The move, which could come as a surprise to many investors, was a nod to better prospects for economy and labor market
Foreign banks and private credit funds are queuing up to fund acquisitions by Indian companies who are buying out their local rivals. The Adani Group, Torrent Group, and the Hindujas have approached several foreign banks and private equity (PE) firms to fund their acquisitions. Global investors have about $2 trillion of funds to invest, and about $100 to $150 billion is set aside for India, according to an estimate by JP Morgan.
The US Federal Reserve rate cut on Wednesday, the 13th after May 16, 2000 may prove to be a boon to Indian depositary receipts.
The ongoing second quarter earnings, movement of oil benchmark Brent crude and the uncertainty in the Middle East would dictate terms in the domestic markets this week, analysts said. Furthermore, the activities of Foreign Institutional Investors (FIIs) will also influence trading in the markets. "A slew of earnings reports from heavyweights expected this week will significantly impact market direction.
The surge is a stark turnaround from 2013 when the country's current account gap hit a record high due to outflows on expectations the US Fed would rein in its stimulus programme
The world's largest economy, which is witnessing slow expansion, is also grappling with high unemployment levels. "Reports from the 12 Federal Reserve districts suggest that economic activity continued to expand moderately from November through December," Fed's latest Beige Book said.
The nomination would put Yellen on course to be the first woman to lead the institution.
The US Federal Reserve has earned a whopping $14 billion profit on loan programmes made in the last two years, says a media report.
Crucially, the US central bank softened the blow by making its forward guidance even more dovish.
Federal Reserve chairman Ben Bernanke touched off the biggest one-day rally in US stocks this month by hinting that the Central Bank is almost done with raising interest rates. The indices had their biggest rise since June 29.
Strong currency and sagging oil prices are spooking policymakers.
The new Samvat 2080 is viewed as a year of hope for industrial and precious metals. A key reason is the expectation of US interest rates peaking, followed by a reduction in the coming months. Regarding crude oil, its trajectory depends more on how the situation unfolds in West Asia.
Weaker-than-expected growth in US jobs in recent months had already forced US central bankers to put off a rate hike at their meeting last week
With US Fed increasing interest rates to 3%, equity money flows into emerging markets like India could be impacted in the medium term.
Equity benchmarks Sensex and Nifty faced heavy drubbing on Thursday, falling over 1 per cent each, in tandem with weak global markets following the US Federal Reserve's interest rate hike and its hawkish stance. The 30-share BSE Sensex tanked 878.88 points or 1.40 per cent to settle at 61,799.03. During the day, it tumbled 962.3 points or 1.53 per cent to 61,715.61.
Gold is up 0.8 per cent for the week, after hitting a near-two-week high earlier in the week.
This was the weakest endorsement ever extended to a chairman in the central bank's 96-year history.
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.
In the United States, economic data is likely to take a back seat next week.
The world economy has been run for too long by finance enthusiasts. It is time that finance sceptics began to take over.
Wall Street-correlated stock markets are facing the risk of correction, as Christopher Wood, the global head of equity strategy at Jefferies, conveys to investors in his latest edition of GREED & fear. Rising crude oil prices, which are nearing $100 a barrel (Brent), pose a threat to the global central bank's battle against inflation and have led to a re-evaluation of its exposure to Indian stocks. "The potential for more US Federal Reserve (Fed) rate hikes, combined with the risk that monetary tightening finally bites as regards the economy, remains a risk for Wall Street-correlated world stock markets. "There is also the oil factor. This is why GREED & fear continues to believe the pain trade is down. "Areas in Asia, such as Indian midcaps, which have already done very well, are at obvious risk of some profit-taking," writes Wood.
Foreign Portfolio Investors' (FPIs) selling spree continues as they pulled out over Rs 3,400 crore from the Indian equity markets in the first three trading sessions of November on rising interest rates and geopolitical tensions in the Middle East. This came after such investors withdrew Rs 24,548 crore in October and Rs 14,767 crore in September, data with the depositories showed. Before the outflow, FPIs were incessantly buying Indian equities in the last six months from March to August and brought in Rs 1.74 lakh crore during the period.
Iyer is a player who primarily plays with hands with not much pronounced footwork.
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.
The rupee is expected to become more jittery and choppy in the near-term
Index heavyweights Reliance Industries and ITC were the top losers along with ICICI Bank and SBI
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.
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.
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.
There are already some signs of stress in this market.
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.
Rupee ends flat against dollar ahead of Fed policy outcome.
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.
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 challenge for the RBI in 2024 is likely to be less about containing elevated inflation and more about curbing excessive financial market exuberance and a 'problem of plenty', notes Sajjid Chinoy, Chief India Economist JP Morgan.
'Historically, the markets tend to perform well during election years as governments aim to increase spending and call attention to growth.'
Titan, IndusInd Bank, Axis Bank, State Bank of India, Power Grid, NTPC and Tata Motors were among the among the major gainers. Mahindra & Mahindra, Larsen & Toubro, Nestle, JSW Steel, Infosys and Tata Consultancy Services, Tech Mahindra and Maruti were the major laggards.
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