Straight from the Specialists
(Any opinions expressed here are those of the author and not of Thomson Reuters)
The Nifty closed at a new closing high of 7,954 amid volatility in an eventful week that started with the Supreme Court ruling that the allocation of more than 200 coal blocks over the past two decades was illegal.
With nearly 3 trillion rupees at stake, this had a direct effect on the metals and power sector. It also affected banking, which has exposure to the two sectors.
The court’s verdict on the fate of the coal blocks and future course of action is expected on Sept. 1. It is not expected that licences for working coal mines would be cancelled as that would result in widespread disruption as well as financial losses and litigation. It’s possible that non-working coal mines could be de-allocated and others may be let off with penalties.
The much-awaited GDP data was published on Friday, which was a holiday to celebrate Ganesh Chaturthi, to honour the elephant-headed god of wisdom and prosperity. A growth of 5.7 percent for the April-June quarter was the best in nine quarters, albeit on a low base. This should cheer investors, although it also raises the bar going ahead.
(The views expressed in this column are the author’s own and do not represent those of Reuters)
Today’s fragile global economy faces many risks: the risk of another flare-up of the euro zone crisis; the risk of a worse-than-expected slowdown in China; and the risk that economic recovery in the United States will fizzle (yet again). But no risk is more serious than that posed by a further spike in oil prices.