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New Delhi: Enthused by higher GDP number and improvement in fiscal situation, the government may lower fiscal deficit target below 5.1 per cent of GDP for the current fiscal when full Budget for FY25 is presented in July, sources said. The deficit number may be better on account of bouyancy in both tax and non-tax heads. For previous financial year ended March 2024, the fiscal deficit was better at 5.6 per cent of the GDP as against estimates of 5.8 per cent accounted in the interim Budget presented on February 1. The government would relook at the fiscal deficit when the full Budget is presented, sources said. Monsoon will be above average and it bodes well for the agricultural sector, they said. The growth rate in the agriculture sector would be higher than FY24, they said. The agriculture sector growth decelerated to 1.4 per cent in FY24 from 4.7 per cent in the previous fiscal. India's annual growth rate for FY24 to 8.2 per cent as compared to 7 per cent in the previous fiscal, mainly on account of good showing by the manufacturing sector. The sources said the RBI forecast of 7 per cent for the current fiscal year seems realistic and nominal GDP will be higher in the current fiscal as against the previous financial year. Domestic economic activity remains resilient, backed by strong investment demand and upbeat business and consumer sentiments, according to the sources. Strong corporate and bank balance sheets and the government's continued capex push could bolster economic growth. Talking about challenges, sources said, geopolitical tensions pose substantial downside risks while divergence of monetary easing paths of major central banks adds to policy uncertainty. Elevated financial market valuations globally (particularly in the US) and possible spillover effects on Indian markets could also pose risks. Besides, there could be impact on sentiment and household finances due to rising retail exposure to stocks through direct stock investments and derivatives positions. It could keep household savings rate from recovering, the sources said, adding, it is not a systemic risk.

State-owned REC Ltd on Friday said its board has approved raising the borrowing limit in foreign currency to USD 24 billion form USD 20 billion. The overall borrowing limit in Indian rupees was however retained at Rs 6 lakh crore, the company said in an exchange filing. The board of directors at its meeting held on Friday approved "proposal of retaining the overall borrowing limit of the company in INR at Rs 6,00,000 crore and increase the borrowing limit in any foreign currency equivalent from USD 20 billion to USD 24 billion..." The board also approved raising up to Rs 1,45,000 crore through private placement of unsecured/secured non-convertible bonds/debentures. The funds will be raised, in one or more tranches, from time to time, during one year from the date of passing of resolution by the shareholders in the ensuing annual general meeting. Besides, it approved appointment of Harsh Baweja as Director (Finance) (Additional Director) and Chief Financial Officer of REC with effect from May 14, 2024. REC, under Ministry of Power, is a non-banking finance company, public financial institution, and infrastructure financing company.

NSE’s index services subsidiary, NSE Indices, on Friday launched a new strategy index — Nifty500 Equal Weight — which represents an alternative weighting strategy to its parent index, the Nifty 500. It includes the same companies as the Nifty 500, however, weighed equally, an NSE press release said.The base date for the index is April 1, 2005, and the base value is 1000. The index is reconstituted on a semi-annual basis and weights are rebalanced on a quarterly basis.The index is expected to act as a benchmark for asset managers and a reference index tracked by passive funds in the form of Exchange Traded Funds (ETFs), index funds and structured products, the release said.It comes as a second consecutive launch by the NSE Indices. On Thursday, NSE Indices had launched a new thematic index — Nifty EV & New Age Automotive index — which will track the performance of companies forming a part of the EV ecosystem or are involved in the development of new-age automotive vehicles or related technology.In a separate press release issued on Thursday, NSE said it was India’s first- ever Electric Vehicle Index. "The new index is expected to act as a benchmark for asset managers and be a reference index tracked by passive funds in the form of Exchange Traded Funds (ETFs), index funds and structured products," the release said.The base date for the index is April 2, 2018, and the base value is 1000 and the index will be reconstituted semi-annually and rebalanced on a quarterly basis.Commenting on the development, Mukesh Agarwal, CEO of NSE Indices, said, “Nifty EV & New Age Automotive index aligns with NSE’s vision to provide innovative indices in line with market trends. The launch of the Nifty EV & New Age Automotive index will facilitate relation of products, which will create opportunity for asset managers to invest in the electric vehicle and new age automotive market thereby providing an investment vehicle to investors."Currently there are 17 thematic indices on the NSE viz. Nifty Commodities, Nifty India Consumption, Nifty CPSE, Nifty Energy and Nifty Infrastructure.Apart from thematic indices, NSE operates Broad Market Indices (like Nifty, Nifty Next 50, Nifty 100, Nifty 100 etc) and 15 sectoral Indices including Nifty Bank, Nifty IT and Nifty Auto.It also operates Strategy Indices and Fixed Income Indices.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

The Reserve Bank of India has become a very aggressive buyer of gold this year buying one and a half times the gold the central bank bought in the whole of 2023 in just the first four months this calendar year and is also stocking a big chunk of its stock overseas. Now it is planning to bring back home a portion of those reserves. ET explains why RBI keeps a big chunk of its gold overseas and the risks, post the West freezing Russian assets.How much gold does the Reserve Bank hold overseas?As at end-March 2024, the Reserve Bank held 822.10 metric tonnes of gold, of which 408.31 metric tonnes were held domestically. While 387.26 metric tonnes of gold were kept in safe custody with the Bank of England and the Bank for International Settlements (BIS), 26.53 metric tonnes were held in the form of gold deposits.110595616Why does the central bank park a big chunk of the gold abroad?In 190-91, when the country had foreign exchange reserves adequate enough to fund only 15 days of imports, it had pledged a part of its gold reserves in May 1991 to the Bank of England. It had shipped 46.91 tonnes of gold to England then and raised a $405 million loan which also included some pledge with the Bank of Japan. Although the loan was repaid by November 1991, the Reserve Bank chose to keep the gold in the Bank of England vault more for logistics reasons. Besides gold held in the form of certificates could be used for trading entering into swaps and earning a small return. Moreover , RBI has also started accumulating gold from the market which it largely does from the international markets and keeping it in Bank of England vaults makes it logistically convenient. What are the risks?At times of geopolitical tensions there is uncertainty over the safety of one's international assets. In the current situation the freezing of the Russian assets by the west and the general outlook on the UK economy has likely added to the concerns of the Indian government of the safety of gold reserves overseas.110593990 What could RBI do?In consultation with the government, the RBI could use the gold in the domestic market to manage gold prices given the huge domestic demand especially in investment products like gold exchange traded funds making sure it also does not promote wasteful consumption and also develop a local market for the bullion . Also at the same time ensure that the gold stays within the domestic boundary within the country. Why does the central bank buy gold?Besides using it as a hedge against inflation and currency volatility and for diversification of foreign exchange reserves, one of the major reasons for holding gold reserves is the decline in confidence in dollar assets among central banks. The US Treasury Department data suggest that the non-US central banks' holdings of US Treasury bonds have dropped from 49.8 % in March 2023 to 47.1 % as of March 2024.110595918

Nifty formed a long-legged Doji candle on the daily charts to breach a 5-day losing streak, ending 42 points higher at 22,531.The 50-DMA is placed at around the 22,400 level, and a slip below this level could shift the test to the 22,300-22,260 zone. However, crossing 22,660 could resume the bullish trend, Om Mehra of SAMCO Securities said.On the daily chart, the Nifty has now bounced back from close to the 50-day SMA after four sessions of losses. Chartists said that the 14-day RSI at 50.33 is falling and remains below its 9-day EMA, indicating that the momentum is weakening.What should traders do? Here’s what analysts said:Jatin Gedia, SharekhanOn the daily charts, we can observe that Nifty consolidated within the range of the previous trading session and has formed an inside bar pattern which makes the extremes of the range 22,700 – 22,400 crucial levels to watch out for. A breakout on either side shall lead to a treading move in that direction. In terms of levels, 22,420- 22,313 is the crucial support zone while 22,820 – 22,900 is the crucial resistance zone from a short-term perspective.Rupak De, LKP SecuritiesThe highest call writing is visible at 23,000, while significant put writing at 22,500 indicates that the Nifty might oscillate between 22,500 and 23,000 in the next few days. However, a fall below 22,500 might trigger a correction towards 22,000.Tejas Shah, JM Financial & BlinkXNifty is trading around a make-or-break support zone of 22,400-500 levels (50-day EMA Support area) and a sharp movement of 2% to 3% can be expected on either side from this zone, preferably on the higher side. As long as Nifty is holding above 22,400-500 levels (+/- 25 points), there is no major sense of panic as of now. The short-term moving averages are just around the price action and should continue to support the indices on any decline. Supports for the Nifty are now seen at 22,400-500 and 22,200 / 22,000-050 levels. On the higher side, immediate resistance is at 22,600-650 levels and the next resistance zone is at 22,825-850 levels.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)