From market shifts driven by the US Federal Reserve’s rate move to key political developments and a court ruling impacting telecom companies, this week was eventful for investors. NDTV Profit, in its weekly news wrap every Friday, brings you the major events shaping businesses, industries, and global markets.
The Beginning Of Rate Cuts
The US Federal Reserve slashed its key rate for the first time in more than four years by 50 basis points to 4.75–5.00% to shift focus to engineering a soft landing.
The reduction was in line with expectations, with traders anticipating even deeper cuts prior to the announcement. "Dot plot" of Fed officials' commentary now expects to lower rates by one percentage point by year-end.
The Fed is not in a pre-set course, and dot-plot projections are not a policy plan, Chair Jerome Powell stated. "Our recalibrated policy stance will help maintain the strength of our economy and the labour market and continue."
The US Central Bank revised the inflation outlook downward to 2.3%, compared to 2.6% previously. For core inflation, the committee lowered its projection to 2.6%, a decrease of 0.2 percentage points from June.
Upside inflation risks have diminished and downside risks to employment have increased, Fed Chair Powell said in the press conference after the rate decision. "The rate cut is timely and don't think we are behind."
However, analysts remained mixed about the size of the rate cuts as such big cuts "typically taken in times of crisis and this isn't a typical move to start off in a period where the economy is holding up relatively well."
Read here for a detailed review of the Fed's decision from top voices.
Unified Election Push
The Union Cabinet approved the 'One Nation, One Election' proposal, to conduct simultaneous assembly and parliamentary elections.
To pave the way for this proposal, the government in 2023 had formed a committee under former President Ram Nath Kovind to submit a report on One Nation, One Election. The committee in March had recommended implementing the proposal.
The committee's report was given the nod in the Cabinet meeting on Wednesday, which was chaired by Prime Minister Narendra Modi.
The committee's report was given the nod in the Cabinet meeting on Wednesday, which was chaired by Prime Minister Narendra Modi.
Implementing the simultaneous elections plan will require around 18 constitutional amendments, according to political strategist Amitabh Tiwari. The Opposition is expected to strongly object to the proposal. However, there's a possibility that all National Democratic Alliance parties are on the same page, as the move has been approved by the Union Cabinet.
AGR Burden Remains
The Supreme Court on Thursday rejected telecom operators' plea seeking a re-computation of their adjusted gross revenues.
Vodafone Idea, Bharti Airtel and various other telcos had filed curative pleas against the 2019 top court verdict in the case. The telecom operator alleged that there is a grave error in the calculation of AGR dues by the Department of Telecommunications, coupled with an arbitrary penalty imposed on them by the top court.
Read here to know the background of the almost two-decade-old battle.
Vodafone Idea's AGR liability stood at Rs 70,300 crore as of June 2024, which makes up 33% of its gross debt. Re-computation of the dues would have cut down AGR by Rs 30,000–35,000 crore. Bharti Airtel current cues stands at Rs 44,000 crore.
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J&K Decides Future
A voter turnout of more than 61% was recorded in the first phase of assembly polls covering 24 segments across seven districts in Jammu and Kashmir.
Kishtwar district recorded the highest polling at 80.14%, followed by Doda at 71.34% and Ramban at 70.55% in the Chenab valley region of Jammu, the Election Commission said.
In south Kashmir, Kulgam district led the turnout chart with 62.46% followed by Anantnag district at 57.84%, Shopian district at 55.96%, and Pulwama district at 46.65%, the EC said.
This was the first assembly elections in J-K post abrogation of Article 370 in August 2019. The last assembly elections were held in 2014.
The second phase will be held on Sept. 25 and the third and final on Oct. 1, according to the schedule announced by the ECI.
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