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‘If rupee continues to be under pressure, RBI may look at alternate measures’

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Rahul Singh, Senior Fund Manager � Fixed Income, LIC Mutual Fund Asset Management Ltd, said that if the rupee continues to be under pressure, the RBI may look at alternate measures. The recent fall in 10-year US yield and dollar index may also have provided some respite for the time being.

Excerpts from the interview:

Q. How much repo rate hike do you expect in the upcoming monetary policy and what will be the stance?

A: We expect 35-50 bps repo rate hike in the upcoming policy. The MPC stance however may not be changed from the last policy.

Q. What will be the inflation and growth outlook by the RBI?

A: The RBI may continue to maintain that they see inflation around 6 per cent mark by Q4 FY23. Inflation has softened considerably from the levels we have seen in the 1st quarter. Further global commodity prices have corrected to a great extent which is good news considering India is a big importer, Plus, monsoon till now has been good. All this may give comfort to the RBI maintaining its Inflation level of 6 per cent by end of this fiscal year. The RBI may also be positive on their growth numbers and would at least maintain (if not revise upwards) the numbers projected in the last policy. GST numbers, credit growth and PMI numbers have been encouraging.

Q. Will the RBI continue to support rupee on the near term?

A: The RBI has always maintained that they would not want too much volatility in INR and may continue to maintain the same stance, though there might be direct intervention, our reading says they may not be too comfortable in letting reserves slip. It has come down from 650 billion to 572 billion as per latest data. If Rupee continues to be under pressure, the RBI may look at alternate measures. The recent fall in 10-year US yield and dollar index may also have provided some respite for the time being.

Q. Where you see bond yields if the RBI hikes rate in the August policy?

A: Rate hike is a certainty which the market may have factored in. The movement will play on what RBI says on their inflation forecast and how much of the impact they see on rupee movement. If the statement is like last policy with no major deviations in the projected numbers from last policy, we may see 10-year G-Sec yield falling further to 7.20 levels.

Q. Now FII’s net investment turned positive after nearly 9 months and indices are rising, do you think this trend will sustain?

A: While it is difficult to predict the future FII flows, it is fair to assume that FIIs may not wish to remain away from India for a long time. Rising domestic demand, attractive valuations and favourable macroeconomic factors may catch FIIs interest.

Q. What are your views on US Fed hinting that they are looking to slow the pace of rate hikes in the upcoming meetings?

A: If FED is convinced that Inflation is cooling down going forward, then this statement certainly makes sense. It could have originated looking at certain statistics which shows softness in crude and other commodities prices, weakening Chinese economy, Q2 GDP numbers and the talks regarding recession going ahead. However, the question remains that if PCE price index is 6.8 per cent and core PCE is 4.8 per cent, then is inflation softening going ahead?. The weak GDP numbers majorly owe to lower US government spending and higher inventories rather than indicating falling demand. Similar dovish statements were made earlier as well when there were rumours of 75 bps rate hike, however we saw two back-to-back 75 bps hike. My understanding is that as long as Inflation shows a declining trend, FED needs to be aggressive in controlling that otherwise it may unnecessarily elongate the entire hike cycle impacting the growth cycle going ahead.

Business

Bharat NCAP Awards 5-Star Crash Test Rating to Mahindra Thar Roxx

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The Mahindra Thar Roxx has earned a prestigious 5-star rating in Bharat NCAP’s latest crash tests, reflecting its commitment to safety. Recently evaluated under stringent testing, the SUV excelled with a 31.09 out of 32 score for adult occupant protection and 45 out of 49 for child safety.

Tested in its AX5L and MX3 variants, the Mahindra Thar Roxx delivered notable results, scoring 15.09 out of 16 in the Frontal Offset test and a perfect 16 out of 16 in the Side Impact test. The assessment revealed strong protection for most areas, with adequate ratings for the driver’s chest and lower legs.

The Mahindra Thar Roxx has received high marks for child occupant safety, scoring 24 points in Bharat NCAP tests, along with 12 points for CRS (Child Restraint System) installation and a Vehicle Assessment Score of 9. This top-tier safety rating applies to all Thar Roxx units produced from November 2024 onward, underscoring Mahindra’s dedication to enhancing safety features across its SUV range. Additionally, Mahindra’s XUV400 and 3XO models have also achieved 5-star safety ratings, further emphasizing the automaker’s commitment to robust safety standards.

The Mahindra Thar Roxx offers two interior themes – Classic Ivory and a new Dark Mocha Brown. Comfort and convenience are prioritizing with ventilated seats, leatherette upholstery, a digital driver display, a larger 10.25-inch touchscreen, a high-quality Harmon Kardon sound system, a panoramic sunroof, rear AC vents, wireless connectivity for Apple CarPlay and Android Auto, and a six-way adjustable driver’s seat, combining practicality with luxury.

Mahindra Thar 5-door comes packed with safety and interior upgrades to enhance its appeal. On the safety side, it includes essentials like six airbags, three-point seatbelts for all occupants, hill control features, electronic stability control, and a seatbelt reminder. Advanced driver-assist features, such as autonomous emergency braking, adaptive cruise control, lane-keeping support, lane departure alerts, and a 360-degree camera system with blind spot monitoring, add an extra layer of protection.

Mahindra Thar Roxx offers two engine choices: a 2.0-litre turbo-petrol and a 2.2-litre diesel. The petrol engine comes in two setups—150 bhp and 330 Nm of torque for the manual, and 174 bhp with 380 Nm for the automatic. The diesel option is available only with four-wheel drive.

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Business

Why The Indian Stock Market Struggled: Inflation, FPI Outflows, And Currency Pressure; Everything You Need To Know

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The Indian stock market on Wednesday (November 13) wrapped the another challenging day, marking the fifth consecutive session of losses.

The Sensex and Nifty, the two benchmark indices, both ended lower amid concerns over inflation and a broad selloff in metal stocks.

Market Snapshot

By the close of the trading session, Sensex was down by 984.23 points, or 1.25 per cent, ending at 77,690.95. Nifty 50 followed suit, shedding 324.40 points, or 1.36 per cent, to settle at 23,559.05.

The day saw a sea of red on both the Sensex and Nifty, with the majority of stocks ending lower. Among the few gainers were NTPC, Tata Motors, and Infosys, which saw minor upticks on BSE.

However, the broader market was dominated by heavy losses, especially in stocks such as JSW Steel, State Bank of India (SBI), Adani Ports, Mahindra & Mahindra (M&M), and Tata Steel, all of which posted declines.

Reasons behind the sharp decline

One of the major factor contributing to the market’s downward trajectory is the growing concern related to inflation.

As per the data which released by the Ministry of statistics and Programme Implementation regarding the India’ retail inflation, it showed that for the month of October, it surged to 6.21 per cent, breaching the Reserve Bank of India’s (RBI) upper tolerance limit of 6 per cent for the first time in over a year. The primary factors that contributed to surge include rise food prices, driven by the extended monsoon season and crop damage.

Adding to the pressure is the continued outflow of foreign portfolio investments (FPIs). On November 12, FPIs sold shares worth Rs 364.35 crore, bringing the total outflows for November to Rs 23,911 crore

The Indian rupee also struggled on November 13, weakening by 1 paisa to close at 84.38 against the US dollar.

The rise of the US dollar, which surged 1.8 per cent in November, has been exacerbated by the US presidential election result and higher bond yields. The US 10-year bond yield spiked to 4.42 per cent, further diverting capital away from emerging markets like India.

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Business

Trump Victory Revives The Crypto Mania; Bitcoin Touches 81,000 Mark, Other Virtual Currencies Also Surge

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The world of cryptocurrency, which was enduring its long-drawn-out winter since the end of the pandemic, appears all set to come out of its ‘haitus’.

And this new surge has been powered by the recent triumph of Donald Trump at the 2024 US election. The president-elect, Donald Trump, who once thought that crypto was a ‘scam’, has come a long way. Donald Trump, by all means, is the most crypto-friendly president that the US has had so far.

Bitcoin

As a result of this newborn optimism, major names in the crypto business. The biggest of them all, Bitcoin, saw the biggest jump. Bitcoin scaled the USD 80,000 mark for the first time.

In the past 5 days, the cryptocurrency has surged in value by 7.76 per cent or USD 5,865.47, taking the overall value to 81,456.88 for one USD. In the Indian context, one Bitcoin is worth Rs 68,72,585.50.

Ethereum

And it is not just Bitcoin that has seen its value gallop. The second biggest name in the crypto world, Ethereum has observed a rise in its price since Trump’s victory. 8.71

In fact, this crypto has seen an even bigger jump of 17.00 per cent or USD 462.66, in the past 5 days, taking the overall value to USD 3,184.54.

Ripple

Another cryptocoin, Ripple, has also seen its prices rise. In the past 5 days alone, the value of this digital currency has jumped to USD 0.59.

This came to pass after an 8.71 per cent USD 0.05 rise in its value.

Dogecoin

The meme coin or a currency that was started as a joke, Dogecoin or ‘Dog Coin’ also saw a gargantuan rise in its prices. Just in the past 5 days, Dogecoin jumped in value by a substantial 49.76 per cent.

The price increased by USD 8.24, taking the overall value to USD 24.80. It is to be noted that Tesla boss Elon Musk, who is a close ally of Donald Trump, is a major proponent of this cryptocurrency.

One of the controversial policies that Trump has advocated throughout his campaign is weakening the US Dollar and loosening any scope of scrutiny on cryptocurrency. In fact, it is even reported that he would ‘fire’ the Security Exchange Commission chair, Gary Gensler. Gensler has been at the forefront of attempts to regulate cryptos.

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