Forex Reserves Growing Prospectively to Establish Even Higher Peaks

Market Roundup: Sensex Continue Nears All-time High Mark; Nifty Establishes New All-Time Record
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Sensex, one of the two most prominent indices, continues to exhibit relatively minimal variance about their respective all-time high valuations, as evidenced through its close on Friday, October 8th, ending with a valuation of 60,059. BSE Sensex, was capable of surpassing the 60,000 mark, for the first time since its inception, on September 27th, and since that achievement, the index has been fluctuating. 

Despite conveying a similar pattern to the former, NSE Nifty 50 was capable of concluding the same week in question with the establishment of a new-record peak, strongly finishing with a 18,895 to its value.  

Robust performances by the Indian stock markets in recent weeks continue to outperform other global markets in a vis-a-vis ranner, and these new highs serve as the cumulation of a rebounding Indian economy, robust performances by the banking sector, as well as continual bullish behaviour across markets. 

Such performances, though having presented a prospective growth potential for the coming weeks, have developed a mild aura of uncertainty from analysts alike, due to suspicions that the markets possess some frivolity. 

With input from The Economic Times

In Spite of Optimism, RBI Speculates Markets Growth to be “Froth-like”

Headlines in recent weeks would have been dominated with the dominant progressions and augmentations exhibited through the Indian equity markets and indices, however, this continued bullishness has raised debate amongst thousands of investors, analysts and economists, as well as the Reserve Bank of India themselves. 

Even as the Indian markets were capable of robustly outlasting declining margins of companies, and overall tumultuous uncertainty from the second wave, such persistence and enhancements have developed concerns that the markets are exhibiting trends ‘too good to be true’.  

In its Monetary Policy Report published on October 8th, the RBI verbalised “episodic shifts in risk appetite have rendered equity markets frothy with stretched valuations”. According to the Central bank, recent expedited market growth rate has at times shown to be unsubstantiated. 

The benchmark equity indices are yet to experience a correction exceeding 10% from their recently established zeniths, and currently, market corrections appear to be the most optimal way to eliminate these inconclusive superficialities.

With input from The Economic Times

Forex Reserves Growing Prospectively to Establish Even Higher Peaks

India’s foreign exchange reserves experienced a continued declining pattern since the achievement of its record-high, as it slipped by $1.169 billion to achieve a valuation of $637.477 billion (₹4723970 Crore) in the week ended October 1st. This information is in accordance with the weekly reports published by the Reserve Bank of India (RBI). 

The forex reserves obtained a lifetime pinnacle during the week ended September 3rd, in which it posted valuations exceeding $642.4 billion, however, post that milestone, the reserves have been subject to slight diminishing.

The reporting week presented decreasing weekly quotations for foreign currency assets (FCAs), special drawing rights (SDRs), which served as the primary contributors for the decline. 

FCAs comprise the effect of escalation/degradation of non-US currencies, however are expressed in dollar terms. India’s FCA reserves declined by $1.28 billion to $575.5 billion in the reporting week.

SDRs serve as ancillary forex reserve assets which are regulated by the IMF and denote a claim to currency which can then be exchanged. The IMF distributes SDRs in accordance with the country’s existing quota. India’s SDR reserve witnessed a more moderate decline of $175 million to stand at $19.24 billion for the same week in question.

With input from The Reserve Bank Of India

Sunday, October 10th, 2021
​Ronojoy Borpujari