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Business News/ Market / Stock-market-news/  Market roundup | After Indonesia, India has got most room to ease
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Market roundup | After Indonesia, India has got most room to ease

India, which lowered rates this month, has the most scope to cut interest rates further, followed by Thailand

A file photo of the Reserve Bank of India (RBI)’s headquarters in Mumbai. Photo: Aniruddha Chowdhury/MintPremium
A file photo of the Reserve Bank of India (RBI)’s headquarters in Mumbai. Photo: Aniruddha Chowdhury/Mint

After Indonesia, India has got most room to ease

India has the most room for easing among emerging Asian nations after Bank Indonesia’s surprise decision to lower its benchmark rate. Just take a look at inflation-adjusted policy rates of emerging Asian countries. India, which lowered rates this month, has the most scope to cut interest rates further, followed by Thailand.

After Wednesday’s move, Indonesia’s interest rates have fallen to less than 1%. More easing could be good news for Asia’s bond markets. Excluding China and the Philippines, they have attracted a net $11.6 billion this quarter, data compiled by Bloomberg shows. Bloomberg

Steel output on a tear, China on top

Global crude steel output rose by 6.3% from a year ago, shows World Steel Association data. China leads the race, with a 10.3% increase in its output in July. Most regions saw higher crude steel output, with the exception of the Commonwealth of Independent States, which saw output fall by 7.9% over a year ago. The European Union saw steel output rise by 3.9% while North America saw a 4.4% increase in output.

Between January and July, global crude steel output has risen by 4.6%. Capacity utilization of steel units has been rising and in July, it was 72.1% compared to 68.9% a year ago.

Cement realizations to rise by 4% over FY17-19

Cement companies have highest earnings sensitivity towards change in cement realizations, according to Quant Capital. A 5% change in realization results in nearly 20% change in earnings. A 5% change in the price of the key cost element results in largely equivalent change in earnings. Power and fuel, and freight costs account for around 55% of the total cost of production for cement producers. A 5% change in volume will result in nearly 10% improvement in earnings.

The broking firm foresees further improvement in realization of cement makers by around 4% over fiscal years 2017-2019 (FY17-19), aided by improved demand.

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Published: 24 Aug 2017, 11:56 PM IST
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