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Business Recorder
6 days ago
- Business
- Business Recorder
Indian shares set to open higher as moderate US inflation spurs global rally
India's stock benchmarks are likely to open higher, tracking Asian peers after moderate U.S. retail inflation data bolstered the odds of a September rate cut by the Federal Reserve, while easing domestic inflation is also expected to lift sentiment. Gift Nifty futures were trading at 24,629, as of 7:55 a.m. IST on Wednesday, indicating that the Nifty 50 will open above Tuesday's close of 24,487.4. Asian markets rose, with the MSCI Asia ex-Japan index gaining 0.6%. Wall Street closed higher, with the S&P 500 and Nasdaq Composite indexes hitting record peaks after U.S. consumer prices increased marginally in July, up 0.2% month-on-month. The in-line print lifted September Fed rate cut odds to 94% from 86% a day earlier. Lower U.S. rates typically boost the appeal of emerging market equities, including India, as yields on U.S. Treasuries fall. India's retail inflation dropped to an eight-year low of 1.55% in July, slipping below the Reserve Bank of India's 2%-6% band, driven by falling food prices. 'While the July print by itself doesn't alter the rate trajectory, sustained low inflation, especially if compounded by downside growth risks from external shocks, would strengthen the case for further easing,' said Arsh Mogre, economist at PL Capital. Meanwhile, investors await talks between the U.S. and Russian presidents, scheduled Friday, to discuss a potential resolution to the war in Ukraine. The meeting is being closely watched by Indian market participants after Washington imposed an additional 25% tariff on goods from the country over its Russian oil imports. Positive U.S.-Russia talks could help ease U.S.-India trade tensions, according to multiple analysts. Domestic institutional investors remained net buyers of Indian stocks for 27 straight sessions, purchasing 35.08 billion rupees ($401 million) of stocks on Tuesday. Foreign portfolio investors remained net sellers with outflows of 33.99 billion rupees ($388 million) on Tuesday, according to provisional data from the NSE.
Reuters
06-08-2025
- Business
- Reuters
Indian shares fall after RBI rate pause, US tariff threat
Aug 6 (Reuters) - Indian shares fell on Wednesday, dragged by rate-sensitive stocks after the central bank held key rates and maintained a 'neutral' stance, disappointing expectations of a dovish tilt, while concerns over U.S. tariffs weighed on IT and pharma. The Nifty 50 (.NSEI), opens new tab fell 0.31% to 24,574.20, while the BSE Sensex (.BSESN), opens new tab lost 0.21% to 80,543.99. While reiterating that the domestic economic outlook remained "bright" despite global trade challenges, the RBI held rates steady, as expected, and retained its policy stance at "neutral" following a surprise 50-basis-point cut in June. "Even with inflation at lower levels, RBI chose to remain watchful rather than supportive. That silence on future easing took the steam out of rate expectations," said Nikunj Saraf, chief executive at Choice Wealth. Fourteen of the 16 major sectors logged losses. Rate-sensitive sectors such as realty(.NIFTYREAL), opens new tab lost 1.5%, while consumer (.NIFTYFMCG), opens new tab and auto (.NIFTYAUTO), opens new tab indexes fell 0.9% and 0.5%, respectively. High-weight financials (.NIFTYFIN), opens new tab were little changed. Amid U.S. tariff-related growth concerns, the RBI stuck to a cautious stance which is likely its best option, three analysts said. "The RBI appears acutely aware that the downside risks to growth from U.S. tariff spillovers are not yet fully priced in," said Arsh Mogre, economist at PL Capital. U.S. President Donald Trump said on Tuesday he would raise tariffs on Indian imports from the current rate of 25% "very substantially" within 24 hours over continued Russian oil purchases. IT (.NIFTYIT), opens new tab and pharma (.NIPHARM), opens new tab stocks, which derive a significant share of revenue from the U.S., fell 1.7% and 2%, respectively. The broader small-cap (.NIFSMCP100), opens new tab and mid-cap (.NIFMDCP100), opens new tab indexes fell 1.1% and 0.8%, underperforming the benchmarks due to their higher exposure to the domestic economy and borrowing costs. Among individual stocks, biscuit maker Britannia ( opens new tab lost 4.1% after quarterly profit miss while Bharti Airtel's unit Bharti Hexacom ( opens new tab lost 2.8% on weaker earnings.
Business Recorder
06-08-2025
- Business
- Business Recorder
Indian shares fall after RBI rate pause, US tariff threat
Indian shares fell on Wednesday, dragged by rate-sensitive stocks after the central bank held key rates and maintained a 'neutral' stance, disappointing expectations of a dovish tilt, while concerns over U.S. tariffs weighed on IT and pharma. The Nifty 50 fell 0.31% to 24,574.20, while the BSE Sensex lost 0.21% to 80,543.99. While reiterating that the domestic economic outlook remained 'bright' despite global trade challenges, the RBI held rates steady, as expected, and retained its policy stance at 'neutral' following a surprise 50-basis-point cut in June. 'Even with inflation at lower levels, RBI chose to remain watchful rather than supportive. That silence on future easing took the steam out of rate expectations,' said Nikunj Saraf, chief executive at Choice Wealth. Fourteen of the 16 major sectors logged losses. Rate-sensitive sectors such as realty lost 1.5%, while consumer and auto indexes fell 0.9% and 0.5%, respectively. High-weight financials were little changed. Amid U.S. tariff-related growth concerns, the RBI stuck to a cautious stance which is likely its best option, three analysts said. Metal, IT stocks drive Indian stock benchmarks higher 'The RBI appears acutely aware that the downside risks to growth from U.S. tariff spillovers are not yet fully priced in,' said Arsh Mogre, economist at PL Capital. U.S. President Donald Trump said on Tuesday he would raise tariffs on Indian imports from the current rate of 25% 'very substantially' within 24 hours over continued Russian oil purchases. IT and pharma stocks, which derive a significant share of revenue from the U.S., fell 1.7% and 2%, respectively. The broader small-cap and mid-cap indexes fell 1.1% and 0.8%, underperforming the benchmarks due to their higher exposure to the domestic economy and borrowing costs. Among individual stocks, biscuit maker Britannia lost 4.1% after quarterly profit miss while Bharti Airtel's unit Bharti Hexacom lost 2.8% on weaker earnings.
Business Recorder
06-06-2025
- Business
- Business Recorder
India's benchmark Nifty 50 logs best day in three weeks on RBI's bumper policy support
India's benchmark Nifty 50 logged its best day in three weeks as investors rallied behind the central bank's bumper policy measures. The Reserve Bank of India (RBI) cut the key lending rate by 50 basis points, exceeding the widely expected 25 basis point reduction. It also unexpectedly reduced the cash reserve ratio (CRR) requirement for banks by 100 bps and shifted its policy stance to neutral from accommodative. The Nifty 50 and the BSE Sensex added about 1% on the day and for the week to close at 25,003.05 and 82,188.99, respectively. The benchmarks also recorded their first weekly gain after two straight weeks of decline. 'This is not business-as-usual monetary policy. It is a deliberate realignment based on a rare convergence of falling inflation, stable external accounts, and the need to pre-empt global slowdown spillovers,' said Arsh Mogre, economist at PL Capital. The CRR cut is expected to boost banking liquidity by 2.5 trillion rupees, on top of the existing surplus of 3 trillion rupees, Barclays said. This liquidity boost is expected to lower the cost of funding for banks and spur credit growth, powering rate-sensitive stocks. All 13 sub-sectors climbed. Financials jumped 1.8% on the day to hit record highs, with heavyweight HDFC Bank touching a lifetime high level after an 1.5% surge. Non-bank lender Bajaj Finance gained 4.9%. Reliance, rate-sensitive sectors lead Indian shares higher, RBI decision in focus Real estate stocks soared 4.7% and automobile stocks added 1.5%. The smallcaps and midcaps gained 0.8% and 1.2%, respectively. 'Excess liquidity tends to find its way into capital markets, especially in an environment of declining savings and deposit rates,' said Apurva Sheth, head of market perspectives and research at SAMCO Securities. Bucking the trend, some railway stocks, including RailTel Corporation of India and RITES, slipped on the day after Kotak Institutional Equities said the recent surge in stocks contrasted their fundamentals.
Economic Times
06-06-2025
- Business
- Economic Times
Bajaj Finance shares jump 5% after RBI cuts repo rate by 50 bps, CRR by 100 bps
Shares of Bajaj Finance jumped 5.5% to hit an intraday high of Rs 9,425.5 on the BSE in Friday's trade, as the Reserve Bank of India's 50 basis point repo rate cut and 100 basis point CRR cut sparked broad optimism in the lending sector, especially among non-banking financial companies (NBFCs). ADVERTISEMENT While the aggressive repo rate cut is expected to weigh on net interest margins (NIMs) for banks in the near term, the RBI's simultaneous move to reduce the Cash Reserve Ratio (CRR) by 100 bps, unlocking Rs 2.5 lakh crore of liquidity, has emerged as a game-changer for the credit ecosystem. For NBFCs like Bajaj Finance, which rely on borrowing from banks and capital markets to fund lending, this dual move of easing both rates and liquidity is expected to lower funding costs and support loan growth. Analysts noted that NBFCs stand to benefit disproportionately from the rate cut as falling interest rates reduce borrowing costs, enabling lenders to offer more competitive loan products and expand their credit books. Also read: RBI's bazooka sends Sensex, Nifty soaring. What does it mean for stock market investors 'This move is likely to enhance liquidity in the system, making borrowing cheaper and encouraging companies to pursue capital expenditure,' said Divam Sharma, Founder of Green Portfolio PMS. 'With FPI inflows slowing down, this infusion of liquidity is a timely and welcome move.' ADVERTISEMENT According to Arsh Mogre, Economist at PL Capital, 'By lowering both the price (repo) and quantity (CRR) of money, the RBI has flattened the transmission curve. The CRR cut in particular offsets short-term pressures on margins from falling lending rates.'For a lender like Bajaj Finance, improved liquidity and falling interest rates are likely to aid credit disbursal, support margins, and revive consumption-led demand, especially in retail and SME segments. ADVERTISEMENT 'Tailwinds for NIMs from improving systemic liquidity and deposit rate cuts are visible,' said Naveen Kulkarni, CIO at Axis Securities he said, even as H1FY26 will see a more pronounced impact of the rate cut on NIMs, some respite is expected over H2FY26. ADVERTISEMENT 'Asset quality concern appears to be steadily waning with unsecured segment stress showing gradual signs of stability, while the secured segment asset quality continues to hold up well. At present, we would prefer banks with promising growth prospects, healthy deposit franchises, stable asset quality metrics and strong and steady management teams.' Also read: RBI slashes rates by 50 bps: What it means for debt mutual fund investors ADVERTISEMENT With the RBI maintaining a neutral stance and indicating scope for further easing if inflation remains benign, NBFCs and banking companies could continue to benefit from the evolving rate cycle. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
