The Sensex and the Nifty witnessed biggest one day loss in percentage terms since June 24
More interest rate cuts by the US Federal Reserve to protect its slowing economy are likely to strengthen gold prices further with the metal being a safe haven for investors having offered handsome returns in the last year-and-a-half.
'It will be best for investors to have a systematic investment plan in mid-cap and small-cap funds with a three-/five-year horizon.'
HCL Tech was the top loser in the Sensex pack, shedding around 4 per cent, followed by Infosys, Dr Reddy's, TCS, Reliance Industries, Tech Mahindra and NTPC. NSE Nifty slumped 163.45 points to 14,557.85.
India will have to show more willingness to import, and since Biden will not encourage sale of oil and gas to bridge the gap, it means there has to be more meaningful duty reduction in other areas even if Delhi baulks at a Free Trade Agreement so soon after walking out of RCEP.
Top gainers from the Sensex pack are Asian Paints, Bajaj Auto, ITC, NTPC, L&T and HDFC, all up 2% each
A day after Federal Reserve Chairman Ben Bernanke announced the rate cut, FIIs bought shares worth over Rs 2,400 crore (Rs 24 billion), lifting the index up by 650 points, one of its biggest intra-day gains.
This is the first hike in about a decade, signaling a recovery.
HDFC, TCS, RIL, ITC and ICICI Bank dragged the Sensex by over 100 points.
The sudden movement of the rupee - post the monetary policy - is not a reason to panic, said currency dealers. According to them, a correction was overdue for the rupee that remained the best performing currency in the region for well over a month. The rupee closed at 74.72 a dollar on Friday from its previous close of 74.60. It had dropped 1.52 per cent against the dollar on April 7 after the Reserve Bank of India (RBI) announced its monetary policy, committing to buy Rs 1 trillion of bonds in the June quarter. A weak rupee goes well with the export narrative of the government, and is consistent with the RBI's intervention strategy that prevented an appreciation.
RBI will take a cue from the Fed policy statement.
There are more near-term global draggers in store for the domestic stock market, as the central banks across the US, Japan and Europe are likely to further hike their benchmark interest rates
'Slower-than-anticipated recovery can be a bigger risk this time than a liquidity-driven event -- at least for India.'
We have not suffered such huge price shocks across so many basic commodities, at the same time, in decades. Has the inflationary impact of all this been factored into stock prices as yet, asks Debashis Basu.
However, dollar's rise against other currencies overseas capped the gains
The faster-than-expected rise in interest rates by the US Federal Reserve (US Fed) shook global financial markets in early 2022. And now the ongoing war between Russia and Ukraine has lifted commodity prices, with Brent crude oil hitting a 14-year high of $139 a barrel in intraday trade. All these developments have sent the equity markets across the world into a tailspin.
The broader markets ended negatively with mid-caps and small-caps shedding 0.5 per cent on the BSE.
'I was feeling so suffocated under Yogiji's rule.'
'Avoid going overweight on gold. But maintain a 10 per cent allocation via sovereign gold bonds,' Bajaj Capital MD Sanjiv Bajaj tells Sarbajeet K Sen.
The markets are in bubble territory.
The dollar-rupee rate could move in the opposite direction if dollar policy rates rise and the FPIs sell in December, says Devangshu Datta.
Experts say foreign investor sentiment was bolstered by the US Federal Reserve's decision to go slow with interest rate hikes and hopes of political stability.
Benchmark share indices opened lower on Monday, amid weak global cues, as investors turned cautious ahead of the US Federal Reserve stance on interest rate.
'Markets are factoring in a good show by India Inc in Q2.'
Bajaj Finserv was the top gainer in the Sensex pack, rallying around 7 per cent, followed by Bajaj Finance, HDFC, L&T, ICICI Bank, Sun Pharma and NTPC. On the other hand, Tech Mahindra, ITC and M&M were the laggards.
Titan was the top laggard in the Sensex pack, shedding 1.39 per cent, followed by HDFC, Axis Bank, Kotak Bank, HCL Tech and Tech Mahindra. On the other hand, Asian Paints, SBI, M&M, TCS, Bajaj Finserv and ICICI Bank were among the winners, spurting as much as 3.25 per cent.
The markets have been unable to sustain at higher levels as a rise in bond yields globally, especially in the US have dented sentiment. Surging commodity prices, especially crude oil that have now hit $70 a barrel (Brent) coupled with inflation woes and fear of sporadic lockdown across major economic hubs back home as Covid cases rise have chased the bulls away. In the short-term, analysts expect the markets to remain volatile as they react to news flow - both from overseas and developments back home. Investors, they say, need to keep a tab on how the US treasury yields move, which in turn will have a ripple effect on how big money moves across developed (DMs) and emerging markets (EMs), including India.
Losers included Bharti Airtel, SBI, Wipro, Vedanta, Maruti Suzuki, ICICI Bank, Axis Bank and Reliance Industries, falling up to 2.18 per cent.
The Reserve Bank may be hitting the end of its tolerance for high inflation and will most likely hike interest rates in the first half of 2022, analysts said on Friday. The central bank will also start rolling back its accommodative policies which have led to easy liquidity conditions, they said. The view from analysts came even as inflation cooled down to 5.6 per cent for July, after two months of breaching the upper end of the RBI's tolerance band of 6 per cent.
The impact of the Iraqi war on the US economy cannot be gauged until enough critical data relating to the period since the war's onset is available over the next several weeks, Federal Reserve policymakers said on Monday.
After rallying over 300 points, the 30-share BSE Sensex ended 169.14 points, or 0.42 per cent, higher at 40,581.71. Similarly, the broader NSE Nifty settled 61.65 points, or 0.52 per cent, higher at 11,971.80.
n the broader market, BSE Midcap and Smallcap indices are trading higher by 0.3% each.
Given the economic trends, it might make sense to allocate some savings to gold.
The report did not specify the impact the rate hike will have on India.
Bank of America (BofA) Securities expects India to be the third-largest economy in the world by 2031. The economic rise could become a reality by 2028, but the Covid pandemic delayed the pace, BofA Securities economists Indranil Sen Gupta and Aastha Gudwani wrote in a report.
As if wanting to be an antidote to the coronavirus pandemic, the Indian stock market adorned carnival robes in 2021 with a tsunami of liquidity unleashed by global central banks coupled with supportive domestic policies and the world's largest vaccination drive sparking off a world-beating rally on Dalal Street, despite bouts of uneasiness over fizzy valuations. While the wider economy shuttled between recovery and relapse, dictated by multiple mutations of the virus, equity market benchmarks appeared headed in just one direction -- skywards. The dizzying upward journey has added a whopping Rs 72 lakh crore during 2021 to investors' wealth, measured as the cumulative value of all listed shares in the country, taking it to nearly Rs 260 lakh crore.
Devangshu Datta predicts the good, the bad and the ugly of currency trends for the coming year.
The Federal Reserve must now ensure that higher inflation doesn't derail the US recovery.
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