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Indian companies least confident worldwide, shows survey

LiveMint logoLiveMint 12-03-2017 Livemint

The Markit Business Outlook survey shows that a net balance of 16% of firms expect output to expand over the course of the next year, compared with 25% in October 2016.

This is the lowest reading of the 12 countries for which composite outlook data is available.

Optimism has fallen in both the manufacturing and services sectors.

“Whereas Indian enterprises foresee new projects in the pipeline, strong client demand and the possible introduction of the goods & services tax as potential growth drivers for the year ahead; competitive pressures, government policies, client defaults, and uncertainty in global markets are seen as threats to the outlook,” said IHS Markit.

Of course, after the Bharatiya Janata Party’s landslide victory in Uttar Pradesh and Uttarakhand, confidence levels are expected to rise.

Besides being seen as a vote of confidence for the government, investors and companies are likely to expect reforms to pick up pace.

Wall Street unanimous on US rate hike next week

Wall Street’s top banks were unanimous on the view that the Federal Reserve will increase interest rates at its policy meeting next week following a stronger-than-forecast February US payrolls report, a Reuters poll showed on Friday.

Employers added 235,000 jobs last month, more than the 190,000 forecast among economists polled by Reuters. A drop in unemployment, more people seeking jobs and a rebound in wage growth were other upbeat aspects of the report that economists at these top banks reckoned give the Fed the green light to raise rates by a quarter percentage point, to 0.75-1%.

The Fed previously raised rates by a quarter point, to 0.5-0.75%, in December. Barring unexpected outcomes, the widely anticipated rate increase in less than a week would be followed by two more hikes later in 2017, 20 dealers said in the poll. Reuters

Hedge funds increased net long positions in gold

Gold prices have been under pressure due to the strengthening dollar index and rising possibilities of an interest rate hike by the US Federal Reserve at its meeting next week. However, according to a report by Angel Broking Pvt. Ltd, hedge funds and money managers have been bullish on the yellow metal since last month.

As on 28 February, money managers had net long positions of around 121,720 contracts, much higher than 72,067 on 31 January.

As on 6 March, SPDR gold trust data shows, holdings by these funds stand at 836.77 tonnes, the report added.

Going ahead, the interest rate hike decision by the Fed will decide the movement in gold prices. Also, liquidation of net longs in the speculative positions of fund managers can hit gold prices.

From a month’s perspective, the broking firm expects global gold prices to trade lower towards $1,170/ounce and MCX gold price to move lower towards Rs28,400/10g.

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