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Rupee at its two-year low as Sensex goes south

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New Delhi: Bombay Stock Exchange (BSE) Sensex was trading at 25,663 down 223 points whereas NSE Nifty was at 7,799, down 65 points at 9:45 AM declining over 200 points as Nifty fell lower than the 7,800 level.

BSE Mid-cap Index is trading down at 0.55% – 10,990, however BSE Small-cap Index is trading down at 0.54% – 11,569.

All BSE sectors are showing impuissance.

The Indian rupee opened up poorer by 30 paise at 66.91/$ in early trade on Friday. On the domestic front, Nikkei/Markit India Services Purchasing Managers’ Index (PMI) the assessment showed that India’s services productiveness clamber throughout November as companies continued to be negative about commercial predictions.

Services PMI index fell severely to 50.1 from October’s level of 53.2. Adding to the dip, market retained on the reoccurrence of the opinion of a US Fed rate hike. The Fed Forward rate turns are now hinting at a 79 percent possibility of 25 basis points moved rates.

The Sensex drop off affected the Indian rupee to a two-year low of 66.99 against the dollar. The Reserve Bank Governor Raghuram Rajan is aimed at fighting the crunch-like situation.

The plan for the improvement is chalked out on the basis of these points.

The latest feebleness of rupee has occurred due to external reasons, in specific, because of the expected rise of US Federal Reserve rates for the first time in the last 10 years.

The betterment of euro currencies has also affected the rupee as it is closely tracked by India.

Trading pressure on the Indian market is as well contributing to the stress as the sectoral indices on the BSE trading is negative. Some of the important service providers have seen a low of 1 percent and 1.5 percent, specifically the Tata Consultancy (TCS), ICIC Bank and Infosys.

One of the recent obstruction is caused by the floods in Chennai as most Indian IT companies have 10-30 percent workplace based there.

Also, the S&P 500 suffered its biggest dip since late September on December 4 due to the dissatisfied performance of European Central Bank for greater stimulus.

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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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Fall in rupee is driven by apprehensions about China crisis

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Mumbai: The huge fall in rupee has been described by the State Bank chairman Arundhati Bhattacharya, as being propelled by growing fears about the crisis affecting China and does not indicate any problems with the Indian economy, according to a report in Economic Times.

She said: “The current strain on the rupee is triggered by global issues as there are some amount of apprehension as to where China is going. Obviously it’ll take a little time before we get the floor.”

The markets crashed on Monday and the stock indices fell nine pins. Following this the rupee fell 82 paise to 66.65 to the dollar. The Sensex and Nifty had to take the blows as well. The Sensex was 5.94 per cent down at 25,741.56 and the Nifty registered 7,809 around 5.92 per cent down.

The cumulative market value of listed stocks that denote the total investor wealth, fell below Rs 100 trillion mark.

Bhattacharya called this blood bath in the market as being “triggered by facts then it is much more difficult to stop. But I do believe that this is more triggered by apprehension (over China) than facts” as per the ET report.

She added that investors will realize that India is a good spot as all its macro parameters are doing well.