Author: victorybull

Rupee falls to a new intraday low, but recovers when RBI intervenes

The rupee struck a new intra-day low on Thursday, breaching the 77.5/$ barrier, as the US dollar strengthened, before the Reserve Bank of India (RBI) intervened to aid minimise its losses.The rupee finished the day at 77.43 per dollar, down 18 paise or 0.24 percent from its previous close of 77.24 per dollar.

“As the dollar strengthened, the rupee dropped to a new all-time low today (Thursday).” However, losses were limited when the RBI intervened to reduce currency volatility. “The dollar surged after US inflation climbed in April,” said Gaurang Somaiya, Motilal Oswal Financial Services’ Forex and Bullion Analyst.

On May 5, the rupee touched an all-time closing low of 77.47/$.Following the global uncertainty induced by the prolonged Russia-Ukraine conflict, investors pulled out of riskier assets, putting pressure on the rupee. So far in FY23, the currency has declined 2.1 percent versus the dollar, with a further 4% depreciation expected in 2022.

To stem the rupee’s decline, the central bank has increased its intervention in the foreign exchange markets — spot, futures, and off-shore. As a result, since September 2021, the foreign exchange reserves have decreased by $45 billion.
Total FX reserves have dropped below $600 billion, and the market anticipates reserves to drop further more before rising. For the week ending April 29, total foreign exchange reserves were $597.7 billion.

The RBI stated its net forward assets were $65.79 billion at the end of March 2022, according to its half-yearly report on foreign exchange reserve management released on Thursday. According to the report on foreign reserve management, the RBI has boosted its gold reserves by over 100 metric tonnes in the last two years.

The RBI owned 760.42 tonnes of gold at the end of March 2022, up from 653.01 tonnes at the same time in 2020 and 695.31 metric tonnes in 2021.

May 13, 2022
Rupee falls to a new low of 77.58 against the US dollar

The Indian rupee fell to a new record low against the US dollar on Thursday, echoing losses across Asian rivals. The drop in global and local shares following the US inflation report pointed to more aggressive Fed tightening amid deteriorating investor confidence hit down by the global economic slowdown.

The currency began trading at 77.56 per dollar and fell to a new low of 77.58 per dollar. The local currency was trading at 77.57 per dollar at 9.30 a.m., down 0.4 percent from its previous close.

The South Korean won dropped 1.05 percent, the Taiwan dollar 0.5 percent, the Chinese Renminbi 0.41 percent, the Philippine Peso 0.25 percent, and the Malaysian ringgit and Thai Baht each declined 0.2 percent.

Last month, the US consumer price index increased by 8.3% over the previous month. This was lower than the 8.5 percent increase in March, which was the largest since 1981. Following similar hikes in June and July, analysts now expect the Federal Reserve to raise rates by half a point in September.

Investors were particularly concerned about the Russia-Ukraine conflict and China’s COVID restrictions.

Traders are now waiting for India’s consumer price inflation and industrial production index data, which will be released after 5.30 p.m. today. According to Bloomberg, the CPI will be 7.42 percent in April, up from 6.95 percent the previous month. IIP will be 1.3 percent in March, down from 1.7 percent the previous month.

In response to increased oil costs and slower global growth, Morgan Stanley has lowered India’s GDP growth predictions to 7.6% for FY2023 and 6.7 percent for FY2024.

The dollar index, which gauges the strength of the US currency versus other major currencies, was at 104, up 0.1 percent from its previous closing of 103.85.

May 12, 2022
Indices fall for the fourth day in a row as global equities markets tumble and FPIs retreat

The benchmark Sensex and Nifty indices dropped for the fourth day in a row on Wednesday, extending their month-to-date decline to over 5 per cent amid a global equity rout and sustained pull-back by foreign portfolio investors (FPIs).

The US Federal Reserve’s (Fed’s) decision to aggressively hike interest rates and reduce balance sheets to catch up with inflationary pressures has wreaked havoc across risky assets in recent weeks. Add to that, global growth concerns due to China’s Covid-management approach and jump in commodity prices attributable to the disruption in supply chains caused by the Russia-Ukraine conflict.
On Wednesday, the Sensex closed at 54,088 points, down 276 points or 0.51 percent.

The Nifty ended the day at 16,167, down 73 points or 0.45%. Both indicators closed at their lowest levels since March 8. Both indices are down roughly 12% since the year’s top in January.

Other worldwide markets have fallen even faster. The MSCI Emerging Markets (EMs) Index, for example, is down 28% from its peak in February last year, while MSCI China has more than halved.

India is one of the most expensive emerging markets. In addition, due to its large reliance on imports, India has the weakest profit revision. Due to margin pressure caused by rising prices, several leading Indian corporations failed to reach consensus earnings projections in the March quarter.

According to Bloomberg, 11 of the 28 Nifty50 companies that have released earnings thus far have missed projections, while 17 have at least met them. Cipla and Asian Paints were the most recent companies to declare profits that fell short of expectations.

On Wednesday, only nine Sensex components rose, while 22 fell. Larsen & Toubro, Bajaj Finserv, and Bajaj Finance all lost more than 2% of their value. Axis Bank and IndusInd Bank both gained 1.9 percent and 1.4 percent.

May 12, 2022
To protect the rupee, the RBI may be cautious about spending FX reserves

When the Federal Reserve tightens, the Reserve Bank of India tries to defend its currency once more.

Analysts expect it to launch a more limited defense this time, geared at fighting off the worst of speculative attacks rather than drawing a line in the sand when global capital flows are shifting and the Fed is expected to increase throughout the year.

To save ammunition amid a broad dollar surge spurred by expectations of aggressive monetary tightening by the Federal Reserve, the RBI may choose a limited intervention policy. According to analysts, the RBI’s stated goal is to reduce excessive currency volatility, and reserves have declined in recent weeks, indicating market involvement.

On Monday, the rupee fell to a new low of 77.53 per dollar as the dollar rose further and amid rising petroleum prices, threatening to extend the trade gap to uncharted heights. Foreign funds have been fleeing the country’s equities at an unprecedented rate, and a central bank that delayed tightening policy until last week hasn’t helped matters.

When compared to its emerging Asian peers, the rupee’s movements have been orderly during the last month. This year, the currency has lost about 4% of its value and sits in the middle of the Asian pack.

India’s central bank is intervening in all foreign exchange markets, including offshore markets, and will continue to do so to defend the rupee, which fell to a record low on Monday. A spokeswoman for the central bank was not immediately available for comment.

According to the most recent data, the country’s foreign reserves were $598 billion. Although this is down 7% from a record high of over $640 billion in September due to a combination of intervention and valuation revisions, it still performs well on key metrics such as import coverage and short-term debt obligations, according to Radhika Rao, the senior economist at DBS Bank Ltd.

May 11, 2022
In early trade, the rupee rose 17 paise to 77.17 against the US dollar

In early trade on Wednesday, the rupee rose 17 paise to 77.17 against the US dollar, as the American currency fell from its recent highs.

The rupee began at 77.24 versus the dollar on the interbank foreign exchange, then gained further ground to quote at 77.17, up 17 paise from the previous close. The rupee also hit a low of 77.31 against the dollar in early trade.

The rupee was trading at 77.34 against the US dollar on Tuesday.

The dollar index, which measures the strength of the greenback against a basket of six currencies, was down 0.06 percent at 103.85.

Domestic equities, firm crude oil prices, and ongoing foreign fund outflows, according to forex traders, could weigh on the currency and limit its gains.

The 30-share Sensex was up 27.61 points, or 0.05 percent, at 54,392.46, while the wider NSE Nifty was up 8.30 points, or 0.05 percent, at 16,248.35 on the domestic equity market.

Brent crude futures increased 1.83 percent to USD 104.34 per barrel, the global benchmark.

According to stock exchange data, foreign institutional investors were net sellers in the capital market on Tuesday, offloading shares worth Rs 3,960.59 crore.

May 11, 2022
Investors are panicking as Bitcoin falls below the $30,000 level

On Tuesday, the global cryptocurrency market reached its lowest point in history, with Bitcoin falling below $30,000 a coin, sending millions of investors into a panic.

The whole global cryptocurrency market fell 13%, hovering around $1.37 trillion in market capitalization, its lowest level this year.

Bitcoin had dropped more than 55% from its all-time high of $69,000 in November of last year.

Cardano (20%), Solana (16%), XRP (13%), BNB (16%), and Ethereum (16%) were among the digital assets that experienced double-digit percentage declines (10 per cent),

According to experts, the combination of rising interest rates and declining economic activity has created a risk-off atmosphere.

Terraform Labs (TFL), the company behind UST, LUNA, and the Luna Foundation Guard (LFG), has depleted its treasury wallet of all of its bitcoin (about 42,530 bitcoin) worth $1.3 billion.

According to TechCrunch, the UST stablecoin lost its 1:1 dollar peg for the second time in three days on Monday, falling as much as 5.3 percent to 95 cents.

The drop is due to concerns about the US Federal Reserve’s willingness to combat inflation. The Federal Reserve raised interest rates by 50 basis points last week.

The GST council in India is considering a 28 percent tax on cryptocurrencies, similar to the present GST on casinos, betting, and lottery, which might further damper the attitude of crypto investors in the country.

Bitcoin is worth approximately $650 billion and accounts for almost a third of the cryptocurrency market.

May 10, 2022
Adani Wilmar is down for the eighth consecutive day, down 34% from its 52-week high

Adani Wilmar’s stock fell 5% to Rs 583.25 on the BSE on Tuesday, marking the eighth consecutive day of losses. For the fifth day in a row, the stock of Adani Group Company, which is in the edible oil business, has been stuck in a 5% lower circuit. After the company announced a mixed bag of results for the quarter ending March 2022, it fell 34% from its 52-week high of Rs 878 reached on April 28, 2022. (Q4FY22).

On the NSE and BSE, a total of 781,497 equity shares changed hands until 10:41 a.m., with 2.73 million shares pending sell orders. The S&P BSE Sensex, on the other hand, was up 0.19 percent at 54,575 points.

Adani Wilmar is currently listed on the BSE in the T group and on the NSE in the BE category. Each trade in the T2T and BE segments must result in delivery, and no intra-day netting of positions is permitted.

Adani Wilmar is a joint venture between the Adani and Wilmar groups, and the Fortune brand is India’s top edible oil manufacturer. In addition to oil, the corporation sells wheat flour, rice, legumes, sugar, and packaged meals.

Adani Wilmar had previously collected Rs 3,600 crore through an initial public offering (IPO) and launched on the stock exchanges on February 8, 2022. From its issue price of Rs 230 per share, the stock had risen 282 percent. However, on the day of the IPO, it hit an intra-day low of Rs 221.

Adani Wilmar’s net profit for Q4FY22 declined 26% year on year (YoY) to Rs 219.2 crore, owing to higher tax burden. However, revenue from operations increased by 40.2 percent year on year to Rs 14,960.4 crore. “Inflation caused a decrease in rural demand,” the business explained.

Analysts at KRChoksey Shares and Securities, on the other hand, feel that Adani Wilmar’s focus on growing its FMCG and packaged food businesses, as well as its shift to value added goods, will result in increased market share and margin expansion.

May 10, 2022
Reliance Industries loses 3% after the March quarter results; it has dropped 9% in the last six days

Reliance Industries (RIL) shares fell up to 3% to Rs 2,542.1 on the BSE in intraday trade on Monday after the Mukesh Ambani-led oil-to-chemicals (O2C) firm reported a consolidated net profit of Rs 16,203 crore for the quarter ended March 31, 2022 (Q4 FY22), up 22.5 percent from the year-ago period’s Rs 13,227 crore, but falling short of expectations.

The stock was trading lower for the sixth consecutive trading day, down 9% over time. On April 29, 2022, it reached a record high of Rs 2,855. In comparison, the S&P BSE Sensex was down 1.5 percent at 54,039 points at 09:25 a.m.

Reliance Industries (RIL) shares fell up to 3% to Rs 2,542.1 on the BSE in intraday trade on Monday after the Mukesh Ambani-led oil-to-chemicals (O2C) firm reported a consolidated net profit of Rs 16,203 crore for the quarter ended March 31, 2022 (Q4 FY22), up 22.5 percent from the year-ago period’s Rs 13,227 crore, but falling short of expectations.

The stock was trading lower for the sixth consecutive trading day, down 9% over time. On April 29, 2022, it reached a record high of Rs 2,855. In comparison, the S&P BSE Sensex was down 1.5 percent at 54,039 points at 09:25 a.m.

The retail category created 714 new outlets, pushing the total number of establishments to 15,000, while sales topped pre-Covid levels.

While sim consolidation led to the third consecutive quarter of net subscriber decline, the positive surprise came from better ARPU growth and a minor beat at EBITDA levels due to higher topline.

May 9, 2022
As crude oil prices rise, the rupee falls to an all-time low of 77.42 per dollar

The Indian rupee has broken over the 77-per-dollar barrier for the first time, owing to rising crude oil prices and a growing trade deficit.
The rupee was trading at 77.32 per dollar, 41 paise lower than its previous close.
The US Federal Reserve’s hawkish posture has resulted in higher US bond yields, with the dollar index reaching a 20-year high.
The RBI has been robust in its intervention in the foreign exchange market in the past, and was seen protecting the Rs 77 per dollar levels.

As a result, foreign exchange reserves have fallen by roughly $45 billion from their all-time high of $642 billion, which was recorded for the week ending September 3, 2021.
According to the most recent figures issued by the RBI on Friday, the country’s foreign exchange reserves dipped to $598 billion for the week ending April 29.

Risk appetite has diminished, according to forex traders, due to growing fears about inflation, which may prompt more aggressive rate hikes by global central banks.

The dollar index, which measures the strength of the greenback against a basket of six currencies, was up 0.35 percent at 104.02, reflecting rising US yields and concerns about higher interest rates.

Furthermore, Asian and developing market rivals began the day badly and likely impact on mood.

The 30-share Sensex was trading 737 points, or 1.34 percent, lower at 54,098.58 points, while the wider NSE Nifty was down 220.25 points, or 1.34 percent, at 16,191.00 points.

Brent crude futures increased 0.14 percent to USD 112.55 per barrel, the global oil benchmark.

According to stock exchange data, foreign institutional investors were net sellers in the capital market on Friday, offloading shares worth Rs 5,517.08 crore.

May 9, 2022
Elon Musk has secured almost $7 billion in new cash for his purchase of Twitter

Elon Musk has obtained approximately $7.1 billion in new finance pledges for his proposed $44 billion takeover of Twitter, gaining the support of some of the world’s most powerful investors.

He was also anticipated to act as Twitter’s interim CEO for a few months once the acquisition was completed

The equity commitments come as the Tesla billionaire raises funds to fund one of the most significant tech industry takeovers. Binance, Brookfield Asset Management, Fidelity Management & Research, and Qatar Holding are among the investors identified in the filing on Thursday.
Musk has also garnered the backing of fellow entrepreneur and Oracle co-founder Larry Ellison, who has a significant position in Tesla and serves on its board of directors. Ellison’s trust has pledged $1 billion to Musk’s takeover.

In intraday trading, Twitter shares surged 3.63 percent.

On April 25, the world’s wealthiest individual agreed to buy Twitter using a financing strategy that has concerned some Tesla investors. Musk promised to provide $21 billion in equity in addition to promising tens of billions of dollars in Tesla stock to support margin loans. According to the filing on Thursday, that figure has climbed to $27.25 billion.

Saudi Prince Alwaleed bin Talal, chairman of the board at Kingdom Holding Firm and one of Twitter’s most ardent supporters, has agreed to pledge nearly 35 million shares in Twitter — worth $1.9 billion — in order to maintain a stake in the company following Musk’s takeover.

He earlier rejected Musk’s offer, claiming that it fell “far short of the underlying worth of Twitter.” Musk is reportedly in talks with Twitter co-founder Jack Dorsey about contributing some of his shares to the purchase.

Musk’s new investors include a slew of traditional asset managers, venture capital firms, boutique hedge funds, and one of the world’s largest capital pools. Qatar Holding, a subsidiary of the country’s sovereign wealth fund, has committed to provide $375 million.

May 6, 2022