Discover the top business headlines that are trending across the world today!
The benchmark stock indices opened lower on Monday, with IT stocks dragging the markets following a volatile session on Friday, where the Sensex recovered from a nearly 1,200-point loss. At 9:35 AM, the S&P BSE Sensex had fallen by 279.70 points to 81,853.42, while the NSE Nifty50 declined 74 points to 24,694.30.
Dr. V K Vijayakumar of Geojit Financial Services attributed Friday's volatility to contrasting views on near-term market trends, driven by significant positions in the F&O segment, causing sharp movements. The 500-point recovery in the Nifty highlighted extensive short covering.
While Foreign Institutional Investors (FIIs) turned net buyers in December after two months of heavy selling, sustained inflows remain uncertain due to strong US dollar trends and high bond yields. Additionally, sluggish GDP growth and stagnant earnings pose challenges for a sustained rally, contingent on signs of economic recovery.
The upcoming 55th GST Council meeting, scheduled for December 21, 2024, in Jaisalmer, will review the tax framework on life and health insurance. Recommendations from the Group of Ministers (GoM) on Health Insurance propose significant changes to improve accessibility and affordability.
Key suggestions include a GST exemption for pure-term life insurance policies covering family members, reducing financial burdens on policyholders. The GoM also recommends waiving GST on health insurance for senior citizens to make healthcare more affordable for the elderly. Another proposal is to lower the GST on individual health insurance policies to 5%, excluding Input Tax Credit (ITC), to reduce premiums and simplify processes.
Currently, insurance premiums are taxed at 18% GST. Reports suggest the Council may approve tax exemptions on policies up to ₹5 lakh, targeting low- and middle-income groups. If adopted, these changes could substantially enhance insurance affordability and bolster financial inclusion in India.
India's wholesale price index (WPI)-based inflation dropped to a three-month low of 1.89% in November 2024, compared to 2.36% in October, as per data from the Ministry of Commerce and Industry. This decline was driven primarily by falling food prices, particularly vegetables and onions. Vegetable inflation plummeted by 28.57%, significantly improving from October's 63.04%. Onion prices also fell by 2.85%.
In the fuel and power sector, deflation deepened slightly to 5.83% from 5.79% in October. However, inflation in manufactured products rose to 2% in November from 1.50% previously. Retail inflation, measured by the consumer price index (CPI), eased to 5.48% in November, staying within the Reserve Bank of India’s (RBI) target range. This raised expectations of a potential policy rate cut in February 2025. Currently, the RBI has maintained the repo rate at 6.5% for the 11th straight time, citing a neutral monetary stance.
India's private sector output accelerated at the fastest pace in four months, ending 2024 on a strong note due to robust demand in services and manufacturing sectors and record employment growth. According to HSBC's December flash India Composite Purchasing Managers’ Index (PMI) by S&P Global, the PMI rose to 60.7, matching August's reading, after November's dip to 58.6. This marks significant private sector expansion, with the index staying above 60 for most of the year, a trend not seen since 2008.
Manufacturing PMI climbed to 57.4 from 56.5, driven by higher production, new orders, and employment, while the services PMI rose to 60.8, its highest in four months. Easing inflationary pressures supported demand, with consumer inflation falling to 5.48% in November. Economists predict a possible rate cut by the Reserve Bank of India in early 2025, providing further optimism for economic growth.
