Indian equities fell with Asian rivals on Tuesday, as investors awaited a deluge of inflation data coming this week for hints on the extent of monetary tightening by central banks, while the rupee fell to a new low.

As of 0504 GMT, the NSE Nifty 50 index (.NSEI) was down 0.4 percent at 16,154, while the S&P BSE Sensex (.BSESN) was down 0.3 percent at 54,220.50.

Investors are watching India’s retail inflation report later in the day and the U.S. consumer price index on Wednesday, as a surge in inflation would keep central banks on the road of aggressive rate increases.

According to a Reuters poll, India’s inflation will remain over the top of the central bank’s tolerance zone for the rest of 2022, making many more interest rate rises in the following months all but certain. more info

Global markets have become more volatile as a result of COVID-19-led shutdowns in several Chinese cities and better-than-expected US employment statistics this week, indicating that the US Federal Reserve would continue to raise interest rates, according to Gaurav Dua, head of capital market strategy at Sharekhan.

After discovering a highly transmissible Omicron subvariant, many Chinese cities, notably the economic powerhouse of Shanghai, are implementing additional COVID-19 limits beginning this week to rein in new infections. 

Meanwhile, the Reserve Bank of India (RBI) said on Monday that it is establishing a framework for foreign trade settlements in rupees, which banks would require prior authorisation to utilize. 

The action by the RBI comes as the Indian rupee falls to all-time lows due to ongoing foreign portfolio outflows from local stock markets and a generally stronger greenback.

Individual stocks jumped 4.6 percent after receiving an order totaling 1.50 billion rupees ($18.84 million), while Techno Electric & Engineering Co (TEEC.NS) fell 5.4 percent after accepting a share repurchase.

Source: Reuters

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