Indian Stocks Archives - Lokmarg

Indian Stocks In Green After Touching Four-Week Low

By LokMarg 29th September 2023

Indian stock indices edged marginally higher on Friday morning after touching nearly a four-week low the previous session, tracking Asian peers and relatively firm overnight US market cues.

Benchmark Sensex and Nifty were 0.2 per cent higher each from their Thursday closing. Nifty metal, pharma, PSU bank sectoral indices were the top movers this morning.

“The ‘triple whammy’ of up-trending dollar, US bond yields and Brent crude is showing signs of easing. If this trend continues it will facilitate a recovery in markets. Stability in the US market yesterday also can be a supportive factor,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Lately, the indices slumped sharply after the US central bank, while keeping its interest rate steady in the September meeting, hinted that it may again hike rates going ahead if need be, in its fight against inflation.

Rising global crude oil prices and subsequent strengthening of the US dollar also weighed on the financial markets.

Going ahead, the RBI monetary policy scheduled for October 4-6 will be monitored closely by the investors. RBI typically conducts six bi-monthly meetings in a financial year, where it decides interest rates, money supply, inflation outlook, and various macroeconomic indicators.

RBI in its past three meetings – April, June, and August — held the repo rate unchanged at 6.5 per cent. The repo rate is the rate of interest at which RBI lends to other banks.

According to SBI Research, the monetary policy committee is expected to yet again pause the key repo rate.

“Domestically, we believe at 6.50%, we are in for a prolonged pause as seasonality of inflation is tapering first…,” SBI Research report, authored by Soumya Kanti Ghosh, Group Chief Economic Adviser, said recently. (ANI)

Foreign Investors Turn Net Buyers In Indian Stocks

By LokMarg 1st April 2023

Foreign portfolio investors (FPIs) have turned net buyers in Indian stock markets after having sold two months on a trot in January and February – data from the National Securities Depository (NSDL) revealed.

FPIs have bought assets worth about Rs 7,936 crore in Indian stock markets in March 2023, according to NSDL data.
The banking crisis in the US that emanated after the collapse of Silicon Valley Bank in early March seemed to have made renewed appetite for Indian stocks.

One of the most prominent lenders in the world of technology startups, Silicon Valley Bank, which was struggling, collapsed on March 10, after a run on the bank by the depositors. After the run on the bank, local regulators closed down the tech lender and put it under the control of the US Federal Deposit Insurance Corporation (FDIC). In latest, First Citizens Bank agreed to acquire all of its deposits and loans.

In January and February, FPIs sold equities worth Rs 28,852 crore and Rs 5,294 crore, respectively. NSDL data showed. Foreign investors were apparently cautious amid risks from the then volatility in Indian stock markets.

“The sustained selling by FPIs appears to be over since they have turned buyers in the last few days. The near-term outlook for FPI looks much more positive now. Even though Indian valuation continues to be relatively high, the recent market correction has made valuations a bit more reasonable than earlier,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Barring some exceptions, foreign portfolio investors (FPIs) had been selling equities in the Indian markets for over a year, which started in October 2021 for various reasons.

Tightening monetary policy in advanced economies including rising demand for dollar-denominated commodities, and strength in the US dollar had triggered a consistent outflow of funds from Indian markets. Investors typically prefer stable markets in times of high market uncertainty.

In 2022, foreign portfolio investors sold Rs 121,439 crore worth of stocks in India on a cumulative basis, the data on the NSDL website showed. (ANI)

Stocks Tank, Rupee Falls Over US Fed Rate Hike Move

By LokMarg 22nd September 2022

Indian stocks declined, though marginally, on Thursday morning in line with weak global cues, following yet another policy rates hike by the US Federal Reserve in its fight against high inflation.

However, a steep decline was likely cushioned as investors seemed to have already discounted the possible rate hikes by the US central bank.

At 9.33 am, Sensex traded at 59,303.96 points, down 152.82 points or 0.26 percent, whereas Nifty traded at 17,671.95 points, down 46.40 points or 0.26 percent.

“The big question from the Indian market perspective is whether India’s outperformance will continue in the present global risk-off context.” Investors can remain optimistic but be cautious since India’s valuations are on the higher side, “said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

“Financials, capital goods, select autos, telecom, and construction-related stocks can be bought on declines,” Vijayakumar said.

Meanwhile, the Indian currency rupee breached the psychologically crucial 80 mark again to touch another fresh all-time high of 80.44 against the US dollar against its previous day’s close of 79.97. This sharp depreciation was because of the current strength in the US dollar index.

The key policy rate in the US was raised by 75 basis points to 3.0–3.25 percent —which is the third consecutive hike of the same magnitude.

The US central bank seeks to achieve maximum employment and inflation at the rate of 2 percent over the long run, and it anticipates that the ongoing hikes in the target range will be appropriate.

Reacting to the rate hike move, stocks in the US fell nearly 2 percent to close the day.

Consumer inflation in the US, though, declined marginally in August to 8.3 percent from 8.5 percent in July but is way above the 2 percent goal.

Raising interest rates is a monetary policy instrument that typically helps suppress demand in the economy, thereby helping the inflation rate decline.

The US Fed statement added that the Committee’s future assessments would consider a wide range of information, including readings on public health, labor market conditions, inflation pressures and expectations, and financial and other international developments.

“Price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy.” Without price stability, the economy does not work for anyone. In particular, without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all,” the US central bank’s Chair Jerome Powell, said in his opening statement after the latest monetary policy review meeting.

Powell added the central bank was moving our policy stance purposefully to a level that will be sufficiently restrictive to return inflation to 2 percent.

“We are highly attentive to the risks that high inflation poses to both sides of our mandate, and we are strongly committed to returning inflation to our 2 percent objective,” Powell said later in his opening statement.

On slowing the pace of rate hikes, the Chair said: “At some point, as the stance of monetary policy tightens further, it will become appropriate to slow the pace of increases, while we assess how our cumulative policy adjustments are affecting the economy and inflation.”

He added restoring price stability will likely require maintaining a restrictive policy stance for some time and a historical record cautions strongly against prematurely loosening policy. (ANI)