Sep 04 2018

Dollar surge continues; no respite for rupee

Financial Market Overview

4th September, 2018

Evening report:-

MARKETS CLOSED AT:-

Rupee:-

  • The Indian rupee crashed to record low against the dollar for a fifth straight session, tracking similar sell-off across other emerging market peers amid surging global crude oil prices. However, further decline in the local currency was limited on likely intervention from the central bank.
  • The rupee closed at a record-low 71.58 to a dollar, against 71.21 at previous close. Intraday, the pace of decline in rupee was limited amid dollar sales by several state-run and private lenders, likely on behalf of the Reserve Bank of India. There was also talk that the RBI may have intervened through futures though the same could not be confirmed.

Indian Equities:-

  • Indian shares ended lower for a second straight session on Tuesday, dragged down by banks and consumer stocks, as the rupee extended declines to a record low and oil prices rose sharply.
  • The broader NSE index fell 0.54 percent to 11,520.30, while the BSE index ended 0.4 percent lower at 38,157.92.

Global Markets:-

  • European markets are lower today. The France’s CAC40 is down 1.58%, the eurozone’s STOXX50 is lower by 1.39%, the Germany’s DAX fell by 1.34%, the SMI is off 0.99% , the Spain’s IBEX35 fells 0.52% .
  • The benchmark Brent crude oil contract shot well past the key $79-a-barrel price level, prompting fresh worries over further widening of current account deficit amid higher oil imports and weak export growth. The contract was last trading at $79.26, extending yesterday 0.9% gain. Prices rose as much as $79.72 also highest since May.24.
  • Asian and emerging market currencies continued to languish against the greenback amid fears that further escalation in global trade tensions could weigh on global growth, with the sword of U.S. imposing additional tariffs on Chinese imports as early as this week hanging over everyone’s heads.The Indonesian rupiah slipped against the dollar for the sixth consecutive session, trading at lowest levels since 1998, while the Brazilian real traded flat after posting its largest single-session fall since May yesterday amid concerns over this year’s presidential election.The Turkish lira plummeted near about 2% against the greenback yesterday despite the nation’s central bank reportedly saying it will adjust the monetary stance at a meeting next week to support price stability. Meanwhile, the Argentinian peso witnessed further sell-off despite the country unveiling a new export tax and spending cuts to fight the currency crisis.