Rise With Profit: US Fed Rate Cut, India's Net Direct Tax Collection Rises, SEBI Board Meeting | Podcast

Good morning!

This is the daily morning update from NDTV Profit and I'm Alex Mathew. Here's everything you need to know at the start of your day.

Listen to this as a podcast here.

There's chaos in global markets as investors reset expectations for rate cuts by the US central bank next year. Overnight, the Federal Reserve cut the policy rate by 25 basis points, or a quarter of a percentage point, as expected, but Chair Jerome Powell stressed that further cuts depend on progress in lowering inflation, which remains stubbornly high.

It's not very often that you get such unambiguous messaging from the head of a central bank. And Powell's repeated references to the need for caution from this point jolted investors across asset classes.

Wall Street experienced its worst selling in months. The Dow lost over 1,100 points, the S&P 500 dropped nearly 3% and the Nasdaq plummeted 3.6%. Meanwhile, bond prices plunged on rapid selling, pushing yields on the 10-year treasury higher to 4.51%, over 10 basis points higher than the previous close. Meanwhile, the dollar rose to its highest since 2022 on anticipation of a lesser number of rate cuts.

In the Asia Pacific region, the three early risers have all started on the backfoot. In India, equities have already declined so far this week, with the Nifty 50 lower by about 2.3%. Investors should brace for more volatility.

Trade Deficit Calculation Mistake

In the top news back home, a bizarre mistake may have led to the surge in India's trade deficit in November, which has contributed to pushing the rupee to an all-time low. Bloomberg has reported quoting unnamed sources that officials, believe it or not, double-counted gold shipments in warehouses, following a change in methodology in July. Attempts are on to reconcile the data, which could have been over-estimated by as much as 50 tons in November or almost 30% of total imports of the precious metal in the month.

You should anticipate a reaction in the currency market if it comes to light that there was an error. There was a great deal of speculation after the data came through that higher gold imports were symptomatic of certain problems in the economy. That would get resolved.

SEBI Board Meeting 

The other big talking points are from the board meeting of the Securities and Exchange Board of India that was concluded last evening. Among the key updates, the regulator approved a number of proposals for stringent oversight of small and medium enterprises looking to raise capital through initial public offerings, bringing the rules for Small and Medium Enterprises closer to those of mainboard IPOs.

Stricter norms for merchant bankers were also approved. The revised rules introduce restrictions on non-permitted tasks, valuation services, and other operational areas. And finally, changes were approved to the definition of Unpublished Price Sensitive Information under the Insider Trading Regulations, 2015. The changes were made to enhance regulatory clarity and streamline compliance in the market.

India's net direct tax collection rose 16% year-on-year to Rs 15,82,584 crore so far in the financial year ending March 2025. Based on the latest data, the collections are set to exceed the budget estimate of Rs 22.07 lakh crore. Gross tax collections as of Dec. 17, are over 20% higher compared with last year at over Rs 19.2 lakh crore.  

In corporate news, Asian Paints has said that two of its senior executives—Shyam Swamy and Vishu Goel — have announced their resignations due to 'personal circumstances'. The resignations were disclosed in separate filings to the stock exchanges. Swamy had served as the vice president of home improvement, décor, services, and retailing, while Goel served the paintmaker as associate vice president of retail sales, commercial, and marketing.

In tragic news in Mumbai, 13 people have died, and 101 others were rescued after an Indian Navy speedboat collided with a ferry off the coast yesterday, according to Maharashtra Chief Minister Devendra Fadnavis. He also announced Rs 5 lakh ex gratia from the CM relief fund.

Top Reads

US Fed Rate Cut Highlights: Jerome Powell Speech, Less Cuts Ahead, Near-Unanimous Decision And More

Here's How India Can Capitalise On Trump's Tariff Threats To Boost Trade

TVS Motor's Venu Srinivasan Thinks EVs Are Overhyped And Explains Reasons For Slowdown

This Sector Is Turning Out To Be Perfect Hedge Against Donald Trump Uncertainty