Investors and companies should brace for higher commodity prices over the next few weeks in the backdrop of Russian troops attacking Ukraine on Thursday. Meanwhile, US President Joe Biden threatened new sanctions against Russia for an act of aggression against Ukraine. All this, analysts believe, can push prices of key commodities such as crude oil, ammonia, urea, potash, and phosphates higher.
The Reserve Bank of India on Friday decided to leave benchmark interest rate unchanged at 4 per cent but maintained an accommodative stance as the economy faces heat of the second Covid wave.
'Valuations are very attractive, and most companies are cash-rich with strong dividend yields.'
China will use airpower to support Pakistan from the start of a war. China will use the opportunity to at least take Ladakh. Its growing navy will prevent India from blockading or attacking the Makran Coast. And thanks to Chinese weapons, Pakistan keeps expanding its forces, observes Ravi Rikhye.
India's current account slipped into a deficit of $9.6 billion or 1.3 per cent of GDP in the September quarter, the Reserve Bank said on Friday. The current account, which records the value of exports and imports of both goods and services along with international transfers of capital, was in a surplus mode both in the quarter-ago and year-ago periods. India's current account surplus had stood at $6.6 billion or 0.9 per cent of GDP in the April-June 2021 quarter, while in the year-ago period (Q2FY22), the surplus had stood at $15.3 billion or 2.4 per cent of the GDP, the data said.
India's exports are unlikely to get an immediate boost from a depreciating rupee, which touched an all-time low on Monday, driven by rising commodity prices. The rupee fell to 76.97 against the dollar earlier in the day, settling 1.05 per cent weaker than the previous close. Oil prices soared to their highest since 2008 on Monday at $139 per barrel, after the US and European allies explored a Russian oil import ban, while delays in the potential return of Iranian crude oil to global markets increased supply fears.
India's reserve position with the International Monetary Fund was down $4.4 million to $1.67 billion.
Gold reserves remained unchanged at $19.943 billion.
Democratic Left Front politician Nanayakkara was among the 42 members who declared independence in Parliament from the ruling Sri Lanka Podujana Peramuna (SLPP) coalition.
The gold reserves remained unchanged at $18.691 billion in the week.
The first quarter earnings season will dictate the trend in the equity markets in this holiday-shortened week amid absence of major macroeconomic drivers, say analysts. Besides, lacklustre global markets may increase volatility in the market, they added. Equity markets would remain closed on Wednesday for Bakri-Id.
SBI was the top gainer, soaring over 5 per cent, followed by Tata Steel, IndusInd Bank, Bajaj Finance, Bajaj Finserv and HCL Tech.
In April and May, there were additions by RBI of 600 kg and 900 kg. RBI's total gold holding is now 561.9 tonnes.
Gold reserves remained unchanged at $21.584 billion.
The total foreign exchange reserves had increased by $1.838 billion to $297.28 billion in the previous reporting week.
On the Sensex chart, M&M, NTPC, Bajaj Auto, Tech Mahindra, TCS and Maruti emerged as top gainers. NSE Nifty climbed 157.55 points to settle at 14,919.10.
'The prospects for both India and the global economy is that we are headed towards a very difficult time.' 'I see very uncertain at least 8-10 months for both India and the rest of the world.'
India's forex reserves recently declined by $704 million to $354.517 billion.
The private companies announced projects worth Rs 11.33 lakh crore (Rs 11.33 trillion) during 2014-16.
Referring to visible indicators of green shoots, the finance minister said the forex reserve is at an all time high and the stock market is upbeat.
On the Sensex chart, Bajaj Auto, HDFC, Infosys, Tech Mahindra and ICICI bank emerged as the prominent gainers. NSE Nifty ended with a gain of 106.95 points at 14,724.80.
India's foreign exchange reserves declined for the second consecutive week to $295.50 billion, down $12.6 million, in the week ended December 20, the Reserve Bank said.
After selling dollars for the past few months, the Reserve Bank of India (RBI) may take a hands-off approach before its annual account closing by not trying to prop up the rupee as geopolitical tensions show signs of stabilising with global crude oil prices easing from its $140 peak. The central bank was a net buyer of dollars between April and September, and then turned a net seller in the following months, the data released by the RBI showed. The RBI continued to be a net buyer of $36.6 billion in this fiscal year - between April and January. In 2020-21, it purchased $68 billion on a net basis.
'The government expects demand for electronic products to reach $400 billion by 2023-24. This would be a huge foreign exchange outflow, which may further widen our trade deficit with other nations. Hence, the government plans to push local electronics manufacturing to cut down on their import bill.'
Foreign currency assets, a major component of the overall reserves, declined by $3.208 billion to $395.276 billion.
The currency market won't care for our moans, groans, cries and sighs. The rupee will find its own level, explains Tamal Bandyopadhyay.
Gold reserves declined by $346.2 million.
With days to go before the new tax regime around crypto assets kicks in, several investors are reportedly either booking profits, rejigging their portfolios or moving their crypto assets to their private wallets outside of India. Starting April, gains from trading in crypto and other virtual assets like non-fungible tokens (NFTs) will be taxed at a flat 30 per cent, as announced in the Union Budget. And, 1 per cent of tax will be deducted at source (TDS) on every transaction involving crypto and other virtual assets. The new tax regime also bars investors from offsetting losses from one crypto asset (such as Bitcoin) against gains from another (say, Ethereum).
Record equity divestment by the Reliance Group in its telecom and retail businesses garnering around $23 billion revved up the deal street in 2020, which otherwise would have gone down as one of the dullest on record, and dealmakers are seeing sunnier days in 2021 given the large scope for consolidation in a slew of sectors ravaged by the pandemic. With Jio Platforms alone garnering over $16 billion (Rs 1,18,318 crore) by selling 25.24 per cent stake and Reliance Retail notching up $6.4 billion (Rs 47,265 crore) by divesting around 9 per cent shareholding, the deal street signed off with $85 billion in the deal kitty across 1,270 transactions. This is higher by about 10 per cent over 2019. What is significant is that over a third of the total deal value came from Reliance transactions, say investment bankers.
IndusInd Bank was the top laggard, tumbling over 7 per cent, followed by Bajaj Finance, M&M, Tech Mahindra, TCS and Tata Steel.
For the week under review, Special Drawing Rights fell by $ 13 million to $4.19 billion, while India's reserve position with the International Monetary Fund was down $3.5 million to $1.14 billion.
India's foreign reserves continue to march to record highs, touching USD 393 billion early this month backed by strong foreign portfolio and investment flows, according to Development Bank of Singapore.
While the rupee depreciation in 2012 persuaded many companies in taking hedges against their foreign currency loans, industry analysts feel it might not be sufficient to counter the swift slide in the value of the local currency.
Equity benchmark Sensex ended 127 points higher on Friday, primarily led by gains in auto, metal and power sector stocks amid positive cues from global markets.
The reserves had dropped by $1.434 billion to $348.934 billion.
Tata Steel was the top gainer in the Sensex pack, rallying nearly 4 per cent, followed by Bajaj Finance, M&M, Bajaj Finserv and Reliance Industries. NSE Nifty advanced 33.95 points to a fresh high of 16,563.05.
Under the trade agreement between India and Iran, the West Asian country can pay India in rupees for its imports against oil exports to India, which New Delhi pays for in Iranian rial.
Forex dealers said besides strong demand for the American currency from importers, capital outflows mainly weighed on the domestic currency.
Assume that the rupee will trend lower over the next 10 years as India increases overseas sovereign exposures, and your long-term asset allocation should be geared to deal with this trend, suggests Devangshu Datta
On the Sensex chart, L&T, ONGC, HCL Tech, NTPC, Axis Bank and Infosys were major gainers. NSE Nifty ended with a gain of 18.10 points at 14,956.20.
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