- HSBC manufacturing PMI for October 2013 stays at 49.6pts. Same as September.
- RBI moves part of OMC forex demand to the markets.
- Markets decline on news of better than expected US economic growth. Fears of taper return.
- S&P maintains long term BBB- and short term A-3 rating for India.
Adding to speculation about the volatility that the huge OMC demand for dollars will induce in the markets, were reports of better than expected US economic data which led to fears that the QE tapering may start soon. India followed other emerging market economies to react negatively to this news.
In other developments, the HSBC manufacturing PMI for October 2013 remained at 49.6pts which still signals contraction in the economy. A score of 50 divides growth from contraction. The services sector PMI saw a marginal growth to 47.1pts which also was still indicating contraction.
The rating agency, S&P has announced that it is maintaining a long term rating of BBB- and short term rating of A-3 for now on the back of good forex reserves, low debt and a largely free-floating exchange rate. This obviously has given some relief to economists and the govt. for now. However, it has said that it maintains a negative outlook and if the post-poll govt. fails to improve the economic situation, the rating may be downgraded to junk status.
It seems that the next week will also see uncertain markets in the absence of any triggers and current correction will continue at-least to some extent. The only thing that is going upward for certain, it seems, is ISRO’s Mangalyaan.
