Analysts attribute the tightening to a combination of seasonal currency leakage, muted government spending, tax outflows, and most notably, heavy unsterilized foreign exchange intervention by the RBI.
India's domestic two-wheeler (2W) market is heading towards a structural stagnation even as electric two-wheelers (E-2Ws) accelerate on a secular growth path, noted a research report by Emkay Global Financial Services.
A sustained revival in vehicle sales is critical for long-term growth in the Non-Banking Financial Companies (NBFC) and insurance sectors, according to a report by Emkay Research.
Industrials, IT, and Energy have been downgraded to a Neutral stance, while Financials, Staples, and Materials remain Underweight due to valuation concerns and structural headwinds.
The monetary policy committee of the Reserve Bank of India, when it announces the outcome of the ongoing policy meeting on Thursday morning, is likely to hike the repo rate by 25 basis points (100 basis points is equivalent to 1 percentage point), according to advisory firm Emkay Global Fina