Oct 16 2017

Rupee at over 3-week high; WPI inflation cools down in September

Financial Market Overview

16th October, 2017

Evening Coffee:-                                                                                      

MARKETS AT CLOSE:-

Rupee:-

  • Indian rupee rose to an over three-week high against the dollar, as the nation’s trade gap shrank and U.S. inflation grew at a slower-than-expected pace, damping expectations for another rate increase in the world’s largest economy this year. However, dollar purchases by state-run banks, likely on behalf of the central bank, limited the rupee’s gains.
  • The rupee settled at 64.74 to a dollar, its highest since Sep. 20 and against 64.93 at close on Oct. 13. The currency rose for a sixth consecutive session, marking its longest winning streak since Feb. 6, 2017. It had earlier risen to 64.69, but surrendered some gains on dollar purchases by at least two large state-run lenders, likely on behalf of the Reserve Bank of India. Most other Asian currencies also traded higher.
  • India’s wholesale inflation moderated to 2.60 percent in September, aided by softening food prices, although a sharp surge in onion prices, ahead of the festival season can pinch households’ kitchen budget. In August, wholesale inflation stood at 3.24 percent in August and 1.36 percent in September 2016.

Indian Equities:-

  • Indian shares hit record closing highs on Monday as investors were encouraged by recent economic data which showed the country’s merchandise exports surged in September, pushing the trade deficit to a seven-month low.
  • The broader NSE index ended 0.62 percent higher at 10,230.85, after rising to a record high earlier in the session.
  • The benchmark BSE index closed up 0.62 percent at 32,633.64, after hitting an all-time high early in the day.
  • Federal Bank Ltd gained about 7 percent after posting upbeat second-quarter profit.

Global Markets:-

  • European markets are mixed today. The CAC 40 is up 0.10% while the DAX gains 0.10%. The FTSE 100 is off 0.02%.
  • Asian markets finished mixed as of the most recent closing prices. The Hang Seng gained 0.76% and the Nikkei 225 rose 0.47%. The Shanghai Composite lost 0.36%.
  • In prepared remarks at an international banking seminar in Washington yesterday, Federal Reserve chair Janet Yellen reiterated concerns over rising uncertainty on the path of inflation. However, she acknowledged that the U.S. economy remains strong and the strength in labor markets calls for a gradual rate increase despite subdued inflation.
  • The Dollar index was last trading up 0.03%, tracking a decline in the euro. The single currency fell 0.09% against the dollar, post Austria’s weekend election amid concerns over Catalonia’s confrontation with Madrid, where Catalan leader Carles Puigdemont is expected to clarify today whether he is calling for the region’s independence.