India Rupee Near 2-Week Low On Oil Woes, Shares Sell-Off

India Rupee Near 2-Week Low On Oil Woes, Shares Sell-Off

17 Sep 2019 05:38 PM

Financial Market Overview

17th Sep, 2019

Evening Coffee

MARKETS AT CLOSE                                    

Indian Rupee

  • The Indian rupee fell to a near two-week low against the dollar as oil prices remained elevated amid an increase in geopolitical tensions in the Middle East and on likely foreign fund outflows from local shares.
  • The rupee settled at 71.78 to a dollar, its lowest since Sep. 5, against its previous close of 71.59. The local unit opened at 71.82 and fell to the day's low of 71.98. Today's implied volatility for options have shot up for the dollar/rupee pair considering FOMC tomorrow is going to be a big mover and direction provider.
  • Focus is on Fed’s decision and a 25 bps rate cut is expected by Fed. However, the key is statement. If Fed is dovish enough then, rupee will move towards 71.00. However, if Fed disappoints rupee will move towards 73.00. We expect Fed to be supportive of risk sentiments and dovish enough.

Indian Equities

  • Benchmark indices ended lower on September 17 as geographical tension erased Nifty and Bank Nifty gains of the year 2019, with all Bank Nifty stocks ended in red. At close, the Sensex was down 642.22 points at 36,481.09, while Nifty was down 185.90 points at 10,817.60.
  • About 858 shares have advanced, 1641 shares declined, and 143 shares are unchanged. Hero Motocorp, Tata Steel, Tata Motors, Axis Bank and Maruti Suzuki were among major losers on the Nifty, while gainers were GAIL, HUL, Titan Company, Asian Paints and Dr. Reddy’s Labs.

Global Markets

  • European markets are mixed. The FTSE 100 is higher by 0.18%, while the DAX is leading the CAC 40 lower. They are down 0.25% and 0.02% respectively.
  • Energy stocks spiked while most of Wall Street fell on Monday after weekend attacks on Saudi Arabia's oil facilities added to investors' concerns about geopolitical risk and a stumbling global economy. The attacks on the world's biggest crude exporter sent oil prices up more than 20% before they eased, as various nations said they would tap emergency reserves to ensure stable supplies. The Dow Jones Industrial Average fell 0.52% to end at 27,076.82 points, while the S&P 500 lost 0.31% to 2,997.96. The Nasdaq Composite dropped 0.28% to 8,153.54.
  • U.S. President Donald Trump said on Monday Washington had struck trade agreements with Tokyo that could be implemented without congressional approval, but stopped short of assuring Japan that new tariffs would not be slapped on vital auto exports. In a letter to the U.S. Congress released by the White House, Trump said that he intends to enter into the agreements on tariff barriers and digital trade "in the coming weeks" and was notifying lawmakers that the tariff deal would be made under a trade law provision allowing the U.S. president to make reciprocal tariff reductions by proclamation.
  • Germany's ZEW economic sentiment index, the first major confidence indicator of the month in Europe, rose to -22.5 in September from a seven-year low of -44.1 in August, amid signs of progress in the U.S.-China trade dispute and the European Central Bank's monetary policy easing package last week. The reading is stronger than the -38.1 forecast by economists. It's important because the ZEW index is usually seen as a better indicator of turning points in the German economy than of its overall performance.