'If you look at where inflation (headline and core) is today in India and where the rates are, there's clearly room to cut rates.'
Foreign investors have poured Rs 57,359 crore into Indian equities in September, making it the highest inflow in nine months, mainly driven by a rate cut by the US Federal Reserve. With this infusion, foreign portfolio investors' (FPIs) investment in equities has surpassed the Rs 1 lakh crore mark in 2024, data with the depositories showed. Going ahead, FPI inflows are likely to remain robust, driven by global interest rate easing and India's strong fundamentals.
To minimise risk, invest in a debt fund whose duration matches your investment timeframe.
The rate hike in the future is set to be 'calibrated and cautious'.
The US Fed has also retained its benchmark rates for the Federal funds in the range of zero to 0.25 per cent, as part of its efforts to help in boosting the economy. After its two-day monetary policy meeting, which ended on Wednesday, the Fed said that 'economic activity is leveling out'.
Market breadth is positive with 942 advances and 196 declines.
After two weeks of buying, FPIs turned net sellers in Indian equities this week, with a net withdrawal of Rs 976 crore amid a strengthening US dollar and steady rise in US 10-year bond yields, impacting investor sentiment. Foreign Portfolio Investors (FPIs) began the week on a positive note, investing Rs 3,126 crore in equities during the first two trading sessions (December 16-20).
Among the Sensex stocks, JSW Steel, Asian Paints, Maruti Suzuki India, NTPC, Adani Ports and Special Economic Zone, Bharti Airtel, ITC and Tech Mahindra were the major gainers. Reliance Industries, Tata Motors, Infosys, Mahindra and Mahindra, Bajaj Finance and Axis Bank were the laggards.
The US Federal Reserve's interest rate decision is the biggest event that would drive sentiments in the domestic stock market this week, besides a host of macroeconomic data from the global front and trading activity of foreign investors, analysts said. The Indian equity market had an exceptional last week, with both the Nifty and Sensex hitting their all-time high levels on Thursday.
Jewellery stores remained deserted as buyers deferred their non-essential purchases awaiting softness in gold prices.
After heavy selling in the past two months, foreign investors have staged a strong comeback to Indian equities with a net investment of Rs 24,454 crore in the first week of December amid stabilising global conditions and expectations of potential US Federal Reserve rate cuts. This revival follows significant outflows in the preceding months, with foreign portfolio investors (FPIs) pulling out a net Rs 21,612 crore in November and a massive Rs 94,017 crore in October - the worst monthly outflow on record.
The US Fed interest rate decision, ongoing quarterly earnings, macroeconomic data and FII trading activity are the major triggers that will drive stock markets this week, analysts said. Investors would also track global market trends and the movement in global oil prices for further cues. "This week, the focus will shift to global cues, particularly the US markets," Santosh Meena, Head of Research, Swastika Investmart Ltd said.
The index could be vulnerable to a bigger fall given the present market dynamics.
Release of key macroeconomic numbers, monthly derivatives expiry, and global cues are likely to drive stock market movement this week, according to analysts. Markets will also be reacting to remarks made by the US Federal Reserve Chair Jerome Powell, they said. "This week, we expect the market to witness a gradual up-move with stock-specific action.
Yes Bank was the biggest gainer in the Sensex pack, soaring 6.04 per cent, followed by IndusInd Bank, Tata Steel, HeroMotoCorp, Sun Pharma, Bajaj Auto, Power Grid, Tata Motors, SBI and Kotak Bank that gained up to 5.32 per cent.
The November 5 US presidential elections, Federal Reserve interest rate decision, trading activity of foreign investors, and the upcoming quarterly earnings from domestic firms are the major triggers that would influence sentiments in the equity market this week, analysts said. In an eventful week ahead, a host of macroeconomic data announcements and global trends would also drive the markets, experts said. "The upcoming week is poised to be eventful on the global front.
'In the short term you keep your return expectations very, very low; in the medium term be prepared to invest and in the long term growth will come and your returns from stocks will be high.'
Hawkish guidance by the US Fed raises concerns it could tie the hands of RBI from trimming rates.
'A 10 to 15 per cent allocation to gold in portfolios reduces risk without compromising on potential returns.'
'Market corrections are a natural part of investing, so it's essential to remain focused on long-term financial goals.'
There is anecdotal evidence that the US economy is really, sharply slowing.
Venus Williams will travel to Germany with the US Fed Cup team for their World Group playoff later this month and could be available for duty if fit, American captain Mary Joe Fernandez said on Tuesday.
The chances of a rate cut in September have risen.
'Consider 40% to 50% in equities, 10% in gold as a hedge, and the remaining 30% to 40% split between multi-asset funds and hybrid funds.'
Top gainers in the Sensex pack included Vedanta, Coal India, ICICI Bank, PowerGrid, HCL Tech and Bajaj Finance, rising up to 2.65 per cent.
Quarterly earnings from corporates, the US Fed interest rate decision and other global trends will be the major driving factors for determining movement in the domestic equity market in a holiday-shortened week ahead, analysts said. Besides, factors like trading activity of foreign investors, global oil benchmark Brent crude and rupee-dollar trend would also influence trading.
Foreign investors have continued selling in the Indian market, pulling out a massive Rs 85,790 crore (around $10.2 billion) from equities this month due to Chinese stimulus measures, attractive stock valuations, and the elevated pricing of domestic equities. October is turning into the worst-ever month in terms of foreign fund outflows. In March 2020, FPIs withdrew Rs 61,973 crore from equities.
After a robust 2023, foreign investors significantly scaled back their investments in Indian equities in 2024, with net inflows amounting to over Rs 5,000 crore, as elevated domestic valuations, coupled with geopolitical uncertainties prompted investors to adopt a more cautious stance. Looking ahead to 2025, FPI flows into Indian equities could see a recovery, supported by a cyclical upswing in corporate earnings, particularly in domestic-oriented sectors like capital goods, manufacturing, and infrastructure, Vinit Bolinjkar, head of research, Ventura Securities, said.
Fed is still concerned about weak export growth.
After depreciating 0.32 per cent against the dollar in October so far, the rupee is expected to hold ground against the greenback in the current quarter on the back of robust inflows. According to the median of a Business Standard poll of 10 respondents, the rupee is seen trading around 84 per dollar till the end of December. "In India's case, at least the bond and cash related inflows will continue.
The US Federal Reserve late on Tuesday slashed its lending rate from 1 per cent to zero to 0.25 per cent.
Tata Sons will likely choose Singapore as a "key partner" for its semiconductor plans, a senior minister from the city-state said on Friday. Speaking to reporters after a meeting with Tata Sons chairman N Chandrasekaran earlier in the day, Singapore's minister for home affairs and law K Shanmugam said semiconductors was a "big discussion" point during the meeting. "If they (Tatas) want to, they can do business with anybody in the world.
Among the Sensex firms, Titan, Asian Paints, ITC, Hindustan Unilever, Nestle India, Bajaj Finserv and Bharti Airtel were among the gainers. In contrast, UltraTech Cement, Tech Mahindra, Tata Steel, Power Grid, HDFC Bank, HCL Technology, State Bank of India and ICICI Bank were the laggards.
Further tapering by the US Fed led to a sell-off in emerging markets on concerns of slowdown in foreign fund inflows
Stock markets would take cues from the biggest event of the week -- the US Fed interest rate decision, besides tracking the trends in global markets and trading activity of foreign investors, analysts said. Last week, a heavy decline in smallcap, midcap firms, foreign fund outflows and elevated crude oil prices in the international market dented investors' sentiments. Experts said equity markets may remain volatile in the near-term amid a host of global central bank's monetary policy decisions lined up during the week.
If the central banks act harshly now, the markets will crash and then rally. If they are hesitant, the pain will be prolonged, predicts Debashis Basu.
From the Sensex pack, Tata Motors, NTPC, Bajaj Finserv, Power Grid Corp, Titan, Asian Paints, IndusInd Bank, Maruti Suzuki India and Tata Steel were among the biggest gainers. Sun Pharmaceuticals, ITC, Hindustan Unilever, Bharti Airtel, UltraTech Cement and Reliance Industries were among the laggards.
Markets ended lower on Tuesday, snapping a two-day winning streak, as investors turned cautious and booked profit in financials.
The Reserve Bank of India (RBI) abstained from selling any US dollars throughout February, for the first time in nine months. The decision comes amid increasing pressure on the rupee, as expectations of rate cuts by the US Federal Reserve keep pushing back. The last time the RBI did not sell dollar over a month was in May 2023.
The RBI under former governor Shaktikanta Das resisted pressures to cut interest rates through 2024 as it kept its 'Arjuna's eye' trained on inflation, but the central bank under a new detail-oriented head will soon have to take a call if it can continue sacrificing growth. Das, a career bureaucrat who in 2016 oversaw Prime Minister Narendra Modi's highly disruptive demonetisation move, left a lasting legacy as he demitted office towards the end of 2024 after expertly navigating monetary policy for six years, the highlight of which was steering India's recovery through the pandemic.
