Therupee staged a smart rebound from its low towards the fag-end trade on dollar selling as well as suspected intrusion by the Reserve Bank to end steady at 63.39.
Banking and financial stocks got more than their fair share of foreign portfolio investor (FPI) flows in February. Overseas investors pumped in $3.56 billion into domestic equities last month. Of this $1.96 billion went into financial stocks, data analysed by Edelweiss shows. "The sector now has 34.8 per cent of FPI assets, up from 33.8 per cent in January.
Indian companies had invested $7.34 billion.
Forex dealers said a strong opening in domestic equity markets supported the rupee.
In rupee terms, India's market cap is currently about Rs 184 trillion - 90 per cent of the GDP of Rs 203 trillion for FY20 at current prices.
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Forex dealers said a higher opening in the domestic equity market also supported the rupee.
Experts said banking is a play on the economy and the latest buying into this space is underpinned by hopes of a sharper-than-expected recovery in the economy.
Small-cap stocks raked in big gains in fiscal 2021-22 by giving up to 36.64 per cent returns, outshining the bigger benchmark gauge and experts believe that they may continue to outperform in FY23. Markets faced many headwinds in the latter part of the last fiscal with the emergence of geopolitical tension, inflation concerns and FII selling. Analysts said that the first half of the last fiscal was very good, while the market entered into consolidation in the second half, combined with high volatility.
The government made these changes in the third edition of the Consolidated FDI Policy Circular, a ready reckoner on foreign investment-related regulations that was released in New Delhi on Thursday.
The US Fed kept its near-zero benchmark interest rate unchanged.
Axis Bank was the top gainer in the Sensex pack, soaring over 13 per cent, followed by ICICI Bank, HDFC Bank, IndusInd Bank and Bajaj Finance. On the other hand, Sun Pharma, UltraTech Cement, Titan and Asian Paints were among the laggards.
Dealers attributed the rupee's fall to increased demand.
Continued demand for the American unit from importers and the greenback's persistent gains against other Asian currencies put pressure on the rupee
A weakening dollar against other currencies overseas supported the rupee.
Concessional rate of tax on dividends received by Indian companies from foreign subsidiaries will be done away with from April 1, a change that may hamper global expansion of Indian companies and compel some firms to move their headquarters out of India to geographies such as Singapore and Dubai. At present, dividends received by Indian companies from their foreign subsidiaries are subject to a concessional tax rate of 15 per cent under Section 115BBD of the Income Tax (I-T) Act. The provisions of this section shall not apply from assessment year 2023-24 onwards, according to the Finance Bill.
The currency market won't care for our moans, groans, cries and sighs. The rupee will find its own level, explains Tamal Bandyopadhyay.
Foreign portfolio investors (FPIs) remained net buyers to the tune of Rs 12,266 crore in the Indian market in the first five trading sessions of February, as positive sentiment post-Union Budget 2021 sparked a rally in investment.
Foreign investors are pumping funds into debt in order to take advantage of higher yields
Market experts attributed the outflow to profit booking and consolidation in the equity market.
'It could tempt investors to pick stocks that are not fundamentally sound.'
Overseas, the US dollar took a breather against basket currencies
A series of steps taken by the government to promote ease of doing business and liberalisation of foreign direct investment norms have helped India receive record FDI inflows so far this year, and implementation of measures like PM Gati Shakti, single window clearance and GIS-mapped land bank are expected to further push investments in 2022. Notwithstanding the global slowdown and the COVID-19 pandemic, total foreign direct investments into India rose to a record $81.72 billion in 2020-21. During April-July this fiscal, FDI (foreign direct investment) into the country increased by 62 per cent to $27.37 billion.
Rising prices of international coal - both coking and thermal - used in the making of ferrous and non-ferrous metals, respectively, are expected to have an impact on margins of metals companies in July-September quarter (Q2) as steel companies may see margins getting eroded, while the base firms could stand to benefit, said brokerages.
The veteran Congress leader said people asked him why only he had been arrested, but he had no answer.
The move is meant to curb or reverse the export of India's financial markets to overseas trading platforms.
'The market was expecting the Budget to do more, given the domestic economic slowdown and global uncertainty. Over the next few days, the market is expected to absorb the volatility.'
Overseas investors buoyed by recent rate cut by RBI and hopes of a good monsoon
A higher opening in the domestic equity market influenced the rupee uptrend.
Dollar's weakness against some other currencies overseas supported the rupee.
Since jobs will remain scarce for the foreseeable future, an unemployment allowance should be the next big social-security initiative, suggests T N Ninan.
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Hopes of more foreign funds on the back of sharp recovery in domestic equity market also boosted the value rupee against the dollar
Yes Bank was the top gainer in the Sensex pack, soaring 24.03 per cent, after the lender said it had received a binding offer for $ 1.2 billion funding from an overseas investor. SBI, Infosys, Tata Motors, Bharti Airtel, HCL Tech and HDFC too rallied up to 7.69 per cent.
The Reserve Bank said overseas direct investments by Indian companies, including Bharti Airtel, totalled $2.37 billion in February, up about 30.25 per cent year-on-year.
Navi Mutual Fund (MF), among the latest entrants in the Rs 35-trillion industry, is looking to make a mark in the passive investment space, which is gaining traction in the country. The Flipkart co-founder Sachin Bansal-led fund house filed seven offer documents with the market regulator Securities and Exchange Board of India (Sebi) on a single day this week. Some of the schemes Navi MF plans to launch are Navi NASDAQ 100 Fund of Fund, Navi Nifty Commodities Index Fund, Navi Nifty 100 ESG Index Fund.
India's current account surplus moderated to $15.5 billion or 2.4 per cent of the GDP in the July-September quarter of the current fiscal, the RBI said on Wednesday. The same was at $19.2 billion or 3.8 per cent of the GDP in the preceding three-month period on account of a rise in the merchandise trade deficit, the RBI said in a statement on 'Developments in India's Balance of Payments during the Second Quarter (July-September) of 2020-21'. It is for the third consecutive quarter that India's current account remained in surplus. In the last quarter of 2019-20, the surplus was $0.6 billion. Current account deficit/surplus reflects the difference between the outflow and inflow of foreign exchange in a country's current account.
There is polarisation among sectors with IT and healthcare receiving the lion's share of FPI money in the past two quarters.
Dealers said besides increased demand for the American currency from importers, the dollar's strength against other Asian currencies overseas, put pressure on the local unit.
A weak dollar overseas supported the rupee sentiment.
