Your question: Which sector in the stock market amongst the following is most likely to be adversely impacted by an appreciating rupee?

Which sector is best for stock market?

Top 5 Sectors to invest in, in 2021

  • – Banking: A number of sectoral mutual funds have increased their allocation in this sector of the economy, resulting in a higher proportion of banking and financial stocks in the market. …
  • – Infrastructure: …
  • – Pharmaceuticals: …
  • – IT/ technology: …
  • – Chemicals: …
  • Conclusion.

What effects the stock market the most?

Macro-economic factors such as interest rates, inflation, unemployment and economic growth often move stock markets. Stock markets are always rooting for more economic growth, because it usually means more profits for companies, and more profits tend to grow the value of stocks.

Which of the following industries is most adversely affected by the recent surge of Indian rupee against the dollar?

The rupee has slid further to a fresh 15-months low, hitting 67.32 against a dollar on May 10.

These are the sectors that will hurt due to a weaker rupee:

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Sector Chemicals
Import 34.17
Export 33.58
Net Import 0.59

How does rupee depreciation affect stock market?

This happens as the value of the Rupee dips against the US Dollar, and imports become more expensive. Therefore, companies importing raw materials, capital-intensive sectors, and foreign borrowings will be hurt the most. This will directly translate into the stock prices of such companies tanking at the market.

Which sector is not performing in stock market?


mutual Fund (MF) schemes.

How does the stock market affect the economy?

When inflation is at a low rate, the stock market responds with a surge in selling. High inflation causes investors to think that companies may hold back on spending; this causes an across the board decrease in revenue and the higher cost of goods coupled with the drop in revenue causes the stock market to drop.

What causes changes in the stock market?

Stock prices change everyday by market forces. … If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall. Understanding supply and demand is easy.

What does strong rupee mean?

When the rupee rises, the trade deficit comes down. Products that have an import component too become cheaper. Since inflation is high and liquidity is robust, the appreciation sucks in the liquidity from the system.

What does weak rupee mean?

A depreciating rupee means higher prices of goods and services, costlier petrol and trips abroad turning more expensive. On the flip side, the domestic tourism could grow as more tourists visit India since their currency now buys more here.

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How can we make rupee stronger?

Increase demand for currency (say INR) will strengthen it. Interest Rates: This is another tool (Repo Rate) which government alters to control inflation and economic activity. When repo rate is low, banks borrow more money from RBI. When banks have more money, they lend more money to people/business.

How does rupee appreciate or depreciate?

Rupee depreciation means that rupee has become less valuable with respect to dollar. It means that the rupee is now weaker than what it used to be earlier. … 70, now USD 1 is equal to Rs. 76, implying that the rupee has depreciated relative to the dollar i.e. it takes more rupees to purchase a dollar.

Which of the following would cause rupee to depreciate against US dollar?

A fall in incomes in U.S.A. would cause Rupee to depreciate against U.S. Dollar, other things being equal.

Can I invest in dollar in India?

The Reserve Bank of India (RBI) released guidelines under the Liberalized Revenue Scheme (LRS) that permitted an Indian Resident to invest up to 250000 dollars (around 1.9 crore rupees) per year without any special permissions.