ONGC shares ended up 1% at Rs 292.20 on BSE, off its 3.3%intraday high. Oil India ended up 2.2% at Rs 428.80, also off its day high of 3.8%.
CLSA in a report on Wednesday said higher interest rates in the US, a stronger dollar and lower domestic rates will lead to rupee falling further.
With demonetisation and potential for further disinflation, we expect one more rate cut of 25 bps in the rest of the fiscal year.
If one expands the list to include Latin American equities, Turkey and Russia, Indian markets were the fifth-biggest laggards among major emerging markets.
The post-election rally is likely to continue as we expect Trump tax cuts reduced regulations and increased fiscal spending to boost U.S. GDP growth and further strengthen U.S. corporate profits.
While the dollar has gone up against many emerging market currencies, that dollar strength could turn to weakness if trade policy doesn’t become as restrictive as many people fear.
These stocks mostly belong to sectors that are likely to be the hardest hit in case of a demand slowdown as a result of the government's demonetisation drive.
Domestic investors wanting to cash in on this opportunity could invest in units of local mutual funds that invest directly in US stocks or in offshore US schemes.
The Nifty and Nifty Private Bank have lost 5% and 6.8%, respectively. The Nifty PSU Bank index had remained nearly flat in the last one year.
The spotlight will be on the Eurozone next week as opinion polls have shown that that the Italian Prime Minister is likely to lose the vote of confidence he is seeking, said Wood.
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