Large firms have become larger at the cost of smaller firms: HSBC

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By Sanjeev Sharma
New Delhi, Jan 20 |
Large firms have become larger at the cost of smaller firms, while informal sector firms have been disrupted, HSBC said in a recent report.

Those earning their livelihoods from small and informal firms have suffered. This is a problem because 80 per cent of India’s labour force is employed in the informal sector, and the roughly half of them who are in the non-agricultural sector have borne the economic brunt of the pandemic, the report added.

The rise in inequality also holds significance for the investment cycle. In the period when India’s investment rate was falling, a closer look reveals that it wasn’t the public sector or the private corporations leading the fall. Rather, it was private household investment that was falling sharply, the report said.

This category includes a bulk of the small businesses in the economy. It was already a hurting and underperforming sector even before the pandemic. There may also be a funding angle to the large fall in household investment in the FY13-FY20 period. With NPLs on the rise, risk averse banks slowed credit outgo, particularly to industry.

Large firms had access to capital markets and overall reliance on banking sector credit fell Small firms, which don’t have as much access to capital markets, are likely to have suffered. While many banks are keen on increasing credit to small firms this time around, whether or not it rises significantly is an area to track.

For FY22, the scenario shows that an upside surprise in tax revenues is likely to more than offset weak disinvestment receipts and higher-than-budgeted current expenditure, while maintaining strong capex.

In fact, the fiscal deficit is likely to be a tad lower than budgeted. For FY23, tax buoyancy may not be as strong – and may even decline in the case of excise duties (where taxes have been cut). The hope is that privatisation receipts rise and cover that slack. As some crisis level subsidies fall, that space can be split between higher capex, a well-funded NREGA programme, and fiscal consolidation. We expect the government to lower the fiscal deficit by 0.5 per cent of GDP in FY23, the report said.

“There is hope that investment will revive, led by buoyant world growth and lower corporate debt. But we find that elevated policy uncertainty and unsure future growth expectations can come in the way. The budget can step in here by being a much-needed source of predictability and stability in volatile times,” it added.

(Sanjeev Sharma can be reached at Sanjeev.s@ians.in)

Source: IANS

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Share Market Closing Bell: Nifty ends above 15,800, Sensex gains 180 pts

Share Market Closing Bell: Nifty ends above 15,800, Sensex gains 180 pts

The benchmark Indices Nifty started on the positive side after continuous sell off in last week and has managed to settle at 15842.30 with 60 point gain or 0.38 percent. However Nifty has failed to regain 16000 levels prior to LIC listing.

While Bank nifty has managed to settle at 33597.60 levels after gaining 1.44 percent. On the sectoral front, Nifty PSU Bank, Nifty Realty and Auto have contributed 2-3 percent gain on closing basis. On the flip side Nifty IT and FMCG ended with losses of 0.75 percent and 0.35 respectively. In Nifty, EICHERMOT, APOLLOHOSP and UPL were the top gainers while ULTRACEMCO, SHREECEM and ASIANPAINT were the prime laggards.

Technically, after forming the bearish candle on the weekly chart, the index has formed a Doji candlestick on the daily chart which shows indecisiveness among the trades. Moreover, the index has also faced a resistance from falling trend lines and showed profit booking from higher levels. However, Fibonacci retrenchment also has support around 15650 levels.

Traders may find buying opportunities for short term as if 15650 levels is protected. In the hourly chart, with support of the middle Bollinger band short term upside movement is expected. Stock specific action would drive the market in coming days too.

On the derivatives front, the highest call OI is at 16000 strike price followed by 16200 strike prices while on the put side, highest OI is at 15500 strike price. INDIA VIX closed at 24.53 with gain of 4.43 percent intraday indicating volatility is going to remain till weekly expiry . On the other hand, Bank nifty has support at 32600 levels while resistance is placed at 34500 levels.

Sumeet Bagadia
Executive Director
Choice Broking

Source: Choice India

 

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