India Rupee At 2-Week Low On State Banks’ Dollar Bids

India Rupee At 2-Week Low On State Banks’ Dollar Bids

16 Jul 2019 05:30 PM

Financial Market Overview

16th July, 2019

Evening Coffee

MARKETS AT CLOSE                                    

Indian Rupee

  • The Indian rupee fell to a two-week low against the dollar, on greenback demand by state-run lenders while investors awaited the release of U.S. retail sales data and speeches by Federal Reserve officials due later in the day.
  • The rupee settled at 68.71 to a dollar, its lowest since Jul. 3, against 68.54 at previous close. The local unit opened at 68.56 before declining to the day’s low of 68.76 in late trade.
  • Recent data from the U.S. has been good including jobs data and core inflation print, and we expect retail sales to add itself to the list of positive data prints. “However, this may not be enough to move dollar index and any substantial move in the greenback will come only on the back of Fed officials’ remarks that may hint on Fed’s likely action for the next policy.

Indian Equities

  • Benchmark indices closed strong with the Sensex rising 234.33 points to 39,131.04 and the Nifty50 climbing 72.70 points to 11,661.05 as all sectoral indices were higher except IT which lost over half a percent.
  • The market breadth was negative as about 1,285 shares declined against 1,149 advancing shares on the BSE. The Nifty Midcap index gained 0.7 percent while the Nifty Smallcap index ended flat.
  • The Nifty Bank, Auto, FMCG and Metal indices climbed 0.4-1 percent while Pharma rallied 1.5 percent and Realty surged 2 percent.

Global Markets

  • European markets are mixed today. The FTSE 100 is up 0.28% while the CAC 40 gains 0.21%. The DAX is even.
  • The benchmark S&P 500 index ended little changed on Monday after oscillating between positive and negative territory throughout the session after Citigroup Inc C.N kicked off the earnings season with a mixed quarterly report. The bank reported a better-than-expected profit but also a decline in its net interest margin. The fall in net interest margin triggered a fall in shares of other banks on concerns that it would presage lower profits across the industry as interest rates have dropped. The Dow Jones Industrial Average rose 27.13 points, or 0.1%, to 27,359.16, the S&P 500 gained 0.53 point, or 0.02%, to 3,014.3 and the Nasdaq Composite added 14.04 points, or 0.17%, to 8,258.19.
  • The mood among German investors deteriorated more sharply than expected in July, a survey showed on Tuesday, with the ZEW institute pointing to the unresolved trade dispute between China and the United States as well as political tensions with Iran. A separate gauge measuring investors' assessment of the economy's current conditions plunged to -1.1, the lowest level since June 2010. The weak reading bodes ill for the German economy which is expected to post only meager growth of 0.5 percent this year.
  • British wages, excluding bonuses, rose at their fastest pace in nearly 11 years, official data showed on Tuesday, but there were potential signs of future weakness in jobs growth, the economy's silver lining since the Brexit referendum. Core earnings rose by an annual 3.6% in the three months to May, the biggest increase since mid-2008 and stronger than the median forecast of 3.5%.