At present, the repo rate acts as the policy rate when liquidity is in deficit mode while reverse repo becomes the operating rate when there liquidity is surplus.
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.
Global trends, trading activity of foreign investors and movement of oil benchmark Brent crude would dictate terms in the domestic markets this week, analysts said. Equity markets, which fell nearly 3 per cent last week, may face volatile trends amid the monthly derivatives expiry on Thursday. "This week marks the September month Futures and Options (F&O) expiry, which is expected to bring about volatility in the market," said Santosh Meena, Head of Research, Swastika Investmart Ltd.
The Indian stock markets' buoyant reaction to US Fed's decision to halt the interest rate hikes seems to reflect the growing clout of FIIs on the domestic bourses, which were falling like ninepins not long time back.\n
Investors still seem to have a disinflation bias to their thinking.
From the Sensex pack, Infosys, HCL Technologies, Infosys, NTPC, Mahindra & Mahindra, Tata Consultancy Services, Nestle, Tech Mahindra and Bajaj Finance were the major gainers. Power Grid, Larsen & Toubro, Maruti, Titan, HDFC Bank, Wipro, HDFC and ITC were among the laggards.
The US Federal Reserve's interest rate decision, global cues, macroeconomic data announcements and the ongoing quarterly earnings are the major triggers that will dictate trends in stock markets this week, analysts said. Besides, the trading activity of foreign investors and the movement of global oil benchmark Brent crude will also be tracked. "All eyes are on the outcome of the US Federal Reserve meeting scheduled for November 1, particularly due to the multi-year high levels of the US bond yields.
'If there is any reason to change my holding in Adani group stocks, the Hindenburg report on the group is not the one.'
In the offshore non-deliverable forwards, the one-month contract was at 61.56/66, while the three-month contract was at 62.16/26.
After a stellar run in 2021 that saw the S&P BSE Sensex and the Nifty50 clock gains of 20 per cent and 22 per cent respectively, global equity markets, including India, are gearing up to welcome 2022 on a cautious note. For one, new variants of the Covid -19 infection that make current vaccines less effective is one of the key risks worth flagging, analysts said. Inflation was also a risk for this asset class in 2021, although most market participants expect that the current elevated inflation levels will be transitory.
Expect heightened volatility and stress to hit the markets. Caution may be the need of the hour, alerts Akash Prakash.
The Fed's decision on tapering its monthly $85 billion bond-buying programme is expected later on Wednesday.
Markets end higher ahead of Fed outcome, China stimulus
In a memorable year for the equity market, Dalal Street investors added a whopping Rs 81.90 lakh crore to their wealth in 2023 as a raft of positive factors powered a stellar rally in stocks. Experts said India's strong macroeconomic fundamentals, political stability owing to the BJP's success in recent elections in three significant states, optimistic corporate earnings outlook, signals from the US Federal Reserve about three prospective rate cuts next year and heavy retail investors participation played a major role in fuelling the stock market rally in 2023. In the year 2023, the 30-share BSE Sensex jumped 11,399.52 points or 18.73 per cent.
Indian government bonds, particularly those of shorter maturity, strengthened sharply on Monday, as the collapse of the California-based Silicon Valley Bank (SVB) prompted investors to rush to the safety of American debt, leading to a decline in US bond yields.
The majority in the markets believe that a September lift-off is likely.
Among the Sensex firms, Larsen & Toubro, UltraTech Cement, JSW Steel, Titan, Bajaj Finance, Wipro, Tech Mahindra and Nestle were the major laggards. Maruti, Power Grid, Axis Bank, State Bank of India, NTPC, HDFC Bank, ITC and IndusInd Bank were the gainers.
A gradual increase works best for the US, as well as global markets, says Nizam Idris managing director, head of strategy (fixed income and currencies), Macquarie Bank.
The Reserve Bank is likely to maintain status-quo on the key interest rates for the third time in a row in its upcoming bi-monthly policy review despite the US Federal Reserve and the European Central Bank hiking benchmark rates, as domestic inflation is within the RBI's comfort zone, say experts. The borrowing cost which started rising in May last year has stabilised with RBI keeping the repo rate unchanged at 6.5 per cent since February when it was raised from 6.25 per cent. In the previous two bi-monthly policy reviews in April and June the benchmark rate was retained.
'It makes sense to have gold in one's portfolio keeping the political and economic risks of 2024 in mind.'
The Karnataka high court has said abusive words used against the prime minister was derogatory and irresponsible but it does not constitute sedition, while quashing a case of sedition against a school management.
Market participants attribute the stability to the Reserve Bank of India's timely intervention in the foreign exchange market, both in terms of selling and buying dollars.
The US Fed will decide if it should raise interest rates from near-zero levels first time in a decade.
Elevated food price-led inflation could become a sore point for markets, which they seem to be ignoring at current levels, observe analysts. Retail inflation in India - as measured by the Consumer Price Index (CPI) - came in at a three-month high of 6.52 per cent in January 2023, compared with 5.72 per cent in December and 5.88 per cent in November 2022. The inflation print for February, according to Madan Sabnavis, chief economist at Bank of Baroda, will be critical for the Reserve Bank of India's monetary policy committee.
An escalation in the already simmering tensions between North and South Korea, China and Taiwan, and Russia and Ukraine could prove to be a bigger worry for the markets over the next few months rather than central bank policy action, said analysts. The markets, they said, are still not fully factoring in this possibility. "The conflict between Iran and Saudi Arabia is another geopolitical worry.
The 30-share Sensex closed down 114 points at 28,622 and the 50-share Nifty ended down 37 points at 8,686.
Summers dogged by controversies over past views
Tennis players Sanaa Bhambri and Rushmi Chakravarthi feel only Indian citizens deserve to hold the tri-colour in international sporting events, an opportunity that has been denied to them by foreign passport holders of Indian origin in the past. The duo got a place in the Fed Cup team at the expense of Sunitha Rao and Shikha Uberoi -- both US citizens -- who were rendered ineligible for selection due to the new government policy.
It is by now quite clear that in all likelihood the US Federal Reserve will hike interest rates in its next meeting in mid-December.
'Yet the market didn't do all that badly because it was cushioned by domestic inflows.'
The markets, at this point, have rallied on the view that the Fed will not budge from the zero-bound as long as inflation remains subdued
The US Federal Reserve on Wednesday surprised the markets by saying it will continue with its monthly $85-billion bond buying programme and wait for more evidence of growth recovery.
Though the Reserve Bank would want to keep excess liquidity under check to contain inflation, it may still go for a CRR cut to enable banks lower interest rates in order to spur growth through increased credit offtake.
Bond markets, global as well as domestic, are likely headed towards hard times over the next three to six months, as higher vegetable prices, rising fuel costs, and improved wages may keep inflation hot, believe analysts, who expect the yields to hit 7.5 per cent in the near-term from the current 7.234 per cent. In this backdrop, they suggest investors can put in money in funds/instruments with residual maturity of 4 to 6 years, while longer-term investors can allocate cautiously to the longer end in the range beyond 7 years.
The US Federal Reserve, on Wednesday, announced a 0.25 per cent cut in benchmark interest rate, which is expected to increase capital flow from foreign institutional investors in the Indian stock market.
The year 2015 may well turn out to be a watershed in global macroeconomic adjustment.
There are already some signs of stress in this market.
Investors have turned cautious ahead of the policy meetings of central banks in Japan and the US
The Reserve Bank's rate-setting panel will start its 3-day deliberations on Wednesday amid expectations of yet another rate hike of 50 basis points to check high inflation, in line with similar actions taken by other major central banks, including the US Fed. Based on the recommendations of the Monetary Policy Committee (MPC), the RBI had effected 50 basis points increase in repo rate each in June and August after raising the short-term lending rate by 40 basis points in an off-cycle decision in May. The MPC, headed by RBI Governor Shaktikanta Das, is scheduled to meet during September 28-30.
An aggressive rate hike by the US Fed and the possibility of a recession can trigger a slide in these stocks, which will be a good opportunity to buy from a long-term perspective.
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