RBI intervention halts rupee's slide to record low, risks linger
RBI moved higher.
· Economic Times Markets
The Indian rupee struggles amid climbing oil prices and a weakening of Asian currencies. Despite the Reserve Bank of India's intervention, traders remain wary regarding the future of the currency. Many market players doubt that a central bank interest rate hike will stem capital flight, while escalating Brent crude prices raise alarms over possible Middle Eastern supply issues.
The analysis
Against that, the stock is -0.8% on the day at ₹132.50, and has returned -1.6% over three months. It sits 25% below its 52-week high, which means a good deal of bad news was already in the price. The banks sector has moved -1.7% over the same period, so Bank of India is running 0.1 points ahead of its peers.
This is an Input cost / crude event. India imports most of its crude, so input costs pass through to margins downstream and to the rupee. Producers and consumers of the same input move in opposite directions. On the day the stock is -0.8%, so a modest reaction.
For Bank of India, the question is how much of this is already reflected in the price and how much re-rates the banks peer set alongside it.
Why it matters
- With RBI involved, this carries a regulatory dimension that can outlast the immediate market reaction.
Market context
- The company directly in focus is BANKINDIA.
- Sector exposure: Banks, Capital Goods & Engineering, Capital Markets.
In this story
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