India: Investment improved in Q3-FY20 – Standard Chartered

Sandeep Kanihama FXStreet Contributor

Analysts at Standard Chartered point out that India’s Capex data published by the Centre for Monitoring Indian Economy (CMIE) for Q3-FY20 (ended December 2019) shows a sequential improvement in most investment variables after two quarters of sharp declines.

Key Quotes

“A few large projects drove the improvement; we believe sustainability is key. New project announcements jumped nearly threefold on a q/q basis due to a large aircraft procurement announcement. However, even after adjusting for this one-off factor, new announcements were up 30% q/q, led by the private sector. Project completions nearly doubled q/q, driven by two large private-sector project completions in the steel and housing sectors. Projects under implementation remained stable, with a marginal increase in private projects.”

“Stalled projects stabilised at 6.4% of GDP (INR 13.3tn) in Q3-FY20; financing constraints have been the key reason for stalled investments since March 2018. This reflects the ongoing financing challenges facing India’s non-banking financial companies (NBFCs) and the rest of the financial sector.”

“Going forward, we will look for the improvement in capex to be sustained before concluding that a firm investment recovery is underway. We expect a slow recovery as challenges in the financial sector are resolved only gradually.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

GBP/USD struggles to gather recovery momentum, holds above 1.3500

GBP/USD loses its recovery momentum and retreats after climbing above 1.3550 earlier in the day. The US Dollar stays resilient against its rivals following Fed Chair Warsh's hawkish tone at the Jackson Hole Symposium and limits the pair's upside. In the meantime, re-escalating tensions in the Middle East cause investors to cling to a cautious stance.

EUR/USD holds steady near 1.1600 after German inflation data

EUR/USD clings to moderate daily gains at around 1.1600 in the second half of the day on Monday. The data from Germany showed that the annual CPI inflation edged higher to 2.9% in August from 2.8% in July, as expected. Meanwhile, the US Dollar holds its ground and caps the pair's upside as investors reassess the probability of a September Fed rate hike after Fed Chair Warsh delivered hawkish remarks at the Jackson Hole Symposium.

Gold holds recovery near $4,450; still cautious

Gold holds its recovery near $4,450 in the European session on Monday, moving away from sub-$4,400 levels, though the upside potential seems limited. A softer US Dollar offers some support to the precious metal and helps recover its intraday losses. Meanwhile, Fed Chair Kevin Warsh's comments on curbing inflationary pressures on Friday lifted bets for a rate hike, which might keep a lid on any meaningful recovery for the non-yielding bullion.

Crypto Today: Bitcoin, Ethereum, XRP broadly consolidate amid renewed US-Iran strikes

Bitcoin remains resilient above $78,000 as investors anticipate a renewed push toward $80,000. Ethereum continues to demonstrate a constructive technical setup, holding above $2,400. Ripple is exhibiting early signs of recovery near $1.37.

Oil rallies on fresh persian gulf strikes

Energy prices are trading firmer this morning after the US carried out targeted strikes against Iran, drawing retaliatory strikes and reinforcing concerns about a prolonged stalemate in the Persian Gulf. Oil prices started the week stronger following the first military strikes between the US and Iran in a month. ICE Brent briefly moved back above US$90/bbl in early morning Asia trading.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.