With inflation remaining under its 6 per cent target and oil prices falling, the Reserve Bank is likely to go for a final interest rate cut of 25 basis points in April.
Activity in India's services sector grew at the fastest pace in three months in January.
Options data is suggesting a range of 9,700-10,000 for the coming week.
UBS' most-favoured sectors are retail private banks, NBFCs, pharmaceuticals, oil & gas petrochemicals, coal, telecom, auto parts
Over 130 companies are set to report quarterly earnings during the day, which could generate stock-specific actions.
Designated RBI Governor Urjit Patel is seen by many as much as an inflation hawk as outgoing Governor Raghuram Rajan and is likely to continue with his predecessor's hawkish stance.
After a jittery start to the week, the Nifty50 managed to close 1.1 per cent higher while the S&P BSE Sensex gained 1.3 per cent during the week ended 3 February.
For the common man, who may be concerned about the interest rate on loans, it pays to understand what the central bank means by liquidity.
Raghuram Rajan told the students that If they want to exercise independence, if they want to make reforms, they have to take the broader public along with them.
“We expect bond yields at 7.3% by March end and 7.5% levels by December.”
Rates would now be revised every quarter making the RBI policy the benchmark, defying years of skepticsim about it, traders said.
Nifty50 formed a Hanging Man kind of pattern, which indicates that there has been buying interest on declines, but the momentum is missing at higher levels.
Premium of Nifty futures moved up to 37 points compared with 16 points in the last session. A higher base also supported the overall bullish undertone.
"While others are saying there were no surprises in the policy, I for one found a little surprise and a pleasant one at that."
The trade, if RBI cuts repo rate more than expected or announces other liquidity measures, could yield gross return of over 70% in less than a week.
The week ended Friday saw benchmark indices Nifty and Sensex losing 0.3% each. Foreign Portfolio Investors net sold nearly Rs 3,000 crore worth of shares.
The next RBI policy review is on December 7.
RBI has previously warned that inflation could accelerate due to a seasonal rebound in food prices and factors such as planned pay hikes for government employees.
This is the highest closing for the home currency since May 15, when it had ended at 64.05 against the dollar.
The Monetary Policy Committee headed by RBI Governor Urjit Patel last month cut benchmark interest rates by 0.25 per cent to 6.25 per cent.
See how the earnings are panning out and how global cues are coming out over the next few weeks
Regarding RBI's monetary policy stance, the report said that expectations of lower growth and inflation solidify its 25 bps rate cut call for the current fiscal year.
With retail or CPI inflation at 14-month low and wholesale prices or WPI falling for the second consecutive month in October, Kotak expects a rate cut of 50 bps by RBI in December.
Retail or CPI inflation dipped to 14 month low of 4.20 per cent in October, while the one based on wholesale prices or WPI fell for the second consecutive month to 3.39 per cent for the same month.
The IRF market gets participation from retail investors, trading houses, foreign portfolio investors (FPIs) and other institutions.
SAIL mopped up Rs 420 crore at 8.35% with a three-year maturity; the company had offered 7.95% for a similar issuance in April.
Last week's high of 8,250.80 would be a daunting task to overcome, though there is a possibility of extending the bounce back to 8,320-8,380 level.
According to global financial services major HSBC, even if food inflation settles at a lowly 4 per cent, it will not be enough to take headline inflation.
"RBI's main objective at the moment to contain inflation below 4 per cent and the recent declines in vegetable prices could be short lived," Patel said.
General insurance is an underpenetrated space and can be backed with a 3-5-year view.
A lowdown on top macro triggers that may move market on Thursday.
On Wednesday, the Nifty50 index ended up making a bearish candle for the seventh session.
RBI Governor Urjit Patel today kept policy rate unchanged at 6.25 per cent.
The RBI also maintained its projection for FY18 real GVA growth at 6.7 per cent.
Price Thomas Holdings along with a subsidiary is a manufacturer and supplier of lubricants and car care products in UK and few overseas automotive markets.
Heavy unwinding of long dollar positions built by speculative traders last week ahead of FOMC meet predominantly gave the rupee a boost amid extreme weak overseas sentiment.
BSE Bankex closed 28 point down ahead of release of minutes of the RBI's policy meet.
Lot of theories are floating around. Some are hoping for a positive impact on mutual funds while some others are busy painting a pessimistic view.
"In fact, transmission is the biggest issue. Governor Rajan has said in his speech that he is looking for more transmission, because the RBI has already cut 125 bps."
Meeting the 4 per cent CPI target on a “durable basis“ is now within the realm of possibilities.
"I don't think the RBI is wrong. The RBI’s policy of wait-and-watch is entirely in keeping with the uncertainty that we are seeing globally."
Investors cut their exposure to dollar futures in the face of UK General Election on Thursday.
Setting up of MPC was criticised as interfering in RBI’s autonomy. But the govt’s thrust to drive its agenda in MPC seems to have received a shock from this move.
The Shikha Sharma-led Country's third biggest private sector lender cut its marginal cost of funds based lending rate (MCLR) for one year tenure.
The softening trend in inflation leaves the door open for a rate cut in the fourth quarter of this calender year "with odds of a move in October on the rise".
The MPC, however, cut Statutory liquidity ratio (SLR) by 50 basis points to 20 per cent starting June 24.
"The Nifty50 made a long-legged Doji pattern on the daily charts, whereas on the weekly charts, we saw a hanging man-like pattern by the end of Friday’s session.”
The Indian market is expected to open flat. Here is a list of top fifteen stocks that are likely to be in focus today.
Data available on IndianOil’s website suggests OMCs have not revised fuel prices since April 24.
Economic Affairs Secretary Shaktikanta Das said Indian markets have already factored in the impact of the increase.
It said larger than average monsoon rainfall will help maintain moderate food price inflation, contributing to keeping headline inflation in control.
Overseas investors look at the RBI's policy decision positively as they continue to earn a good mark-up over returns in their home markets for funds.
On equity markets, the report said that the country will exit the low return environment of the past two years, thanks to better equity valuations.
All six members of the Monetary Policy Committee (MPC) of RBI voted in favour of keeping the repo rate unchanged at 6.25 per cent.
The rupee declined by six paise to close at 67.84 against the American currency on dollar demand from banks and importers ahead of the RBI policy meet.
Heavy selling of the US dollar by banks and exporters in the face of renewed capital inflows predominantly kept sentiment highly buoyant.
The daily technical chart hinted that the bears were putting pressure on the index at higher levels, but buying at lower levels protected it from falling much.
A further upside of 100-150 points could be easily be seen, before a correction kicks in, says Gujral in a chat with ET Now.
State-run lenders Punjab National Bank, Bank of Baroda and Oriental Bank of Commerce have trimmed their base or minimum lending rates.
It expects overnight money market rates to further deviate from the policy repo rate -- at which RBI lends to banks -- fanning unwarranted exuberance and volatility.
Fitch has also slightly revised down GDP growth forecasts for FY17 and FY18 to 7.7% from around 8% in the September GEO.
Economic growth will see a moderation in the near term and would gradually recover to 7.5 per cent in the next financial year, says a Deutsche Bank report.
M-wallet market is segmented into three broad services -- money transfers from wallet to wallet, bank to wallet and vice versa which accounts for 38%.
Cryptocurrencies have captured the imagination of a section of investors globally.
GDP growth is likely to decelerate from 6.4 per cent in the first half of this fiscal to 0.5 per cent in the second half with a distinct possibility of the growth contracting in third quarter of this fiscal, says Ambit Capital
"Being cautious and defensive is advisable for investors this year. No change in structural drivers."
The guidelines, released late Tuesday, require banks to follow the 'marginal cost of funds' method for base rate computation from April 1, 2016.
Benchmark indices are headed for a 4th straight decline in a volatile session ahead of the expiry of monthly derivatives contracts.
The BSE Sensex was trading 23.50 points, or 0.07 per cent, lower at 31,473.60.
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Nifty50 futures on the Singapore Stock Exchange were trading 23 points higher at 9,863.
October CPI inflation could decline to 4.1 per cent from 4.3 per cent last month as the impact from a favorable base effect more than offsets the sequential increase in CPI index.
The Asian Development Bank (ADB) had last month slashed India's GDP growth forecast for the current fiscal to 7 per cent from 7.4 per cent owing to weakness in private consumption.
Overall forex market sentiment witnessed a sudden revival of enthusiasm after the RBI today projected India's growth to strengthen for the current fiscal.
Nifty50 futures on the Singapore Stock Exchange were trading 44 points lower at 9,243, indicating a negative opening for the domestic market.
"Any sharp correction between 3% and 5% should be taken to accumulate qualitative stocks."
Government and RBI remain on top of developments, and a crisis of confidence like 2013-14 is unlikely to be repeated.
"Predictable policy and institutional strength make India stand out among peers."
Most investors are asking aloud whether they should get out of these schemes considering the volatility experienced after the RBI policy.
RBI is unlikely to cut rates on Tuesday but investors will watch the central bank’s commentary on future rate cuts and inflation.
Retail inflation hit a 13-month low at 4.31 per cent in September as against 5.05 per cent in August.
As things stand today, the interest rate appears to either remain stagnant or there exists a remote possibility for them to move up in the near term.
Nomura said: "The RBI's policy stance remains accommodative with a focus on implementing its revised liquidity management framework."
At 11:05 hours on Tuesday, the rupee was trading a little higher at 66.88 per dollar from its opening level at 66.91. The local unit closed at 66.97 on Monday.
Data showed US non-farm payrolls rose by 38,000 in May, the smallest gain since September 2010. This was far below a Reuters’ poll of 164,000 additions.
“We are spreading the buying over several weeks and looking for the earning season for new stock ideas”
The S&P BSE Sensex added 372 points during the week, while NSE’s Nifty50 gained 115 points.
ICICI Bank Managing Director and CEO Chanda Kochhar said rate cut will boost investment as well as consumption.
Finance Secretary Ashok Lavasa said RBI and the government are on the same page with regard to inflation target.
The domestic currency had closed at 67.33, registering a solid gain of 42 paise, or 0.62 per cent, in the previous trading session.
The Indian rupee has witnessed a moderate volatility so far this year and its movement towards Rs 68-69 during the year looks likely, it said.
Global gold prices dropped from $1,342 per troy ounce on September 26 to $1,316 on Friday due to a rise in US consumer confidence index
The fear gauge is unlikely to see the kind of sharp rise that was seen on Thursday but will remain elevated given the key events lined up in the next few weeks.
Finance Minister Arun Jaitley, in his Budget speech, proposed that category I and II FPIs should be exempted from taxation on indirect transfers.
Rupee gained more than half a percent or 35 paise to close at 66.67 per dollar as overseas investors were seen buying domestic debt securities and shares.
What we have created over the last 67 years is going to be duplicated over the next seven-eight years, says Singhania.
Sharp reduction in bank MCLR and increase in asset market rates have narrowed down the spread between the two segments, said Soumyajit Niyogi of Ind-Ra.
Standard Chartered cut its base rate or minimum rate of lending by 0.25% to 9.50%, joining a large number of rivals who have slashed rates after the RBI's policy.
First is the fiscal consolidation that now sets India on course for a possible rating upgrade. This happened by lowering the fiscal deficit to 3.2% of GDP.
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