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.
Strong dollar will impact financial system in India.
Traders suspect The Reserve Bank of India (RBI) bought bonds and actively intervened in the rupee to support sentiment.
Given the impact Covid-19 pandemic had over the world economy, analysts expect global central banks, especially the US Fed, to keep the liquidity tap open, which, in turn, is likely to keep the equity markets, especially those in the emerging markets, buoyant.
The BSE Sensex rose on Wednesday to mark a record close as telecom firms such as Bharti Airtel surged on better-than-expected operating performance, while continued strong foreign flows also boosted sentiment.
'Sectors that had been left out till now will also start participating in the rally.'
'It was because of the huge selloff in the Indian equities that the rupee fell so sharply against the dollar on Friday.'
Kotak Bank was the top loser in the Sensex pack, shedding over 2 per cent, followed by ICICI Bank, PowerGrid, HDFC, IndusInd Bank and Axis Bank. NSE Nifty declined 45.75 points to 16,568.85.
He said cheap valuations, improving sentiment and the ongoing reform momentum coupled with increased transparency due to the internet are driving investors to the Dalal Street.
'Thankfully, most investors in India have now seen through this false narrative and are once again deploying their hard-earned money.
Most Asian currency and equity markets too suffered steep losses due to US rate hike fears.
Analysts say that the rupee trajectory, going ahead, will be a function of flows.
'A time-wise, as well as price correction, so that the market can absorb the gains made over the past 17 months.'
'One way to deal with these is to address these quickly and have rapid reaction teams in New Delhi, the state capitals and wherever possible.'
Forex dealers said a higher opening in the domestic equity market and dollar's weakness against other currencies overseas after the US Federal Reserve kept its easing policy unchanged also supported the rupee.
The new Guv needs to focus on structural inflation problems.
Amid imminent phasing out of the fiscal stimulus by US Federal Reserve, Prime Minister Manmohan Singh on Wednesday called for an "orderly exit" from unconventional monetary policies being pursued by the developed world for the last few years to avoid damaging growth prospects of the developing world.
Top gainers in the Sensex pack included Infosys, Bajaj Finance, Maruti, HUL, HCL Tech and Reliance Industries, while M&M, IndusInd Bank, ITC, PowerGrid and L&T were among the losers. The NSE Nifty settled 190.80 points, or 2.51 per cent, down at 7,801.05.
Gains in realty, teck, IT, power, consumer durables, banking and oil & gas stocks helped both the key indices to score gains.
ONGC was the top gainer in the Sensex pack, rallying around 6 per cent, followed by IndusInd Bank, L&T, UltraTech Cement, Titan, SBI and NTPC. NSE Nifty settled 32.10 points up at 14,707.80.
RBI Governor cautioned against more volatility.
RBI is committed to bringing down retail inflation to eight per cent by January 2015 and six per cent by January 2016.
The 30-share Sensex ended down 249 points or 0.94% at 26,304 levels.
The Rupee is expected to weaken further against the dollar.
Led by the weak trend in the broader market, the market capitalisation of BSE-listed companies plunged Rs 1,65,437.91 crore to Rs 1,38,54,439.41 crore.
By piling more pressure on governments, central banks risk not accomplishing much and yet provoking a political backlash that could threaten their independence.
The 30-share Sensex ended down 563 points at 25,202.
Engineering major BHEL rebounded from its day's lows to end around 1% higher.
A firming trend in domestic stock markets, however, capped the rupee fall to some extent
Demonetisation impact, earnings growth, central bank policies will get attention.
Brokerage firm Bank of America Merrill Lynch (BofA-ML) on Monday said the ongoing US government shutdown is positive for the country, as it gives additional time to recoup the forex reserves.
The view among the regulator and the government is that the currency is overvalued
All policy planners want low interest rate, says Jaitley
RBI Governor has been under pressure from Finance Ministry.
The tiny Central American nation of El Salvador has embarked on an interesting experiment by recognising bitcoin as legal tender. This is proving painful for many of its citizens but it's a useful "pilot" project for larger economies that are contemplating the peculiarities of this new asset class. El Salvador has a population of 6.5 million and GDP of about $27 billion.
Heavyweights such as Coal India, L&T and SBI ran up losses, taking cues from overseas markets.
Monetary policy easing, coupled with the relaxation of lending rules and greater election-driven fiscal spending in the first quarter of 2019, will provide some support to growth during the first half of 2019-20 fiscal
Many analysts over the past week have said the RBI has legroom to cut rates to the tune of 65 bps by June and some like Barclays and BofA have also spoken about the likelihood of an inter-meeting cut.
On the 10th anniversary of the global financial crisis, a multi-part series analyses the lessons learnt and those not learnt.
Tata Motors (down 1.7%) was the top loser on Sensex and Nifty, while Lupin (1.6%) gained the most.
