Apr 02 2018

India Rupee Falls Most In 10 Quarters On Fiscal, Inflow Concerns

 Weekly Synopsis

 

Date:- 31st March 2018

 

Markets from 26th March 2018 to 31st March 2018:-

 

Indian Rupee:-

  • The rupee closes the week at 65.17 against the previous weekly close of 65.0050 on March 23rd, 2018 to a greenback. It trades in a weekly range between 64.7225 to 65.30 against the greenback.
  • India’s foreign exchange reserves rose to $422.53 billion as of March 23, compared with $421.33 billion a week earlier
  • The Indian rupee posted its biggest quarterly fall in 10 quarters, after the federal budget for the next fiscal widened the budget gap aim, while capital inflows slowed amid global equity rout.
  • The rupee settled at 65.17 to a dollar, its lowest since Mar.21, and against 64.98 at previous close. The rupee opened higher at 64.88 to dollar, but pared gains and fell to 65.30, lowest since Feb 28, amid importers’ demand for month-end payments and April-February fiscal deficit data that triggered stop losses. Most Asian currencies ended mixed against the dollar.
  • On a quarterly basis the rupee fell 2.03%, its biggest quarterly slump since September 2015. For the financial year that ends on Mar. 31, the rupee fell 0.5%, against 2.1% gain in previous fiscal year. The local unit slumped for the second consecutive week and month as well.

Global Market:-

  • The U.S. dollar’s share of currency reserves reported to the International Monetary Fund declined in the final quarter of 2017 to a four-year low, as other currencies’ shares of reserves grew.
  • The share of dollar reserves has declined for four straight quarters as the greenback weakened in 2017 due to faster growth outside the United States and bets that other major central banks would consider reducing stimulus. Still the dollar has remained the biggest reserve currency by far.
  • The dollar stalled against its peers as the recovery seen earlier this week petered out ahead of the new quarter, which could potentially bring renewed pressure on the greenback.Against a basket of six other major currencies, the dollar was off 0.2 percent to 89.985.
  • The index was up nearly 0.6 percent for the week, during which it touched a one-week high of 90.178 on factors including easing of concerns over global trade protectionism and perceived progress on North Korea’s nuclear programme.
  • S. economic growth slowed less than previously estimated in the fourth quarter as the biggest gain in consumer spending in three years partially offset the drag from a jump in imports.
  • Gross domestic product expanded at a 2.9 percent annual rate in the final three months of 2017, instead of the previously reported 2.5 percent, the Commerce Department said in its third estimate for the quarter on Wednesday. That was a slight moderation from the third quarter’s brisk 3.2 percent pace.
  • Confidence among U.S consumers fell in March. The Conference Board’s index of consumer confidence decreased to 127.7, compared to a reading of 131.0 forecast by economists. The measure had climbed to 130.0 in the previous month.
  • Wall Street surged on Thursday, bringing an upbeat end to a tumultuous, holiday-shortened week as technology stocks rebounded, but the S&P 500 and the Dow Jones Industrial Average posted their biggest quarterly declines in more than two years.The Dow Jones Industrial Average rose 254.69 points, or 1.07 percent, to close at 24,103.11, the S&P 500 gained 35.87 points, or 1.38 percent, to 2,640.87 and the Nasdaq Composite added 114.22 points, or 1.64 percent, to 7,063.45.For the week, the Dow rose 1.16 percent, the S&P rose 0.80 percent, and the Nasdaq dropped 0.94 percent.
  • European markets finished broadly higher on Thursday with shares in Germany leading the region. The DAX is up 1.31% while France’s CAC 40 is up 0.72% and London’s FTSE 100 is up 0.17%

Local Market:-

  • Indian shares snapped a two-day gaining streak to end lower on Wednesday, dragged down by market heavyweights such as Reliance Industries Ltd and ICICI Bank Ltd due to volatility around the expiry of derivatives contracts at the end of the session.
  • The broader NSE index closed down 0.69 percent at 10,113.70, but posted a weekly gain of 1.16 percent.
  • The benchmark BSE index ended 0.62 percent lower at 32,968.68, but gained 1.14 percent this week.
  • The indexes posted a monthly loss of about 3.6 percent, their steepest drop for the month of March since 2015.