Without naming India, S&P said it expects that in regions where inflation already exceeds targets, or which are vulnerable to capital flight, central banks will be forced to raise interest rates.
Equity investors will track the trading activity of foreign investors, global trends and ongoing earnings results for further cues, and benchmark indices may continue to witness consolidation in a holiday-shortened week amid the monthly derivatives expiry, analysts said. Markets fell sharply last week amid massive foreign capital outflows and dismal Q2 earnings so far. Weakness in the markets might continue in the near term amid cautiousness among investors ahead of the US presidential election early next month, an expert said.
Following alterations in the tax structure, mutual fund (MF) schemes that invest in overseas securities have experienced a sharp decline in inflows. In the first five months of 2023-24 (FY24), international MF schemes have received an average monthly gross inflow of only Rs 270 crore, compared to Rs 490 crore during the same period in the previous year. This decline persists despite nearly all fund houses opening subscriptions for such schemes, with higher redemptions creating headroom for fresh investments.
'Listing of scaled Indian subsidiaries of multinational corporations as well as of Indian conglomerates continues to remain a key theme for IPOs in India.'
The rupee plunged 61 paise to decline below the 83-mark for the first time against the US dollar on Wednesday amid unabated foreign capital outflows and a strong dollar in the overseas markets.
GST 2.0 may cushion consumers against US tariffs, but like the 2019 corporate tax cut, it risks being another tactical fix rather than a structural growth strategy, expects Debashis Basu.
Tech Mahindra was the biggest loser in the Sensex pack, slipping 4.59 per cent, followed by Asian Paints, Wipro, Kotak Mahindra Bank, Bajaj Finserv, Infosys, ITC, Mahindra & Mahindra, Hindustan Unilever, IndusInd Bank, Reliance Industries and JSW Steel. In contrast, Larsen & Toubro, Bharti Airtel, Power Grid and Axis Bank were among the gainers.
Foreign investors continue to show confidence in the country's equity market, infusing Rs 18,620 crore so far this month, driven by a combination of global tailwinds and improving domestic fundamentals. This positive momentum follows a net investment of Rs 4,223 crore in April, marking the first inflow in three months, data with the depositories showed.
Foreign investors continue to pull back money from the Indian equity market, withdrawing Rs 24,753 crore (about $2.8 billion) in the first week of March amid escalating global trade tensions and lacklustre corporate earnings.
Market watchers link the pullback to underwhelming listing-day performance and the lack of big-name IPOs.
Foreign fund outflows and a lower opening in the domestic equity market, restricted rupee's gain.
The rupee appreciated 6 paise to 78.27 against the US dollar in opening trade on Monday as heavy buying in domestic equities and weakness in the greenback strengthened investor sentiment. However, elevated crude prices and persistent foreign fund outflows restricted the rupee's gain, forex dealers said. At the interbank foreign exchange, the rupee opened sharply up at 78.24 against the US dollar, then inched lower to quote 78.27, registering a gain of 6 paise over the last close.
Global fund managers witnessed one of their largest-ever declines in assets under custody (AUC) during the ongoing correction in the Indian markets, as stocks came under pressure from foreign outflows and the weakening rupee.
The market breadth was extremely weak with 1,806 losers against 1,009 gainers on the BSE.
The rupee had hit a record low of 68.85 in August 2013.
Equity benchmark indices Sensex and Nifty settled higher on Thursday, powered by a rally in banking and power stocks amid a largely firm trend in global markets. The stock markets mostly traded range-bound in the absence of any major trigger and persistent foreign capital outflows, traders said. The 30-share BSE Sensex rose 144.31 points, or 0.18 per cent, to settle at 81,611.41.
'Expect India to keep doing well irrespective of geopolitics.'
Several mutual funds (MFs) have recently approached the Reserve Bank of India (RBI) as they renew efforts to increase their overseas investment limit. In June 2022, the capital markets regulator Securities and Exchange Board of India (Sebi) permitted MFs to invest in foreign stocks within the aggregate mandated limit of $7 billion after a correction in stocks. One of the proposals shared with the RBI is to link MFs' foreign investment limit to the country's foreign exchange reserves.
The exodus of FPIs from the Indian equity markets continued unabated, as they withdrew over Rs 7,300 crore (about $840 million) in the first week of this month due to global trade tensions, with the US imposing tariffs on countries such as Canada, Mexico, and China. This came following an outflow of Rs 78,027 crore in the entire January. Before that, they invested Rs 15,446 crore in December, data with the depositories showed.
The last time this happened was in 1996.
Domestic institutional investors (DIIs), mostly mutual funds and insurance companies, overtook foreign portfolio investors (FPIs) in ownership of NSE-listed companies in the March quarter of 2025. According to Prime Database, DIIs held a 17.62 per cent stake, up from 16.89 per cent in the December 2024 quarter.
The rupee depreciated 11 paise to a record low of 78.96 against the US dollar in opening trade on Wednesday, weighed down by persistent foreign capital outflows. At the interbank foreign exchange, the rupee opened on a weak note at 78.86 against the American dollar, then lost ground to quote at 78.96 -- its all-time low level, registering a fall of 11 paise from the last close. On Tuesday, the rupee plunged by 48 paise to close at record low of 78.85 against the US dollar.
'Binary fission will happen -- startups will lead to more startups.'
Amid volatility in stock markets generated by tension between Russia and the US over Ukraine, LIC chairman M R Kumar on Monday said that the insurance behemoth was watching the geo-political situation carefully, though it was keen on listing of the IPO in March. The Life Insurance Corporation (LIC) has already filed the DRHP with the Securities and Exchange Board of India (SEBI) for its initial public offering (IPO). "We are watching the situation closely and carefully...but we are very keen on having listing in March," Kumar said, when asked about the impact of the evolving geopolitical situation on the upcoming IPO.
The rupee weakened by 14 paise to close at a new lifetime low of 79.59 against the US dollar on Tuesday as a strong greenback overseas and persistent foreign fund outflows continued to weigh on investor sentiment. This comes a day after the RBI announced measures for international trade settlement in rupees. At the interbank forex market, the local unit opened weak at 79.55 against the greenback and witnessed an intra-day high of 79.53 and a low of 79.66.
After three consecutive years of infusing huge funds, foreign portfolio investors retreated from the Indian equity markets in a big way in 2022 with the highest-ever yearly net outflow of nearly Rs 1.21 lakh crore. The huge outflow, which surpasses by a big margin the previous record of Rs 53,000 crore net withdrawal in 2008, came amid aggressive rate hikes by central banks globally but 2023 is expected to be better on positivity about overall macroeconomic trends in India, experts said. Apart from global monetary tightening, volatile crude, rising commodity prices along with Russia and Ukraine conflict led to an exodus of foreign money in 2022.
The recent global fund flow data suggests that one big cycle of foreign fund allocation into India may have come to an end and the trend could remain soft for a longer time, according to a report by Elara Capital. The note said last week's outflow of $302 million from India's dedicated funds is the largest since June 2022.
Equity benchmark Sensex declined nearly 390 points on Friday, pressured by heavy selling in IT, tech and energy stocks despite a positive trend in the global markets. Besides, rising crude oil prices and relentless foreign capital outflows further weighed on sentiment, traders said. The 30-share BSE Sensex opened strong but came under severe selling pressure to close 389.01 points or 0.62 per cent lower at 62,181.67.
RBI governor Raghuram Rajan is concernedabout the rupee votality.
The declines also tracked the Indian rupee, which fell to a record low as central bank measures to tighten capital outflows and curb gold imports were seen as unlikely to prop up the currency and could even spark further selling if they spook foreign investors.
To enable Indian banks and financial institutions to develop an aircraft-leasing ecosystem at GIFT City, the Ministry of Civil Aviation has sought support from the Ministry of Finance. It has also raised concern over slow progress in developing aircraft leasing in India.
The rupee depreciated 22 paise to a record low of 78.59 against the US dollar in opening trade on Tuesday as persistent foreign funds outflows weighed on investor sentiments. At the interbank foreign exchange, the rupee opened on a weak note at 78.53 against the American dollar, then lost ground to quote at 78.59 -- its all-time low level, registering a fall of 22 paise from the last close. On Monday, the rupee declined by 4 paise to close at its life-time low of 78.37 against the US dollar.
Foreign investors have made a strong comeback to Indian equities with a net investment of Rs 22,766 crore in the first two weeks of December driven by expectations of rate cut by the US Federal Reserve. This revival follows significant outflows in the preceding months, with Foreign Portfolio Investors (FPIs) pulling out a net Rs 21,612 crore in November and a massive Rs 94,017 crore in October -- the worst monthly outflow on record.
Forex dealers said a strong opening in domestic equity markets supported the rupee.
The rupee tumbled 3 per cent against the US dollar in 2024 as concerns over slower economic growth and a stronger greenback in global markets weighed, but it was among the least volatile currencies in the world and the headwinds may be less intense in the coming year.
After a robust 2023, foreign investors significantly scaled back their investments in Indian equities in 2024, with net inflows amounting to over Rs 5,000 crore, as elevated domestic valuations, coupled with geopolitical uncertainties prompted investors to adopt a more cautious stance. Looking ahead to 2025, FPI flows into Indian equities could see a recovery, supported by a cyclical upswing in corporate earnings, particularly in domestic-oriented sectors like capital goods, manufacturing, and infrastructure, Vinit Bolinjkar, head of research, Ventura Securities, said.
The liquidity deficit in the banking system crossed Rs 2 trillion again on Monday, despite the second instalment of cash reserve ratio (CRR) reduction coming into effect from December 28.
Foreign investors have continued selling in the Indian market, pulling out a massive Rs 85,790 crore (around $10.2 billion) from equities this month due to Chinese stimulus measures, attractive stock valuations, and the elevated pricing of domestic equities. October is turning into the worst-ever month in terms of foreign fund outflows. In March 2020, FPIs withdrew Rs 61,973 crore from equities.
India's stock markets are experiencing a shift in investor sentiment, with a 30 per cent surge in Chinese stocks, prompting investors to move money from domestic markets to China. This reversal of fortunes is a notable change from the past three years, where China's losses benefited India.
HDFC was the top laggard in the Sensex pack, shedding over 3 per cent, followed by Infosys, L&T, Kotak Bank, Bajaj Finserv and Tech Mahindra.
