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Business Recorder
22-05-2025
- Business
- Business Recorder
Indian shares fall on US fiscal worries, rising Treasury yields
Indian benchmark indices fell on Thursday, mirroring global losses as U.S. fiscal worries and rising Treasury yields weighed on investor sentiment. The Nifty 50 fell 0.82% to end at 24,609.70, while the BSE Sensex dropped 0.79% to close at 80,951.99. Other Asian markets also declined on the day, with the MSCI Asia ex-Japan index losing 0.9%. European markets also traded lower, ahead of the crucial vote in the U.S. on President Donald Trump's tax bill. Investors are worried the new tax and spending bill could add about $3.8 trillion to the $36 trillion U.S. debt pile. Concerns over mounting debt and Moody's downgrade of the U.S. credit rating last week pushed longer-dated Treasury yields to 18-month highs. Rising Treasury yields make bonds more attractive to foreign investors, driving out capital from stocks in emerging markets such as India. 'The domestic market does not appear to be on strong legs as uncertainties have increased significantly,' said Sandeep Bagla, CEO of Trust Mutual Fund. India's Nifty, which rose 4.2% last week, helped by foreign inflows, ceasefire with Pakistan and U.S.-China trade truce, has lost 1.6% so far this week. Indian equity benchmarks snap 3-day losing streak on financial, pharma boost 'While some investors expect domestic flows to continue supporting the market, others remain concerned about whether economic and earnings recovery can sustain the uptrend,' Bagla said. On the day, the broader, more domestically focused, small-caps and mid-caps fell 0.3% and 0.5%, respectively. All 13 major sectoral indices logged losses. The Nifty IT index fell 1.3%, pressured by its high dependence on U.S. clients amid rising economic uncertainty. 'Recent developments in the U.S. have intensified concerns about client spending in the IT sector,' said Anil Rego, founder and fund manager at Right Horizons PMS. Consumer stocks fell 1.4%, dragged by Colgate, down 6.5% on weak March quarter profit and soft urban demand.
Time of India
21-05-2025
- Business
- Time of India
RBI to slow cash boost after $100 billion injection; surplus transfer eyed, say economists
The Reserve Bank of India is expected to slow its liquidity infusion after pumping Rs 8.57 lakh crore ($100.06 billion) into the banking system since December, with a large surplus transfer to the government expected soon, several economists said. The central bank concluded its final scheduled open market bond purchase on Monday, and has not yet announced any more purchases. The RBI has been infusing liquidity since the last six months. " Dividend payment to the government and subsequent government expenditure will release adequate funds into the system and there should be no need to infuse liquidity through OMOs ( open market operations )," said Sandeep Bagla, CEO at Trust Mutual Fund. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 21st Century Skills Start with Confident Communication Planet Spark Learn More Undo Estimates for the upcoming surplus transfer range from Rs 2.5 lakh crore to Rs 3 lakh crore as per seven economists, though those at Citi expect a larger payout of between 3.5 trillion rupees and Rs 4 lakh crore. The RBI has of late slashed its cash reserve ratio, followed by secondary market debt purchases, foreign exchange swaps and aggressive open market operations. It is expected to announce its surplus transfer to the government before the end of this month. Live Events "With the dividend payment, the core liquidity may cross Rs 5 lakh crore, which is a very high number. For the next three months RBI need not inject durable liquidity, they can look at OMOs may be from September onwards," said A Prasanna, head of research at ICICI Securities Primary Dealership. Bond market participants expect a pause in the recent price rally, with yields likely to consolidate after a sharp move. The 10-year benchmark yield has dropped 38 basis points since the start of the financial year, following a 17 bps decline in the prior four months. Shorter duration bond yields have seen a more significant drop, with the five-year yield down 57 bps since April 1 after easing by 26 bps in previous four months. "We do not expect any more announcement for open market purchases in this month, and with expectation of terminal repo rate of 5.50%, the decline in the 10-year benchmark bond yield could bottom out around 6.15%-6.20% levels for now," said VRC Reddy, treasury head at Karur Vysya Bank .
Yahoo
21-05-2025
- Business
- Yahoo
India cenbank to slow cash boost after $100 billion injection; surplus transfer eyed, say economists
By Dharamraj Dhutia MUMBAI (Reuters) -The Reserve Bank of India is expected to slow its liquidity infusion after pumping 8.57 trillion rupees ($100.06 billion) into the banking system since December, with a large surplus transfer to the government expected soon, several economists said. The central bank concluded its final scheduled open market bond purchase on Monday, and has not yet announced any more purchases. The RBI has been infusing liquidity since the last six months. "Dividend payment to the government and subsequent government expenditure will release adequate funds into the system and there should be no need to infuse liquidity through OMOs (open market operations)," said Sandeep Bagla, CEO at Trust Mutual Fund. Estimates for the upcoming surplus transfer range from 2.5 trillion to 3 trillion rupees as per seven economists, though those at Citi expect a larger payout of between 3.5 trillion rupees and 4 trillion rupees. The RBI has of late slashed its cash reserve ratio, followed by secondary market debt purchases, foreign exchange swaps and aggressive open market operations. It is expected to announce its surplus transfer to the government before the end of this month. "With the dividend payment, the core liquidity may cross 5 trillion rupees, which is a very high number. For the next three months RBI need not inject durable liquidity, they can look at OMOs may be from September onwards," said A Prasanna, head of research at ICICI Securities Primary Dealership. Bond market participants expect a pause in the recent price rally, with yields likely to consolidate after a sharp move. The 10-year benchmark yield has dropped 38 basis points since the start of the financial year, following a 17 bps decline in the prior four months. Shorter duration bond yields have seen a more significant drop, with the five-year yield down 57 bps since April 1 after easing by 26 bps in previous four months. "We do not expect any more announcement for open market purchases in this month, and with expectation of terminal repo rate of 5.50%, the decline in the 10-year benchmark bond yield could bottom out around 6.15%-6.20% levels for now," said VRC Reddy, treasury head at Karur Vysya Bank. ($1 = 85.6460 Indian rupees)
Reuters
21-05-2025
- Business
- Reuters
India cenbank to slow cash boost after $100 billion injection; surplus transfer eyed, say economists
MUMBAI, May 21 (Reuters) - The Reserve Bank of India is expected to slow its liquidity infusion after pumping 8.57 trillion rupees ($100.06 billion) into the banking system since December, with a large surplus transfer to the government expected soon, several economists said. The central bank concluded its final scheduled open market bond purchase on Monday, and has not yet announced any more purchases. The RBI has been infusing liquidity since the last six months. "Dividend payment to the government and subsequent government expenditure will release adequate funds into the system and there should be no need to infuse liquidity through OMOs (open market operations)," said Sandeep Bagla, CEO at Trust Mutual Fund. Estimates for the upcoming surplus transfer range from 2.5 trillion to 3 trillion rupees as per seven economists, though those at Citi expect a larger payout of between 3.5 trillion rupees and 4 trillion rupees. The RBI has of late slashed its cash reserve ratio, followed by secondary market debt purchases, foreign exchange swaps and aggressive open market operations. It is expected to announce its surplus transfer to the government before the end of this month. "With the dividend payment, the core liquidity may cross 5 trillion rupees, which is a very high number. For the next three months RBI need not inject durable liquidity, they can look at OMOs may be from September onwards," said A Prasanna, head of research at ICICI Securities Primary Dealership. Bond market participants expect a pause in the recent price rally, with yields likely to consolidate after a sharp move. The 10-year benchmark yield has dropped 38 basis points since the start of the financial year, following a 17 bps decline in the prior four months. Shorter duration bond yields have seen a more significant drop, with the five-year yield down 57 bps since April 1 after easing by 26 bps in previous four months. "We do not expect any more announcement for open market purchases in this month, and with expectation of terminal repo rate of 5.50%, the decline in the 10-year benchmark bond yield could bottom out around 6.15%-6.20% levels for now," said VRC Reddy, treasury head at Karur Vysya Bank. ($1 = 85.6460 Indian rupees)
Zawya
08-05-2025
- Business
- Zawya
Indian rupee, shares, bonds drop on signs of escalation in India-Pakistan conflict
The Indian rupee, equities and bonds dropped on Thursday, pressured by risk aversion after India said it pushed back Pakistani retaliation overnight. The rupee dropped 1% to 85.71, the Nifty 50 benchmark share index declined 0.6%, while the yield on India's benchmark 10-year bond rose 6 basis points. The markets came under pressure in late afternoon trading after the Indian government said it had "neutralised" attempts by Pakistan to "engage" several military targets. Pakistan, meanwhile, said it had shot down 25 drones from India in its airspace. "This is a knee-jerk reaction from the markets just as we had expected due to the escalation of border tensions," said Sandeep Bagla, CEO of Trust Mutual Fund. On Wednesday, India said it hit "terrorist infrastructure" in Pakistan two weeks after it accused the Islamic nation of involvement in an attack in Indian Kashmir in which 26 people, mostly Hindu tourists, were killed. The United States, Russia and China have urged the South Asian countries to exercise restraint. Volatility gauges for the rupee and Indian equities have spiked, reflecting the nervousness among market participants. The Nifty volatility index rose to a peak of 21.9 in intra-day trade, the highest since April 9, while the rupee's volatility has also spiked to an over two-year high. India's overnight index swap (OIS) rates also jumped, with the most-liquid five-year rate rising 12 basis points to 5.68% on the likely unwinding of speculative positions In Pakistan, trading in the benchmark share index was halted after the index slumped 6.3% on news of the drone attacks. The country's international bonds also extended recent losses. Cross-border developments are expected to stay in focus going forward, with market participants likely to remain risk-averse in the near term, traders said. "If the conflict were to escalate, worries might rise regarding important industrial / infra facilities located close to the India-Pakistan border," Jefferies said in a report dated May 7. "Based on precedents, we believe that any potential market correction on the back of escalation would be short-lived." In the medium term, traders expect the focus to return to fundamentals and the U.S.-India talks on a trade deal, following the UK-India trade deal. (Reporting by Jaspreet Kalra, Khushi Malhotra and Bharath Rajeswaran; Editing by Mrigank Dhaniwala)
