'There is no change in the overall story of economic recovery.'
Thus far in 2017-18, FIIs and MFs have invested Rs 198.91 billion and Rs 1,119.49 billion in the Indian equity markets. Of this, around Rs 152.46 billion has come in January alone.
Rupee, bonds may see knee-jerk reaction, as Urjit Patel is considered an inflation warrior
It can be noted that the rupee lost nearly 7 per cent since the beginning of May as FIIs have pulled out nearly $4 billion from the domestic debt, as bond yields fell on expectation of RBI cutting rates on Monday.
Post the correction over the past one year, we are seeing opportunities across sectors.
Also keenly watching inflation numbers, with wholesale inflation data expected today
The large current account deficit and the growing vulnerability on the external front have largely contributed towards the secular decline and the current volatility of the rupee.
It was a roller-coaster week for the markets, amid talk of a fiscal stimulus by the government. Saurabh Mukherjea, chief executive officer, and Prashant Mittal, strategist, at Ambit Capital tell Puneet Wadhwa the recent flows into equity mutual funds are largely speculative in nature and pose a risk of reversal.
Most investors find it very hard to understand when markets have over-extended themselves and look for data points to understand when a correction is due.
When big offers hit the market, broader indices corrected 2-4%
Investors not stop their SIPs or STPs due to election-related uncertainty.
The year 2014 has been one of the best for investors in the equity markets.
India's rupee is likely to remain under pressure due to high prices of crude oil and other commodities, and may stabilise at around 79-80 against the US dollar in the near term, say experts amid limited headroom available with the Reserve Bank to check the weakening of the domestic currency. The currency has slumped over 5 per cent this year after Russia's invasion of Ukraine sent international crude oil prices soaring to a decade high. On Monday, rupee ended at a fresh all-time low of 78.34 (provisional) against the US dollar.
Between now and the general elections (likely in May 2019) there are 12 assembly polls, which analysts say, in a way will also be interpreted as a referendum on the Modi-led government's key reforms
The rupee's fall against the dollar is bad news for companies which have increased their exposure to foreign currency loans in recent years.
Year 2017 will be a benign year for FII flows into India feels Akash Singhania, deputy chief investment officer, DHFL Pramerica Asset Managers.
The Indian government and RBI must keep foreign equity investors happy and avoid crushing growth expectations, notes Akash Prakash.
The broader markets were marginally higher with mid-caps and small-caps gaining 0.1-0.4 per cent on the BSE.
The RBI's policy decision would be the major event driving trading sentiment in the equity market this week, while global cues, foreign funds movement and crude oil prices will be the other key factors to watch out for, analysts said. Markets have been witnessing a rebound recently. However, the move lacks decisiveness amid lingering challenges like global policy tightening due to soaring inflation and geopolitical tensions, they added. "RBI policy, global macro numbers and crude oil prices will set the trend for this week.
The Indian diaspora remain bullish despite single-digit equity market returns since May 2014, says Pavan Burugula.
The rupee may also gain against the euro but be prepared for a snapback in the euro as Greece resolves.
'Overall, the Indian economy is doing well.' 'Our economic fundamentals are strong and the early signs of recovery are sustainable.' 'This is positive for the market in the long run.'
'India is still a cash economy.' 'For a common household, almost everything from grocery to maid services is paid in cash.' 'The demonetised notes account for 85 per cent of the currency in circulation.' 'Until fresh notes flow back into the economy, day-to-day transactions ordinarily done in cash will be impacted.'
The Bank Nifty is likely to be a bellwether.
Experts say the BSE Sensex could rise to around 32,000 in a year.
'In the short term, we may see some disruptions due to Covid, but in the medium-to-long term, we should keep an eye on US inflation and 10-year bond yields.'
Chances of a sudden collapse in the Shanghai Composite are remote.
The sector faces many challenges and calls for prompt corrective action.
The Nifty's put-call ratios are very bearish.
Even US equities are now back to end-2014 levels.
Higher growth, reform bets have boosted returns but leave limited room for error.
'Swachh Bharat Cess imposed last year should be made broad-based.' 'Budget should be predominantly economy/ business-oriented and problem-solving rather than political consideration-based.'
It is high time to manoeuvre the rupee more effectively and predictably, even as it has to be recognised that such tweaking of the rupee needs to be accompanied by reforms to the real sector and factor markets.
While information technology companies will benefit, firms with high foreign borrowings or heavy dependence on imports will be hurt.
An expected withdrawal of FIIs from the market likely to weaken the rupee against the dollar.
The second half of June could be driven more or less by technical factors triggered by news flow from Greece, the US Federal Reserve and the monsoon. The technical picture seems bearish as of now, says Devangshu Datta.
Slow pace of reforms in India is disappointing: Faber
Premium valuations and lack of big triggers will weigh on Indian equity markets in the near term, believes Mahesh Nandurkar, India Strategist, CLSA.
Cairn, which is sitting on a cash pile of about $3 billion, in a statement said its board has approved buying 17.09 crore shares or 8.9 per cent of the total shareholding, from open market at no more than Rs 335 apiece.
Concluding the three-part series, Paranjoy Guha Thakurta says that the black money law is likely to fail because of the ineptness of India's investigative and enforcement agencies.
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