UK House Price Inflation Fastest Since 2004

Eurozone GDP Falls Less Than Estimated In Q2

The euro area economy contracted less than initially estimated in the second quarter but the pace of decline was the most since the records began in 1995 due to the coronavirus containment measures adopted by the member countries, revised data from Eurostat revealed Tuesday.

Gross domestic product fell by a record 11.8 percent sequentially but this was revised down from -12.1 percent estimated initially. GDP had contracted 3.7 percent in the first quarter.

The annual decline in GDP was revised to 14.7 percent from 15 percent. Nonetheless, this was the biggest fall since the series began in 1995 and followed a 3.2 percent drop in the first quarter of 2020.

On the expenditure-side, household spending plunged 12.4 percent on quarter following a 4.5 percent drop in the first quarter. Government spending decreased moderately by 2.6 percent, faster than the 0.7 percent fall in the previous quarter.

The decline in gross fixed capital formation deepened to 17 percent from 5.2 percent.

Likewise, exports were down 18.8 percent, which was bigger than the first quarter’s 3.9 percent fall. Imports decreased 18 percent compared to a 3.2 percent drop a quarter ago.

Further, data showed that the number of employed persons decreased by a record 2.9 percent sequentially versus a 0.3 percent drop in the first quarter. The second quarter rate was revised from -2.8 percent.

Year-on-year, employment fell 3.1 percent in the second quarter, in contrast to a 0.4 percent rise in the first quarter. The flash estimate was -2.9 percent.

Silver Lake to Invest $1 Billion in Reliance Retail Ventures

Silver Lake Partners will invest about $1 billion in Indian billionaire Mukesh Ambani’s retail business, the country’s largest.

The California-based private equity firm with stakes in technology-related companies will pay 75 billion rupees ($1 billion) for a 1.75% equity stake in Reliance Retail Ventures Ltd., the Reliance unit said Wednesday in a statement. The firm has about $60 billionunder management, including a $1.35 billion stake in Ambani’s digital services business, Jio Platforms Ltd.

Ambani is boosting his grocery and apparel businesses through acquisitions, widening his lead as the country’s biggest retailer and setting the stage for a push into e-commerce to challenge Inc. andWalmart Inc.’s businesses in India. Silver Lake is widening its bet on Ambani’s plans, which include using his conglomerate’s almost 400 million wireless phone subscribers to promote services like digital payments, grocery delivery and streaming entertainment.

Sensex falls over 250 points in early trade; Nifty drops below 11,300

ONGC was the top loser in the Sensex pack, shedding around 3%

Domestic equity benchmark Sensex tumbled over 250 points in early trade on Wednesday tracking losses in index-heavyweights HDFC Bank, ICICI Bank and ITC amid intense selloff in global markets.

The 30-share BSE index was trading 255.26 points or 0.67% lower at 38,110.09; while the NSE Nifty dropped 79 points or 0.70% to 11,238.35.

ONGC was the top loser in the Sensex pack, shedding around 3%, followed by Tata Steel, SBI, NTPC, ITC and Bajaj Finserv. On the other hand, Reliance Industries, Asian Paints, Infosys and Tech Mahindra were among the gainers.

In the previous session, Sensex ended 51.88 points or 0.14% lower at 38,365.35; while the NSE Nifty slipped 37.70 points or 0.33% to 11,317.35.

Exchange data showed that foreign institutional investors sold equities worth ₹1,056.52 crore on a net basis on Tuesday.

Domestic equities opened on a negative note tracking weak cues from global equities after late-stage studies of AstraZeneca’s COVID-19 vaccine candidate were put on temporary hold, traders said.

The company is in the process of investigating whether a recipient’s “potentially unexplained” illness is a side effect of the shot.

Bourses in Shanghai, Hong Kong, Seoul and Tokyo were trading with intense losses in mid-session deals. Stock exchanges on Wall Street witnessed massive selloff in overnight sessions. Global oil benchmark Brent crude was trading 0.90% lower at $39.42 per barrel.

UK House Price Inflation Fastest Since 2004

UK house prices increased the most since early 2004 as the property market showed signs of recovery following the easing of lockdown restrictions, data from Nationwide Building Society showed Wednesday.

House prices advanced by more-than-expected 2 percent on month in August, faster than the 1.8 percent rise seen in the previous month.

This was also the fastest growth since February 2004. Economists had forecast a monthly increase of 0.5 percent.

On a yearly basis, growth in house prices accelerated to 3.7 percent from 1.5 percent in July. Prices were forecast to advance 2 percent.

“The bounce back in prices reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions,” Robert Gardner, Nationwide’s chief economist, said.

Gardner said the rebound reflects a number of factors. Pent up demand is coming through, where decisions taken to move before lockdown are progressing.

“Behavioural shifts may also be boosting activity, as people reassess their housing needs and preferences as a result of life in lockdown,” said Gardner.

According to Gardner, this trend is set to continue in the near term, further boosted by the recently announced stamp duty holiday, which will serve to bring some activity forward.

However, the labor market conditions are forecast to weaken significantly in quarters ahead, which would likely dampen housing activity once again in the quarters ahead.

Data released by the Bank of England on Tuesday showed that mortgage approvals for house prices rose to a five-month high of 66,281 in July.