China Vs America: FPI surcharge removal or worry about trade war?

Earlier in this month the eyes were at the results of the companies listed on the exchange. But now the focus has been shifted to the Global macro impacts. Impact of US china war on currency is inevitable. The finance minister Nirmala Sitharaman have made announcement to boost Indian Economy. This measures include removal of surcharge on FPIs and removal of CSR violation as criminal offence. But there is worry in the global market about the US China trade war. FPI surcharge removal will help to boost up the Indian share market as well as economy. But it is doubtful that the move will put an impact on the market as desired. This is because of prevailing tensions between US and china. About Automobile Industry and FPI surcharge removalrnAutomobile industry is pillar of the Indian economy. It contributes 7.5 % in the country GDP. Manufacturing sector in overall contributes around 17% in which the share of automobile industry is about 49%. The automobile industry got some relaxation by Nirmala Sitharamans announcement.rnAlthough the decision of the finance minister have been very positive but the global woes have suffered the market in negative. Macro economic imapact on Indian marketrnSpeaking of growth, a key macro data point to watch out for in the coming week is India’s June quarter gross domestic product (GDP) data. In the backdrop of ongoing consumption slowdown, expectations aren’t very high. Manufacturing and mining activity is expected to be broadly flat. Services (including construction) is expected to slow sharply to 7% year-on-year from 8.2% in the previous quarter on lower government spending. Construction, real estate and financial services and trade, hotel and transportation activity also slowed from the previous quarter. It should be kept in mind that Moody’s Investors Service on Friday revised downwards India’s GDP growth forecast for the current year to 6.2%. It said the economy remains slow moving due to a combination of factors such as weak hiring, distress among rural households and tighter financial conditions. This could also weigh on investor confidence in the coming week. Thus, there will be uncertainty in the market due to tussle between FPI surcharge removal and trade war impact. Stability is not to be restored to Indian stocks as long as the trade war continues, impacting global trade and growth. Foreign investment money typically tends to flow in to safer havens such as dollar and gold at times such as these when risk aversion is high.