The International Monetary Fund (IMF) on Tuesday said it is expecting some slowdown in the Indian economy next fiscal year and projected the growth to 6.1 per cent from 6.8 per cent during the current fiscal ending March 31. The IMF on Tuesday released the January update of its World Economic Outlook, according to which the global growth is projected to fall from an estimated 3.4 per cent in 2022 to 2.9 per cent in 2023, then rise to 3.1 per cent in 2024. "Our growth projections actually for India are unchanged from our October Outlook.
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The Indian rupee touched record low of 65.52/dollar on Thursday and is down 16 per cent so far this year despite efforts by policymakers to prop it up.
President Donald Trump has tapped Jerome "Jay" Powell to lead the US central bank, bypassing Janet Yellen for a second term despite praising her excellent management of the world's largest economy over the past four years.
The central bank also left the benchmark rates unchanged in the range of 0 to 0.25 per cent. The Federal Open Market Committee which decides on the key rates has retained the same near zero and said economic conditions warrant 'exceptionally low levels' of federal fundsfor a longer period.
The Sensex ends up 16 points to end at 20,514.
Analysts believe that investors should look at stocks that hit 52-week lows only if they have a dividend paying track record, are debt-free and have sound fundamentals.
Grand schemes for macroeconomic policy coordination have a mixed record.
The US Federal Reserve has said economic activity is improving while deciding to continue with the near-zero interest rate regime to bolster the economy.
Across most of the developing world, outflows have gathered pace.
India was less directly affected by the Chinese stock market rout and yuan devaluation that battered currencies and markets in the region.
Goldman Sachs downgraded its rating on Indian stocks to 'underweight'.
Markets will watch the policy meeting on June 18 and 19 for clues to a rollback of stimulus measures. Fed officials are divided over their ultra-easy monetary policy and some warn it could stoke future inflation and financial instability.
One culprit behind the poor recent performance of emerging markets is growing bond market volatility and the knock-on effect that that may be having on so-called carry trades, under which investors borrow money cheaply in one currency and then invest it for what they hope will be higher returns elsewhere.
'In the overall global portfolio, India's weighting has come down in the past seven months.'
Forex dealers said apart from month-end demand for the American currency from importers, dollar's gains against other currencies overseas amid US data showing more-than-expected economic growth in the second quarter also put pressure on the local unit.
India's rupee woes seem to have worked in favour of non-resident Indians (NRIs). Last week, the Reserve Bank of India increased the cap on foreign currency non-resident (FCNR) and non-resident external (NRE) interest rates.
Spot gold rose $8.32 an ounce to $1,474.56 by 0624 GMT, well below a lifetime high around $1,920 an ounce hit in September 2011.
Breakfast meeting between Timothy Geithner, US treasury secretary, leading industralists due Wednesday.
However, dollar's rise against other currencies overseas capped the gains
It has mostly been a one-way street for markets that have moved up sharply since July. The front-line indices - the S&P BSE Sensex and the Nifty50 - have gained 6.7 per cent and 7.3 per cent, respectively, in the past three months. The rally in mid- and small-caps has been sharper, with both indices surging 14 per cent and 9 per cent, respectively, during this period. This sharp run has made analysts at Jefferies cautious.
Various global and domestic factors had a sizable impact on the performance of the Indian markets
Urjit Patel as the new RBI governor whose focus is on taming inflation has lowered the probability of interest rate cut soon
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.
Sharp swings likely in equity, forex and bond markets.
The Fed's decision on tapering its monthly $85 billion bond-buying programme is expected later on Wednesday.
RBI Governor Raghuram Rajan on Friday said keeping inflation low is the key task for sustainable economic growth of the country.
The second-quarter GDP numbers are scheduled to be announced on Friday.
Rising for the fourth straight day, benchmark indices Sensex and Nifty settled marginally higher after a choppy session on Friday, tracking mixed global trends amid uncertainties on the geopolitical front. The BSE Sensex opened weak and declined 414.44 points to 55,049.95 in opening deals. But within minutes, it pared all its losses and jumped 369.56 points to 55,833.95. Facing volatility, the index finally settled at 55,550.30, higher by 85.91 points or 0.15 per cent.
Traders said persistent selling by stockists in line with a weakening global trend after Federal Reserve Chairman Ben Bernanke signalled that the central bank may start curbing stimulus programme this year, mainly dragged gold and silver prices down.
Modi's Atma Nirbhar Bharat Abhiyan or Self-reliant India Mission is about 10 per cent of India's GDP in 2019-20 and would rank behind Japan, the US, Sweden, Australia and Germany. But unlike most of the relief packages announced globally, Rs 20 lakh crore is not entirely in new spending and includes Rs 1.7 lakh crore package the government had announced in March as well as the steps taken by the Reserve Bank of India (RBI) such as liquidity enhancing measures and interest rate cuts.
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.
US employers stepped up hiring in May in a show of economic resilience that suggests the Federal Reserve could begin to scale back the amount of cash it is pumping into the banking system later this year.
He also feels that central banks have injected too much liquidity, which is not sustainable and will end badly for investors.
Snapping its two-day gains, the rupee on Monday declined by 48 paise to settle at nearly four-week low of 62.17 against the US currency.
With the international markets facing uncertainty after Russia invaded Ukraine and Western nations retaliated with sanctions, Indian companies are putting their international fundraising plans on hold as they wait for the markets to recover. Bankers said apart from the geopolitical crisis, international rates are hardening in anticipation of interest rate hikes by the US Federal Reserve to control rising prices in the US. The Ukraine situation has implications for the market. In such a situation, international investors try to shift to safe haven assets by exiting from emerging markets.
The second half of June could be driven more or less by technical factors triggered by news flow from Greece, the US Federal Reserve and the monsoon. The technical picture seems bearish as of now, says Devangshu Datta.
RBI Governor has been under pressure from Finance Ministry.
The friction with the political class is not only about interest rates and monetary policy. While the government often spoke freely about its discomfiture, the RBI had to be careful even in its response to the government as any loose statement would affect the markets.
Expect heightened volatility and stress to hit the markets. Caution may be the need of the hour, alerts Akash Prakash.
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