Oct 31 2018

Rupee Opened Lower On Report RBI Governor Mulls Resignation

Financial Market Overview

31st October, 2018

Morning Coffee:-                                                                        

MARKETS AT OPEN:-

Rupee:-

  • The Indian rupee is expected to open lower against the dollar following a media report that the Reserve Bank of India Governor Urjit Patel is considering resigning amid differences with the federal government. The rise in the dollar index to its highest in 16 months is further expected to weigh on the local currency. The rupee opened at 73.92 versus its previous close of 73.68, the central bank would want to be “in control of the situation” and will likely step in to contain the volatility and ensure that there is no undue panic.
  • CNBC-TV 18 television channel, citing multiple sources familiar with the matter, reported earlier today that the RBI governor is considering all options including resigning following critical comments by India’s finance minister over the functioning of the country’s central bank. Yesterday, Finance Minister Arun Jaitley blamed the RBI for failing to stop the 2008-2014 lending spree, which has led to asset quality issues at state-owned banks.
  • We Expect Pair to trade in the range between 73.60 to 74.00

Indian Equities:-

  • Equity benchmarks opened higher Today morning the Nifty holding 10,000 levels it opened at 10229 25 points up.
  • The Sensex is gain by 131 points opened at 34002.

Global Markets:-

  • Asian markets are higher today as Japanese and Hong Kong shares show gains. The Nikkei 225 is up 1.55% while the Hang Seng is up 0.56%. The Shanghai Composite is up 0.85% while the australian ASX200 is down by -9 points and -0.16%
  • European markets finished mixed as of the most recent closing prices. The FTSE 100 gained 0.14%, while the DAX led the CAC 40 lower. They fell 0.42% and 0.22% respectively.
  • Major U.S. stock indexes jumped more than 1 percent on Tuesday, helped by strong gains for chip and transport stocks as investors took advantage of cheaper prices following a steep recent pullback for equities.
  • The Dow Jones Industrial Average rose 431.96 points, or 1.77 percent, to 24,874.88, the S&P 500 gained 41.39 points, or 1.57 percent, to 2,682.64 and the Nasdaq Composite added 111.36 points, or 1.58 percent, to 7,161.65.
  • The dollar could rise back to last year’s peak, the highest since the global financial crisis, if current bearish technical signals for oil pan out. The dollar index and WTI have a strong, long-term negative correlation. The dollar rose to a 16-month high against a basket of major currencies on Tuesday, amid growing signs the United States economy is outperforming its peers.
  • The dollar index, which measures the greenback against six major currencies, was 0.4 percent higher at 97.004. Earlier in the session, the index hit a high of 97.02, its strongest since 30 June, 2017.
  • EUR/USD’s ability to bounce back from disappointing readings on euro zone economic growth and Italian funding concerns should send a warning to anyone betting against it. In Italy’s first debt auction since S&P assigned a negative outlook, funding yields came in at the higher end of expectations, widening Italian-German and German-U.S. yield spreads, which in turn weighed on the EUR/USD. Above-forecast German CPI eased the downward pressure on EUR/USD