For a variety of reasons it would seem that endangering the dollar is in the interest of the Wall Street at this point in time. The Fed has merely obeyed its masters at Wall Street. Good luck to the US dollar!
India's economy is forecast to grow at 4.8 per cent in 2013, down 1.3 per cent from its earlier projection, the UN's World Economic Situation and Prospects 2014 report said.
The rupee surged to its highest level in five weeks to end at 65.58 by gaining 38 paise against the US currency.
The Indian markets look extremely stretched. The Sensex valuations have gone up 19.28 per cent to 26 per cent since the lows triggered by the sub-prime crisis two months ago. Taiwan and Kospi, on the other hand, have not changed much. A Citi group report suggested that the RBI might hike CRR rates to suck out excess liquidity from the system. An increase of one per cent would draw out $7 billion from the system.
Analysts agree China, Greece and US Fed developments need careful monitoring but India should gain, over time, from relative rise of the dollar and fall in commodity prices.
The central bank operationalised these special windows on September 4 to prop the rupee which had fallen close to 30 per cent between April and August.
High net-worth individuals, or the rich investors with investment portfolios of Rs 25 lakh and above, who totted up huge losses in this year's price corrections in February and August, are booking profits following the nearly 4,000-point surge in the Sensex since late August.
Investors turned cautious ahead of the US Fed meet outcome later today and July F&O expiry.
RBI has reiterated its faith in the Indian economy but it has also put forth some key concerns that have the potential to derail the growth engine.
Though the Reserve Bank would want to keep excess liquidity under check to contain inflation, it may still go for a CRR cut to enable banks lower interest rates in order to spur growth through increased credit offtake.
Index majors NTPC, BHEL, Reliance Reliance Energy, Reliance Communications and HDFC, DLF, TCS, SBI and Bajaj Auto have zoomed.
Commerce and Industry Minister Kamal Nath has said a hefty cut in the US interest rates will have a positive impact for the Indian exports, but industry leader Rahul Bajaj felt the move will further hit exporters. "The US Fed's decision would rather boost Indian exports to America as it would raise demand in the biggest economy of the world," Nath said at the World Economic Forum annual meet in Davos.
.jpg)
As many as nine respondents said RBI would hold the repo rate at 8% till March-end, 2015
.jpg)
The country has enough forex reserves to meet the demand.
From India's perspective, a decline in the dollar against the major currencies invariably means appreciation for the rupee.
The Williams sisters will in the United States' Fed Cup match against Belgium in April.
Silver followed suit and recovered Rs 400 to Rs 34,100 per kg.
Demand bounces back but uncertainty over GST rate for jewellery casts a shadow over future.
The NSE Nifty is also at a new high at 4659, up 113 points.
US Fed Cup captain Zina Garrison has picked both Williams sisters in her squad to face Russia in next month's semi-final.
Experts believe dollar may continue to appreciate due to an increase in US economic growth
The Sensex opened with a bang at 15,326 - up 493 points - on positive cues from the global markets after the US Federel Bank cut interest rates by 75 basis points. The index touched a high of 15,467 in opening trades. The index thus ended the holiday -shortened week with a loss of 766 points. The markets are closed on Thursday and Friday. The NSE Nifty touched a high of 4,718, but settled with a gain of 41 points at 4,574. The index was down 172 points for the week.
In the case of Indian equities specifically, all eyes will now be on the next RBI monetary policy scheduled for September 29.
All policy planners want low interest rate, says Jaitley
Michael Metz, Chief Investment Strategist of Oppenheimer and Company, does not expect US Fed to increase rates again. Metz feels that the margins of US companies may have peaked out.
The NSE Nifty recovered from a low of 6005, and zoomed to a fresh all-time intra-day high of 6176 before finally settling with a gain of 62 poins at 6159. The market breadth on the BSE was fairly positive with advancing stocks outnumbering declining stocks nearly 3:1 - out of 2,924 stocks traded, 2,139 moved up, 750 were down and the rest were unchanged on Wednesday.
The 50-share Nifty bounced 83.35 points, or 0.86 per cent, to 9,794.15 at close.
The Indian stock markets' buoyant reaction to US Fed's decision to halt the interest rate hikes seems to reflect the growing clout of FIIs on the domestic bourses, which were falling like ninepins not long time back.\n
The Survey also said that the borrowings by banks have increased significantly.
All sectoral indices, led by realty, PSU, oil & gas and banking, were in positive zone with gains of up to 1.25 per cent.
The Nifty gained 186 points to close at 4,732.
Gold prices in the country may even dip to Rs 20,500 per ten grams.
Finance Minister P Chidambaram on Tuesday termed the steep fall in the stock market as a correction triggered by factors, including a fall in metal prices.
The NSE Nifty ended at 4,209, up 101 points.
The rupee had lost 21 paise on Tuesday's trade.
India too will advocate the IMF quote reforms at the two-day meeting of G20 Finance Ministers and Central Bank Governors beginning Saturday.
The IMF has encouraged both the UK and the EU to work collaboratively towards a smooth transition.
The rupee is likely to strengthen to 60-61 level by this fiscal-end on expectations of improvement in current account deficit (CAD) and higher inflows from overseas investors.
Revising inflation forecast upwards would be positive
© 2026 Rediff.com - Investor Information - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances