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Global cues, GDP data to drive equities
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SME Times News Bureau | 22 Feb, 2021
As the Indian equity market goes on a consolidation
mode, global markets along with the GDP data scheduled to be released
later in the week is likely to steer the domestic stock markets going
ahead.
Vinod Nair, Head of Research at Geojit Financial Services,
said that the market was largely in a consolidation phase throughout
the week following weak global cues.
Bears took control of the
markets across the globe as worries of increasing US Bond yield and
inflation kept investors' mood gloomy, he said, adding that PSU banks
outperformed during the week due to developments around privatisation,
while the sector witnessed profit booking towards the end of the week.
"We
expect the domestic market to continue following the global markets in
the coming week due to lack of any major domestic events. The GDP data
for the third quarter which is to be released towards the end of next
week is expected to show signs of economic recovery adding positive
momentum in Indian market," he said.
The economy is expected to
record positive growth for the October-December quarter after the 7 per
cent contraction in the previous quarter.
As per the recent projection by ICRA, India's GDP is expected to record a year-on-year rise of 0.7 per cent in Q3FY21.
S.
Ranganathan, Head of Research at LKP Securities noted that that week
ended Friday belonged to the PSU Bank Index which rose close to 11 per
cent with Midcap state-run banks and non-life insurers posting huge
gains.
"During the coming week we expect investor interest coming
back to large banks as FPI flows this month of over Rs 24,000 crore
reflects the appetite of foreign funds," he said.
Deepak Jasani,
Head of Retail Research at HDFC Securities said that the optimism about
the global economic recovery was shortlived this week as profit booking
emerged at higher levels on February 16.
"Weakness in global markets on lingering pandemic concerns pushed against stronger economic data," he said.
The
Nifty and the Sensex fell by 1.2 per cent and 1.3 per cent respectively
over the week. Markets ended in the red on four out of five trading
days.
The Indian rupee on the other hand ended the week around 72.65 levels.
Sajal
Gupta, Head, Forex and Rates, Edelweiss Securities: "It seems like RBI
has slowed the pace of intervention and has given some strength to
rupee. FII flows poured in though at a reduced pace. We expect rupee to
trade with strong bias towards 72.40 with a range of 72.30 to 72.80."
He,
however, said that rising crude prices, trade deficit and high US
treasury yields pose risk to the rupee rally and any rise in US yields
beyond 1.33 levels can be a serious risk to global liquidity.
Rahul
Gupta, Head of Research for Currency at Emkay Global Financial Services
said: "Even next week, the hopes that Biden could pass a decent
stimulus package will underpin the risk appetite, keeping the focus on
stimulus headlines. At the same time, the vaccine rollout will act as a
tailwind to the risk-on mode limiting any uptick in the USD-INR spot and
will keep it below the psychological level of the 73 zones."
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
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64.50 |
UK Pound
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87.50
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84.65 |
Euro
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78.25
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75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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