Traders are now focussed on the upcoming November trade data, due sometime this week, for near-term direction, with consumer inflation data due out on Thursday, which will help set expectations ahead of the Reserve Bank of India's policy review on December 18.
Reserve Bank Governor Shaktikanta Das on Thursday said the central bank's asset purchases, aimed at mitigating COVID-19-related liquidity stress in the system, did not dilute its balance sheet or compromise on core principles of central banking. In the wake of the pandemic, the RBI undertook several conventional and unconventional measures. "Unlike many central banks, the RBI's asset purchases did not dilute its balance sheet and hence, did not compromise on core principles of central banking," Das said while addressing an event organised by the Bombay Chamber of Commerce. These purchases were confined to risk-free sovereign (government) bonds including state government securities only, he said.
Deadline to submit convincing reform plans is this week.
The sell-off was probably aggravated by computer-driven traders
He was referring to the issue of Indians allegedly stashing unaccounted money in Swiss banks.
The 30-share Sensex ended down 245 points at 28,799 and the 50-share Nifty closed down 81 points at 8,750
The International Monetary Fund (IMF) on Tuesday slashed India's growth forecast for 2022-23 (FY23) by 80 basis points to 7.4 per cent, citing less favourable external conditions and rapid policy tightening by the central bank. In its update to the April World Economic Outlook, the IMF said that though a global recession in 2022 was ruled out with a growth estimate of 3.2 per cent, the balance of risks was squarely to the downside, driven by a wide range of factors that could adversely affect the global economic performance. "The risk of recession is particularly prominent in 2023, when in several economies growth is expected to bottom out, household savings accumulated during the pandemic will have declined, and even small shocks could cause economies to stall.
The broader NSE Nifty dropped by 48.65 points, or 0.45 per cent to 10,808.05 after shuttling between 10,773.55 and 10,833.70.
Enthused by the upbeat mood visible about India at the World Economic Forum in Davos, eminent banker Uday Kotak said investors now want to see some real action on the ground.
The result of the opinion polls would allow the government to move ahead quickly to reach a deal with creditors
'The financial sector will be hit even harder than the overall market.' 'The banking sector will eventually be rescued.' 'But it may go into a long downwards spiral before things turn around.' 'Threat or buying opportunity?' asks Devangshu Datta.
On February 22, 2013, the Reserve Bank of India issued guidelines on 'Licensing of New Banks in the Private Sector'.
Foreign ministers of G20 major economies will meet in the national capital on March 1 and 2 to deliberate on pressing global challenges amid escalating confrontation between Russia and the West over the Ukraine conflict that entered the second year this week.
The ruble has recouped most of its losses and become the top-performing currency globally. It continues to gain and is up 60 per cent against the US dollar from its lows in the first week of March. The ruble appreciated to 83 to the dollar intraday on Tuesday against a record low of 139 on March 7.
Some say the MPC will raise the rate, while others are of the view that there is already de facto interest rate tightening through rising bond yields, which might prompt the central bank to go for a pause.
Participants are keenly waiting for the January IIP.
The rupee ended at 59.18 compared with previous close of 59.33 to the dollar.
'It is less dependent on imported capital.'
The rupee resumed marginally lower at 67.24 per dollar against Wednesday's closing level of 67.21.
The 50-issue NSE Nifty in range-bound movements settled higher by 59.15 points, or 0.58 per cent, at 10,252.10.
In dollar terms, the Indian markets managed to climb back to 2008 levels only in January this year. The subsequent fall in the rupee because of emerging market woes has once again pushed the markets below their 2008 level in dollar terms.
Hopes of revival and earnings growth in 2020, surprise tax cuts, and robust foreign flows - thanks to easy global monetary policies - are a few reasons why the markets have managed to digest the low GDP footprint. Select bluechips such as Reliance Industries, Bajaj Finance, Asian Paints, and ICICI Bank have gained sharply this year. On the other hand, YES Bank, Zee Entertainment, and Indiabulls Housing have seen a sharp fall.
'We continue to believe that the global economy will narrowly avoid a recession, despite expecting the US, Canada, and most of Europe to fall into recession at some point over the next year or so.'
Closing banks and restricting the flow of capital can build pressure for a solution as finances get squeezed.
Side indices raced ahead with BSE Midcap and BSE Smallcap advancing 0.4% and 0.3% up, respectively.
A crucial meet of the Reserve Bank's central board is underway amid a rift between the central bank and the government over future course of policies. Expectations of a positive outcome boosted market mood after the meeting began.
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In the offshore non-deliverable forwards, the one-month contract was at 61.58, while the three-month contract was at 62.18.
A fresh demand for the US currency from importers weighed on rupee.
The 30-share Sensex lost 54 points at end at 27,086 and 50-share Nifty shed 19 points to close at 8,096.
Money parked by Indians in Swiss banks rose over 50 per cent to CHF 1.01 billion (Rs 7,000 crore) in 2017, reversing a three-year downward trend amid India's clampdown on suspected black money stashed there.
'Higher than expected inflation in the US or the European Union, faster than expected tightening by the major central banks, break out of a war in Europe, and withdrawal of portfolio equities from the emerging markets are factors which can result in equity market corrections.'
The Indian unit opened sharply higher at 64.80 as against Wednesday's closing level of 65.12.
Political risk culminating from elections in the US and Latin America, and evolving right-wing populism in Europe could lead to substantial volatility, say Abheek Barua & Tushar Arora.
Will Greece manage to pay euro 1.5 billion to IMF?
Many analysts over the past week have said the RBI has legroom to cut rates to the tune of 65 bps by June and some like Barclays and BofA have also spoken about the likelihood of an inter-meeting cut.
Tech Mahindra was the top gainer in the Sensex pack, jumping over 5 per cent, followed by Bajaj Finance, Bharti Airtel, Bajaj Finserv, L&T, Tata Steel and Infosys. NSE Nifty surged 191.95 points to 15,824.05.
In the national capital, gold of 99.9 and 99.5 per cent purity were up by Rs 150 each to Rs 28,500 and Rs 28,300 per 10 gram respectively.
Besides, a higher opening in the domestic equity market and strengthening of the euro against the dollar overseas supported the local currency, forex dealers said.
The Indian stock market had rallied through the first fortnight of October but it gave back the bulk of its gains in the second half.
'Sectors that had been left out till now will also start participating in the rally.'
