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After opening the day on a flat note, the Indian share markets witnessed selling pressure and went on to trade in the red. Sectoral indices are trading on a negative note with stocks from the metal sector , banking sector and telecom sector witnessing maximum selling pressure.
The BSE Sensexis trading down 217 points (down 0.8%) and the NSE Nifty is trading down 72 points (down 0.9%). Meanwhile, the BSE Mid Cap index is trading down by 1.3%, while the BSE Small Cap index is trading down 1.1%. The rupee is trading at 67.89 to the US$.
The Reserve Bank of India (RBI) has relaxed its decree on deposits exceeding Rs 5,000 in old currency. It has now said that questioning will only apply to those who haven't furnished know-your-customer (KYC) documentation.
Earlier this week, the RBI announced strict curbs imposed on depositing old notes in bank accounts stating that deposits of more than Rs 5,000 in old Rs 500 and Rs 1,000 notes can be made only once per account until 30 December. Along with this, it also asked banks to question the depositor in the presence of at least two bank executives on why he or she could not deposit the amount earlier. The above move had led to chaos amongst depositors as well as bankers.
One must note that ever since demonetization was announced, there have been numerous flip flop amid the changing narrative of demonetization. This could undermine people's trust in Mr Modi and central bank.
Being on the topic of demonetisation, my colleague Rohan Pinto has highlighted how political parties continue to make hay post demonetisation. Here is what he wrote in the latest edition of The 5 Minute WrapUp:
Moving on to the news from currency markets, the dollar is witnessing buying interest this week. The currency has extended its uptrend seen last week and has stood higher against major currencies this week so far. Most of the gains are seen on the back of sustained dollar demand form importers and corporates. Also, the Fed's decision to raise interest rates last week helped dollar trade on a positive note.
To keep a tab on the movements in the dollar and other currencies, you can read the stock market commentary from the Daily Profit Hunter team. Their commentary tracks the developments in the global economy as well as stock, currency and commodity markets.
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