In August, the Fed announced that it would develop a "new interbank 24x7x365 RTGS with integrated clearing functionality to support faster payments in the United States". The Fed Board asked for comments on FedNow by November. In reply to this, Google mentioned its experience of launching Google Pay -- Google's payments app which uses the UPI -- in India.
A potential early wind-down of the US stimulus programme and a shrink in China's factory activity pulled down markets.
The economists, polled by industry body Federation of Indian Chambers of Commerce and Industry, said the RBI may raise the cash reserve ratio, which is a portion of deposits that banks keep in cash with the central bank, by 50 basis points to 5.5 per cent, although this would have no impact on containing inflation.
The Reserve Bank in its first mid-quarter policy review on Monday kept the key interest rates unchanged because of elevated food inflation, rupee depreciation and uncertainty over foreign fund inflows.
Aggressive rate hikes by the US Federal Reserve could result in a flight of capital from emerging markets like India, says B Gopkumar, chief executive officer, Reliance Securities.
The 30-share Sensex closed 80 points lower at 21,753 levels while the 50-unit NSE Nifty index was down 38 points at 6486 levels. Benchmarks plunged to their lowest levels since March 06, 2014.
US Federal Reserve Chairper Janet Yellen hinted at raising interest rates sooner than expected, in her first press conference after assuming the top job at US central bank.
In the broader markets, BSE Midcap index slipped 0.3% whereas the BSE Smallcap index inched up by 0.2%
The partially convertible rupee closed at 61.77/78 per dollar compared to its close of 63.38/39 on Wednesday.
Banks such as IndusInd Bank, Federal Bank, DCB Bank and Axis Bank which have renewed their focus on secured loans may be, hence, walking on a tightrope.
'The Fed rate will peak in the range of 5.1-5.3 per cent during the second quarter of CY23 and will most likely stay there for a while before rate cuts start in CY24.'
The reason for the stickiness in bond yields can be many, but the most responsible is the liquidity deficit stance taken by RBI, says Anup Roy.
A day after BRICS (Brazil, Russia, India, China and South Africa) nations agreed on a $100-billion foreign currency reserve pool to tackle the volatile foreign exchange markets, India on Friday said the pool would act as a buffer arrangement, adding it might not withdraw anything from this reserve.
The rupee had revisited the near 2-month low of 60.55 per dollar earlier in the session.
Bankers say loan demand was more muted this festival season than last year.
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The Indian rupee touched record low of 65.52/dollar on Thursday and is down 16 per cent so far this year despite efforts by policymakers to prop it up.
'Rate cut should reiterate RBI's commitment in providing confidence to consumers and small business.'
Unlike in the past, when old private banks compromised upon underwriting standards to take on the bulk, they've now realised that scaling up at the cost of quality isn't worth the while. These banks have also readjusted growth targets when required, and rebalanced books to preserve capital and asset quality.
Smaller stocks have emerged as Dalal Street's favourites in 2023 that has turned out to be a "great year" for equities, rewarding investors with big gains, driven by optimism over the country's macroeconomic fundamentals and heavy retail investors participation. Experts said equity markets are experiencing a prolonged bull run and it is during this time that the midcap and smallcap segments tend to outshine their larger counterparts. Till December 22 this year, the BSE smallcap gauge has jumped 13,074.96 points or 45.20 per cent while the midcap index has surged 10,568.18 points or 41.74 per cent.
The central bank had revised its inflation forecast significantly downward in the last policy
The filing of offer documents with the capital markets regulator - Securities and Exchange Board of India - has more than halved this financial year (2022-23, or FY23) as the outlook for new share sales has worsened, following correction in the secondary market. So far in FY23, 66 companies filed their draft red herring prospectus (DRHP), as opposed to 144 in the preceding financial year (2021-22, or FY22).
The broader NSE Nifty jumped 57.25 points or 0.49 per cent to close at 11,844.10.
The central bank also left the benchmark rates unchanged in the range of 0 to 0.25 per cent. The Federal Open Market Committee which decides on the key rates has retained the same near zero and said economic conditions warrant 'exceptionally low levels' of federal fundsfor a longer period.
Goldman Sachs downgraded its rating on Indian stocks to 'underweight'.
Grand schemes for macroeconomic policy coordination have a mixed record.
India was less directly affected by the Chinese stock market rout and yuan devaluation that battered currencies and markets in the region.
The Sensex ends up 16 points to end at 20,514.
The US Federal Reserve has said economic activity is improving while deciding to continue with the near-zero interest rate regime to bolster the economy.
President Donald Trump has tapped Jerome "Jay" Powell to lead the US central bank, bypassing Janet Yellen for a second term despite praising her excellent management of the world's largest economy over the past four years.
Forex dealers said apart from month-end demand for the American currency from importers, dollar's gains against other currencies overseas amid US data showing more-than-expected economic growth in the second quarter also put pressure on the local unit.
Across most of the developing world, outflows have gathered pace.
The government can also individually exempt the PSBs, that are to be privatisated from the two Bank Nationalisation Acts. This will bring such lenders under Banking Regulation Act, and make them companies, reports Nikunj Ohri.
Markets will watch the policy meeting on June 18 and 19 for clues to a rollback of stimulus measures. Fed officials are divided over their ultra-easy monetary policy and some warn it could stoke future inflation and financial instability.
One culprit behind the poor recent performance of emerging markets is growing bond market volatility and the knock-on effect that that may be having on so-called carry trades, under which investors borrow money cheaply in one currency and then invest it for what they hope will be higher returns elsewhere.
The Fed's decision on tapering its monthly $85 billion bond-buying programme is expected later on Wednesday.
India's rupee woes seem to have worked in favour of non-resident Indians (NRIs). Last week, the Reserve Bank of India increased the cap on foreign currency non-resident (FCNR) and non-resident external (NRE) interest rates.
'We are in a sweet spot.' 'Equity, on a standalone basis, will continue to remain the asset class to stay invested in.'
Sharp swings likely in equity, forex and bond markets.
Spot gold rose $8.32 an ounce to $1,474.56 by 0624 GMT, well below a lifetime high around $1,920 an ounce hit in September 2011.
