The Reserve Bank of India's (RBI's) interest rate decision, West Asia conflict and trading activity of foreign investors are the key factors that will dictate investors' sentiment in the market this week, analysts said. Moreover, quarterly earnings from IT bellwether TCS, domestic macroeconomic data and movement in global oil benchmark Brent crude would also guide trends in the market. Worsening tensions in the Middle East and foreign fund outflows were the major culprits behind the equity markets sharp fall last week.
Acutely conscious that he's left with less than four years to create his legacy, Trump is undoubtedly a man in a hurry, observes Ambassador M K Bhadrakumar.
On a five-day rolling basis, FPI selling is the highest in 24 years.
'IT companies do not have a large presence there either in terms of market and team. So, the impact of the war will be minimal. But West Asia is an emerging economy.'
'War is not an answer. War is not a solution.' 'Deterrence is a solution. We should have the stick with us with which we can beat Pakistan.'
Stock Market News today, PSU banks: The year 2024 was a roller-coaster ride for Indian stock markets, marked by volatility driven by the Lok Sabha elections, Union Budget 2024, a slowdown in corporate earnings, and sticky inflation. Geopolitical tensions - particularly between Israel and Iran in West Asia - along with various stimulus announcements by China and yen carry trade rocked the equity markets throughout the year.
The stage may be set for a recalibrated US-Iran relationship, suggests Ambassador M K Bhadrakumar.
Global financial markets are not yet fully factoring in any escalation in the Israel-Palestine geopolitical conflict, said Christopher Wood, global head of equity strategy at Jefferies in his latest weekly note to investors, GREED & fear. The pertinent point about ongoing events in West Asia from a financial market perspective, according to him, is that, despite much talk about a pending ground invasion of Gaza, no such invasion has yet happened. "This is beginning to make GREED & fear wonder if it is ever going to happen.
Brent crude on the other hand rose to $105/bbl on West Asia tensions.
New investors should gradually build a 5 to 10 per cent allocation to gold.
West Asia tension will keep crude prices high
As tension escalates in West Asia, the United States has dispatched three warships to the region to be on standby in the event of a need, even as President Barack Obama and Secretary of State Hillary Clinton spoke to world leaders in efforts to defuse the crisis.
More than half (56 per cent) of chief economists expect the global economy to weaken in 2024, with most saying the pace of geo-economic fragmentation will accelerate, according to the latest "Chief Economists Outlook" released on Monday at the World Economic Forum (WEF). The report indicates that the global economic prospects remain subdued and uncertain. Challenges include tight financial conditions, geopolitical rifts, and the rapid development of generative artificial intelligence (AI).
'Even now, investors are not bothered about the war but are more concerned whether it will remain localised or not.' 'In case things are contained, markets can stage a bounce back in the next few days.'
Sources are in touch with Iranian authorities through diplomatic channels, both in Tehran and in Delhi.
Foreign portfolio investors (FPIs) have net sold domestic shares worth over $10 billion so far this month amid a shift to China, which not only offers attractive valuations compared to India but has also announced several measures to support the economy and the stock market in recent weeks. If the trend doesn't reverse, this will be the first time that overseas funds will yank out more than $10 billion from Indian equity markets in a month.
Escalation of the conflict in West Asia between Israel and Iran has had a direct impact on the energy markets, and more broadly on the financial markets as well as the global economy.
Among the Sensex firms, Infosys, Bharti Airtel, NTPC, Tata Motors, IndusInd Bank, Bajaj Finance, ICICI Bank, Tech Mahindra, Titan and Axis Bank were among the major laggards. Tata Steel, State Bank of India, Mahindra & Mahindra, Maruti and Nestle were the gainers.
The announcement comes as the military conflict between Hamas militants and Israel continued for the fifth day.
India's solidarity with the Palestinian cause dates back to Mahatma Gandhi's time and its rising global stature and influence over all key players in West Asia make it well-placed to play a crucial role in defusing the crisis arising out of the Israel-Hamas conflict, Palestine Ambassador Adnan Abu Alhaija said on Tuesday.
The foreign ministry's statement came amidst the reported visit of Foreign Minister Sun Weidong to Pakistan on a mediation mission.
'Higher interest rates make gold less attractive as it doesn't generate yield.' 'However, with rates set to fall, the tables are turning for gold.'
From the Sensex basket, Tata Motors, State Bank of India, Tata Steel, Power Grid, NTPC, Bajaj Finserv, Bajaj Finance and Asian Paints were the major laggards.
If technical analysts are to be believed, the index has more room for a slide down to 72,000 levels in the worst-case scenario, wiping out all the gains made in 2024 so far.
India's merchandise exports in April 2024 marginally rose to $34.99 billion from $34.62 billion in the year-ago month, according to government data released on Wednesday. Imports too increased to $54.09 billion from $49.06 billion in April 2023.
India, the world's third biggest oil consumer, meets more than 80 per cent of its oil needs through imports.
India and China have made "some progress" in disengagement, External Affairs Minister S Jaishankar said on Sunday, describing it as a "welcome" move which opens up the possibility that other steps could happen.
Gold, a safe-haven bet, is likely to continue its record-smashing journey in the New Year, rising to Rs 85,000 per 10 grams and even Rs 90,000 level in domestic markets if geopolitical tensions and global economic uncertainties continue.
ABB reported a weak quarter. Revenue was at Rs 2,910 crore, up only 5 per cent year-on-year (Y-o-Y), with operating profit at Rs 540 crore, up 23 per cent and net profit at Rs 440 crore.
US President Joe Biden is set to meet his Chinese counterpart on Wednesday in the San Francisco Bay Area, CNN reported, citing senior US administration officials.
The Indian Navy, which regards itself as the 'net security provider' in the Indian Ocean Region, has also stepped up to the plate, with a warship stationed at all times off the Gulf of Aden for counter-piracy tasks. 91 Indian warships have been deployed in the region since 2008, patrolling high risk areas where piracy was rampant.
'A 10 to 15 per cent allocation to gold in portfolios reduces risk without compromising on potential returns.'
As China's Foreign Minister Sun Weidong visited Pakistan on a mediation mission, a statement from Foreign Ministry on Monday said it is maintaining close contacts with Pakistan and Iran to 'bridge their differences'.
As Donald Trump registered a historic comeback in the US presidential election, many former Indian diplomats on Wednesday concurred that the India-US ties will "continue to grow" from strength to strength, even as some of them cautioned that Trump is "highly unpredictable" and New Delhi will have to "wait and watch" to see what position he adopts going forward.
Among the Sensex firms, UltraTech Cement, Reliance Industries, ICICI Bank, HDFC Bank, Bharti Airtel, IndusInd Bank, State Bank of India, Tata Consultancy Services, Larsen & Toubro, Kotak Mahindra Bank and State Bank of India were the major gainers. In contrast, Tata Motors, Maruti, Axis Bank, Mahindra & Mahindra, ITC, NTPC, Tata Steel and Bajaj Finserv were the major laggards.
Carter was in politics, but not a politician, certainly not a transactional politician, points out Shreekant Sambrani.
'The biggest near-term risk to Indian equities is the outflow of investments to China as tactical trades by foreign investors.'
India's merchandise exports rose by 9.1 per cent to $38.13 billion in May even as the trade deficit widened to a seven-month high of $23.78 billion during the month, according to government data. Healthy growth in sectors, such as engineering, electronics, pharmaceuticals, textiles and plastics helped register growth in exports despite global economic uncertainties.
Trump's sweeping tariffs and penalties on China-built ships have turned global shipping into the front line of economic war, observes Shyam G Menon.
The escalation of conflict in the West Asian region is expected to push already high logistics costs besides hurting trade in sectors such as oil, electronics and agriculture, according to exporters. They said that insurance costs for exports to the countries directly involved in the war could also go up, which will impact Indian exporters' working capital. Think tank Global Trade Research Initiative (GTRI) stated that the conflict is already hurting India's trade with countries like Israel, Jordan, and Lebanon.
