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Bio War! - Inflation - GDP Cut - Stock Market & Economy

Bio War! - Inflation - GDP Cut - Stock Market & Economy
By Rakshith Pai M • Issue #6 • View online
No:6 
Hi everyone,
I welcome you all to this week’s top news regarding Investment, Economy & Personal Finance. 
Russia - USA Bio-war!
Long before the modern period, illness weaponization was practiced. The Mongols flung plague victims’ bodies into the besieged Crimean city of Caffa in 1346. Both the Axis and Allied governments developed bioweapons during World War II.
Russia accused the United States of supporting bioweapons’ development in Ukraine. Ukraine intends to transmit illness via wild birds traveling between Russia and Ukraine, they claim.
The West, for its part, believes that by making such charges, Russia is preparing to unleash chemical or biological weapons on its own.
Although COVID-19 does not appear to be genetically modified (As per WHO, the claim is disputed), its vast worldwide impact demonstrates the potential effectiveness of such a weapon.
Historically, nations have prioritized expanding their nuclear forces when it comes to military strategy. Countries must also be prepared to cope with bio-weapons in the event of such unexpected war occurrences.
For the future, fortifying cities, strengthening health systems, companies, and supply chains, and making them less susceptible to disruption must be a priority.
Inflation Worrying Indian Investors?
Inflation is a situation when the economy’s demand exceeds its supply. After the economy reopened following the epidemic, demand increased, but supply-side limitations caused by the virus and subsequent conflict have resulted in rising costs. 
In the United States, inflation reached 7.9 percent, the highest level since the 1980s. Biden referred to it as “Putin’s price increase,” but is inflation created overnight?
To a large extent, inflation worries are a result of misguided government actions over an extended period of time. Whether it was cheap borrowing rates or massive government investment in infrastructure and social services during the World War II era,
Central banks must intervene to rein in inflation. The Fed has already begun raising rates after three years, and it is quite probable that the RBI will follow suit.
As of now, the Fed has raised interest rates by 25 bps. A further 6-7 such rate hikes are on the table up to 1.88%!
What happens to the Indian Market?
During such periods, foreign investors pull their money out of emerging economies such as India and put it in safer asset classes such as US government bonds.
As capital outflows begin, the rupee weakens in relation to the dollar, resulting in less purchasing power.
An increase in interest rates will have an effect on the availability and cost of foreign financing for Indian businesses, thereby affecting their growth rates.
In 2008, foreign investors sold shares worth Rs. 53,000 crore, resulting in a 35% decline in the Nifty, whereas foreign investors sold equities worth Rs. 1.2 lac crore in the first 75 days of this year, resulting in a 9% decline in the Nifty.
What makes this period unique is how retail investors continue to trust in the long-term growth trajectory and are increasing their investments amid such declines. This should result in their portfolios doing better than they would if they purchased during a period of high optimism.
 Last Monday, the Federal Open Market Committee (FOMC) increased the federal reserve rate by 25 basis points, in accordance with expectations on Wall Street. 
The move sparked new purchasing throughout the world, as 46 of 50 equities in the Nifty 50 ended the week in the green, and enhanced clarity into the Fed’s hike timeline alleviated some market concerns. 
In the coming week, markets will be focused on China’s deteriorating epidemic situation and continuous bloodshed in Ukraine.
India’s GDP growth cut!
Fitch Ratings has reduced India’s FY23 GDP growth forecast to 8.5 percent from 10.3 percent. According to the worldwide agency, the rising price of energy as a result of the Russia-Ukraine war might have an effect on the growth rate.
Since Russia invaded Ukraine last month, global commodity prices have been rising. The rating agency anticipates that inflation in India will remain elevated at 5% in 2022. 
Fitch also anticipates that global oil prices will stay elevated for the foreseeable future, with an average price of $100 per barrel in 2022.
News for the Week:
  1. Suzuki Motor, the parent company of Maruti Suzuki, announced a commitment to invest Rs 10,440 crore in the local production of electric vehicles (EVs) and batteries. This is the industry leader’s first significant announcement in the EV arena.
  2. Ola Electric, a maker of electric two-wheelers, has announced an investment in Israeli battery technology startup StoreDot. Ola Electric would have access to StoreDot’s cutting-edge XFC battery technology as part of the agreement.
  3. According to a survey by Monster.com, the Indian BFSI business is forecast to increase at a year-on-year rate of 27% in February 2022. This is an encouraging growth tendency in light of the industry’s 26% decline last year.
  4. The Moscow stock exchange has reopened partially following a nearly month-long shutdown due to the Ukraine crisis. Only Russian government bonds can be traded as part of a gradual market reopening.
  5. Over the previous two weeks, institutional investors and entities that had invested in cryptocurrencies withdrew $157 million. According to a CoinShares analysis, the haemorrhage has slowed to $47 million in the last week, down from $110 million the previous week.
  6. A parliamentary panel recommended that the government increase the payback time for loans made under the MSME sector’s Emergency Credit Line Guarantee Scheme (ECLGS).
  7. Daiichi-Koutsu India Private Limited (DIPL), a subsidiary of Japan’s oldest cab business and biggest car repair firm, has partnered with SpareIt to establish a network of service, parking, and charging (SPC) centers for electric vehicles in Bengaluru (EVs).
That’s all the major updates for the week. See you next Sunday at 10:00 am. Until then, Work hard, stay safe, and most importantly… Always believe in India!
Week’s Website Articles & YouTube Videos:
  1. Website link: Sukanya Samriddhi Yojana Features, Benefits & Eligibility Criteria Explained:
  2. YouTube link: 3 Simple Habits To Get Out of Poverty and Become Rich! #Habits
  3. Website link: 10 Simple Habits to Overcome Poverty and Become Rich!
  4. Website link: 10 Best Stock Screeners For Indian Investors!
  5. YouTube link: Approach Stock Market with “SMART SIP!” How Does SIP Works? #SIP #StockMarket
  6. Website link: Everything you need to know about Mutual Fund Investing:
  7. Website link: Fixed Income Investments & Risks Involved:

Approach Stock Market with "SMART SIP!" How Does SIP Works? #SIP #StockMarket
Approach Stock Market with "SMART SIP!" How Does SIP Works? #SIP #StockMarket
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Rakshith Pai M

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