Weekly Wrap: Citizenship Law; Trump Signs Trade Deal; World’s First $2-Trillion Firm

India’s President gave his assent to the Citizenship (Amendment) Bill, 2019, amid protests. U.S. President Donald Trump signed a phase-one trade deal with China. And Saudi Aramco raised $25.6 billion in the biggest-ever IPO, valuing the company at $1.8 trillion.

Here’s what happened in the business world and markets between Dec. 9 and Dec. 13...

Citizenship Amendment Act

The Citizenship (Amendment) Bill was passed by Rajya Sabha and Lok Sabha. On Thursday, President Ram Nath Kovind gave his assent to the bill turning it into an act.

• The bill changed the rules governing granting of citizenship to undocumented migrants to include religion as a criteria.
• It bars undocumented Muslims from Pakistan, Bangladesh and Afghanistan from seeking citizenship, but allows Hindus, Sikhs, Buddhists, Jains, Parsis and Christians who illegally migrated to India from these regions to do so.
• Several incidents of violence have been reported from Assam, following the passage of the bill in Parliament on Dec. 11.

Phase-One Trade Deal Done

The U.S. and China agreed to the first phase of a broader trade agreement that will see the U.S. reduce tariffs, and at least temporarily calm fears of an escalating trade war between the world’s two largest economies.

• The deal announced hinges on China increasing purchases of American farm goods such as soybeans and pork, and making new commitments on intellectual property, forced technology transfer and currency.
• Speaking to reporters in Washington, President Donald Trump said he expects China’s agriculture buying to hit $50 billion annually “pretty soon.”

Boris Johnson Is Back In U.K.

Boris Johnson won an emphatic election that redraws the political map of Britain and gives the prime minister the mandate he needs to pull the U.K. out of the European Union next month.

• The result spectacularly vindicated Johnson’s gamble on a snap election to break the deadlock in Parliament over Brexit, as his Conservatives won their biggest majority since 1987 under Margaret Thatcher.
• The pound surged 1.3 percent to $1.3338. The benchmark FTSE 100 Index closed 1.1 percent higher despite being heavily skewed to exporters vulnerable to currency appreciation.

World Gets Its First $2-Trillion Firm

Saudi Aramco raised $25.6 billion in the biggest-ever initial public offering, selling shares at 32 riyals each and valuing the company at $1.8 trillion, overtaking Microsoft Corp. and Apple Inc. as the most valuable listed company.

Saudi Aramco made its stock market debut on Dec. 11. The stock rose for the second day on Dec. 12, but failed to hold on to the $2-trillion valuation that Crown Prince Mohammed bin Salman had long targeted, finishing the day at $1.96 trillion.

Get up to speed:

• The Wall Street bankers who burst Aramco’s $2-trillion bubble.
• Aramco is said to pay banks only $64 million for record IPO.

How Markets Fared This Week

Indian equity benchmarks registered their best run in six weeks. The S&P BSE Sensex gained 1.4 percent this week to close at 41,009. The NSE Nifty 50 Index rose 1.35 percent to end the week at 12,086.70.

“The market has confidently crossed the 12,080 level, which is positive, and the strategy should be to trade long on dips between 12,000 and 11,950,” Shrikant Chouhan, senior vice-president (equity technical research) at Kotak Securities, said in an emailed statement. “On the down side, 11,900 levels would be the ultimate support. Above 12,100, the Nifty would face hurdles at 12,160 and 12,250.”

Eight of the 11 sectoral gauges compiled by the National Stock Exchange gained this week, led by the NSE Nifty PSU Bank Index’s 4.5 percent jump. The NSE Nifty Media Index was the top loser, down 1.2 percent.

How Broader Markets Fared

The broader market represented by the NSE Nifty 500 Index gained 1.18 percent this week, led by a rally in Arvind Fashions Ltd., Indiabulls Housing Finance Ltd. and Magma Fincorp Ltd.

How The Rupee Fared

Indian rupee strengthened against the dollar for the second straight week. The home currency appreciated 0.55 percent against the greenback to close the week at 70.81.

Big Talking Points This Week

• Mutual fund inflows tumbled by more than half in November.
• SBI lowers MCLR-based lending rates by 10 basis points, reports bad loan divergence for FY19.
• BJP retains majority in Karnataka Assembly.
• Passenger vehicle sales resume decline in November.
• Qatar to invest $450 million in Adani’s Mumbai power unit.
• India CPI data: Retail inflation surges to 5.54 percent in November.
• Industrial production contracts 3.8 percent in October.
• Lagarde marks ECB policy debut with optimistic note for economy.
• A diamond scandal is hurting India’s economy in grip of slowdown.
• Personal data protection bill: India dilutes data localisation proposal; allows transfer with conditions

Key Events To Watch Next Week

• Dec. 16: Indian to report wholesale price inflation data for November.