Many stocks could be nearly 50-60% off their peak value or even lesser, says Sabharwal.
Rate-sensitive stocks gained momentum in an otherwise weak market on Monday, ahead of the Reserve Bank of India’s policy review on Tuesday.
Investor wealth as measured by m-cap of BSE-listed firms slipped by Rs 14.50 lakh crore.
The domestic currency for the week finished lower by 28 paise, posting its fifth straight weekly loss.
The Reserve Bank of India left key interest rates on hold on Thursday, as expected, after six increases since March. Lets see what experts have to say:
Inflation and industrial production numbers will keep forex investors' interest alive.
We were hoping for a softer number on WPI both on the core and the headline. This is a kind of a negative surprise for us.
The election results were not exactly as we all expected, says Memani.
Now it is actually time to tighten up the stops and hold your long positions, not really look to create fresh ones.
Realty firms and property consultants today expressed disappointment over RBI's decision to keep key policy rate unchanged.
"I can see that the RBI remains concerned about inflation. I think we need to watch what happens in inflation but probably the need to push the growth at this moment is little higher on agenda than the concern about inflation," Ahluwalia told.
If we do see a rate cut, then people will be more positive on the market going ahead and if that does not come through, then I am afraid that some amount of disappointment might come our way.
In the near term, the catalyst is RBI’s policy meet tomorrow. Realty firms with high debt to equity ratio may benefit if the RBI lowers interest rates or takes a dovish stance.
Let’s check out what all might matter to Dalal Street all through Wednesday.
India’s Q2 GDP grew at 7.1 per cent compared to a growth of 8.2 per cent in the previous quarter.
RBI maintained 'calibrated tightening' stance and projected H1FY20 GDP growth at 7.5%.
Let's take a look at what might matter on Dalal Street all through the day.
Market breadth remained in favour of bulls with the advance-decline ratio at 3:1.
'If savings is constant and investment goes up, by that identity current account deficit will widen.'
The expectations of a status quo are despite a moderation in growth and easing inflation.
Be more focussed on valuation rather than the noise that is being made across, says Agarwal.
The ten-year benchmark bond yield has increased eight basis points to 8.80% pushing prices down immediately after the RBI hiked its repo rate.
Kejriwal's government will review schemes and projects earmarked for financial year 2013-14 under a budgetary outlay of about Rs 36,000 crore (plan and non-plan).
"At the moment, the currency is definitely under pressure. You could see a pull a little beyond Rs 63," Marwaha said.
Planning Commission today said that RBI has taken a cautious stance due to sticky inflation in its quarterly review by keeping the key rates unchanged.
SLR cut will release funds for private sector where interest rates could ease at least for the top rated companies.
The BSE Banking index was trading 0.4 per cent lower, led by losses in BoB, Punjab National Bank and State Bank of India.
Rate sensitive sector stocks such as banking & realty have rallied in opening trades on Monday ahead of the Reserve Bank of India policy review on July 31.
In an interview with ET Now, Avinnash Gorakssakar, Founder Director, Moneyinvestments.in, gives his views on Infosys results, IIP numbers and expectations from the RBI policy.
When one looks at the stand that RBI had taken during the announcement of 50 bps cut, it probably showed RBI taking a different stand. So, this is a correction of that stand.
"For the first time, HDFC Bank has posted lower than 30 per cent profit growth in the last quarter," Chokkalingam said.
"On Wednesday, we may be in better place to know whether levels of 6150 is giving away, are we breaking down, or will we get a bounce back from current levels," Thacker said.
"On the RBI policy front, clearly there is expectation of a 25 bps kind of a rate hike, looking at the inflation numbers."
Trade-off between growth & inflation will be a challenging call for RBI . Inflation is facing an uptrend after temporarily moving in a RBI comfort zone of below 7%.
Market returns typically track corporate earnings growth or nominal GDP growth in the long term.
RBI's monetary policy review meeting, political conflict in the Gulf and North Africa will determine the stock market direction this week.
The rupee got a boost as stock market investors cheered the Reserve Bank's steps. Fresh dollar sales by exporters also supported the local currency.
It is a standard practice for RBI Governor to discuss the state of economy with the Finance Minister before review of the monetary policy.
1 month data is not to be taken as something which is a confirmed trend and this has happened earlier also. This number is less and less reliable.
Benchmark government bonds completed a second weekly gain on speculation the central bank will refrain from increasing interest rates by more than 25 basis points next week.
The Central Bank may deliver its first interest rate hike in nearly 4.5 years.
Keep on investing in bottoms-up stock-specific ideas, says the chief market strategist.
A pullback cannot be ruled out on Wednesday, but the overall trend remains negative.
Rangarajan also said that present decision of cutting CRR by 75 basis points is an important step towards easing of the monetary policy.
We should look out for fiscal deficit, the underlying assumptions of which should be realistic and whether the government can muster some courage to control subsidies.
'This RBI policy brings back the inflation fighting credentials of the central bank, which will prove positive for the economy'
Mutual fund managers are cautious in taking trading positions ahead of the crucial US central bank meet.
With the indications from the FOMC and the Fed, markets can shift down back to the 5700-5720 odd levels, says Tushar Mahajan.
In next few weeks, we are probably looking at more global action, says Joshi.
Today's fall in one stroke knocked off Rs 1,70,000 crore of investors' wealth.
One will have to be very stock specific in terms of bottoms-up stock picking, says Murarka
Look outside the index, the broader market should stand to gain in the next month or so, says Bhasin.
Momentum to continue for next two months but one year down, markets to turn very expensive, says UBS MD
RBI lowered its economic growth rate forecast to 5.5% and warned that inflation could rear its head again.
FDs are likely to fetch better returns soon as lenders respond to the RBI’s policy action.
Bond yields ended steady, a day ahead of the central bank’s mid-quarter policy review, with the market pricing in a quarter point hike in key lending and borrowing rates.
However, it's highly doubtful that a huge and sustained shift downwards is something that debt investors can count on.
A sharp fall in global crude prices further supported the local currency.
Shares in consumer durable, auto and FMCG indices advanced between 1-2% post the policy announcement by the Reserve Bank of India.
The RBI left interest rates on hold and said further rate increases may not be warranted, with future policy actions likely to respond to risks to growth.
SBI has raised deposit rates not only for a shorter duration but also for longer maturities.
CAD widened to 2 per cent or USD 13.5 billion in the October-December quarter of 2017, up from 1.4 per cent, or USD 8 billion, in the corresponding period a year ago.
Jaitley in Budget 2018-19 had reintroduced the LTCG tax on gains exceeding Rs 1 lakh.
According to the global financial services major, the factors that are likely to impact inflation going forward include higher oil prices, a weaker rupee, higher MSPs and more currency in circulation.
The rupee oscillated between a high of 68.53 and a low of 68.76 in day trade.
Barclays Capital said the Reserve Bank's prolonged tight monetary policy has only aggravated the problem for the manufacturing sector.
Stock investors and traders may need to brace for choppy sessions this week, after three straight weeks of gains.
Nobody on the Street is factoring in a BJP defeat but market watchers remain cautious. Tune in to find out why.
Short-to-medium duration funds would be the ideal space because there still are a lot of uncertainties in the market, says Abhiroop Mukherjee.
Bond yields, swap rates closed down on Thursday as market sentiment was supported by RBI deputy’s statement that global developments were being watched for policymaking in India.
Amid growing industry clamour for a pause in policy rate hikes,RBI said any change in its monetary policy will depend on inflation.
Ripples of massive PNB scam continued to drag the market momentum during the week trade.
Rate sensitive sectors like banks, realty and auto, which had run-up sharply earlier today, came under selling pressure soon after the RBI policy.
Dealers said dollar demand from oil importers also hurt the rupee while the euro's losses added to the negative sentiment.
Options data show Nifty has major support at 10,000 & faces resistance at 10,500.
Encouraged by the marginal decline in rate of price rise to 9.22%, Pranab said inflation pressure would ease further on back of good monsoon.
RBI should do its job of protecting the integrity of debt markets, but growth should not suffer.
USD/INR depreciated by 2.8% (from 53.61 to 55.13) in just 2 days; whereas it was seen taking more than 15 days to appreciate by 2.1% (from 55.13 to 53.97).
The volatility trend is likely to be choppy with large intraday swings and stock-specific movements will be the theme.
We have already been given approval by Government of India with the capital support of Rs 2406 crore, says MV Tanksale
Wait for two things, a) how the quarterly results pan out over the next few days and b) what is essentially the outcome of the RBI policy.
This RBI policy move was unexpected as most polls hinted at a possible 25 bps hike.
The Dow Jones Industrial Average index fell 0.75 per cent.
A study by ICICI Sec reveals the median correction of a bull market in India stands at 14%.
DIIs bought shares worth Rs 1,402. per cent crore on Wednesday.
Mood was decidedly cautious ahead of the RBI policy meeting decision tomorrow.
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