'Investors hate uncertainty and the demonetisation move certainly creates that.'
As it is a highly liquid asset, central banks can afford to look past its short-term volatility to longer-run average returns.
Hopes of revival and earnings growth in 2020, surprise tax cuts, and robust foreign flows - thanks to easy global monetary policies - are a few reasons why the markets have managed to digest the low GDP footprint. Select bluechips such as Reliance Industries, Bajaj Finance, Asian Paints, and ICICI Bank have gained sharply this year. On the other hand, YES Bank, Zee Entertainment, and Indiabulls Housing have seen a sharp fall.
'Higher than expected inflation in the US or the European Union, faster than expected tightening by the major central banks, break out of a war in Europe, and withdrawal of portfolio equities from the emerging markets are factors which can result in equity market corrections.'
Global investors are fast losing appetite for equities, as deflation seems more of a reality. With commodity prices collapsing, few safe havens are left for investors, with many of the BRICS(Brazil, Russia, India, China and South Africa) losing their charm.
India Ratings principal economist Sunil Kumar Sinha said the Brexit is a mixed bag for the country.
'It is less dependent on imported capital.'
Given Indian corporates's high indebtedness, new credit will be used for servicing loans rather than building factories. This is setting us up for more companies on life support and more zombie banks, warns Rahul Jacob.
If Chinese growth starts falling, sharply or otherwise, the risk on trade might reverse.
'India is possibly the most fiscally constrained market in the region.'
Global liquidity expected to continue amid ECB stimulus
The broader markets were marginally higher with mid-caps and small-caps gaining 0.1-0.4 per cent on the BSE.
It is by now quite clear that in all likelihood the US Federal Reserve will hike interest rates in its next meeting in mid-December.
The improving earnings and economic outlook has titled the scales back in favour of Indian equities this year, reports Pavan Burugula.
Total holdings of the top eight gold ETFs have risen by 3.8 million ounces so far this year
ICICI Bank, HDFC Bank, IndusInd Bank down between 0.2%-1.4% each.
It is surprising that central bankers around the world have cautioned the US Federal Reserve against raising rates.
Broader markets are outperforming the benchmark indices- BSE Midcap and Smallcap indices are up 0.8%-1%.
'The assumed linear correlation between forced lower yields, higher bank borrowing from the RBI, higher lending, and higher growth involves leaps of faith, each a step on the quicksand of false beliefs,' warns Debashis Basu.
India, Asia's third-largest economy, is likely to grow 5.3 per cent in 2013, the OECD said, lower than the November forecast of 5.9 per cent.
Index heavyweight RIL surged 3% to end above Rs 1,000 mark while IT majors were also the top gainers.
'A positive oil shock has a detrimental effect on growth and activity.'
Silver, platinum and palladium all declined.
Macro and micro environment are becoming more challenging.
On Friday, the euro weakened to a near 14-month-low against the dollar, after the European Central Bank announced a fresh round of stimulus and promised more if required.
Gold is often favoured as a hedge against economic and financial uncertainty
Traders are waiting for the earnings season to kick off.
In India we have to be careful not to copy any level of dependence on the financial sector and infatuation with the get-rich-quick syndrome, says Jaimini Bhagwati.
Even if the central bank doesn't pull the trigger later, it is still expected to by the end of the year.
A falling rupee and lower foreign buying in equities are signals investors should watch out for, says Devangshu Datta
Markets could slide again owing to conditions in Europe and the US.
The dollar gained strength with the emergence of the US as the only developed economy showing signs of recovery.
Reserve Bank of India Governor Shaktikanta Das tells Anup Roy, Raghu Mohan and Niraj Bhatt that it is time for banks to lower interest rates and start lending to cash-starved finance companies after due credit appraisal and proper risk assessment.
ICICI Bank and SBI were among the top Sensex gainers along with FMCG majors ITC and HUL.
Gold is seen as a preferred asset for all types of investors, even central banks.
The market breadth, indicating the overall health of the market, was positive
In the broader market, the BSE Midcap was down 0.2%, while BSE Smallcap fell 0.1%.
The Indian stock market had rallied through the first fortnight of October but it gave back the bulk of its gains in the second half.
Financials were among the top losers along with Sun Pharma and index heavyweight Reliance Industries
Not only is gold a hedge against currency depreciation, rising crude prices and uncertainty, it is up 7 per cent (in dollar terms) in the past 12 months, says Devangshu Datta.
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