Hong Kong: International Monetary Fund chief Christine Lagarde on Wednesday issued a stern warning to governments to avoid undermining global growth with protectionist trade policies.
In a less than thinly-veiled warning to US President Donald Trump, who has locked horns with China on trade, the head of the IMF said countries should open trade further by reforming their own domestic practices rather than putting up new barriers to trade.
And she said it was a mistake to view trade deficits as a sign of unfair trade practices — as Trump has repeatedly claimed, most notably in the current dispute with China.
Trump last month imposed steep tariffs on steel and aluminum imports, and announced pending tariffs on $50 billion in Chinese goods in retaliation for alleged theft of intellectual property.
Since then Washington and Beijing have escalated threats of new import duties, raising the real risk of an all-out trade war.
Governments “need to steer clear of protectionism in all its forms,” Lagarde urged.
“Remember: the multilateral trade system has transformed our world over the past generation. It helped reduce by half the proportion of the global population living in extreme poverty.”
In a speech previewing the issues to be discussed when world finance ministers and central bankers gather in Washington next week for the IMF and World Bank Spring meetings, Lagarde said free trade “has created millions of new jobs with higher wages.”
“But that system of rules and shared responsibility is now in danger of being torn apart,” she warned. “This would be an inexcusable, collective policy failure.”
Lagarde stressed that experience showed protectionist “import restrictions hurt everyone, especially poorer consumers,” by making products more expensive.
But barriers “also prevent trade from playing its essential role in boosting productivity,” something the IMF has repeatedly said advanced economies need to improve in order to improve potential economic growth rates.
Governments should work to “reduce trade barriers and resolve disagreements without using exceptional measures,” and should directly help those facing upheaval, whether from trade or new technology, by improving investment in training and education.
Lagarde also dismissed the argument — made by Trump and his trade advisers — that the presence of a trade deficit is a sign of unfair trade practices.
In fact, “these bilateral imbalances are a snapshot of the division of labor across economies,” she said.
The IMF next week will release its updated World Economic Outlook with forecasts of global growth, but despite the “darker clouds looming,” Lagarde said the world economy was seeing an upswing and “we continue to be optimistic.”
The IMF in January forecast global growth of 3.9 per cent for this year and next, and she said advanced economies were growing above potential while China, India and Japan continued to see strong growth.
Sensex sheds 298.82 to close at 38,811; Nifty shrinks to 11,650
Mumbai: The benchmark BSE Sensex erased early gains to end 299 points lower Thursday as investors booked profits after stocks soared to record highs after BJP’s strong showing in the Lok Sabha polls.
Sensex and NSE Nifty went on to record highs even as Lok Sabha election results showed that PM Modi-led NDA leading on over 300 seats. However after the euphoria during the morning session, Sensex shed 298.82 to close at 38,811 and Nifty shrank to 11,650 on the closing bell.
During the day, the Sensex hit the 40,000 mark while the Nifty crossed the 12,000-level for the first time ever. However, the indices succumbed to profit booking towards the fag-end of the session.
The 30-share Sensex tumbled 298.82 points, or 0.76 per cent, to close at 38,811.39. Similarly, the broader NSE Nifty settled 80.85 points, or 0.69 per cent, lower at 11,657.05.
IndusInd Bank was the biggest gainer in the Sensex pack, rallying 5.23 per cent, followed by Hero MotoCorp, Coal India, Yes Bank, PowerGrid, ICICI Bank, HCL Tech, L&T, Kotak Bank and Bharti Airtel, rising up to 1.56 per cent. On the other hand, Vedanta, ITC, Tata Motors, HDFC twins, Bajaj Finance, Sun Pharma, Tata Steel, TCS, ONGC and Infosys fell up to 5.53 per cent.
Riding on a massive Modi wave sweeping through most parts of India, the BJP was set to return to power Thursday as it led in 298 seats while the Congress trailed far behind with 52, according to trends released by the Election Commission for all 542 seats that went to polls.
“Markets were initially enthused to see the election results falling in line with the exit polls. However, the run up to the D-day was so sharp that it turned out to be a sell on news phenomenon,” said Devang Mehta, Head – Equity Advisory, Centrum Wealth Management.
Participants would now be keen to know the future course of action for bringing the economy back on track, solution to the liquidity situation, the union budget, onset and progress of monsoon in June and most importantly the earnings trajectory, he added.
According to traders, weak cues from other global markets and a depreciating rupee also weighed on investor sentiment. The rupee depreciated 37 paise to 70.04 against the US dollar in afternoon trade. Globally, bourses in Asia ended in the red.
Indices in Europe were also trading on a negative note in early deals. Brent crude, the global oil benchmark, was trading 1.79 per cent lower at USD 69.72 per barrel.
Silver up on increased offtake; gold steady
New Delhi: Silver prices rallied by Rs 200 to Rs 37,400 per kg in the national capital on Thursday, while gold held steady, according to the All India Sarafa Association.
Traders said silver prices rose on pick-up in offtake by industrial units and coin makers at the local spot market. Globally, spot gold was trading marginally higher at USD 1,276 an ounce, while silver was slightly up at USD 14.53 an ounce in New York.
In the national capital, gold of 99.9 per cent and 99.5 per cent purity dropped by Rs 10 each to Rs 32,670 per ten 10 gram and Rs 32,500 per 10 gram. Sovereign gold, however, held steady at Rs 26,500 per eight gram.
Silver ready surged Rs 200 to Rs 37,400 per kg, while weekly-based delivery fell by Rs 66 to Rs 36,234 per kg. Silver coins held flat at Rs 79,000 for buying and Rs 80,000 for selling of 100 pieces.
India PC mkt declines 8.3 per cent to 2.15 mn units in Jan-Mar qarter
New Delhi: Personal Computer (PC) shipment in India fell by 8.3 per cent in the January-March quarter of 2019 to 2.15 million units, registering a year-on-year decline for the third consecutive quarter, according to research firm International Data Corporation (IDC).
Besides, big commercial deals, market remained weak due to weak consumer demand, high inventory from previous quarters, and supply issues for Intel chips.
Shipments in the consumer segment saw a 26.5 per cent dip in the said quarter compared to the year-ago period. The commercial PC market saw a total shipment of 1.35 million units in the said quarter, a growth of 7.3 per cent over last year.
“The announcement of central elections on March 10, 2019 resulted in the model code of conduct coming into immediate effect further resulting in a delay in execution of government projects and impacting the commercial segment,” IDC said in a statement.
However, IDC expects the overall PC market in India to witness a growth in the second quarter. The commercial market is expected to pick up post new government formation in May, while the consumer market is expected to pick up largely driven by back to school campaign by vendors and online sales.
HP maintained its leadership position with an overall market share of 28.1 per cent in the first quarter of 2019, followed by Dell (25.9 per cent), Lenovo (25.2 per cent) and Acer (11.7 per cent).
The notebook PC (laptop) category accounted for 61.4 per cent of the shipment and witnessed a 9.8 per cent year-on-year decline.