Geo-political concerns over death of a Saudi journalist, Brexit and likely breach in Italy's budget also kept investors cautious.
Tech Mahindra was the top loser in the Sensex pack, shedding over 3 per cent, followed by NTPC, IndusInd Bank, Kotak Bank and Reliance Industries. NSE Nifty fell 185.60 points to 17,671.65.
A sharp sell-off in the Indian equities markets after a spike in crude oil prices should not be surprising. Historically there is a negative correlation between stock valuations in India and the price of Brent crude oil, which is the benchmark for the Indian crude oil basket. Between 2011 and 2014, crude oil traded above $100 a barrel for an extended period, the Sensex-trailing price/earnings (P/E) was 18X, on average, during the period, nearly 22 per cent lower than the current index P/E of 23X.
ONGC was the top gainer in the Sensex pack, surging around 7 per cent, followed by IndusInd Bank, Infosys, Tech Mahindra, Reliance Industries, HCL Tech and TCS. On the other hand, HDFC, ICICI Bank, Axis Bank, SBI and M&M were among the laggards.
Global trends, WPI inflation data for April and the ongoing quarterly earnings of corporates would be the major driving factors for the stock markets, analysts said. Investors would also keep a tab on the movement of foreign institutional investors who are on a selling spree in the domestic equity market for the past many days. "Inflation concern and monetary tightening across the globe are key concerns for the equity markets. "Equity markets are under the strong grip of bears however they look extremely oversold and due for a pullback rally.
'Recent underperformance notwithstanding, equities should constitute a major part of investors' financial portfolio.'
The RBI's financial stability report has on Wednesday highlighted the disconnect between the real economy and equity market yet again. The central bank observed that Indian equities were trading at rich valuations, with several metrics such as price to earnings multiples, price to book ratio, market cap to GDP and the cyclically adjusted P/E ratio, or Shiller P/E, at above historical averages. For instance, as on December 13, the one-year forward P/E ratio for India was 35.1 per cent, above its 10-year average, and one of the highest in the world.
However, volatility is likely to be on the rise, said Benjamin Yeo, MD & CIO (Asia & Middle-East) for Wealth & Investment Management, Barclays.
India believes rich nations should be away from farm subsidies.
'This fall is nothing. We could see worse if everybody hits the panic button.'
Equity benchmarks Sensex and Nifty ended on a mixed note on Wednesday as the euphoria about the Budget fizzled out, with investors going for profit-taking ahead of the Fed interest rate decision. The 30-share BSE benchmark Sensex climbed 158.18 points or 0.27 per cent to settle at 59,708.08 after it trimmed most of the intra-day gains. During the day, it had zoomed 1,223.54 points or 2 per cent to 60,773.44.
Bhargavi Zaveri & Radhika Pandey explains how complexities of foreign exchange rules are used by India Inc to dispute contractual obligations.
Here's the full text of Prime Minister Narendra Modi's address to a joint session of the United States Congress, delivered on Thursday.
Young investors could allocate in the proportion of 70:20:10 to equity, debt and gold.
Shivaji made sure that his soldiers respected the sanctity of mosques and the Quran Sharif to ensure that his fight against the Mughals did not become fight against Islam, explains Colonel Anil A Athale (retd).
COVID-19 forced people to work from home turned into the fuel for new demat accounts, observes Debashis Basu.
Although the Malabar is a routine exercise which has been carried out for several years now, security experts attach a lot of traction to it in view of China's assertive behaviour in the South China Sea, observes Rup Narayan Das.
Stretched valuations and slowdown in DII flows are some of the reasons why Goldman Sachs cut its India rating to 'market-weight'
'If the third wave of Covid infections is as bad as the second one, the market may get very polarised with a preference for blue-chips with low volatility.'
The rupee breached the 80-mark against the dollar on Tuesday. The steady depreciation in the value of the rupee against the US dollar is likely to prove expensive for corporate India. The listed companies' revenue expenses in foreign currency or imports exceed their export revenues or revenue earnings in forex. In their latest financial year, BSE500 companies, excluding banks and non-banking finance companies and insurance (BFSI), reported combined forex expenses of Rs 12.31 trillion against forex earnings of around Rs 10 trillion.
The Reserve Bank of India (RBI) is precariously balancing two opposing objectives - maintaining easy financial condition in the domestic market, while ensuring external stability - and economists have started taking note. They say India is going through the classic trilemma of the 'Impossible Trinity'. The RBI cannot have an independent monetary policy (setting domestic interest rates) in an environment of an open capital account and flexible exchange rates. What is even more complicated for the central bank now is that financial market stability overlays all the other three objectives.
China continues to hold the top slot.
Kumar joined KPMG in 1995 as a Finance Management Leader and from 2005 until his retirement in September 2013 he led the firm's West Coast Finance Management Consulting practice.
The Saudi and Iraq offer to replace Iranian crude supplies comes with a catch: Higher prices for the same quality of crude. The new government will face a tough decision over fuel price hike, says Aveek Sen.
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The broader consensus was that the Fed would cut the monthly stimulus of $85 billion by $10-15 billion.
RustOrange co-founders Samik Sarkar, Shashank Agnihotri and Kuvalaya Singh share their story and learnings.
Forex dealers said besides strong demand for the American currency from importers, capital outflows mainly weighed on the domestic currency.
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But their trajectory and direction have been largely influenced by politics and the political leadership's understanding of how the economy needs to be managed, explains A K Bhattacharya.
The 41- year old is currently the head of macro trading in Goldman's Securities Division.
MCA portal clocks 5 mn views in 8 months; ministry to integrate company records portal with DGFT, I-T dept this year
Nobutaka Kitajima, chief investment officer -- equity, LIC Nomura Mutual Fund, tells Business Standard the reaction to the Fed's statements has been overdone and the current downturn has punished certain stocks much more than their inherent economic worth and business potential.
Since October, FPIs have sold over $26 billion worth of stocks, which is the largest selling ever seen in India, observes Akash Prakash.
Dr Rakesh Mohan, former RBI deputy governor, and Dr Pronab Sen, former chairman of the Indian Statistical Commission discuss the issues facing the Indian rural and manufacturing sectors and what the government must possibly do to improve demand and perk up the Indian economy
The broader NSE Nifty closed below the 10,600 mark by plunging 98.15 points, or 0.84 per cent, to 11,582.35 after shuttling between 11,567.40 and 11,751.80.
Sensex, Nifty have lost about 6%, against 0.5-5% decline in other key Asian indices.
Materials and utilities were the worst-performing sectors in March.
Should candidates for particular positions in the government be permitted to agitate for changing the recruitment process itself? The candidates have to meet the requirements of the jobs rather than ask for their own standards to be accepted as the requirement of the jobs. Those who cannot meet those criteria should seek other jobs that match their skills, says T P Sreenivasan.
Covid-19, US yields, dollar to weigh on equity flows in the near term.
'The uneducated think of their rights as a gift. This is deeply troubling.' 'If they were educated they could claim what is rightfully theirs.'
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