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Fed policy action, RBI rate decision key driving factors for mkts: Analysts



The US Fed policy action, RBI rate decision and foreign fund flows are some of the major factors that will guide the equity markets in the near-term, analysts said on Wednesday.


Besides these, September quarter earnings announcements would also pave the way for the markets, whose overall structure remains bullish, they added.


From its 52-week low of 50,921.22 quoted on June 17 this year, the Sensex has jumped 16.91 per cent till now. The Nifty has climbed 16.96 per cent from its 52-week low of 15,183.40 on June 17 this year.


So far in 2022, the BSE Sensex has climbed 2.20 per cent and the Nifty has advanced 2.33 per cent.


“We believe that the underlying market is bullish. Given India’s stance as a high-performing economy, there are many reasons for India to be an excellent performer as we advance,” said Sunil Damania, Chief Investment Officer, MarketsMojo.


He said the rupee has stabilized after hitting an all-time low level.


The rupee is currently hovering at 79.50 against the US dollar. It had touched an all-time low of 80.15 against the US dollar in intra-day trade on Monday.


“We are of the opinion that irrespective of whether the market touches a record high in September, market sentiments will stay bullish by Diwali,” Damania said, adding that the BSE benchmark Sensex and the NSE Nifty have picked up since mid-June 2022.


At the moment, investors might be skeptical of the current market rally, Damania said, adding that “We maintain the Sensex could touch 65,000 by December 2022, and our short-term Nifty target is 19,000 by December 2022.”

Factors that could influence the direction of global markets include geopolitical issues, commodity prices, inflationary trends, interest rate trajectory followed by central banks and recessionary conditions, experts said.


According to Deepak Jasani, Head of Retail Research, HDFC Securities, Indian markets could get impacted by the turn in global sentiments and as more investors turn risk averse ahead of the historically down month of September.


“However, the intensity and amount of fall in India will be limited as its economy may not be linked fully with the happenings in the US economy,” he noted.


From now till the end of the calendar year, Nifty could see an upside of 18,100 and downside of 15,850, Jasani added.


Reshma Banda, Head-Equity & Executive VP, Bajaj Allianz Life Insurance said Indian macroeconomic fundamentals are better placed on a relative basis.


Inflation in India is elevated and is only marginally higher than the RBI threshold band, which compares favorably to other developed countries where inflation is hovering at multi-decade highs, Banda said.


According to official figures, India’s retail inflation softened to 6.71 per cent in July due to moderation in food prices but remained above the Reserve Bank’s comfort level of 6 per cent for the seventh consecutive month.


Some of the other factors that can impact market sentiments include normal monsoon, which augurs well for controlling food inflation levels in the country.


Further, foreign fund inflows have returned to India, thereby aiding a healthy rally in the equity markets, experts said.


After turning net buyers last month, foreign investors have become aggressive shoppers of Indian equities and pumped in Rs 49,250 crore so far in August on improvement in corporate earnings and macro fundamentals.


Sunil Nyati, Managing Director, Swastika Investmart Ltd, said, Indian equity benchmark indices are witnessing profit-booking after a stellar rally of about 17 per cent from June lows.


Historically, September remains a weak or sideways month for Nifty and Sensex but in October month or near Diwali, Nifty and Sensex can approach their fresh all-time highs, Nyati added.


On the global front, the market will have an eye on economic data and geopolitical situations while on the domestic front, earnings, festive season demand, and FIIs’ behavior will be the key factors.


The Fed’s September policy action is the one significant factor the market will consider until Diwali.


The US Federal Bank chair Jerome Powell has indicated that the central bank will stick to a strategy of rate hikes to cool inflation.


Some experts believe the market is ready for aggressive rate hikes and most of this is already discounted whereas any relief on the inflation front may improve investor sentiments.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)



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Mcap of seven of top-10 valued firms tumbles over Rs 1.54 trilion



Seven of the top-10 valued firms suffered a combined erosion of Rs 1,54,477.38 crore in market valuation last week, with IT majors Tata Consultancy Services and emerging as the biggest laggards.


Last week, the benchmark index tanked 812.28 points or 1.36 per cent.


Reliance Industries Limited, ICICI Bank and State Bank of India were the only gainers in the top-10 pack.


The market valuation of Tata Consultancy Services (TCS) plunged Rs 59,862.08 crore to Rs 11,78,818.29 crore.


The valuation of tanked Rs 31,789.31 crore to Rs 6,40,351.57 crore.


HDFC Bank’s valuation declined by Rs 16,090.67 crore to Rs 8,13,952.05 crore and that of Hindustan Unilever fell by Rs 14,814.18 crore to Rs 6,04,079.91 crore.


The market capitalisation (mcap) of Bajaj Finance declined by Rs 14,430.4 crore to Rs 4,27,605.59 crore and HDFC by Rs 13,031.62 crore to Rs 4,34,644.36 crore.


The valuation of Life Insurance Corporation (LIC) dipped Rs 4,459.12 crore to Rs 4,29,309.22 crore.


On the other hand, Reliance Industries added Rs 3,500.56 crore taking its valuation to Rs 17,71,645.33 crore.


The of State Bank of India jumped Rs 3,034.37 crore to Rs 4,67,471.16 crore and that of ICICI Bank climbed Rs 523.02 crore to Rs 6,06,330.11 crore.


Reliance Industries continued to rule the chart as the most valued firm, followed by TCS, HDFC Bank, Infosys, ICICI Bank, Hindustan Unilever, State Bank of India, HDFC, LIC and Bajaj Finance.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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Govt starts process for filling posts of independent directors in PSBs, FIs



The government has initiated the process of filling about 100 vacancies of in public sector banks and financial institutions to meet regulatory norms of corporate governance.


There have been vacancies at the independent director level across the public sector space leading to regulatory non-compliance, sources said.





As per the Act 2013, every listed public company shall have at least one-third of the total number of directors as


Since many listed public sector banks (PSBs) and some financial institutions (FIs) are short of mandated number of directors, it is in violation of Act as well as listing norms of market regulator Securities and Exchange Board of India, sources said.


For example, some of the banks like Indian Overseas Bank, Indian Bank and UCO Bank are not compliant with independent director norms.


Except State Bank of India (SBI) and Bank of Baroda, the position of chairman in most of the state-owned banks is vacant. The posts of Workman Director and Officer Director, representing the employees and officers of the banks, respectively, have been vacant for the past 7 years.


According to a study, there were 72 public sector undertaking (PSU) as a part of the NIFTY 500 in both 2019 and 2020. PSUs forming part of NIFTY 500 had 133 fewer in 2020 compared to the earlier year.


There are 12 public sector banks, four public sector general insurance companies while one life insurance firm. Besides, there are some specialised insurance players like Agriculture Insurance Company of India Ltd.


In addition, there are state-owned financial institutions like IFCI, IIFCL, ECGC Ltd and EXIM Bank.


As many as 52 per cent of the director posts in the 11 nationalised banks were vacant, All India Bank Employees’ Association (AIBEA) said in a letter written to Finance Minister Nirmala Sitharaman recently.


Of the 175 board-level positions, 91 are lying vacant and there is urgent need to address the issue, AIBEA general secretary C H Venkatachalam said in the letter.


The posts of Workman Director and Officer Director have remained vacant in 11 nationalised banks for the last seven years, he said, adding, the board of each bank has 7-9 board level vacancies.


This defeats the very purpose for which these posts were envisaged and created to take care of the varied interests and fields of banking operations of the banks, he added.


The Boards of Directors of nationalised banks are guided by the provisions of Section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and Nationalised Banks (Management and Miscellaneous Provisions ) Scheme, 1970.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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LIC seeks to appoint CFO before its mega IPO planned in 2021/22



State-backed Life Insurance Corp of India (LIC) is seeking to appoint a chief financial officer, according to a notification on its website, ahead of an initial public offering slated before the end of the fiscal year.


The move to hire a CFO follows a decision to re-designate LIC’s top job to chief executive officer from chairman earlier this year.





LIC is currently under going a valuation exercise for an IPO that could be India’s biggest ever as the government seeks to raise around 900 billion Indian rupees by selling 5%-10% stake in the company by the end of the fiscal year that runs through March.


Recently, government appointed ten investment banks including Goldman Sachs, Citigroup and SBI Capital Market to handle the offering.


 


(Reporting by Aftab Ahmed; Editing by Simon Cameron-Moore)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

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