The rupee bounced back by 26 paise to end at 59.93 against the American currency on Friday as exporters and some banks sold dollars.
Inflation moderates, but a rate cut is unlikely.
Slight recovery in growth is expected only in July-September.
The Reserve Bank of India unexpectedly raised its policy interest rate on Tuesday by 25 basis points (bps) but said that if consumer price inflation eases as projected, it does not foresee further near-term tightening.
Bank Nifty closes at a 30-month high; Rate sensitives lead the rally on RBI rate cut optimism.
Managing Brexit, inflation and banking reforms, along with the political environment, will be tough.
Markets surged in late trades to snap five-day losing streak led by bank shares.
The RBI cut the rate several times last year to reduce it by 125 basis points to the current 6.75 percent.
Repo rate may well end 2013 at 8 per cent, where it had begun the year.
The WPI inflation stood at negative 2.4% in May 2015, compared with a negative 2.65% in April 2015.
The NSE Nifty, which again went past the 9,900-mark to touch a high of 9,903.95 intra-day, finally settled 103.15 points, or 1.05 per cent higher at 9,897.30.
Factory output in June likely rose 5.4 per cent from a year earlier, faster than the 4.7 per cent growth in May, according to a poll of 27 economists.
In New York, the dollar fell against the British pound on Wednesday after the Bank of England raised its projections for UK growth in 2014. However, analysts warned that gains against the dollar could be limited.
Disagreeing with Reserve Bank's projection on the price situation, former RBI Governor and PM's Economic Advisory Council chairman C Rangarajan said WPI and CPI may not be as high as being projected by the central bank.
Data late on Wednesday showed consumer price inflation eased more than-expected to a 25-month low of 8.10 per cent in February, while industrial output unexpectedly expanded, albeit only by 0.1 per cent.
Distress sales, market closures and anchoring of fishing fleets have been reported from West Bengal, Andhra Pradesh, Tamil Nadu and Kerala.
With inflation figures expected to be well within RBI's target, there may be room for further rate cut.
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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.
The economists, who were surveyed, also felt it will take time for banks to make any further reduction in deposit rates
It is also likely to assume a deflator of around 4 per cent. That could take the nominal GDP outlook for FY21 to around 10 per cent. It is this nominal GDP forecast on the basis of which the finance ministry is calculating key Budget targets like the fiscal deficit as a percentage of GDP and tax revenue growth for the coming year.
Gold discounts in India, the world's second-biggest consumer, widened this week as dealers struggled to offload stocks amid sluggish demand.
Speaking at an Assocham event, Modi said the recent cut in corporate tax has brought rates to all-time low for businesses, adding that labour force should also be taken care of.
Also keenly watching inflation numbers, with wholesale inflation data expected today
According to bankers and economists, there is room for further rate cut by the RBI as retail and wholesale inflation rates have remained benign.
Bankers said high interest rate could make Indian economy sluggish given that inflation is around 5%
The minders of the Modi government's economic policy believe it would take 7 to 8 quarters -- or till around late 2018 -- for the economy to reap the rewards of demonetisation.
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.
There is a lot of police action on the ground and even inter-state movement has been stopped, because of which deliveries of essential items via platforms, such as Flipkart, Amazon, Grofers, and Milkbasket, aren't happening. Food-delivery firms -- Swiggy and Zomato -- are facing similar challenges, according to the sources.
'It is almost four years since we've seen strong growth in earnings.' 'The markets have rallied about 20 per cent in the past year, which is ahead of earnings.' 'So, the stress now will be on earnings to catch up.'
More rate cut by RBI unlikely this fiscal, say Ind-Ra
Food and fuel are two perennial areas of concern.
Record equity divestment by the Reliance Group in its telecom and retail businesses garnering around $23 billion revved up the deal street in 2020, which otherwise would have gone down as one of the dullest on record, and dealmakers are seeing sunnier days in 2021 given the large scope for consolidation in a slew of sectors ravaged by the pandemic. With Jio Platforms alone garnering over $16 billion (Rs 1,18,318 crore) by selling 25.24 per cent stake and Reliance Retail notching up $6.4 billion (Rs 47,265 crore) by divesting around 9 per cent shareholding, the deal street signed off with $85 billion in the deal kitty across 1,270 transactions. This is higher by about 10 per cent over 2019. What is significant is that over a third of the total deal value came from Reliance transactions, say investment bankers.
The survey showed firms passed on a greater cost burden to consumers. Prices charged rose at their fastest pace since October.
The survey showed firms' confidence regarding future business grew at the slowest pace in a year last month.
Industrial ouput, however, was seen falling 0.6 per cent in January
The Central bank primarily factors Consumer Price Index while deciding on policy rate.
'If you see the composition of items which are causing this spike in prices, most of them have little to do with the kharif harvest, except for pulses and vegetables to some extent.' 'I don't know on what basis the government is claiming that food prices will moderate in the weeks to come.'
Sun Pharma was the best gainer among Sensex components, surging 6.91 per cent
Markets extended gains for the fourth consecutive day tracking gains in banks, capital goods and oil and gas majors.
Across the board, demand would appear to be slacker than it should be if we are headed for a healthy recovery.
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