Crude oil prices fell by 4.5% during the week. The correction took place post the US government data reflecting that the production of crude oil and rig counts had risen. This data comes at a time where the oil production of Organization of the Petroleum Exporting Countries (OPEC) have hit a 2017 high. The world economy is facing a situation of oil oversupply. An increase in production by the US, will not bode down well for the crude oil prices.

To keep a tab on the movements in crude oil and other commodities, you can read the stock market commentary from the Daily Profit Hunter team. Their commentary tracks the developments in the global economy as well as stock, currency and commodity markets.

Benchmark indices in the US ended the week marginally higher by 0.3%. Minutes from the Federal Reserve’s last meeting released showed a lack of consensus on the future pace of US interest rate increases. Fed policymakers were increasingly split on the outlook for inflation and the economic growth in the US.

US Federal Reserve rate hikes generally have a negative impact on emerging economies. But India is currently seen as better equipped than other emerging markets to ride the impact of higher US interest rates. That’s largely because of its stronger economic growth and impressive foreign exchange reserves of more than US$300 billion.

Only time will tell whether the Fed will increase their interest rates further or not. Meanwhile, we’ll keep you posted on the latest developments on this front.

Apart from the Fed, the European Central Bank (ECB) also released the minutes of their latest meeting on Thursday. As per the minutes, ECB policymakers are open to a further step toward reducing their monetary stimulus. However, they are likely to move slowly on this decision out of fear of causing market turmoil. The stock markets in Germany and France gained by 0.5% and 0.5% respectively during the week.

Key World Markets During the Week

Back home, S&P BSE Sensex gained 1.4% during the week. Major sectoral indices ended the week on a positive note with realty sector rallying the most and gaining 5.5% during the week.

BSE Indices During the Week

Now let us discuss some key economic and industry developments during the week gone by

As per the global rating agency Moody’s, the Goods and Services Tax (GST) regime will be positive for India’s credit profile as it will contribute to productivity gains and higher GDP growth as well as support higher government revenue generation through improved tax compliance.

Moody’s positive reaction on GST will come as a shot in the arm of government as there are concerns that the initial teething problem will impact economic growth in the short term.

Moody’s has a ‘Baa3’ rating on India with a positive outlook. Meanwhile, industry body Confederation of Indian Industry (CII) said that going forward, GST will contribute to ease of doing business and accelerate new business ventures.