On one hand, the RBI will have to initiate measures to contain inflow of foreign capital -- which is expected to increase as an after effect of the Fed rate cut, on the other it will need to ensure that such inflows do not fuel inflationary pressures.
Information technology (IT) companies have been on the road to revival in the past one year. From being the worst-hit sector in 2022 with a loss of 26 per cent, the Nifty IT index closed 2023 with gains of 24 per cent. So far in 2024, the index is up around 7 per cent against the nearly flat Nifty 50 benchmark index. The IT index has been on a continuous decline in the last three sessions.
Both candidates have shifted from their traditional constituencies - Sadhotra from Marh and Sharma from Akhnoor - after these two segments were reserved for Scheduled Castes.
The deficit data was the latest in a run of positive signs for the sluggish domestic economy and could put India in a better position should the Fed start tapering, than in the summer when the rupee hit a record low.
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.
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.
Index heavyweights Reliance Industries and ITC were the top losers along with ICICI Bank and SBI
The rupee is expected to become more jittery and choppy in the near-term
Federal Reserve Chair Janet Yellen on Wednesday pointed to a possible December interest rate "liftoff" but said rates would rise only slowly from then on to nurture the U.S. economic recovery.
Domestic macroeconomic data announcements, global trends and trading activity of foreign investors would guide market sentiments this week, analysts said. After a record rally, markets may face volatile trends this week amid elevated valuations and investors would also keep a track of global oil benchmark Brent crude and rupee-dollar movement for further cues. "Potential volatility in the stock market is anticipated this week. Elevated valuations remain a concern, with investors now focusing on monsoon progress and its impact on the rural economy.
In a complaint to the Karnataka Chief Electoral Officer, the Congress mentioned about a video uploaded on social media platform 'X' by the official account of Karnataka State Bharatiya Janata Party @bjp4karnataka which is operated by Amit Malviya, the head of IT cell on instructions of J P Nadda, BJP national president, B Y Vijayendra, BJP state president and social media in charge- Karnataka BJP on May 4 at 5.34 pm.
Reserve Bank of India (RBI) is unlikely to cut the benchmark interest rate at its upcoming monetary policy review meeting, taking place soon after the announcement of the Lok Sabha election results, amid inflation challenges, said experts. The Monetary Policy Committee (MPC) may also refrain from rate cut as economic growth is picking up, notwithstanding the elevated interest rate of 6.5 per cent (repo) prevailing since February 2023. The meeting of the Reserve Bank Governor Shaktikanta Das headed MPC is scheduled for June 5 to 7.
There are already some signs of stress in this market.
Rupee ends flat against dollar ahead of Fed policy outcome.
Month-end dollar demand from oil companies mainly affected the rupee value against the US currency, a forex dealer said.
64% of 800 investors polled think it will start this week but weak US data suggest it might not be aggressive.
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.
'We are confident that over the next few years the government will strike a fine balance between populist measures and growth, and manage coalition partners well.'
Some investors had speculated that the US central bank might put its plans on hold given the jitters overseas.
Analyst are cautious about the performance of IT services sector from January to March quarter (Q4) of FY24 and the first half (H1) of FY25. While the Bloomberg consensus on revenue implies the market is expecting 2-3 per cent growth on a quarter-on-quarter (Q-o-Q) basis for the IT majors through FY25, the H1FY25 is likely to see even flatter returns, and Q4FY24 is likely to be poor. There is likely to be some recovery in the second half (H2FY25) but even so, there's a chance that the market will be overall disappointed.
It is surprising that central bankers around the world have cautioned the US Federal Reserve against raising rates.
Among the Sensex firms, Tech Mahindra, HCL Technologies, Wipro, Infosys, Bajaj Finance, Tata Consultancy Services, Bajaj Finserv and ICICI Bank were the major gainers. Power Grid, Nestle, Asian Paints and Hindustan Unilever were among the laggards.
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
It wants to wait for more evidence of solid economic growth before making any changes.
India builds up record FX after Fed hints rate hike in future.
Defending champions India beat Korea 3-1 to register their fourth consecutive win at the Hero Asian Champions Trophy.
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.
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.
The Indian financial system is driven more by the domestic factors and "Fed rate cut is one of the triggers to review rates ", said Union Bank Bank of India chairman M V Nair.
At the same time, however, officials at the central bank lowered their projections for the long-run target interest rate, evidence of slightly diminished expectations for a nation climbing out of a severe crisis and struggling with demographic headwinds like declining labor force participation.
Among the Sensex firms, Asian Paints, Tata Steel, HCL Technologies, Nestle, Maruti, JSW Steel, NTPC and Larsen & Toubro were the major laggards. Sun Pharma, Bajaj Finserv, Reliance Industries, State Bank of India and Bharti Airtel were the gainers.
The 30-share Sensex closed down 114 points at 28,622 and the 50-share Nifty ended down 37 points at 8,686.
Dollar's strength and falling crude oil prices force downward revision of 2015 growth forecast.
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.
Rate-sensitive sectors like banks, auto and realty witnessed strong buying demand in trades today
Market breadth continued to remain strong, with 1899 gainers and 674 losers on the BSEs.
In the Sensex pack, 20 stocks ended in the red while 37 of the Nifty constituents closed the session with losses. NTPC was the biggest loser among the Sensex constituents, ending with a loss of 2.71 per cent.
Gold prices tumbled by Rs 3,350 to Rs 72,300 per 10 grams in the local market in New Delhi on Tuesday amid subdued demand by jewellers after the government announced the customs duty cut on the yellow metal and silver to 6 per cent.
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.
