Oct 26 2017

Rupee at 1-week high; ECB tapers Asset Purchase Program, holds rates steady

Financial Market Overview

26th October, 2017

Evening Coffee:-                                                                                      

MARKETS AT CLOSE:-

Rupee:-

  • Indian rupee swung between gains and losses to end at a more-than-one-week high against the dollar, helped by equity-related greenback sales and a recovery in local shares.  Further gains in the rupee were capped on dollar purchases by a large corporate and for month-end related outflows.
  • The rupee ended at 64.82 to a dollar, highest since Oct. 16, against 64.89 at close yesterday. It rose to 64.72 levels intraday but briefly pared all gains to fall to 64.91 levels, on dollar purchases by a large engineering and construction firm along with importers, likely for month-end requirements.

Indian Equities:-

  • Indian shares marked record closing highs for a second consecutive session on Thursday after a finance ministry official said the government’s $32 billion plan to infuse capital into its banks is unlikely to be reflected in the country’s fiscal deficit.
  • Analyst have said New Delhi’s capital injection plan announced earlier this week can be kept off the government’s budget by steering funds through state-owned agencies.
  • The benchmark BSE index closed up 0.32 percent at 33,147.13. The broader NSE index ended 0.47 percent higher at 10,343.80.

Global Markets:-

  • European markets are higher today with shares in France leading the region. The CAC 40 is up 0.62% while London’s FTSE 100 is up 0.46% and Germany’s DAX is up 0.37%.
  • Asian markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 0.31% and the Nikkei 225 rose 0.15%. The Hang Seng lost 0.36%.
  • The European Central Bank announced Thursday that it would extend its tapering program longer although at a lower amount of purchases, while keeping interest rates unchanged. Specifically, and beginning in January, the ECB will reduce monthly purchases from the current €60 billion ($70.6 billion) to €30 billion ($35.3 billion) and will extend those purchases to “the end of September 2018, or beyond, if necessary”. Furthermore and as expected, the ECB left its benchmark interest rate unchanged at a record-low 0.0%.