NDTV Top Stories
중도
기타
$27.6 Billion: Behind Centre's Tax Relief To Foreign Investors On G-Secs
Foreign investors purchasing Indian government bonds convert foreign currency into rupees.
"RUPEE" · 총 77건
필터 보기현재 지수
50.3
0 = 부정 우세
50 = 중립
100 = 긍정 우세
최근 7일 기준 83,887건을 분석한 결과, 뉴스 심리지수는 50.3(균형)입니다. 긍정 4,290건(5.1%)·중립 77,485건(92.4%)·부정 2,112건(2.5%)이며, 중립 비중이 뚜렷하게 높습니다. 성향 지수는 종합 14.8(중도 균형)입니다.
Foreign investors purchasing Indian government bonds convert foreign currency into rupees.
India has announced several measures to boost capital inflows, including the scrapping of capital gains tax for foreign investors in government bonds.
Currency market participants said investor confidence improved following the RBI's policy announcements, particularly after the central bank emphasised that India's foreign exchange reserves remain strong enough to cushion the economy against external disruptions.
The complainant also accused Swarup Biswas of extorting several lakh rupees from her through intimidation and threats.
The rupee appreciated 50 paise to 95.24 against the US dollar on Friday after the RBI liberalised norms for FPI investment in government securities. Forex traders said the announcements in the RBI policy boosted investor sentiments after the apex bank asserted that the country's forex reserves provide sufficient buffer against external shocks. At the interbank foreign exchange market, the rupee opened at 95.72, then touched 95.24 in intraday trade, registering a rise of 50 paise from its previous close. On Thursday, the rupee rose 2 paise to settle at 95.74 against the US dollar. The Reserve Bank on Friday expectedly kept interest rates unchanged for the second time in a row as it weighed the impact of rising energy prices and supply disruptions caused by the West Asia crisis. Announcing the second bi-monthly monetary policy for the current fiscal, RBI Governor Sanjay Malhotra said the Monetary Policy Committee (MPC) has unanimously decided to retain short-term lending rate or repo rate at 5.25 per cent with a neutral stance. Moreover, the RBI raised limit for investments by Non-Resident Indians, Overseas Citizens of India in equity instruments. Malhotra also said that the central bank's policy on exchange rate remains unchanged and it does not target any specific rate/band for the rupee. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 99.40, higher by 0.01 per cent. Brent crude, the global oil benchmark, was trading up 0.36 per cent at USD 95.37 per barrel in futures trade. On the domestic equity market front, Sensex fell 142.06 points or 0.19 per cent to 74,217.95, while the Nifty was down 38.75 points or 0.17 per cent at 23,377.80. Foreign institutional investors offloaded equities worth Rs 4,447.06 crore on a net basis on Thursday, according to exchange data. Meanwhile, RBI has lowered GDP growth projection to 6.6 per cent from 6.9 per cent earlier for the current fiscal and raised CPI inflation projection to 5.1 per cent for FY27, higher from earlier estimate of 4.6 per cent. PTI
India's central bank tries to find a balance between maintaining growth and keeping inflation low, as rising global fuel prices and weak investor sentiment sink the rupee.
Indian stock market traded in the green on Friday, with Sensex and Nifty extending gains for the second consecutive session as investors await the outcome of RBI’s Monetary Policy Committee’s (MPC) meeting today.Sensex gained 270 points at 74,629.94, while Nifty 50 rose over 62 points at 23,478.95. This came as India VIX, which measures volatility in markets, fell over 2% to 15.89.Infosys, UltraTech Cement, TCS, Tech Mahindra, M&M and Maruti Suzuki shares gained over 1% each to lead gains on Sensex. Tata Steel shares meanwhile fell over 1% to lead losses on the benchmark index.Broader markets also traded in the green, with Nifty Smallcap 100 and Nifty Midcap 100 indices gaining over 0.3% each. All sectoral indices opened in the green, with Nifty Consumer Durables, Nifty IT and Nifty Media rising nearly 1% each. Around 1,824 stocks advanced on NSE, while 523 declined and 101 remained unchanged.What’s moving the stock market upward today?"There are some mild positive indications for the market today. There are signs of weakness in the AI trade in the US, South Korea and Taiwan and rotation away from tech stocks, but it is too early to say whether this will sustain,” said VK Vijayakumar, Chief Investment Strategist at Geojit Investments.The focus of the market today will be on the monetary policy and the message from the RBI Governor, the analyst said. “The MPC is likely to hold rates with a guidance of a rate hike later in the year to combat inflation which is expected to rise in H2 FY27. RBI is likely to revise the GDP growth for FY 27 downward and CPI inflation upward in the context of the energy shock and its implications,” he added.According to Vijayakumar, the most likely policy action is a ‘hawkish hold’, that is, the RBI would hold the rates without any change but would send a hawkish message that inflation is set to rise and, therefore, expect rate hike later this year. If the RBI decides to act now with a 25 bps rate hike, that will move the banking stocks sharply upwards since they would benefit from rate hikes, he further said. However, a rate hike would be negative for interest elastic segments like automobiles and real estate, the analyst added.Rupee risesRupee meanwhile gained 8 paise to 95.66 against US dollar in early trade. “With India's import bill under pressure from elevated commodity prices and continued FII outflows, participants will closely monitor the Governor’s commentary for cues on inflation, currency stability, and future policy direction,” said Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities.The analyst expects the near-term range for rupee to be 95.25–96.25.FII selling continuesForeign investors continued to remain bearish on Indian markets. FIIs net sold Indian shares worth Rs 4,447 crore on Thursday, according to data on NSE.Notably, FIIs have remained net sellers of Indian equities for five consecutive sessions. (With inputs from agencies)(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
EVERY June, Pakistan’s budget season follows a familiar pattern: business groups repeat their proposals for relief, the government defends its targets, and taxpayers prepare for additional burdens. Yet a more fundamental question is rarely asked — what is the budget ultimately meant to achieve, and does it reflect a clear long-term national purpose? In principle, the budget is the state’s main instrument for promoting growth, improving public services, reducing poverty and raising living standards. In Pakistan, however, it has increasingly come to resemble an accounting exercise: mobilise sufficient revenue to finance a growing state and meet fiscal benchmarks agreed with the IMF. The result is a lopsided process that remains focused on extracting more from those already within the tax net, while paying insufficient attention to the quality of public spending, the need to broaden the base, or the incentives required for investment, employment and productivity. The Tax Policy Office was expected to introduce a longer-term perspective to this debate, but that wider vision is still not evident. The burden continues to fall, predictably, on the formal economy. Corporations, salaried employees, entrepreneurs, exporters, documented businesses and investors remain the most visible and therefore the most easily taxed. What receives much less scrutiny is whether public spending is yielding meaningful improvements in citizens’ lives, particularly in a country where a large share of the population remains below the poverty line. Pakistan has absorbed much of the fiscal cost of devolution without fully realising its potential efficiency gains. This distortion has become more pronounced since the 18th Constitutional Amendment altered Pakistan’s fiscal structure. Health, education, labour welfare and other social services were devolved to the provinces, which now receive a substantial share of national revenues through the National Finance Commission Award. The logic was straightforward: provinces, being closer to citizens, would deliver services more effectively, while the federal government would gradually withdraw from devolved functions and reduce its own size and cost. That second part of the arrangement, however, remains largely unfulfilled. More than a decade later, successive governments have shown limited willingness to undertake the constitutional, administrative and institutional reforms required to right-size the federation. Pakistan has, therefore, absorbed much of the fiscal cost of devolution without fully realising its potential efficiency gains. The results are plain: weak learning, poor healthcare access, child malnutrition, low productivity, millions of children out of school, under-equipped hospitals, inadequate skills training and persistently low female labour-force participation. Yet, even against this backdrop, the provinces are expected to post a combined budget surplus of roughly Rs1.6 trillion. This surplus forms part of the consolidated fiscal framework that enables Pakistan to meet primary surplus targets under the IMF programme. Fiscal discipline is necessary; Pakistan’s record on deficits and debt leaves little room for complacency. But every rupee retained as surplus is also a rupee not directed towards schools, hospitals, technical training and local services. The balance appears to have shifted too far towards meeting accounting targets and too little towards building human capital. The irony is that while existing taxpayers are repeatedly told there is little room for relief, substantial untapped capacity exists elsewhere. Agriculture contributes nearly a quarter of GDP but remains lightly taxed, while property taxation is among the weakest in the region. Large agricultural and urban wealth holdings generate limited recurring revenue because assessment remains weak, enforcement uneven and valuations often disconnected from market reality. Since provinces have constitutional authority over agricultural income and property taxes, meaningful reform in these areas could broaden the base, improve fairness and reduce the state’s dependence on taxing the same formal businesses and individuals year after year. It would also help strengthen the sense that the fiscal burden is being shared more equitably. The next budget should therefore reset fiscal priorities. Rather than treating compliant taxpayers as an inexhaustible source of revenue, policymakers should present a credible path towards relief for documented economic activity: lower excessive tax rates on salaried employees, entrepreneurs and businesses, phase out the Super Tax, remove distortionary levies, reduce cascading taxation and bring greater predictability to policy. Better incentives would support investment, exports, formalisation and job creation — the key objectives of fiscal policy. But relief must be matched by credible efforts to broaden the tax base, improve spending efficiency and mobilise provincial revenues from agriculture and property. Fiscal sustainability cannot rest indefinitely on squeezing a shrinking pool of compliant taxpayers. Provinces, meanwhile, should be judged less by the size of their surpluses than by measurable gains in education, healthcare, skills, productivity and poverty reduction. Pakistan’s fiscal debate remains confined to the narrow question of how to raise more revenue. The more important issue is how public finances can create opportunity, improve living standards and support durable growth. A budget should be more than a balancing exercise between revenue and expenditure; it should also reflect a willingness to reform the structure of the state itself. Unless Pakistan completes the unfinished agenda of devolution, broadens the tax base and channels provincial resources towards human development, it may strive to meet fiscal targets without delivering the broader prosperity its citizens are entitled to expect. The writer is a former CEO of Unilever Pakistan and of the Pakistan Business Council Published in Dawn, June 5th, 2026
A weaker rupee increases the cost of imports, raising the possibility of imported inflation.
KARACHI: The foreign exchange reserves of the State Bank are inching close to the target of $18 billion for current fiscal year (FY26), but a widening trade deficit threatens to erase the growth in reserves and remittances. Data issued by the central bank on Thursday showed that the forex reserves increased by $43 million to $17.2bn during the week ending on May 29. Financial experts see the improvement in reserves as a good sign, but at the same time they fear the widening trade imbalance would lead to a large current account deficit this fiscal year. They also pointed out that substantial payments to foreign creditors are due this month. SBP forex reserves are nearing their annual target, but large payments are also due this month June which means still a month is available to the SBP to catch the target of $18bn. The State Bank has been purchasing dollars from the inter-bank market to improve reserves and make external payments, while the exchange rate is being managed through a steady uptick in the rupee’s value against the dollar. “More important is the managed exchange rate, which may burst after June after large payments are made before the end of the fiscal year on June 30,” said Atif Ahmed, a currency expert. He added that since the dollar has been appreciating against all regional currencies except Pakistan’s, it is obvious the rupee is under depreciation pressure. According to Atif, the purchase of dollars from the inter-bank market by SBP makes no difference to the dollar rates since the price mechanism in banking market does not exist anymore. “The rate is determined by the central bank.” Alarming deficit Financial experts said the growing trade deficit would affect both the exchange rate and the current account deficit. The current account had a surplus of $1.8bn in FY25. “The trade deficit for the 11 months of FY26 has soared to $35bn, which is seen as alarming by economic managers of the country. It will definitely take the current account deficit to an unexpected level, putting pressure on the rupee to depreciate against the dollar,” said a financial expert. He recalled that the Indian rupee fell from Rs86 to Rs95 in a year. The trade deficit rose by 17.48pc to $34.76bn in July-May 2025-26, up from $29.58bn over the corresponding period last year: a rise of $5.18bn. Currency dealers have already predicted a slowdown in remittances, which means the target of $41bn would be hard to achieve in FY26. “The remittances depend upon the situation in Middle East as more than 50 per cent remittances come from this region,” said the expert. He said the ministry of finance is responsible for such a large trade deficit and would face a tough time in FY27 with higher current account deficit,” he added. The import bill went up to $62.66bn, mainly due to an increase in import of luxury items and foodgrain. The country’s total foreign exchange reserves at the end of last month were $22.63bn, including $5.44bn held by commercial banks. Published in Dawn, June 5th, 2026
A weaker rupee increases the cost of imports, raising the possibility of imported inflation.
Foreign firms are increasingly cashing out of India's booming IPO market, pocketing billions instead of raising capital for expansion. Recent listings, including major players like Hyundai and LG, saw over $5 billion flow overseas. This trend, driven by high valuations, raises concerns about capital outflows and the rupee's stability, with policymakers questioning IPOs as exit routes.
The Foreign Office (FO) on Thursday refuted reports that Deputy Prime Minister and Foreign Minister Ishaq Dar shared any intelligence regarding Iran’s nuclear programme during a meeting with United States Secretary of State Marco Rubio. Dar met with Rubio on May 29 during a brief visit to Washington, where the two discussed bilateral cooperation as well as regional security issues. Rubio had praised Islamabad’s role “in advancing peace in the Middle East”. Responding to queries during a weekly press briefing on Thursday, FO Spokesperson Tahir Andrabi said Islamabad “categorically and unequivocally” rejected claims made in certain media reports that Dar shared any intelligence regarding Iran with Rubio. “Such claims are entirely baseless, speculative, and appear to be aimed at undermining ongoing diplomatic efforts and the broader process of dialogue and engagement,” he said. Emphasising that the discussion between Dar and Rubio “focused on regional peace, stability, and the importance of pursuing diplomatic solutions to ongoing challenges”, Andrabi asserted that “no intelligence was shared during the course of this dialogue”. Welcoming the “continued engagement” of the US in peace efforts and its “positive role” in the ceasefire between Israel and Lebanon, he cautioned the media against “speculative and unwarranted reports”. A journalist had asked Andrabi about media reports that Dar had allegedly shared intelligence with Rubio regarding Iran, “including possible signals such as withdrawal from the NPT and the development of a nuclear weapon”. The reports, according to the journalist, had claimed that the information resulted in the US urging Israel to halt its attacks in Lebanon. The question came after former Central Intelligence Agency (CIA) analyst Larry Johnson, quoting an unnamed source, claimed that Dar had a conversation with Rubio that “revealed what Iran is prepared to do to preserve its independence”, which allegedly “alarmed” Rubio. Rubio had also responded to the claims during a congressional hearing on Wednesday. US Congressman Scott Perry asked him if Dar had delivered a message that Iran is “prepared to demonstrate a nuclear weapon should the current escalation continue”. “I have not seen that reporting and I am not aware of any such message,” Rubio responded. Perry again referred to the reports, to which Rubio said that no such message had been delivered. “I would be surprised if that message had been relayed. I would be aware of it if it was,” he said. The US-Iran conflict is currently stalemated in a shaky ceasefire struck in April, which was followed by historic direct talks between the warring parties hosted by Pakistan. Though daily strikes throughout Iran and the Gulf have stopped since then, bursts of armed conflict have continued. The US and Iran exchanged attacks on each other’s military targets on Monday. After the US military carried out strikes near the Strait of Hormuz, Iran responded with a missile attack on Wednesday, damaging Kuwait’s airport and resulting in casualties. Since the conflict began, Iran has repeatedly attacked targets in the Gulf region home to US military bases. Meanwhile, Israel’s expanding front in Lebanon has proved to be the main spoiler in the peace process, with rising tensions even prompting US President Donald Trump to tell Israel’s PM Benjamin Netanyahu to halt the attacks. Nevertheless, diplomacy has continued with Trump under pressure to reach an agreement that would lift the US and Iranian competing blockades around the Strait of Hormuz, which have choked international oil supplies and threatened the global economy with rising prices. ‘Actively engaged’ to secure release of seamen held by Somali pirates On the continued captivity of 10 Pakistanis aboard an oil tanker seized by Somali pirates, the FO said Islamabad remained “actively engaged” in efforts to secure their release. The MT Honour 25, a Palau-flagged product tanker, was seized on April 21, approximately 30 nautical miles off Somalia’s Puntland region with 17 crew members aboard, 10 of them Pakistani. “Unfortunately, the situation remains grave,” Andrabi acknowledged when asked about the latest update on the situation, days after a video emerged showing the captives with discoloured water available for drinking. “Pakistan remains in contact with the ship owner, who is the principal negotiator with the pirates. These negotiations have been taking place with the knowledge of the Somali government,” the FO spokesperson stated. He explained that the “geographical circumstances, coupled with the fact that the ship is carrying highly explosive cargo, make any law-enforcement operation to secure the release of the captive extremely difficult”, as Pakistan did not want to endanger the safety of the captives. Families of the Pakistani hostage crew members of an oil tanker that was hijacked by pirates off the coast of Somalia, hold placards during a protest, calling on the government to take immediate action for the safe return of their loved ones, in Karachi on May 13, 2026. — Reuters/File The FO urged both the Somali government and the ship owner to ensure that the hostages were provided with food, drinking water, and other basic necessities. Relevant stakeholders, including the interior and maritime affairs ministries, were involved in the matter. “This is a very difficult situation. Our hearts go out to the families of those being held captive,” the spokesperson said, requesting patience from the families. “A team from our Embassy in Djibouti also visited Mogadishu to obtain first-hand information. Therefore, all channels of communication with both the ship owner and the Somali government remain open and active,” he revealed. Andrabi assured the media of the government’s “full attention and concern regarding this emergency situation”. ‘No responsible state can remain passive’: FO on Afghanistan Pakistan’s tensions with Afghanistan also came up during the press briefing. Andrabi was asked about the European Union’s (EU) top diplomat Kaja Kallas noting the “grave humanitarian consequences” of the recent fighting between the two neighbours and urging them to exercise restraint. The FO spokesperson replied: “No responsible state can remain passive when its civilians and security forces are repeatedly targeted. Therefore, we reserve the right to take all necessary measures to safeguard the lives and property of our nationals, based on the principles of necessity and as a measure of last resort.” He stressed that Pakistan adhered to the principles of distinction and proportionality and that any “defensive action” was directed against “legitimate targets under international law, including sanctuaries and bases used for planning terrorism and launching terrorist attacks against Pakistan”. The FO spokesperson further stated, “We will continue to take such actions when necessary, and this remains part of our dialogue with our international interlocutors.” Responding to another question before this, Andrabi had asserted that the EU understood Islamabad’s position, including “our right to defend ourselves and take action against terrorist incidents, particularly those emanating from Afghanistan”. Andrabi then referred to the joint statement issued on Kallas’s visit, which said both sides “reaffirmed the importance of combatting terrorism in all its forms and manifestations”. Both sides had also “expressed serious concerns over the presence of terrorist entities in Afghanistan and reiterated that Afghan territory must not be used to threaten or attack other countries”. Replying to another question, the FO official affirmed that there was “no bar on Pakistan pursuing dialogue and diplomacy with Afghanistan”. “Indeed, this is what we were doing until very recently, when terrorist attacks emanating from Afghanistan, with possible collusion from elements within the authorities there, surpassed a certain threshold of Pakistan’s patience. As a result, there were instances of border closures, and we also took certain actions in our border regions,” he recalled. Expressing Pakistan’s desire to pursue the path of diplomacy but also voicing its strong objection to the killing of Pakistani civilians and members of law enforcement agencies, Andrabi said: “We have adopted a position whereby we seek an unequivocal commitment from the Afghan side that its territory will not be used for terrorism against Pakistan.” The FO spokesperson said China’s Special Representative on Afghanistan Ambassador Yue Xiaoyong “held productive discussions on regional security” during his visit to Islamabad. “Pakistan and China agreed to strengthen coordination and synchronise their counterterrorism efforts in order to protect regional peace and security,” he said, adding that Islamabad appreciated Beijing’s constructive role on security issues in general. On the recent military cooperation agreement signed between Russia and Afghanistan, Andrabi responded, “The details are still being ascertained. At this stage, it would be premature to offer any comment on the matter.” India’s plans to divert Chenab water Meanwhile, the FO also denounced India’s plans to build a river-linking project to divert water from Chenab to the Beas river as a “grave violation” of the Indus Waters Treaty (IWT) and other international laws. Chenab forms at the confluence of the Chandra and Bhaga rivers in Lahaul and Spiti, Himachal Pradesh. The IWT, brokered by the World Bank in 1960, allocates the three western rivers — Indus, Jhelum and Chenab — to Pakistan, and the three eastern rivers — Ravi, Beas and Sutlej — to India. According to Indian news outlet CNBC TV18, India will begin work on the proposed “Link-3 Project”, located on Chenab in Himachal Pradesh, on August 1. The project aims to divert surplus water from the Chenab river to the Beas basin and is estimated to cost 26.2 billion Indian rupees, as per ANI. Responding to a query, Andrabi said, “Yes, we have seen this report as well as the public tendered document issued by the government of India that India has invited bids for the Chenab-Beas Link Tunnel project with the intention of transferring 1.9m acre feet of water annually from Chenab into the Beas system. “Such an inter-basin diversion of water of the Chenab into the Beas system constitutes a grave violation of not just the IWT but also of the laws of treaty, particularly the Vienna Convention on the Law of Treaties, as well as the broader framework of international water law, including the principles reflected in the 1977 UN convention on watercourses,” he added. The FO spokesperson also highlighted India’s planned “silt flushing” of the Salal Dam in occupied Kashmir’s Reasi district. “This is a deeply concerning development. It would provide water control capability that is not permissible under either the Indus Waters Treaty or the 1978 Salal agreement,” he pointed out. Andrabi noted that India had neither officially communicated nor shared any notice of these projects nor has it sought consultations in this regard. “These projects confirm that India seeks to weaponise water. This carries dangerous implications not only for Pakistan’s economy but also for regional stability and international peace and security,” he stressed. Emphasising that Pakistan had “exercised restraint and responsibility” and remained committed to dialogue, Andrabi warned, “However, any illegal action, any illegal measure to endanger Pakistan’s water, food and economic security, as well as the survival and well-being of its 250 million people, is unacceptable.” He stated that such actions amount to “further destabilisation of South Asia, with potential grave consequences” for the entire region. “Under IWT, Pakistan is entitled to receive the unrestricted use of the water of the western rivers, and this is in lieu of the rights of the eastern rivers that were given to India,” Andrabi noted. The FO spokesperson asserted that Pakistan “retains all options necessary for safeguarding rights and entitlements under the treaty and to protect its vital national interests”. “Let me emphasise, we retain all options in this regard,” he reiterated. The FO urged the international community to call upon India to “desist from any form of water coercion, abandon projects that seek to stop, reduce or divert water flow legally belonging to Pakistan, and restore full and faithful implementation of the IWT”.
At the interbank foreign exchange market, the rupee opened at 95.70 against the U.S. dollar, then touched an intra-day low of 95.85 and a high of 95.59 before closing at 95.83 (provisional), down 7 paise from its previous close
The plans are in advanced stages with deliveries expected over 18 to 24 months, for a jump in value from recent government orders worth 30 billion rupees ($313 million) for tactical-class drones
The Indian stock market closed nearly flat, with Sensex and Nifty ending the session in the green with marginal gains after seeing sharp upswings and downswings during the day.Sensex rose nearly 14 points to close at 74,360, while Nifty 50 rose around 11 points to end the session at 23,417, nearly unchanged from the previous session. This came as India VIX, which measures volatility in markets, fell over 3% to 15.77.Titan shares jumped 4% to lead gains on Sensex, while Zomato-parent Eternal jumped 3% to follow. ITC, Tech Mahindra, SBI, Bharat Electronics and ICICI Bank shares meanwhile gained around 1% each. On the other hand, Infosys, Bajaj Finserv, UltraTech Cement, Adani Ports and Tata Steel shares dropped around 15 each.Broader markets closed with higher gains, with Nifty Midcap 100 and Nifty Smallcap 100 indices gaining around 0.5% each. Sectorally, Nifty Consumer Durables rallied more than 2%, while Nifty Metal declined 0.7%. Around 1,817 stocks advanced on NSE, while 1,474 declined and 105 remained unchanged.Rupee watchNotably, investors now await the outcome of the Reserve Bank of India’s Monetary Policy Committee's (MPC) meeting tomorrow. Meanwhile, rupee closed at 95.7850 per U.S. dollar, from 95.7050 on Wednesday.FIIs net sold Indian shares worth Rs 5,617 crore on Wednesday, according to data on NSE. They have net sold Indian equities worth more than Rs 39,625 crore in just four consecutive sessions.India may scrap capital gains tax on FPI investments in govt securitiesThe Indian government is planning to scrap capital gains tax on investments in government securities by foreign portfolio investors (FPIs), a move which will likely shore up overseas capital inflows into the country, The Economic Times reported citing people familiar with the matter.The Cabinet, in a meeting chaired by Prime Minister Narendra Modi on Wednesday, approved the promulgation of an ordinance to amend the Income Tax Act to pave the way for this exemption, sources further told The Economic Times, adding that a notification is expected soon after the President gives her assent to the ordinance.What lies ahead?On Thursday, the benchmark index Nifty opened with a gap-down. However, the index staged a recovery from lower levels and eventually closed on a flat note. Notably, this marked the third consecutive session where Nifty found support near its prior swing low and rebounded thereafter, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities. He however added that a sustained follow-up move on the upside is still required to confirm a potential reversal.“At present, the index continues to trade below its key moving averages, while momentum indicators suggest a sideways trend. The daily RSI has been oscillating within a narrow range for the last 40 trading sessions, in line with the RSI range shift rules, indicating lack of directional strength,” he said.Going ahead, Shah expects the 23,550–23,580 zone to act as an important hurdle for Nifty 50.. A sustained move above the 23,580 level could trigger an extension of the ongoing pullback rally, potentially paving the way towards the 23,700 mark, he said. On the downside, he sees 23,330–23,320 zone as likely to serve as a crucial support area.(With inputs from agencies)(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Traders in Reliance Industries Ltd.’s treasury department are strategizing over where to park the company’s cash in case the Reserve Bank of India starts raising interest rates in the coming months.One proposal involves moving Reliance’s cash holdings from liquid mutual funds into short-dated money market instruments, people aware of the conglomerate’s thinking said. The switch may pay off because the yield spread between money-market papers and the benchmark rate has widened beyond its five-year average and is likely to narrow in the coming months, resulting in capital gains, the people said, asking not to be named as the information is private. Markets are currently expecting about 50 basis points of rate hikes this year, they said.Traders also mulled reducing allocation to longer-dated bonds, which tend to be more sensitive to interest-rate changes, the people said.The strategy discussion cited market expectations and the conglomerate didn’t take an explicit view on interest rates. Treasury departments typically consider a range of market scenarios when evaluating trading strategies.“We categorically deny the information you have provided in your email regarding our opinion on interest rates and the behaviour of the rupee,” a Reliance spokesperson said by email.131502003India's Overnight Swaps Reflect RBI Rate HikesThe view carries weight because Reliance runs one of the largest corporate treasuries in India. The discussion also come ahead of the Reserve Bank of India’s rate decision on Friday, where the central bank is expected to announce measures to support the rupee.While most economists — 29 out of 35 — surveyed by Bloomberg News expect the authority to keep the benchmark rate unchanged, they see the RBI adopting a hawkish stance to prepare markets for potential rate hikes later this year amid inflation pressures triggered by an oil price shock.India’s sovereign bond yields have remained broadly stable this quarter even as the rupee has slid to record lows. The currency has recovered in recent days, helped by RBI intervention and optimism that a US and Iran agreement may lead to the reopening of the Strait of Hormuz, a vital route for the country’s energy imports.The rupee is down 6% this year and recently approached a record low of 97 per dollar. It has been hovering around 95-96 levels in recent days.Reliance’s traders expect the rupee to strengthen if a Middle East peace deal is reached and if the RBI takes measures to attract capital inflows, one of the people said. They have proposed that the owner of world’s largest oil-refining complex partly hedge its long-term forward contract positions as well as coupon payments dues in fiscal year starting March 2028, the person said.