Hi. This is Nazim Khan from Moneycontrol. Welcome to the inaugural edition of The Market Podcast. This is our new series that gets you up to speed on all the important market action that transpired during the week in under five minutes.
To make this quick and insightful, we’ve broken down the podcast into five segments. Each offers a different take on markets and the world of business.
With me is Santosh Nair, Editor of Moneycontrol.
Q: Santosh, welcome to the show.
A: Thanks for having me, Nazim.
Q: The market action in the first week of 2019 wasn’t really inspiring, was it?
A: That’s right. Stocks have been volatile this week. The Dow got off on the wrong foot, with the fall on the first two days of the year making it the worst start since 2000. It followed up with a brutal 600 point sell-off.
Closer home, the Nifty rose on January 1, but has since fallen nearly 300 points over the past 3 trading sessions.
What’s worse? the price action is indicative of a situation where traders are tuning down their risks. Commodities are weak, US bond yields are soft and so-called safe-haven assets such as gold, and even bitcoin, have finally started witnessing buying interest.
Q: What is driving this market action?
A: On top of its mind are fears of a global slowdown.
China’s factory activity contracted for the first time in 19 months, with the Manufacturing Purchasing Managers’ Index (PMI) for December, released on Wednesday, falling to 49.7 from 50.2 in November.
Even the US has been bogged down about fears of a slowdown, even as Donald Trump’s bold policies keep markets on edge.
In fact, what particularly caused the Dow sell-off overnight was the fact that Apple cut its December quarter revenue forecast to $84 billion from $89 billion earlier, saying it expects weak sales from China. This means that the festive season sales for Apple for 2018 were lower than 2017’s. That’s not a good sign.
Q: Let’s cut to the important business developments here. What made news in India this week?
A: The Indian business world was uncharacteristically not quiet, for the first week of a year.
The RBI said it would ease restructuring norms for MSME loans, in what would be the first signs of thaw between the government and the RBI. Das Capital at work here, you could say.
Auto sales for December came out. They were mostly weak.
Maggi found itself in a soup again as the Supreme Court decided to open the government’s case against it in relation to the supposed presence of lead in its noodles.
Jet Airways defaulted on its debt repayments. What this means is the carrier could finally be admitted to bankruptcy court -- ending Naresh Goyal’s control of the airliner finally.
Q: Any important quote that stood out?
A: There was one. In an interview with ANI, Prime Minister Narendra Modi spoke about the resignation of former RBI Governor Urjit Patel. He said that the former governor wanted to resign for personal reasons for a long time, and that he had even written to him about this 6-7 months back.
This downplays at least some of the supposed friction that existed between the RBI and the government in the days leading to Patel’s resignation.
Q: And finally, Santosh, any interesting articles you read this week?
A: Over the turn of the year, I read plenty of listicle pieces rounding up developments and trends in 2018 and what one should expect in 2019. These lists can sometimes be a bit superfluous – but I liked this one piece that painstakingly compiled a fairly impressive list of 2018’s best books, podcasts and articles.
Another interesting article I read, this was published last week, was one on a journalist who decided to take a break from social media and read 30 books in one week. She eventually read 12. What did she learn from it? Read about her experience.
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