The Panorama newsletter is sent to Moneycontrol Pro subscribers on market days. It offers easy access to stories published on Moneycontrol Pro and gives a little extra by setting out a context or an event or trend that investors should keep track of.
China’s stock markets opened for trading after being shut on Monday and Tuesday for a local holiday. Investors in other markets, meanwhile, had reacted to fears of a contagion effect if China’s largest property developer Evergrande defaulted on bond payments due this week. The spillover effect on other property developers, China’s economy, and commodity and capital markets are feared to be severe if that happens.
But China’s markets were relatively calm today. The country’s central bank injected liquidity support worth $18.6 billion which may have soothed frayed nerves. Evergrande also announced it would meet a September 23 deadline to pay a $35.9 million coupon payment on a yuan-denominated bond, according to Reuters. If it is also able to pay a bigger $83.5 million payment on a dollar-denominated bond due on September 24, then that could calm markets further.
Evergrande’s problems are part of a larger problem that China’s property sector is facing, of uncontrolled growth, read about why this growth template has run its course in today’s FT selection (free for Pro subscribers). While the focus may be on near-term events at present, the longer term is likely to see turmoil in China's property sector continue.
Meanwhile, the Federal Open Market Committee (FOMC) will wrap up its deliberations today. Investors will want to see if tapering will begin in November or earlier, and whether the chances of an earlier than interest rate hike have risen. They will also get a sense of how the Fed is looking at the delta variant as a threat to growth and if their position on the growth versus inflation question has changed.
Between what's happening in China and the Fed's position, it promises to be an action-packed week for market watchers.
In today’s edition, we write about why the private sector capex recovery story is not as bright as some think. While the revival in consumption demand is expected to spur companies to invest, the data suggests there is some way to go before companies become confident enough to kick-start investments. Do read.
A crunch in the availability of shipping containers is putting strain on exports, not just by lengthening shipment times but also in higher freight costs. While institutional steps to tweak the supply chain and ease availability can be taken, is there another way out? Read our take.
Investment insights from our research team:
IFGL Refractories: Growth at reasonable valuation
HG Infra Engineering: Building next leg of growth
What else are we reading today?
SEBI's amended skin-in-the-game rules only add to the confusion
Bitcoin is stepping up when central banks fail
India's pharma space normalising, US market needs to step up
Independent Directors | We need less confusion, more relaxation of norms
Will adding Indian debt securities to global bond indices reduce yields?
Technical Picks: Tech Mahindra, ICICI General Insurance and Infosys (These are published every trading day before markets open)