Oct 05 2018

India Rupee Opened Lower Ahead Of MPC Decision

Financial Market Overview

05rd October, 2018

Morning Coffee:-                                                                        

MARKETS AT OPEN:-

Rupee:-

  • The Indian rupee is opened lower against the dollar ahead of the nation’s Monetary Policy Committee decision on whether to raise interest rates to support Asia’s worst-performing currency this year. The rupee opened at 73.65 versus the dollar compared with its previous close of 73.58,
  • The MPC will increase rates by a quarter percentage points and that outcome is well discounted by market participants, However, the odds for half a percentage rate hike have increased in recent days on account of the rout in U.S. Treasuries and the rupee falling to just shy of the 74 level.
  • We expect a wider range today due to a critical event of RBI Monetary Policy 72.80 to 74.10.

Indian Equities:-

  • Benchmark indices recovered more than half of losses on short covering in most beaten down stocks. The 30-share BSE Sensex was down 91.65 points at 35,077.51 and the 50-share NSE Nifty declined 74.60 points to 10,524.70. Benchmark indices opened sharply lower on Friday morning after the government move raised fear of subsidy burden on PSU oil companies.
  • BSE Sensex was down 228.38 points or 0.65 percent at 34,940.78 and the 50-share NSE Nifty fell 113.90 points or 1.07 percent to 10,485.40. GAIL cracked 10 percent and ONGC plunged 12 percent. MRPL was down 10 percent. HPCL, BPCL and IOC crashed another 20-25 percent on government move.

Global Markets:-

  • Asian markets are lower today as Japanese, Chinese and Hong Kong shares fall. The Nikkei 225 is off 0.80% while the Hang Seng is down 0.54%. while the Hang Seng is down 0.56%. Australian’s ASX200 is gain by 15 points and 0.25%. Asian shares were fragile on Friday after benchmark US Treasury yields surged to a seven-year high and strong economic data fanned concerns about inflation and the risk of faster-than-expected interest rate rises.
  • MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3 percent, while Japan’s Nikkei dropped 0.5 percent and Australian benchmark was up just 0.1 percent.
  • European markets finished broadly lower yesterday with shares in France leading the region. The CAC 40 is down 1.47% while London’s FTSE 100 is off 1.22% and Germany’s DAX is lower by 0.35%.
  • U.S stocks ended sharply lower on Thursday as U.S. Treasury yields continued their ascent to multi-year highs on the latest round of strong economic data, building concerns for an acceleration of inflation.
  • The Dow Jones Industrial Average fell 201.05 points, or 0.75 percent, to 26,627.34, the S&P 500 lost 23.91 points, or 0.82 percent, to 2,901.6, and the Nasdaq Composite dropped 145.58 points, or 1.81 percent, to 7,879.51.
  • The number of Americans filing for unemployment benefits fell to a near 49-year low last week, pointing to sustained labor market strength, which should continue to underpin economic growth.
  • The labor market, which is viewed as being near or at full employment, is steadily boosting wage growth, which could help to support consumer spending as the stimulus from the Trump administration’s $1.5 trillion tax cut package fades.
  • The MPC will likely raise the key policy rate by 25 basis points for the third time this year to 6.75% in the wake of a tumbling rupee and rising crude prices.