On the macro front, market participants will closely watch the FY'15 fiscal deficit target
Tata Steel was the top loser in the Sensex pack, sinking over 5 per cent, followed by SBI, IndusInd Bank, Bajaj Finance, HDFC Bank and NTPC. NSE Nifty tanked 371 points to 16,614.20.
The rupee on Thursday recovered by a hefty 60 paise to 53.24 against the US dollar in early trade on the Interbank Foreign Exchange market after the Reserve Bank tightened norms for utilisation of the foreign currency fixed deposit funds to check outflow of forex.
This could be attributed to the attractive valuation of the Indian equities after the sharp correction during the first quarter of calendar year 2020 and significant depreciation of the Indian rupee against USD, which provided them a rather good entry point.
'A soft landing of the Indian economy would be a long-term positive for the equity markets.'
The NSE Nifty after shuttling between 10,441.90 and 10,341.90, ended 6.15 points, or 0.06 per cent down at 10,380.45.
Sentiment took a dramatic change particularly in the last one hour of trading with the lower opening of the European markets and investors booking profits in broader markets at record levels
Although the RBI's open market operations have ensured sufficient system-level liquidity, some sectors are finding liquidity to be a challenge owing to their credit profile.
Sebi has put in place a strong deterrence to check any misuse of participatory notes.
'The potential headwind is that the Indian economy is likely to see a slowdown in growth rates over the next two years.'
Illustration: Uttam Ghosh/Rediff.com After a brief respite at the year's start, FPIs have dumped shares worth more than $5.7 billion (Rs 42,596 crore), taking the cumulative net outflows since October to $10.5 billion (Rs 78,466 crore), and adding to the volatility on the bourses. The figure would have been a lot worse had it not been for net purchases to the tune of $5.7 billion in the primary market from October to date.
Continued outflows amid moderation of domestic investments are a concern
The top losers from the Sensex pack are ONGC, Coal India, Vedanta, Reliance Inds and L&T.
The NSE Nifty cracked below the 10,800-mark to hit a low of 10,753.05 intra-day, before closing at 10,762.45 with a loss of 59.40 points, or 0.55 per cent.
Thus far in FY21, BSE, NSE have rallied 70 per cent and 71 per cent, respectively.
The reserves rose to $501.70 billion helped by a whopping rise in foreign currency assets, the latest data from the Reserve Bank of India.
Investors remained cautious in the face of the expiry of November series contracts in the derivatives segment, which also dampened sentiment.
The rupee has depreciated by about 25 per cent in the past three months, from close to Rs 83 in mid-May, while it was even higher at about Rs 80 against the British Pound in March.
In absolute terms, the CAD stood at $4.6 billion in the current fourth quarter, compared with $13 billion in the year-ago quarter and $17.7 billion in the third quarter of fiscal year 2018-19.
Other losers included HCL Tech, Yes Bank, IndusInd Bank, TCS, ONGC, Bajaj Finance, PowerGrid, Vedanta, Asian Paints, NTPC and Hero MotoCorp, which shed up to 4.07 per cent.
Worried over excessive outflow of foreign exchange as royalty and fees for technology transfer and use of brand names, Commerce and Industry Minister Anand Sharma wrote to Finance Minister P Chidambram on the matter.
India is among 75 countries with which Switzerland's Federal Tax Administration has exchanged information on financial accounts within the framework of global standards on Automatic Exchange of Information.
Strong month-end demand for the US currency mainly from oil importers along with currency futures expiry related purchases predominantly weighed heavily on the forex market and haunted investor sentiment.
The broader Nifty of National Stock Exchange scaled the 10,200 mark intra day before closing at 10,184.85, showing a sizeable gain of 38.30 points, or 0.38 per cent.
The rating outlook change is relevant now, as the US Federal Reserve is set to end its monthly bond-buying programme in October.
The indices closed with losses for the week, with the Sensex declining 476.14 points, and the broader NSE Nifty falling 155.45 points during the period.
Despite the 3 per cent gain in September 2019, the FPI sell-off during the quarter has seen the benchmark indices - the S&P BSE Sensex and the Nifty 50 register negative returns in Q3CY19.
Due to tax associations with the fiscal-ending, April is a month of SIP renewal. So, the April numbers will be important and may perhaps, mark a change in retail attitude.
There has been a decline in foreign direct inflow from China in the last three years, with FDI coming down to USD 163.77 million in 2019-20, Minister of State for Finance Anurag Singh Thakur informed the Lok Sabha on Monday. Giving details of the total foreign direct investment (FDI) inflow from Chinese companies in India, he said, it was USD 350.22 million in 2017-18, while it declined to USD 229 million in the following year.
RBI will review the monetary policy again on September 29.
"According to the global financial services major, though CAD at 3.2 per cent of GDP is significantly lower than the 4.8 per cent it registered in fiscal year 2012-13 ", it still remains higher than the 2.4 per cent of GDP that we estimate as the optimal current account deficit".
After turning net buyers for the fifth straight month till June, foreign portfolio investors (FPIs) withdrew a net of Rs 11,743 crore ($1.7 billion) in July. This was their highest outflow since October 2018.
'Money that came into mutual funds near the previous peaks -- the second half of 2017 and 2018 -- has in most cases experienced unflattering returns.' 'A large proportion of redemptions could be such inflows exiting when the market recovered sharply from July 2020 onwards.'
Participants are keeping an eye on the Winter Session of Parliament, which started today, and US fiscal policies to be followed by President-elect Donald Trump
Finance Minister P Chidambaram on said that financing current account deficit (CAD) year after year is a challenge and the only way to deal with the problem is by increasing exports.
BSE Sensex on Monday closed nearly 34 points higher at 26,350.17 with gains in realty, power, FMCG and oil & gas stocks amid sustained buying by domestic institutional investors.
Trading sentiment remained distinctly weak due to the cash crunch arising out of the government's move to demonetise Rs 500 and Rs 1,000 notes to flush out black money amid concerns about its impact on small and medium-sized businesses which largely run on cash.
There is polarisation among sectors with IT and healthcare receiving the lion's share of FPI money in the past two quarters.
'If the third wave of Covid infections is as bad as the second one, the market may get very polarised with a preference for blue-chips with low volatility.'
Foreign portfolio investors, on the other hand, have been net sellers in the markethaving pulled out Rs 8,600 crore
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