The unexpected upward revision of the country's sovereign rating by Fitch today will strengthen the battered rupee which would also stem the fund outflow from the domestic market, Standard Chartered said.
While RBI's foreign exchange reserves have swelled to over $400 billion, it has a 'sell' position of $981 billion.
'MFs have a combined exposure of Rs 3.2 lakh crore to NBFCs, out of which Rs 1.1 lakh crore matures by September 2019.'
The 50-share NSE Nifty ended up 37.05 points, or 0.36 per cent, at 10,397.45 points
The value of the foreign portfolio investors (FPI) holdings in the domestic equities reached $592 billion in three months ended June 2021, a surge of 7 per cent from the preceding quarter, according to a Morningstar report. This was largely on the back of robust net inflows from FPIs, coupled with the strong performance of the Indian equity markets. "As of the quarter ended June 2021, the value of FPI investments in Indian equities stood at $592 billion, which was considerably higher than the $552 billion recorded in the previous quarter, a spike of around 7 per cent," the report noted. As of June 2020, the value of FPI investments in Indian equities had been $344 billion.
The NSE Nifty settled at 10,454.95, down 121.90 points, or 1.15 per cent.
Markets end in red; bluechips struggle to keep pace.
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On Wednesday, RBI reduced the cap on individual remittances abroad from $200,000 (about Rs 1.2 crore) to $75,000 (Rs 45 lakh) and also barred individuals from using funds under the scheme to buy immovable properties abroad.
The RBI governor is focused on growth, and keeping rupee slightly depreciated is part of that 'Atmanirbhar Bharat' strategy.
Despite a strong start to trade today, key benchmark indices retreated sharply from their higher levels following bouts of profit-taking amid fresh weakness in the rupee against the dollar.
The rupee fell back against the pound to 98.72 from overnight close of 98.48 and turned negative to end at 77.44 per euro from Rs 77.37.
Dalal Street investors became richer by more than Rs 16.36 lakh crore this year as the equity market scaled new highs despite persistent geopolitical uncertainties and inflation worries. Analysts attributed better macroeconomic fundamentals, the confidence of retail investors and foreign investors investing again in the domestic equities towards the latter half of 2022 as the key factors that led to the outperformance of the Indian market in comparison to many other stock markets worldwide. During the initial part of the year, markets were jolted by the Russia-Ukraine war.
Foreign investors have pulled over Rs 6,400 crore from the Indian equity market in the first four trading sessions of the ongoing month when the Reserve Bank of India (RBI) and US Federal Reserve raised interest rates. Given the headwinds in terms of elevated crude prices, inflation, tight monetary policy among others, FPIs' flows in India are expected to remain volatile in the near term, Shrikant Chouhan, Head - Equity Research (Retail), Kotak Securities, said. Foreign Portfolio Investors (FPIs) remained net sellers for seven months to April 2022, withdrawing a massive amount of over Rs 1.65 lakh crore from equities. This was largely on the back of anticipation of a rate hike by the US Federal Reserve and due to the deteriorating geopolitical environment following Russia's invasion of Ukraine.
The 50-stock NSE barometer Nifty finished 22.50 points, or 0.21 per cent, down at 10,526.20
Forex dealers said besides robust month-end demand for the American currency from oil importers, dollar's strength against its rival currencies on expectations of rising interest rates amid lingering Sino-US trade tensions, weighed on the domestic currency.
Not just India, but Asian peers such as Indonesia, South Korea, Thailand, Taiwan and The Philippines have seen sharp FPI outflows this year
The broader NSE Nifty struggled before ending well above the 10,500-mark.
Forex dealers said besides the dollar's gain against other currencies, fresh demand for the American unit from importers and a weak opening in the domestic equity market put pressure on the rupee.
Sentiments took a hit after broader Asian markets weakened, following a renewed sell-off on Wall Street on Tuesday as energy shares dropped after crude oil prices plunged to a 13-month low amid weak earnings and US-China trade disputes, fuelling worries about economic growth
Foreign Portfolio Investors purchased stocks worth about Rs 56,123 crore in 2016-17
The 30-share Sensex ended down 604 points at 28,845 and the 50-share Nifty ended down 181 points at 8,757. The Bank Nifty ended down 602 points at 19,146.
The dollar maintained its bullish momentum in Asian and early European trade
After a a steep fall last week, the rupee has closed slightly stronger against the dollar.
India must carry on structural reforms, the finance minister said.
'Given the worries about sluggish growth, rising interest rates and likely volatility, it's quite logical to infer that the SIP route could be the preferred way of investing.'
Oil tanked to a 7-year low as OPEC decided to maintain production.
Sensex,Nifty to remain under pressure through the week.
Many giving double-digit returns, with India up less than one per cent; even so, it has done much better than other emerging markets.
Forex dealers said besides continued demand for the American currency from importers, increased capital outflows by foreign funds kept pressure on the rupee.
All the sectoral indices, led by realty, metal, consumer durables and power were trading in the negative zone on Thursday.
As markets complete the first half of the calendar year 2022 (CY22) with a fall of around 9 per cent, the interest-rate hike trajectory by global central banks, paired with the conundrum of inflation and growth, will move the needle for the market, observe experts. Here's a quick rundown on what they'll react to over the next six months.
Out of the 30-share Sensex pack, 21 ended lower and one remained unchanged
Foreign funds sold Indian shares worth 446.9 million rupees ($7.4 million) on Wednesday, provisional exchange data showed, marking the third consecutive session of outflows.
However, it is noteworthy that foreign investors pumped in money on the day of election results as the mandate became clear
The clarification by the National Securities Depository (NSDL) - which is tasked with monitoring foreign portfolio investor (FPI) investment in domestic stocks - that the accounts of top investors in Adani group stocks remain 'active' has helped prevent a $500-million selloff of shares. Analysts said a freeze of the FPI accounts, as reported by some media outlets, could have prompted global index providers to cut weighting of four Adani group companies from their global indices. Brian Freitas, an analyst at independent research provider Smartkarma, said if the FPI accounts were indeed frozen, FTSE and MSCI would have reduced weighting of Adani group companies at the next rebalance, since it would have meant that the large part of the free float was not tradeable.
Experts say foreign investor sentiment was bolstered by the US Federal Reserve's decision to go slow with interest rate hikes and hopes of political stability.
Markets ended in green on rate cut hope.
The broader NSE Nifty too fell below the 10,100 level by dropping 100.10 points to end at 10,094.25
Rupee movement, global cues key for stocks this week: Experts
Pakistan's current account deficit (CAD) increased to a 4-year high of $17.4 billion in the fiscal year of 2021-22, indicating more troubles for the ailing economy of the cash-strapped country. The State Bank of Pakistan (SBP) on Wednesday reported that the country recorded a CAD of $17.406 billion in FY22 compared to a gap of just $2.82 billion in FY21. According to Dawn newspaper, the massive CAD speaks a lot about the severe problem of the balance of payments.
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