The US December CPI data indicates stable inflation around 2.6%, aligning with expectations and suggesting the Fed's focus remains on employment. Oil prices have surged due to geopolitical risks involving Iran and Venezuela. JP Morgan warns that Trump's credit card rate cap may reduce credit availability. Indian exporters face potential US tariffs on Iran trade. Tata Elxsi reports mixed Q3 results, while the World Bank upgrades India's FY27 growth forecast to 6.5%.
Welcome to the latest update from Yans Investment Academy, where we cover key developments in the global and Indian economy, stock market news, and corporate earnings.
The US December CPI data reveals that core inflation stands at 2.6% annually, slightly below expectations of 2.7%. The overall inflation rate for all items on a 12-month basis is approximately 2.7%. Food inflation is at 3.1%, while energy inflation is 2.3%. Core inflation, which excludes volatile food and energy prices, remains steady at around 2.6%, primarily driven by services excluding energy-related costs.
Inflation has hovered in a range of 2% to 3% throughout 2025, indicating a range-bound scenario. This stability suggests that the Federal Reserve's focus will likely remain on employment data rather than aggressive rate cuts, unless inflation spikes unexpectedly.
Given the inflation data, the Fed is expected to maintain its current stance, focusing on job market conditions. Rate cuts are unlikely as long as inflation remains within the 2% to 3% range.
Oil prices have risen due to concerns over supply disruptions linked to geopolitical tensions involving Iran, Venezuela, Russia, and Ukraine. Despite reports forecasting oil prices could drop to $30-$40 per barrel in 2026 and 2027 due to oversupply, the geopolitical risk premium has pushed prices higher.
Barclays estimates that Iran-related tensions could add a $3 to $4 per barrel premium, potentially raising average prices to around $45 per barrel for 2026 and 2027.
JP Morgan Chase's CFO, Jeremy Burnham, commented on the Trump administration's 10% cap on credit card interest rates. He warned that this cap could lead to fewer credit cards being issued, reducing consumer spending and potentially harming US economic growth. The bank believes such regulatory actions may have the opposite effect of what the administration intends.
Silver prices have touched $88 per ounce, marking a 25% year-on-year increase. This rise is driven by industrial demand and market uncertainty. Gold prices have also remained elevated, influenced by similar factors.
The Trump administration has announced a 25% tariff on any country doing business with Iran. This move has created uncertainty for Indian exporters, who are currently in a wait-and-watch mode. India, along with China and the UAE, is a key trading partner of Iran.
India faces a strategic dilemma as it balances US trade relations with its interests in Iran, including access to the Chabahar port, which facilitates trade with Central Asia bypassing Pakistan.
China has opposed the US move, calling it unilateral and extraterritorial, potentially escalating trade frictions.
Tata Elxsi shares jumped 4% on hopes of increased MSCI weightage, potentially attracting $390 million in passive inflows in February. The company reported Q3 FY26 results with a 3.9% quarter-on-quarter revenue growth. However, profit before tax (PBT) declined by 5.4%, and profit after tax (PAT) fell by 145%, primarily due to a one-time cost of approximately Rs. 95-100 crore related to the new labor code.
Segment-wise, the transportation mix in the Software Development and Services (SDS) vertical grew by 7.3% quarter-on-quarter in constant currency terms. Other divisions like media, communication, healthcare, and life sciences continue to face challenges.
The World Bank has upgraded India's GDP growth forecast for FY27 to 6.5%, up from the previous 6.3%. This optimistic outlook is driven by strong domestic demand and robust exports despite higher US tariffs on some Indian goods.
The World Bank also noted that if trade disputes ease or tariffs are partially rolled back, India's growth could accelerate to as high as 6.87%. Mobile exports are projected to increase, potentially reaching around Rs. 2.7 trillion.
The 10-minute delivery tag used by several quick commerce companies is being removed. While companies will no longer be compelled to guarantee delivery within 10 minutes, deliveries faster than 10 minutes will still be possible, especially if dark stores are nearby.
The global economic landscape remains complex with stable US inflation, rising oil prices due to geopolitical risks, and regulatory challenges in the US banking sector. Indian exporters face new tariff-related uncertainties, while domestic companies like Tata Elxsi navigate mixed earnings results. The World Bank's upgraded growth forecast for India offers a positive outlook amid these challenges.
Stay tuned for more updates and detailed analyses on market developments and economic trends.
Thank you for reading this comprehensive market news update.
