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.
India builds up record FX after Fed hints rate hike in future.
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.
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
Dollar's strength and falling crude oil prices force downward revision of 2015 growth forecast.
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.
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.
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.
Rate-sensitive sectors like banks, auto and realty witnessed strong buying demand in trades today
The 30-share Sensex closed down 114 points at 28,622 and the 50-share Nifty ended down 37 points at 8,686.
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.
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.
Market breadth continued to remain strong, with 1899 gainers and 674 losers on the BSEs.
Iyer is a player who primarily plays with hands with not much pronounced footwork.
In a speech to the National Economists Club that echoed dovish comments by his nominated successor, Janet Yellen, Bernanke also said that while the economy had made significant progress, it was still far from where officials wanted it to be.
The next policy meeting will be in mid-June, when the panel will be joined by Stanley Fischer, the former Bank of Israel governor whose nomination to the Fed's board was confirmed on Wednesday by the US Senate.
The Fed's decision on tapering its monthly $85 billion bond-buying programme is expected later on Wednesday.
Global liquidity expected to continue amid ECB stimulus
The Indian equity market is likely to remain under pressure and rangebound over the next few months. This comes as global central banks, led by the US Federal Reserve look at a possibility of hiking rates aggressively to tame inflation. Back home, the Reserve Bank of India, too, remains data dependent in its endeavour to keep inflation in check and pursue an aggressive monetary policy stance.
The chances of a rate cut in September have risen.
PowerGrid was the top laggard in the Sensex pack, shedding around 2 per cent, followed by IndusInd Bank, Reliance, L&T, UltraTech Cement and Bajaj Finance.
.jpg)
The partially convertible rupee closed at 63.37/38 per dollar compared with 62.83/84 on Monday. The unit dropped 0.85 per cent on the day, its biggest single-day fall in two weeks.
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.
The majority in the markets believe that a September lift-off is likely.
Even if the central bank doesn't pull the trigger later, it is still expected to by the end of the year.
Trading in the domestic stock market would be influenced by trends in the global equities, macroeconomic data and foreign fund movement in a holiday-shortened week, analysts said. Markets may face volatile trends on Monday after Federal Reserve Chair Jerome Powell's speech at the Fed's annual economic symposium in Jackson Hole on Friday.
The Indian rupee is expected to trade between 80 and 84 against dollar in the first three months of 2023 with support from overseas inflows though worsening current account deficit (CAD) and reduced interest rate differential between the US and India pose challenges. According to a Business Standard Poll of 10 participants, most said the rupee could gain strength in January due to foreign inflows, and the Reserve Bank of India (RBI) is not expected to allow the currency to depreciate ahead of the Union Budget scheduled on February 1. The rupee depreciated 10.15 per cent in 2022, its worst performance since 2013 as the war in Europe and the interest rate increase by the US Federal Reserve prompted investors to flee emerging markets.
The recession-hit US economy has been witnessing signs of revival in recent months especially with the rate of economic contraction slowing down.
'If there is any reason to change my holding in Adani group stocks, the Hindenburg report on the group is not the one.'
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.
Summers dogged by controversies over past views
The Fed has prepared the world very well for a rate hike. In fact the market may have priced in a 25 basis points increase. So if the increase is 50 basis points, the reaction could be stunning, but a 25 basis points rise is not likely to have any great impact, says P V Subramanyam.
'Historically, the markets tend to perform well during election years as governments aim to increase spending and call attention to growth.'
The Sensex finished above the psychologically key 60,000-mark while the Nifty surged past the 18,000-level on Monday on across-the-board buying amid a mixed trend overseas. A depreciating rupee and concerns over the US Federal Reserve hiking rates later this week failed to quell investors' appetite for stocks, traders said. The 30-share BSE Sensex rallied 786.74 points or 1.31 per cent to settle at 60,746.59.
There will very little direct impact from the US Fed's rate hike this time, as we are well prepared both to handle liquidity, outflow of FII funds and managing our currency. But that doesn't mean India will be out of the woods anytime soon, says M V Subramanian.
The US Federal Reserve has raised its benchmark interest rate by 0.25 per cent, only the second increase in a decade.
Online travel portals are flooded with flight and train bookings, hotels teeming with requests for accommodation, and spiritual merchandise on e-commerce platforms is selling like hotcakes. As the consecration ceremony of Ram Mandir in Ayodhya on January 22 draws near, Indians across the country are putting their travelling boots on as the temple frenzy catches on. India's largest travel technology (traveltech) platform MakeMyTrip (MMT) has witnessed a substantial four-fold increase in bookings for Ayodhya compared to the previous year.
'India is an equity market with a breadth and depth of companies to invest in.'
Equity markets this week will be largely guided by trends in global stocks, foreign funds' trading activity and progress of monsoon, analysts said. Investors will also track the movement of rupee against the US dollar and crude oil prices. Benchmark indices Sensex and Nifty closed at fresh lifetime highs on Friday.
© 2026 Rediff.com - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances