The Core Report #445 The Markets Demonstrate Their Weakness
Nov 28, 2024
Tamal Bandyopadhyay, Consulting Editor at Business Standard, shares his expertise on the Indian economy and financial markets. He discusses the recent stock market downturn and its ties to U.S. inflation data and geopolitical tensions. Insights on oil prices amidst rising conflict reveal potential future trends. As central banks initiate another gold rush, Bandyopadhyay explores the influx of unsecured loans into the stock market and their implications for investor confidence and economic growth in India.
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Market Dive
- Indian stock markets fell sharply, led by IT stocks, due to concerns about slower US interest rate cuts.
- Global factors like the Russia-Ukraine war and falling US markets also contributed to the decline.
Rupee Weakness and Liquidity Deficit
- The Indian rupee weakened despite RBI intervention, nearing its all-time low due to foreign portfolio outflows and importer dollar demand.
- This has led to a liquidity deficit for Indian banks, pushing up borrowing costs.
US-India Trade Relations
- India's trade minister expressed optimism about US-India relations under the new Trump administration.
- He cautioned against preemptive concern over potential tariffs, suggesting waiting for the administration's official stance.