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Indian equities open upwards in the morning trade

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Mumbai:  Marking a benchmark index for Indian equities, on Friday. The sensitive index (Sensex), open upwards of the Bombay Stock Exchange (BSE) trading at 27,509.50 points some minutes after the opening bell.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) was also trading higher at 8,314.10 points, with a gain of 62.40 points or 0.76 percent.

The 30-share Sensex opened at 27,529.42 points, against the previous close at 27,287.66 points on Wednesday.

At 9.40 a.m., it was ruling at 27,509.50 points, with a gain of 221.84 points, or 0.81 percent.

Trading on the BSE and NSE remained closed on Thursday on account of Dussehra.

 

(IANS)

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Fate of Indian equity market in the hands of upcoming Budget Session

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Mumbai: The upcoming week in the Indian equity market will witness Parliamentary proceedings, US macro-economic data and trends in crude oil prices, leading the fate of markets’ next moves.

Even the budgetary announcements, rupee’s trajectory and the interest of foreign investors will give vital cues to where the market is heading.

“Markets would continue to be lacklustre and news driven. Forthcoming budget expectations and corporate earnings would be watched closely,” predicted Devendra Nevgi, chief executive of ZyFin Advisors.

Pankaj Sharma, head of equities for Equirus Securities, elaborated that investors will be guided and influenced by developments surrounding the union budget.

“The market would read the important cues on the budget from key decision makers, both politicians and senior bureaucrats and react accordingly,” Sharma noted.

“One good thing in all this market mayhem over last 6-7 weeks which has been led by global factors is that the usual buzz on the budget has largely been missing.”

Vaibhav Agarwal, vice president and research head at Angel Broking, pointed out that investors have not priced in the possibility of key reforms being passed in the parliament session.

“Any progress towards implementation of important reforms such as the GST (goods and services tax) would be a key trigger for the markets,” Agarwal told reporters.

Market participants expect the central government to increase expenditure, announce tax concessions and pave the way to reduce the NPAs levels of the banking sector.

“Sentiments are currently down and any positive announcement is surely going to trigger a relief rally in the equity markets. This rally might spill over to the currency markets,” Anindya Banerjee, associate vice president for currency derivatives with Kotak Securities, told reporters.

According to Banerjee, normal parliamentary proceedings, after the recent political turmoil will be keenly followed by market participants. The parliament’s budget session will commence on Tuesday.

“Any signs of a washout in the initial few days will dampen sentiments and dent the rupee,” Banerjee stated.

He explained that an “over-valued rupee” will come under pressure from February 22 onwards as a string of US economic data released till date is expected to keep the dollar well supported.

The rupee had crashed to an all time low at 68.89 to the dollar in the oversees currency markets on Friday and ended the day’s trade at 68.72.

Domestically, the rupee had closed unchanged from its previous close of 68.47 to a greenback on Thursday. The domestic currency markets were closed on Friday.

Besides, the union budget economic survey and railway budget will dictate trend on the bellwether indices informed Gaurav Jain, the director of Hem Securities.

“Indices may seem to remain volatile with a positive bias ahead of the expiry of February series derivative contract, economic survey and reform measures announced in the upcoming railway budget in the week ahead,” Jain said.

In addition, global cues, such as crude oil prices and the trends in foreign funds inflows will be keenly observed.

“Markets will continue to react to global cues with US home sales and GDP data expected next week,” Agarwal added.

Analysts forecast the continuation of the relief rally at the Indian bellwether indices. Short-covering, value buying and positive global cues had swelled the equity markets, during the just-concluded weekly trade.

The barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange (BSE) zoomed by 723.03 points or 3.14 percent to 23,709.15 points during the just concluded week.

Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) rose by 229.8 points or 3.29 percent to 7,210.75 points.

Global indices too rose with the Dow Jones Industrial Average closing the week with gains of 2.6 percent. London’s FTSE rose by 4.2 percent during the week under review. (Rohit Vaid, IANS)

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India’s Forex reserves rise to $353 billion: RBI

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Mumbai: A strengthening rupee, buoyant equity markets coupled with a fall in dollar value boosted India’s Forex reserves by $2.26 billion, experts said on Saturday.

Overall, the Forex reserves stood at $353.06 billion for the week ended October 9.

“The increase in Forex reserves can be attributed to an appreciation in rupee value and the weakening of US dollar against the major global currencies like Euro, Pound and Yen,” Anindya Banerjee, associate vice president for currency derivatives with Kotak Securities, told IANS.

“It is perceived that the appreciation in rupee value allowed the Reserve Bank of India (RBI) to buy more dollars and keep rupee in a comfortable range,” Banerjee said.

The rupee had closed at 64.74 to a US dollar during the week ended October 9. The rupee gained 77 paise on a weekly basis from its previous close at 65.51 to a US dollar in the week ended October 2.

Previously, a rise in the value of gold reserves had added $827.4 million to India’s Forex kitty which swelled to $350.80 billion for the week ended October 2. The reserves had declined by $2.04 billion to $349.97 billion in the week ended September 25.

Furthermore, the data furnished by the RBI in its weekly statistical supplement showed that the foreign currency assets (FCAs) had gained by $2.22 billion to $329.51 billion in the week under review.

The FCA constitutes the largest component of India’s Forex reserves. It consists of US dollars, major non-dollar currencies, securities and bonds bought abroad.

“The dollar in the week under review, had depreciated by close to 1 percent against major global currencies. This added around $1 billion to the FCA,” Banerjee said.

The Indian reserves consist of nearly 20-25 percent of non-dollar currencies. The individual movements of these currencies against the dollar impacts the overall reserve value.

Besides, currency movements, increased inflows into the equity markets supported the Forex’s upwards trajectory.

During the week ended October 9, the barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange (BSE), rose 858.56 points or 3.17 percent to 27,079.51 points.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) too made gains during the weekly trade ended October 9. It rose 238.8 points or three percent to 8,189.70 points.

“Rising equity markets, increased inflow of foreign funds and appreciating rupee have had a positive impact on the reserves,” Hiren Sharma, senior vice president, currency advisory at Anand Rathi Financial Services, told IANS.

“RBI may have entered into the markets to stabilise the rupee. RBI is seen not to be comfortable with the rupee appreciation.”

During the week under review, the country’s gold reserves remained stagnant at $18.15 billion. The country’s gold reserves had risen by $116.5 million to $18.15 billion during the week ended October 2.

The special drawing rights (SDRs) in the week under review were higher by $30.4 million at $4.07 billion.

The country’s reserve position with the International Monetary Fund (IMF) edged up by $10.5 million to $1.32 billion.

(IANS)

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After US status quo, market hopes ride on Indian rate cut

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Mumbai: After a smart rally in Indian equities last week, pumped further by the US Fed’s decision not to hike interest rates for the moment, the mood back home now will be swayed by some domestic developments, notably the September 29 monetary policy update, analysts maintain.

SENSEX_857945fFor the moment, the status quo in the US interest rates have put to rest fears over a potential shift of funds away from emerging markets such as India to the US, as such an action would have made investments more attractive in the perceived less-risky developed markets.

But that does not rule out movement of funds within the emerging markets, analysts added.

The sensitive index (Sensex) of the Bombay Stock Exchange closed on Friday at 26,218 points — not only above the psychologically-important 26,000 mark but also at the highest level since Aug 31. The Nifty of the National Stock Exchange had also breached the 8,000-point mark.

For the 30-share Sensex the overall gain during the week was 608.70 points or 2.38 percent over the previous week’s close at 25,610.21 points. For the Nifty, it was at a similar level — up 192.60 points or 2.47 percent at 7,981.90 points.

Nearly 1 percent of the gain came on Friday after the previous day’s meeting of the US Fed.

For sometime now, the rallies in Indian equities markets have been led by foreign funds. But that has not been the case in recent months. During August and September, they have been net sellers of equities worth Rs.20,225 crore. Even on Friday, their net sales stood at Rs.214.02 crore.

But going forward, with annual inflation continuing to fall — at (-)4.95 percent in August based on wholesale price index and 3.666 percent at retail levels — the clamour for a rate cut by the Reserve Bank of India (RBI) has become sharper.

“Indian equity markets have reacted positively to the status quo stance of the US central bank,” said Edleweiss Securities.

“But, uncertainty around the rate hike will make the market nervous at regular intervals in the near term. We believe, Nifty will remain range bound in short to medium term within 7,600-8,200 levels,” it added.

Ajit Khandelwal of BNP Securities felt that the US Fed relief was only momentary.

“There has been a clear indication that the US Federal Reserve will go up in December, which will generate momentary impact in the December 2015-January 2016 period. But the market will remain in the trading zone,” Khandelwal said.

Moving ahead, analysts also believed some domestic events will get factored in.

“Factors like Bihar elections, the goods and services tax bill and corporate results will play pivotal roles in the share markets,” said Khandelwal, adding: “I won’t be surprised if the Reserve Bank of India cuts rates by 50 basis points in September.”

HDFC Securities also gave a specific analysis related to the 50-share Nifty.

“Technically, traders will need to watch if the Nifty can move above the immediate resistances of 8,055 points for further upsides early next week. Else, markets could face selling pressure and slide lower. Crucial supports to watch for a resumption of weakness are at 7,957 points.”

IANS