Key financial highlights of 2019

Podcast Duration: 09:37
- Trade talks between the US and China concluded without any outcome
- Crude oil price fell from the peak.
- UK Parliament rejects Brexit Deal.

- Interim Union Budget for 2019–2020 was presented by Piyush Goyal on 1 February 2019.
- RBI cuts benchmark repo rate by 25bps to 6.25% from 6.5% in the first MPC meeting of 2019
- Escalating geo political tension between India and Pakistan after Pulwama terror attack and subsequent retaliation by India
- Market bottoms in third week of February 2019 as opinion polls points to higher chances of incumbent BJP Government returning to power post India’s retaliation after the Pulwama terror attack

- Market rallies sharply with the BSE 100 up by 7.2% as FII’s bought equities worth INR 34,000 cr. during the month
- Monthly GST collections have touched all time high of INR 1.06 lakh Cr.
- UK PM Theresa May’s Brexit proposal is rejected by the UK Parliament twice.
- EU agrees to an extension of the Brexit deadline to the 22nd of May 2019.

- RBI cuts key repo rate by 25bps for the second time in a row to 6.0%.
- FII flows remained strong for the third month in a row as they were net buyers in Indian equities to the extent of INR 21,193 cr.
- Bank consolidation process started with the merger of Bank of Baroda, Vijaya Bank, Dena Bank.
- IMD warns of delay in monsoon for 2019 due to formation of El Nino over the pacific ocean.

- Incumbent BJP comes back to power with an absolute majority which spurs a risk on rally
- GDP growth for Q4FY19 came in below street estimates at 5.8% YoY due to cutback in Government expenditure prior to elections
- US hikes tariffs on USD 200bn worth of Chinese goods to 25% from earlier 10%
- Theresa may announces that she will step down as the leader of the ruling conservative party from the 7th of June 2019.

- Major indices like the Sensex and Nifty 50 hit all-time highs by the first week of Jun’19 as the ruling NDA Government returned to power with an even bigger majority than 2014.
- RBI cuts rate for the third time in it’s third bi monthly meeting for CY19 by 25bps in the benchmark repo rate to 5.75% to counter economic slowdown
- Delayed start to the monsoon led to a deficit of ~30% by the end of June 2019.
- China announces hike in import tariffs on US goods worth USD 60bn.

- The Government in the Union Budget proposed to increase surcharge on Individuals and trusts earning more than ` 2 cr. and ` 5 cr.
- FII pulled out INR 12,419 cr. during the month due to hike in surcharge in the Union Budget. BSE 100 down by 5.9% for the month.
- The trade war between US and China has escalated further with the US President proposing tariffs of 10% on additional Chinese goods worth USD 300bn.
- US Fed cuts their target rate by 25bps to 2.0-2.25% due to risks caused by the US China trade war
- Monsoon deficit reduced to 9% at the end of July as compared to a deficit of over 30% in end June.

- The RBI announced a 35bps rate cut in it’s monetary policy meet and maintained it’s accommodative stance.
- The RBI also accepted the recommendations of the Bimal Jalan committee report and announced a dividend of `1.23lakh cr along with a one-time surplus transfer of `52,640 cr. to the Government.
- The Q1FY20 GDP growth number came at 6 year low of 5.0% due to sharp fall in consumption growth to 3.1%.
- The trade war between US and China escalated further with the US President proposing tariffs on additional Chinese goods worth USD 300bn.
- US Fed announces end of it’s quantitative tightening programme by the end of August 2019.

- Government cuts Peak corporate tax rates from 30% to 22% and announces concessional tax rate for new domestic manufacturing company at 15%.
- US imposes Tariffs of 15% on Chinese goods worth USD 112bn from the 1st of September 2019.
 US Fed restarts it’s quantitative easing program as it expands its balance sheet by USD 97.8bn in the month of September and also cuts the Fed rate by 25 bps to 1.75-2.0%
- BSE100 closes in the green for the first time in four months, up by 4.0% for the month.

- Deadlock on US China trade war continued as both side failed to reach nay deals.
- Impasse over Brexit negotiations continued as the leader of the ruling conservative party failed to push through Brexit deal in UK parliament
- US FOMC cuts the fed target rate by the third time in four months to 25bps on the 30th of Oct to 1.5-1.75% and also expanded its balance sheet by USD 162bn in October.
- UK Parliament approves date for General elections on the 12th of Dec 2019 amidst Brexit deadlock

- CPI inflation at 4.62% for the month of Oct’19 breaches RBI target of 4.0% as food inflation accelerates to 7.9% due to jump in onion prices.
- FII Flow at INR 25,231 cr. for November 2019 was the second highest in the year after march 2019
- Q2FY20 GDP growth fell further to 4.5%
- High frequency data points like PMI and auto sales numbers point to an improvement in Q3FY20
- UK parliament is dissolved as the country heads for a general elections in December.

- New on likely US China trade deal fuels global risk on market rally. Nifty touches new all time highs of 12,294.
- Conservative party wins the UK general elections on the 12th of Dec’19 by a wide margin thus ending uncertainties over Brexit.
- Contrary to market expectation RBI does not oblige market with a rate cut on the 6th of Dec’19 and keeps Repo rate at 5.15%.
- CPI inflation at 3 year high of 5.54% in the month of Nov’19 driven by food inflation which stood at 10.0%