India is set to give final approval to a $2.6 billion deal for military helicopters from U.S. defence firm Lockheed Martin ahead of a proposed visit by U.S. President Donald Trump this month, defence and industry sources said.
Prime Minister Narendra Modi’s government is trying to pull out all the stops for Trump’s trip in a bid to reaffirm strategic ties between the two countries, which have been buffeted by sharp differences over trade, to counter China.
India’s defence purchases from the United States have reached $17 billion since 2007 as it has pivoted away from traditional supplier Russia, looking to modernize its military and narrow the gap with China.
Modi’s cabinet committee on security is expected to clear the purchase of 24 MH-60R Seahawk helicopters for the Indian navy in the next two weeks, a defence official and an industry source briefed on the matter separately told Reuters.
To cut short lengthy negotiations between Lockheed and the Indian government, the helicopters that will be deployed on India’s warships will be bought through the U.S. foreign military sales route, under which the two governments will agree details of the deal.
Trump is expected in India around Feb 24 on his first official visit to the country, although no formal announcement has yet been made.
Both countries are separately working on a limited trade agreement ahead of the trip, after earlier imposing tit-for-tat tariffs on each other’s imports.
Trump has called India the “tariff king of the world” but the Modi government has been trying to address some of his concerns.
Trade officials have pointed to large-scale U.S. arms purchases, from surveillance planes to Apache and Chinook helicopters, as proof of India’s willingness to tighten strategic ties.
The multirole helicopters will be equipped with Hellfire missiles and are meant to help the Indian navy track submarines in the Indian Ocean, where China is expanding its presence.
India’s gold imports in January plunged 48% from a year earlier to their lowest in 4 months as a rally in local prices near record highs prompted buyers to curtail purchases, a government source said on Tuesday.
Lower buying by the world’s second biggest consumer of the precious metal could weigh on global prices trading near their highest level in almost seven years, but help New Delhi bring down the trade deficit and support the rupee.
India imported 36.26 tonnes of gold in January, compared with 69.51 tonnes a year earlier, the source said on condition of anonymity, as he was not authorised to speak to media.
In value terms, January imports totalled $1.58 billion, down from last year’s $2.31 billion, he said. Consumers are struggling to adjust with higher prices. They have risen too much, too fast.
Gold futures in India hit a record high 41,293 rupees per 10 grams in January after rising nearly a quarter in 2019.
The weak demand forced dealers to offer as much $13 an ounce discount over official domestic prices in January, the highest in nearly three months. The domestic price includes a 12.5% import tax and 3% sales tax. India’s gold consumption in 2019 fell 9% from the previous year to 690.4 tonnes, the lowest since 2016, the World Gold Council (WGC) said last week.
India’s gold imports could fall below 40 tonnes in February as prices are still elevated, said a Mumbai-based dealer with a gold importing bank, which would mark a drop from last year’s 77.64 tonnes.
India’s new budget is unlikely to drag Asia’s third- biggest economy out of its worst slowdown in more than a decade as the government has proposed only moderate spending increases and small cuts in personal taxes, economists said on Sunday.
They said there was a risk the government might miss its fiscal deficit target for 2020-21 as it was dependent on raising almost $30 billion from the sale of stakes in state-run firms and financial institutions to meet ambitious revenue goals.
In its budget for the year starting in April unveiled on Saturday, the government relaxed its fiscal deficit target so it could spend an nearly $15 billion more, mainly on infrastructure and farming, while pushing ahead with privatisations.
Economists and industry leaders said the budget proposals would provide some support to growth over the longer term but were insufficient to give it an immediate boost.
India’s economy is forecast to grow 5% in the year ending in March, its weakest pace in 11 years, ratcheting up the pressure on Prime Minister Narendra Modi, who is already facing backlash over a socially divisive citizenship law.
Economists said India risked missing its budget deficit target of 3.5% of GDP in 2020-21 as the government’s revenue growth target of nearly 10% depends on raising almost 2.1 trillion rupees ($30 billion) from privatisations.
European regulators have imposed 114 million euros ($126 million) in fines for data breaches since tougher privacy rules came into force in mid-2018, with approaches varying widely from country to country.
A report by law firm DLA Piper said France has imposed the biggest single fine – of 50 million euros against Google while the Netherlands, Britain and Germany led in terms of the number of data breach notifications.
The General Data Protection Regulation was introduced in an effort to safeguard sensitive personal information and prescribes stiff penalties if companies lose control of data or process it without proper consent.
It is enforced by a patchwork of national data protection offices across the 28-member European Union, with responsibility falling disproportionately on Ireland – the ‘lead’ regulator for Silicon Valley giants that have based their European operations there, such as Facebook.
The fines to date pale in comparison to multibillion-euro penalties imposed in EU anti-trust cases, but they are likely to rise over time as appeals and litigation subject the sanctions to scrutiny and create legal precedents.
Oil prices rose on Thursday after the signing of an initial Sino-U.S. trade deal that sets the stage for a surge in Chinese purchases of American energy products, while U.S. crude inventories fell more than expected.
Brent was 45 cents, or 0.7%, higher at $64.45 a barrel, while U.S. crude was up by 39 cents, or 0.7%, at $58.20 a barrel.
Under the so-called Phase 1 deal to call a truce in a trade war between the world’s two biggest economies, China committed to buying over $50 billion more of U.S. oil, liquefied natural gas and other energy products over two years.
Trade sources and analysts said China could struggle to meet the target and gains in oil are likely to be limited ahead of more detail on how the commitments will be achieved.
Official U.S. data showing a much bigger than expected drop in crude oil inventories, also helped underpin prices
Oil inventories fell by 2.5 million barrels, compared with analyst expectations of a drop of 500,000 barrels, according to data from the Energy Information Administration
U.S. crude production also rose to a record 13 million barrels per day, the agency said.
Oil prices are returning to range trading, analysts said, as the threat of conflict between Iran and the U.S. receded further after they traded missile and drone attacks earlier this month.
That sent Brent to highs above $71 a barrel, before prices touched more than one-month lows in advance of the signing of the U.S.-China deal.
USD/JPY takes the bids to 109.55 during the initial trading session on Friday. In doing so, the pair registers a bullish candlestick formation on the weekly chart that currently confronts the key resistance confluence.
In addition to 109.48/52 area including 50% Fibonacci retracement of October 2018 top to August 2019 low and a downward sloping trend line since November 2018, 200-week SMA around 109.70/75 also challenges the buyers.
If at all USD/JPY prices register a weekly closing beyond 109.75, it confirms the bullish engulfing candlestick pattern on the chart while also the bulls to aim for the late-May top near 110.00.
Following that, 61.8% Fibonacci retracement level of 110.70 and April 2019 high of 112.40 will lure the buyers.
On the downside, pair’s declines below 108.45/40 hold the key to 108.00 and 107.50 support levels. However, the pair’s drop beneath 107.50 might not refrain from dragging the quote to the sub-107.00 region.
Oil prices jumped on Wednesday in Asia after Iran attacked two U.S.-Iraqi airbases in response to a U.S. airstrike that killed a top Iranian general last week, sparking worries of intensifying conflict in the Middle East.
Overnight, the Pentagon said missile strikes were launched from Iran and targeted the Ayn al-Asad base in western Iraq and another facility in Erbil.
U.S. Crude Oil WTI Futures surged 1.3% to $63.53 , while International Brent Oil Futures traded 1.4% higher. Oil prices jumped as much as 5% earlier in the day following the news, but gave up some of their gains later on as Iran’s foreign minister said it had “concluded proportionate measures in self-defense” and is not seeking war.
Supply worries resulting from deepening conflict between the U.S. and Iran were cited as tailwind for oil markets since the beginning of the year as a U.S. airstrike killed general Qassem Soleimani last week.
Developments on the Sino-U.S. trade front also remained as focus. The two nations were reportedly going to sign a phase one trade deal on Jan. 15.
India stocks advanced, extending gains for a second day on the expectation that the government’s plans to spend big will haul the country out of its economic woes.
The S&P BSE Sensex 50 climbed 0.3% to 41,419.41 at 9:39 a.m. in Mumbai. The Nifty 50 Index advanced by a similar magnitude.
The Sensex has had a positive January in six out of the last 10 years. The benchmark stock gauge rose 14% in 2019 even as the economy grew at its slowest pace in more than six years, suggesting that investors have largely priced in a slowdown.
As activity picks up again across markets globally, focus will shift to the companies and sectors that will benefit from fiscal spending and next month’s budget presentation.
While foreign institutional investors will be reshuffling their portfolios ahead of the budget, “no one is going to take considerable money off the table” as they weigh their options.
The dollar started the new year where it left the old one, under pressure as investors wagered U.S. economic out performance could be coming to an end as optimism on trade brightens the outlook for growth globally.
Signs of progress in the Sino-U.S. trade dispute undermined the dollar for much of December, leaving its index down 1.9% on the month. It was flat on Thursday at 96.440 having touched a six-month trough ahead of the holidays.
The euro edged up to $1.1220 , after gaining 1.8% in December to reach its highest since early August. It now looks set to challenge that August peak at $1.1249.
The dollar looked like slipping further on the Chinese yuan after shedding 1% last month to stand at 6.9640 . It was also finely poised on the yen at 108.67 , just a whisker from the December lows and major support around 108.40.
The dollar had benefited from U.S. economic out performance for much of 2019, but an easing in Sino-U.S. trade concerns has boosted optimism that this year could favor other major nations.
While activity was light on Thursday, traders were on watch for any repeat of last January’s “flash crash” when massive stop-loss selling swept through an liquid holiday-hit market.
There are fears the same could happen this week with Tokyo off and Japanese retail investors again heavily short of yen and long of risky high-yielding currencies, including the Turkish lira and the South African rand.