Indian equity markets should be able to withstand inflation up to 8 per cent, said analysts at Credit Suisse Wealth Management in a recent note. Should the rate of inflation move higher than this, the valuation of Indian equities could deteriorate further, they cautioned. The fall from the peak levels has seen Nifty's 12-month forward price-to-earnings (P/E) ratio of 17.6 dip toward its 10-year and 5-year (pre-COVID) average of 16.9, which suggests that valuation froth of Indian equities has settled, said the Credit Suisse analysts.
After selling dollars for the past few months, the Reserve Bank of India (RBI) may take a hands-off approach before its annual account closing by not trying to prop up the rupee as geopolitical tensions show signs of stabilising with global crude oil prices easing from its $140 peak. The central bank was a net buyer of dollars between April and September, and then turned a net seller in the following months, the data released by the RBI showed. The RBI continued to be a net buyer of $36.6 billion in this fiscal year - between April and January. In 2020-21, it purchased $68 billion on a net basis.
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.
Conventional wisdom is that when the US sneezes, emerging markets like India catch a cold. And yet the Indian stock market went up last year, points out Debashish Basu.
The BSE gauge Sensex tanked over 1,500 points to crack below the 57,000-mark and the NSE Nifty slipped below the 17,000-level in the opening session on Monday, amid heightened tension over the Russia-Ukraine conflict. The 30-share Sensex nosedived 1,540.85 points to 56,612.07 in early deals and the broader Nifty plummeted 458.20 points to 16,916.55. On the Sensex chart, all 30 shares were trading with steep to moderate losses -- with SBI, Tata Steel and IndusInd Bank tumbling over 4 per cent.
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.
The rupee fell by 49 paise to close at 81.89 (provisional) against the US dollar on Monday as heavy selling pressure in the domestic equities and a spike in crude oil prices weighed on the local unit.
His business successes which started with the international distribution rights for the Bollywood blockbuster movie 'Sangam' in 1964 made him one of the richest in Britain but it was the Bofors scam that made Srichand Parmanand Hinduja famous, or rather infamous, back home. SP Hinduja, as he was known, died in London on Wednesday after a prolonged illness. He was 87, a family spokesperson said. Born in a business family in Karachi, British India, he and his two younger brothers were accused of receiving payments totalling Rs 64 crore in illegal commissions to help Swedish gunmaker AB Bofors secure an Indian government contract.
India's top oil and gas producer ONGC on Friday reported a tripling of net profit in the June quarter as it earned record prices before the government slapped a tax on windfall profits arising from a global rally in energy rates. Oil and Natural Gas Corporation's (ONGC) standalone net profit at Rs 15,205.85 crore, or Rs 12.09 per share, in April-June, compared to Rs 4,334.75 crore, or Rs 3.45 a share, in the same period a year back, according to a stock exchange filing by the company. Sequentially, the profit was higher than the Rs 8,859.54 crore net profit of January-March.
Petroleum Minister Ram Naik on Monday said the hike in petrol and diesel prices was "justified" given the hardening of global crude prices.
With no major domestic market-moving event scheduled this week, stock market investors would largely focus on global trends and foreign fund movement, and may face volatility amid monthly derivatives expiry, analysts said. This week Federal Open Market Committee (FOMC) meeting minutes are due for release which would provide further cues to the market, Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd, said. "With all major events behind us, participants will take cues from global markets, crude and currency market movement.
The rupee on Tuesday recovered from its all-time intra day low of 77.79 to close higher by 7 paise on a stellar rally in domestic stock markets. After opening lower at 77.67, the local unit plunged further to its all-time intra-day low of 77.79 due to a spike in crude oil prices and disappointing macroeconomic data. However, a strong rally in domestic equities helped the rupee rebound and close at 77.48 (provisional), showing net gains of 7 paise over the last close of 77.55. The forex market was closed on Monday on account of Buddha Purnima.
Benchmark BSE Sensex rose by 160 points on Thursday in choppy trade following gains in select banking and auto counters amid mixed global cues. The 30-share index gained 160 points to settle at 62,570.68 as 13 of its components advanced while 17 declined. The barometer opened lower but later gained momentum to touch a high of 62,633.56 in the day's trade.
'I'm pitching India for the strengths we offer, including the English language, engineers, doctors, nurses, professionals, innovative talent of startups.'
The biggest headwind to the consumption story in FY23 is a sharp decline in government subsidies on food, fertiliser and fuel, and overall decline in revenue expenditure net of interest payments. This, analysts say, will adversely impact purchasing power of households at the lower end of the income pyramid, translating into lower spending on consumer goods and services.
After withdrawing record funds in 2021-22, foreign portfolio investors (FPIs) continued their sell-off in the last fiscal too and pulled out Rs 37,631 crore from Indian equities amid aggressive rate hikes by central banks globally. The outflow trend is likely to reverse in the current financial year since India has the best growth potential in the financial year 2023-24 (FY24), VK Vijayakumar, chief investment strategist at Geojit Financial Services, said. Market analysts believe that FPI flows in the current financial year would be decided by a host of factors, such as the US Federal Reserve's policy stance, oil prices movement and development in the geopolitical situation.
'To summarise, PM Modi's failures in the last nine years can be categorised under 'durniti' (bad policies), 'anyay' (injustice) and - perhaps most importantly - 'badniyat' (ill intention)'
Benchmark BSE Sensex rose by 156 points while the Nifty closed above the 17,300 level on Thursday after gains in metal, IT and capital goods shares amid foreign capital inflows. The 30-share BSE benchmark gained 156.63 points or 0.27 per cent to settle at 58,222.10. During the day, it jumped 513.29 points or 0.88 per cent to 58,578.76.
India's economic growth is now 'extremely fragile' and needs all the support that it can get, as private consumption and capital investment are yet to pick up, RBI Monetary Policy Committee (MPC) member Jayanth R Varma said on Friday. Varma further said out of the four engines of growth for the economy, exports and government spending supported the Indian economy through the pandemic, but other engines need to pick up the baton now. " I like to think in terms of the four engines of growth for the economy: exports, government spending, capital investment and private consumption. "...while exports cannot be the main driver of growth because of the global slowdown, government spending is necessarily limited by fiscal constraints," he told PTI.
Petrol and diesel price soared to an all-time high across the country on Friday after rates were hiked again by 25 paise and 30 paise a litre, respectively. The price of petrol in Delhi rose it its highest ever level of Rs 101.89 a litre and to Rs 107.95 in Mumbai, according to a price notification of state-owned fuel retailers. Diesel rates too touched a record high of Rs 90.17 in Delhi and Rs 97.84 in Mumbai.
It will soon be two years since petrol was decontrolled, but few will happily celebrate this second birthday.
Countries have to start replenishing inventories soon, supply remains tight, and the fall in demand isn't large enough all of which suggests higher prices
Oil presently has demand and supply characteristics which are very close to each other. Both show very little inclination to change in any way in the near future. Demand pattern still has not shown any modification while efforts to gear up supply sources have been slow, says Dr Sanjiv Mehta.
Key lending rate (repo) raised by 50 basis points to 4.9 per cent; 2nd increase in 5 weeks
Cooking gas LPG price on Wednesday was hiked by Rs 50 per cylinder, the third increase in rates since May on firming international energy prices. Non-subsidised LPG now costs Rs 1,053 per 14.2-kg cylinder in the national capital, up from Rs 1,003 previously, according to a price notification of state-owned fuel retailers. Common households pay non-subsidised rates for the cooking gas they buy, after the government restricted subsidy to just poor beneficiaries who got connections under the Ujjwala scheme.
The 30-share BSE gauge climbed 465.14 points or 0.80 per cent to finish at 58,853.07. During the day, it jumped 546.97 points or 0.93 per cent to 58,934.90.
Billionaire investor George Soros said that although the price of oil is rising due to a combination of rise in demand from China, a weakening dollar and the reduction in supply from the Persian Gulf nations, the main reason for the unprecedented spurt in crude price is speculation.
A likely turnaround in profitability margins in the March quarter (Q4FY23) will not be enough to lift the outlook for paint stocks due to volatile crude oil prices and rising competition in the sector, analysts say. Hence, they advise investors to avoid the sector over the short-to-medium term despite the heavy correction in the stocks since last year. Shares of Asian Paints, Berger Paints, Indigo Paints, Nerolac and Pidilite have shed 6-32 per cent over the last 6 months versus a 3 per cent rise in the benchmark Sensex.
Housing is not the sole problem. Instead of sub-prime, it is the Alt A loan portfolio that is at risk. Banks are not recognising the second lien on homes and mortgage rates have not fallen to the extent of interest rates. Taxpayers are borrowing more against their 401(k) savings. High crude prices are giving markets a rude shock. Outstandings in the derivatives segment are higher compared to earlier months and we happen to be in May, a notoriously bad month for equities.
The price of crude oil has surged past $120 a barrel. Supply concerns from Opec members Nigeria and Iran as well as a weaker dollar pushed US crude prices up by $4 to $120.36 before closing at $119.97 on Monday.
A host of factors including the reform measures taken by the government and decline in global oil and commodity prices have led to lower inflation, the Finance Ministry said on Wednesday.
Farmers in the Indian state of Rajasthan are rediscovering the humble camel.
The faster-than-expected rise in interest rates by the US Federal Reserve (US Fed) shook global financial markets in early 2022. And now the ongoing war between Russia and Ukraine has lifted commodity prices, with Brent crude oil hitting a 14-year high of $139 a barrel in intraday trade. All these developments have sent the equity markets across the world into a tailspin.
Benchmark stock indices rebounded around 1 per cent on Thursday following value buying in banking, IT and auto stocks after two days of losses and a largely positive trend in global markets. The 30-share BSE Sensex climbed 659.31 points or 1.12 per cent to settle at 59,688.22. During the day, it jumped 683.05 points or 1.15 per cent to 59,711.96. The broader NSE Nifty rose by 174.35 points or 0.99 per cent to close at 17,798.75.
While prices sustaining lower levels is crucial, Govt actions are also a key monitorable given the forthcoming elections in 2024.
Petroleum and oil marketing companies raised the price of commercial liquid petroleum gas (LPG) cylinders by Rs 350.50 per unit and domestic LPG cylinders by Rs 50 per unit with immediate effect from Wednesday.
The Reserve Bank on Wednesday projected inflation to come down below the upper threshold level of 6 per cent by March quarter of the current fiscal. RBI Governor Shaktikanta Das said the central bank will keep 'Arjuna's eye' (focus) on the evolving inflation dynamics and will remain 'nimble and flexible' to deal with the price situation. Global commodity prices, including crude oil, have undergone some downward correction, but uncertainty continues to surround the near-term outlook in view of the prolonging geo-political hostilities. Moreover, the resurgence in domestic services sector activity could also lead to price increases, especially as firms pass on input costs.
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