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Sensex Trades Flat; Axis Bank Remains Under Pressure
Thu, 6 Oct 11:30 am

After opening the day on a flat note, the Indian share markets registered have continued to trade near the dotted line. Sectoral indices are trading on a mixed note with stocks from the energy sector and power sector witnessing maximum buying interest. Banking stocks are trading on a flat note. Axis Bank and IDFC Bank are bearing the brunt of the selling pressure.

The BSE Sensex is trading up 71 points (up 0.3%) and the NSE Nifty is trading up 20 points (up 0.2%). The BSE Mid Cap index is trading up by 0.5%, while the BSE Small Cap index is trading up by 0.6%. The rupee is trading at 66.62 to the US$.

The automation threat is getting bigger by the day. A recent research by the World Bank said that technology could fundamentally disrupt the pattern of traditional economic path in developing countries. And the threat to India here is not something we can ignore. The study stated that automation threatens 69% of the jobs in India.

World Bank President Jim Kim said research based on World Bank data has predicted that the proportion of jobs threatened in India by automation is 69%, in China it is 77% and in Ethiopia it is 85%.

While India boasts its demographic dividend, the benefit will only come if the government is able to create the right environment for job creation.

The penetration of automation is set to grow in the coming future; thereby making the issue of unemployment worse than before. In fact, this trend is already visible. The automation trend is accelerating not just in manufacturing but in services sectors such as IT too. India's are no longer hiring employees the way they were five years ago.

Vivek Kaul, editor of Vivek Kaul's Diary, has some interesting points to make in this regard. In one of his articles, he has written on the fallacy of the demographic dividend and forced us to question this much hyped competitive advantage as compared to other nations. In a slight different vein, one of our editions of The 5 Minute WrapUp explains how market participants can take advantage of the advances in technology and robotics.

The bottomline for a young nation is that automation remains a threat we cannot afford to ignore. It has the potential to bring many economic concerns for a country that boasts itself of the largest working age population in the world.

In another news update, gold is witnessing selling pressure today. At the time of writing, the yellow-metal was trading down by around 0.2%.

Most of the brunt for gold this week came after the Reserve Bank of India (RBI) cut interest rates by 25 basis points. The Monetary Policy Committee (MPC), headed by RBI Governor Urjit Patel, cut official rates to their lowest level since January 2011. This was in contrast of the more hawkish stance of his predecessor Raghuram Rajan. The news weighed on gold and dragged prices in the negative territory.

Also, the volatility above is followed by losses for gold seen during the last week. Last week, gold registered losses on the back of a firm dollar and the US presidential debate. However, the decline in global stock markets due to lingering concerns over the stability of Deutsche Bank limited the losses for gold.

Being on the topic of precious metals, Dan Denning, in Vivek Kaul's Diary, offers some insight on the times when silver does better than gold.

To keep a tab on the movements in gold and other commodities, you can read stock market commentary from the Daily Profit Hunter team. Their commentary tracks the developments in the global economy as well as stock, currency and commodity markets.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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Jan 17, 2018 01:01 PM