Traders rejoice when the Fed drops the rate, but...
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.
'Gold prices thrive on volatility and more so when the stock markets trend downward.'
'Returns can be very variable in equity markets.' 'That is why I tell small investors don't put 100 per cent of your money in equities, even if you are young.'
An expected withdrawal of FIIs from the market likely to weaken the rupee against the dollar.
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.
Emerging markets could be affected by a combination of lower liquidity and higher dollar interest rates caused by a hike in the US Fed funds rate.
There are already some signs of stress in this market.
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 US Federal Reserve has raised its benchmark interest rate by 0.25 per cent, only the second increase in a decade.
The belief that the Fed knows something that lesser mortals don't is common.
Equity indices chalked up losses for the second straight session on Monday, in tandem with a bearish trend overseas as ratcheting up of hostilities in Ukraine and prospects of further rate hikes by the US Fed soured global risk sentiment. The rupee slipping to another all-time low against the US dollar amid foreign fund outflows added to the gloom, traders said. After tumbling over 800 points in intra-day trade, the 30-share BSE Sensex clawed back some lost ground to end 200.18 points or 0.34 per cent lower at 57,991.11.
Expect heightened volatility and stress to hit the markets. Caution may be the need of the hour, alerts Akash Prakash.
The 30-share Sensex closed down 114 points at 28,622 and the 50-share Nifty ended down 37 points at 8,686.
IPO market hopes to come out of slump in festive season, reports Sundar Sethuraman.
Gold, the safest haven amid the ongoing uncertainty, also emerged as one of the most lucrative investment options in financial year 2022-23 with an impressive return of 16.1 per cent in rupee terms, and 2.3 per cent returns in dollars. And, had it not been for the very high inflow of smuggled gold and the huge discount prevailing in the market due to high prices, the returns in gold would have been much higher, analysts said. The precious metal has consistently been delivering positive returns in India since 2016.
Following are the highlights of the Economic Survey 2022-23 tabled in Parliament on Tuesday
Global rating agency S&P on Tuesday said even though the US and the Euro zone are headed to recession, India is unlikely to face the impact given the "not so coupled" nature of its economy with the global economy. "Indian economy is a lot decoupled from the global economy than we normally think of, given its large domestic demand, even though you (India) are a net importer of energy. "But you have enough forex reserves on one hand and your companies have managed to maintain healthy balance sheets," Paul F Gruenwald, S&P global chief economist and managing director, told reporters in Mumbai.
Stock market investors are expecting a balanced Budget with a focus on job creation, increased spending on infrastructure, reigning in the deficit, and bringing the economy back on track, experts said on Wednesday. Stock markets have been subdued in the run-up to the Union Budget with BSE's benchmark Sensex is almost flat so far this month. Even the corporate earning season failed to excite the markets, while some indices like IT and bankex have seen some positive movements.
The Lok Sabha elections in 2024 are not a consideration when it comes to monetary policymaking, said Reserve Bank of India governor Shaktikanta Das to underscore the central bank's commitment to controlling inflation. "It's not possible for me to comment what we do in the next MPC (Monetary Policy Committee), but one thing I can tell and I would like to make it very clear-that the fact of elections coming up in 2024 is not a factor at all so far as monetary policymaking is concerned. "Monetary policymaking is for checking (and) controlling inflation," Das said at the Business Standard, BFSI Insight Summit.
The Indian startup ecosystem recently celebrated the 100th unicorn milestone. It came after a month of no big fund announcements. Compare this to 2021, when three to four unicorns were being added every month. Nevertheless, the 100th unicorn needs to be celebrated since the first unicorn was announced in 2011 - 11 years ago.
As FY20 Budget fiscal measures need to be better understood, a reversal of the stance back to neutral will allow MPC flexibility to respond to incoming data.
For one thing, US Fed Chairman Ben Bernanke was perhaps right in postponing the quantitative easing taper even though the markets had complained at that time that they were primed for some reduction in QE3 and the Fed had missed an opportunity to execute their plans without causing too much of a flutter.
The difference between what the banks play in the US and India is not that of soccer and football but rugby and football. SVB also has a unique character. But when risks are mispriced, the fallout could be very similar, points out Tamal Bandyopadhyay.
The FMCG index gained more than 1% on the back of stellar gains in ITC.
India's largest cement firm, Ultratech Cement, has joined the race to acquire the Holcim stake in Ambuja Cements and its subsidiary, ACC. UltraTech - part of the Aditya Birla Group - submitted a non-binding bid on Wednesday. Swiss multinational Holcim, which manufactures building material, is exiting India by selling its 63.19% stake in Ambuja Cements. According to banking sources, UltraTech has submitted a plan to Holcim, outlining divestiture details that would meet the norms set by anti-trust body Competition Commission of India.
Aam Aadmi Party leader Arvind Kejriwal and his party feel that they have a fighting chance in Bangalore. The crowd that gathered for his road show comprised both supporters and curious onlookers.
The markets stayed on edge last week due to the endless saga of Greece's problems.
Debt fund managers think the Reserve Bank governor might at best go for one rate cut in April.
Invest in stocks of export-oriented and capital-intensive companies, says Devangshu Datta.
While Governor Ravi's speeches have put the local BJP supporters on the defensive in matters of religion and social justice, his add-on 'attack on the constitutional scheme' in the 'Senthil Balaji case', has been condemned squarely by many legal experts and editorial writers across the country, thus adding weight to CM Stalin's position -- at least until the courts come up with their binding views, observes N Sathiya Moorthy.
'Any normalisation exercise will bring its share of volatility.'
Thus far in FY21, BSE, NSE have rallied 70 per cent and 71 per cent, respectively.
Markets are assuming that by the second half of 2021, the world will be approaching some type of normalcy, points out Akash Prakash.
The AIADMK is convinced that the BJP will remain an electoral burden for a long time to come, beginning the Lok Sabha polls next year, reveals N Sathiya Moorthy.
'We would advise investors to invest in a disciplined way in equities for the long term.'
The Centre has imposed a ban on the Popular Front of India (PFI) and several of its associates for their alleged terror activities.
'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.'
'Increased allocations for MNREGA could have provided the much needed push to rural demand and consumption at a time when recovery continues to remain uneven.'
'If the Union Budget can provide incentives for animal spirits to come as well as induce demand stimulus and consumption, the Budget would have done a wonderful job.'
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