Weekly Commentary – 31-Jan-20

Equity markets are a study in red with Nifty50 sliding 2.3% from last Friday’s closing. Midcap and Smallcap both lost 1.9%.  Amongst sectoral and thematic indices, apart from Realty +1.8%, significant losses were seen in Metal -8.0% and PSE -4.5%. 

Key Highlights of Economic Survey 2019-20

India’s Economic Performance in 2019-20

• India’s GDP growth moderated to 4.8 % in H1 of 2019-20, amidst a weak environment for global manufacturing, trade and demand.
• Real consumption growth has recovered in Q2 of 2019-20, cushioned by a significant growth in government final consumption.
• Growth for ‘Agriculture and allied activities’ and ‘Public administration, defense, and other services’ in H1 of 2019-20 was higher than in H2 of 2018-19.
• India’s external sector gained further stability in H1 of 2019-20.
• Sharper contraction of imports as compared to that of exports in H1 of 2019-20, with easing of crude prices.
• Headline inflation expected to decline by year end.
• Deceleration in GDP growth can be understood within the framework of a slowing cycle of growth.

• Reforms undertaken during 2019-20 to boost investment, consumption and exports. Survey expects an uptick in the GDP growth in H2 of 2019-20.