As the fed rate cuts have increased the liquidity in the Indian markets, the Indian rupee will get support against the dollar and will trade around Rs 83.57, highlighted a research report by the Union Bank of India.
Foreign Portfolio Investment (FPI) in India witnessed a significant decline this week amid market volatility driven by concerns over possible interest rate cuts by the U.S. Federal Reserve.
"Initially, the rate cuts will be credit negative for most US banks. We expect their deposit costs to reprice downward more slowly than their loan yields, constraining net interest income, which is most banks' largest revenue source." Said the report
As the date for the U.S. Federal Reserve's anticipated rate cut draws near (September 18), investors remain cautiously optimistic about its potential effects on various sectors.
American central bank US Federal Reserve will most likely cut key interest rates twice this year -- once this month and again in December, anticipates S&P Global Market Intelligence.
The Indian stock markets are on the brink of entering a new phase, marked by potential rate cuts from the U.S. Federal Reserve, highlighted a report by Nuvama.
The global shift towards gold as a hedge against macroeconomic risks is also being reflected in India. The uncertainty surrounding the US election and potential rate cuts has driven up demand for safe-haven assets like gold.
Expectations of strong festival season demand, revival in rural demand, and hopes of interest rate cuts later this fiscal year are expected to support stock markets, brokerage Prabhudas Lilladher said in its latest 'India Strategy' report.
The Reserve Bank of India (RBI) may begin lowering interest rates around October, provided that external factors like weather conditions and international commodity prices do not cause any disruptions, the credit rating agency, Crisil said in its report.
In India, a key emerging market economy, analysts are pointing out that loosening monetary policy through interest rate cuts in the US amid weak growth projections could drive in investment inflows into India.