Snapping its 3-day winning spree against the American currency, the rupee on Wednesday dropped by 21 paise to end at 66.64 on fag-end dollar demand from banks and importers despite a sharp rally in domestic equities.
'In the next one-and-a-half, two months you'll get decent amount of opportunities in the mid-cap and small-cap sector at lower levels.'
The trading range for the Spot USD/INR pair is expected to be within 66.20 to 67.00.
Volatility ain't going away any time soon. 2013 was the most volatile year for the rupee in at least the last 10, with 2009 not far behind.
The rupee recovered 14 paise to 66.40 against the dollar in early trade on Monday.
A sharp rally in domestic stocks from June lows has once again rendered Indian markets expensive to their emerging-market (EM) peers. The 12-month forward price-to-earnings (P/E) multiple for the Nifty50 Index is around 20.6x - 82 per cent higher than 11.3 per cent for the MSCI EM Index. India's valuation premium has hit a five-month high. This is on the back of sharp outperformance to EM and global peers from June lows and also due to earnings downgrades, following the April-June quarter of 2022-23 earnings.
'Rate cut should reiterate RBI's commitment in providing confidence to consumers and small business.'
Ongoing trade-war rhetoric between the US and China added some nervousness on the trading front coupled with extremely bullish dollar sentiment overseas.
Volatile currency market sentiment across Asia following a fresh round of China's yuan depreciation further added to gloom.
At Rs 919 crore, InterGlobe Aviation, the parent firm of low-cost airline IndiGo, posted its best-ever fourth quarterly net profit in the January-to-March quarter (Q4) of financial year 2022-23 (FY23). The bottom-line, however, was lower than the Street's expectations where estimates ranged from Rs 1,160 crore to Rs 2,180 crore. On the bourses, shares of IndiGo have added just 30 paise (0.01 per cent) since the announcement of the Q4-FY23 results on May 18.
ITC's results for the January-March quarter (Q4) were strong, with robust growth in the fast-moving consumer goods (FMCG) segment and a good performance in hospitality. The tobacco division's performance was on expected lines, with double-digit volume growth, helped by reclaiming of market share from the smuggled trade. There was 60 per cent growth in non-cigarette earnings before interest and tax (Ebit), despite a relatively weak performance in paperboards.
Fresh dollar demand from banks and importers amidst volatile equities triggered the fall
BSE Realty index zoomed by almost 7% followed by counters like Metal, Oil & Gas, Auto, Banks, Auto, Healthcare and Power, all surging between 1-5%.
After a a steep fall last week, the rupee has closed slightly stronger against the dollar.
Foreign direct investment into the country is expected to rebound in the coming months on account of India's high economic growth, and steps to further improve the business environment of India, the Economic Survey said on Tuesday. The rise in global uncertainty in the wake of the Russia-Ukraine conflict, FDI equity inflows in the manufacturing sector in the first half of the current fiscal (April-September) fell below its corresponding level in the first half of 2021-22, the document, which was tabled in Parliament, said. The monetary tightening at the global level has further restricted the FDI equity inflows, the survey said.
'It is like a chicken-and-egg situation.' 'All these product tweaks are innovative, but traders won't move unless there is liquidity.' 'And liquidity cannot be generated until traders move.'
In the forward market, the premium for dollar moved up on fresh paying pressure corporates.
Sustained dollar unwinding from exporters and banks amid weak overseas trend gave a boost to the rupee
All categories of NRI deposits saw net inflows in July.
It is the rupee's biggest single-day gain this year.
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The local currency opened at 62.20 a dollar from the previous close of 61.93 and immediately touched a low of 62.29 at the interbank foreign exchange market.
The boat, with a high-power motor, was en route to Talaimannar from Tuticorin late Monday night when a naval patrol vessel intercepted it.
Heavy unwinding by foreign portfolio investors and lacklustre equities dampened the sentiment
With the benchmark Sensex witnessing a dream-run, total market valuation of BSE listed companies has inched closer to Rs 100 lakh crore milestone.
The rupee on Monday ended lower by 23 paise to close at an over two-week low of 67.31 against the US currency.
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While the measures are aimed at moderating outflows, RBI added that genuine requirement beyond these limits will continue to be considered under the approval route.
One reason why volumes have not increased in the retail segment is that users are not aware of merchants who accept digital currency.
Markets extended losses to end 1.5% down on Tuesday, amid weak global cues, after investors turned cautious ahead of key economic data and booked profits in rate sensitive shares while the further fall in the rupee continued to weigh on investor sent.
Russian traders have started asking for payments in ruble for their exports to India in a move that could derail trade between the two countries which gathered pace after the war in Europe. This is because Indian importers are unable to pay in ruble. The India-Russia trade gathered pace after Vladimir Putin invaded Ukraine in February this year. In the April-June quarter, India's imports from Russia were valued at $9.27 billion, up 369 per cent year on year.
Overall forex market sentiment remained cautious
Gold prices are likely to decline further to around Rs 24,500 per 10 grams by December if the rupee continues to rule at the current level.
Hawkish guidance by the US Fed raises concerns it could tie the hands of RBI from trimming rates.
The dollar index was down 0.01 per cent at 95.86 against a basket of six currencies in early trade
Dollar's strength against other currencies overseas capped the rupee's gain
A massive rally in domestic equities along with smooth supply of dollars on the back sustained capital inflows into equities and debt predominantly helped the upmove
India is attempting to soft-land a rover on the moon and will attempt, at some point next year hopefully, sending humans into orbit. All of this makes an exciting time for space around the world, notes Aakar Patel.
Robust capital inflows alongside a slightly weaker greenback too reinforced the dominance of the home currency
Mahindra and Mahindra was the top gainer in the Sensex pack, surging over 16 per cent, followed by Maruti, Titan, Bajaj Finance, HDFC, Bajaj Auto and Hero MotoCorp. On the other hand, HUL, Tech Mahindra, IndusInd Bank and Nestle were the laggards.
The rupee has been witnessing an unprecedented plunge in its value as it dropped to an all-time intra-day low of 68.75.
Bullish dollar sentiment overseas alongside sluggish domestic equity market predominantly impacted the domestic currency
