Issue: 1132
India manufacturing PMI rises to 55.4 in January, signals sector
rebound: The
manufacturing sector rebounded in January as the Purchasing Managers’ Index
(PMI) rose to 55.4, S&P Global said on Monday. “Indian manufacturing firms
saw a rebound in January, driven by increased new orders, output, and
employment. Input costs rose moderately, while the pace of growth in
factory-gate prices eased, resulting in slight margin pressure for
manufacturers,” This index is derived from responses of 400 purchasing
managers. An index above 50 means expansion, while below 50 means contraction.
(Business Line)
US tariffs on India cut to 18% under trade deal, Trump says: US President Donald Trump has said that
Washington is lowering its reciprocal tariffs on India to 18 per cent from 25
per cent following a trade deal struck between the two countries. “They will
likewise move forward to reduce their tariffs and non tariff barriers against
the United States, to zero,” Trump posted on his social media platform Truth
Social on Monday following a telephonic conversation with Modi. The US President further
said that Modi had agreed to stop buying Russian oil and to buy much more from
the US and, potentially, Venezuela. “The Prime Minister also committed to ‘BUY
AMERICAN,’ at a much higher level, in addition to over $500 BILLION DOLLARS of
US energy, technology, agricultural, coal, and many other products,” Trump
added.
(Business Line)
$48.2 billion of Indian exports to get tariff relief under US
trade deal:
Around $48.2
billion worth of India’s merchandise exports to the United States are now likely
to face lower tariffs of 18 percent after both sides agreed to a trade deal on
February 2. The estimate is based on a projection provided by India’s Commerce
Ministry in August 2025, which assessed the value of Indian exports that were
facing steep 50 percent tariffs in the US. President Donald Trump announced the
trade deal on Truth Social, saying the agreement would significantly reduce the
reciprocal tariffs imposed from mid-2025. Under the agreement, the US will
reduce reciprocal tariffs on Indian goods to 18 percent, while duties on
American products imported into India are expected to drop to zero, according
to Trump.
(Moneycontrol)
RBI closely monitoring lenders’ positions on gold loan
portfolios, say sources: After hitting new highs, gold has finally
reached its moment of truth. Plummeting from an all-time high of Rs 1.83 lakh
per 10 grams to Rs 1.54 lakh per 10 grams in the last three trading days, the
sharp depreciation in gold has necessitated the regulator's attention and need
for closer monitoring on gold loan players. While on Monday's trade, the yellow
metal saw some recovery, it still warrants increased oversight, say sources. Sources
also point out that the practice of top-up loans against the same collateral
was found increasing in the last 12 months. "It became particularly
visible with smaller ticket sized loans and the ongoing cycle will indicate how
many lenders are comfortable on the LTV front," said a banker.
(Moneycontrol)
Govt mulls raising FDI in public sector banks to 49%, says Financial Services Secretary M Nagaraju: The Finance Ministry is contemplating hiking foreign direct investment (FDI) in public sector banks to 49 per cent from the current 20 per cent, a move which can bring them at par with private banks. The Union government’s holding of the number of shares in 12 public sector banks (PSBs) has not declined since 2020. But, the percentage of its shareholding has declined in some of these banks due to issuance of fresh shares to raise capital.
(Business Line)
Need for inclusive credit strategies for unbanked population:
DFS secretary to banks: New initiatives aim to boost
credit access for the unbanked. The BAANKNET app and Digital Balance
Confirmation Platform were launched to streamline property auctions and audits.
The PSB Alliance is encouraged to broaden its services. These steps support
financial inclusion and efficiency. India's banking sector shows robust health
with declining NPAs and steady credit growth.
(Economic Times)
India govt, central bank in talks with Alipay+ to integrate its instant payment systems: India is in talks with China-related Ant International to allow digital payments platform Alipay+ to be linked to India's leading instant payments system for cross-border transactions, two government sources told Reuters. The move would help make payments easier for Indian tourists as they would be able to use India's Unified Payments Interface (UPI) with merchants in countries that have signed up with Alipay+. Alipay+ connects about 1.8 billion user accounts with over 150 million merchants across more than 100 markets, according to its website. The company has a significant presence in Asia, Europe, the Middle East, and Latin America.
(Economic
Times)
Markets rebound over 1% as investors shrug off budget-day
selloff:
Benchmarks
staged a sharp recovery on Monday, with the Sensex surging 943.52 points or
1.17 per cent to close at 81,666.46, recouping a significant portion of the
previous session’s steep Budget-day losses. The Nifty rose 262.95 points or
1.06 per cent to settle at 25,088.40, recovering a remarkable 429 points from
its intraday low of 24,679. The rally
was led by Power Grid, which surged 7.42 per cent to ?270.00, emerging as the
top gainer on the Nifty50. Tata Motors (Passenger Vehicles) jumped 5.61 per
cent to ?364.00, while Adani Ports climbed 4.28 per cent to ?1,402.50. Bharat
Electronics Limited advanced 3.63 per cent to ?440.80, and Tata Consumer
Products gained 3.11 per cent to ?1,121.10.
(Business Line)
"Tick two boxes or pay tax": FM Sitharaman clarifies
new Sovereign Gold Bond rules for secondary market buyers: The intent of introducing
Sovereign Gold Bonds (SGBs) was to make the investor pick it up at the time of
issuance and hold it till maturity, Finance Minister Nirmala Sitharaman told
Network18 Editor-in-Chief Rahul Joshi on Monday. "If one of these two
boxes are not ticked, you will be taxed," Sitharaman said. "There are
these two boxes to ticked," Sitharaman said. Of four situations, the tax
will be "levied in three", she added. She was responding to a query
on the imposition of tax on the sale of SGBs in secondary markets – which
markets are calling "retrospective". Finance Minister Nirmala
Sitharaman said during her Budget 2026 speech that "exemption from capital
gains tax in respect of Sovereign Gold Bonds shall be available only where such
bonds are subscribed to by an individual at the time of original issue and are
held continuously until redemption on maturity."
(Moneycontrol)
Finance Bill 2026 rewrites MAT rules, nudges firms to
concessional tax regime: The Finance Bill, 2026 has overhauled India’s
minimum alternate tax (MAT) framework, lowering the MAT rate from 15% to 14%
and sharply limiting the use of accumulated MAT credits. The changes are aimed
at nudging companies toward the concessional 22% corporate tax regime while
streamlining the corporate tax calculations. Under the proposed changes, MAT
will become a final tax from April 1, 2026, and no new MAT credits will be
allowed to accrue thereafter. Companies opting for the concessional corporate
tax regime will be permitted to set off brought-forward MAT credit accumulated
up to March 31, 2026, but only up to 25% of their tax liability in a year. Such
credits will remain usable only within the existing 15-year carry-forward
window from the year in which they arose.
(Economic Times)
G-Sec yields hit one-year high after FY27 borrowing target;
rupee recovers on RBI action: Yields of Government Securities (G-Sec)
hardened on Monday as the Union Budget for FY27 proposed a higher Government
borrowing programme. However, the rupee recovered lost ground after reports of
RBI intervention in the forex market. The Union Budget for FY27, announced on
February 1 (Sunday), has pegged the Government’s gross market borrowing higher
at ?17.2 lakh crore, up from ?14.8 lakh crore in FY26. Yield of the 10-year
benchmark G-Sec (6.48 per cent 2035GS) touched an intraday high of 6.78 per
cent, the highest level in about a year, to close at 6.77 per cent, up 7 basis
points over the previous close
(Business Line)
SORTINO RATIO
§ The
Sortino ratio is a variation of the Sharpe ratio. It differentiates harmful
volatility from total overall volatility by using the asset's standard
deviation of negative portfolio returns or downside deviation instead of the
total standard deviation of portfolio returns.
§ The
Sortino ratio takes an asset's or portfolio's return and subtracts the
risk-free rate. It then divides that amount by the asset's downside deviation.
RBI KEY RATES
Repo
Rate: 5.25%
SDF:
5.00%
MSF
/Bank Rate: 5.50%
CRR:
3.00%
SLR:
18.00%
FOREX RATES (RBI
REF. RATE)
INR /
1 USD : 91.6443
INR /
1 GBP : 125.2429
INR /
1 EUR : 108.5692
INR
/100 JPY: 59.2000
EQUITY INDEX
Sensex: 81666.46 (+943.52)
NIFTY: 25088.40 (+262.95)
Bnk
NIFTY: 58619.00 (+201.80)
Historical events: February 3rd
holds significant historical events, including the 1509 Battle of Diu where the
Portuguese defeated a combined fleet, and the 1661 victory of Chhatrapati
Shivaji Maharaj's forces over the Mughals. It is also marked by the birth of
freedom fighter Ram Singh Kuka (1816) and economist Raghuram Rajan (1964).
Globally, it saw the launch of Facebook (2004) and the death of Buddy Holly
(1959)..
****Have a nice
Day****
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