endowment policies or term insurance plans may still be appropriate, especially non-participating ones promising fixed returns. Conclusion In essence, insurance should primarily be viewed as a necessary cost for risk management. However, under certain conditions, it can also function as an investment. Both experts stress the importance of making informed decisions based on individual financial circumstances and the specific characteristics of the insurance products available. Ultimately, while insurance provides personal and business benefits, its core purpose remains to offer security against unforeseen risks. Disclaimer:The article is for information purposes only and is not an advertorial. Please read the scheme related documents carefully. Arjit Garg, Digit Partner Code: 1186275
TSX Drops 1.43% to 24,156.87, Led by Technology and Materials; Monthly Gain Holds at 0.65%
