Dec 11 2018

Rupee At 3-Wk Low On Guv Patel’s Exit, State Poll

Financial Market Overview

11th December, 2018

Evening Coffee                                                                        

Indian Rupee:-

  • The Indian rupee fell for a second day and closed at an over three-week low against the dollar, after the central bank chief Urjit Patel’s surprise resignation yesterday, while the ruling Bharatiya Janata Party trailed in assembly elections in key states.
  • The rupee settled at 71.85 to a dollar, its lowest since Nov. 16, and against 71.34 at previous close. The currency opened 1.6% lower at 72.46, lowest level since Nov. 13. However, greenback sales at around 72.45 per dollar by at least two state-run banks and a large private lender, likely on the instructions of the Reserve Bank of India.

 Indian Equities:-

  • In what was anticipated to be a day of bloodbath on D-Street, a trend reversal in the last few hours of trade helped Indian shares close on a positive note.
  • An abrupt resignation by RBI governor Urjjit Patel late on Monday, along with jitters among investors who bet on a stable government added to the negative sentiment.
  • At the close of market hours, the Sensex was up 190.29 points or 0.54% at 35150.01, while the Nifty was up 60.70 points or 0.58% at 10549.20. The market breadth was positive as 1623 shares advanced, against a decline of 771 shares, while 139 shares were unchanged

 Global Markets:-

  • European markets are sharply higher today with shares in France leading the region. The CAC 40 is up 1.59% while Germany’s DAX is up 1.56% and London’s FTSE 100 is up 1.16%
  • U.S. stocks ended a volatile session slightly higher on Monday, helped by gains in technology shares, though uncertainty over Britain’s exit from the European Union kept investors on edge about global growth.
  • The Dow Jones Industrial Average rose 31.94 points, or 0.13 percent, to 24,420.89, the S&P 500 gained 4.43 points, or 0.17 percent, to 2,637.51 and the Nasdaq Composite added 51.27 points, or 0.74 percent, to 7,020.52.
  • The U.S. dollar slid lower against a currency basket on Tuesday while the pound found some support after a steep selloff in the previous session in the wake of a shock decision by British Prime Minister Theresa May to delay a key vote on Brexit.
  • U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.23% to 96.95. The index surged 0.73% on Monday, rebounding from one-week lows boosted by the steep drop in sterling. The U.S. dollar has been pressured lower by growing view that the Federal Reserve could pause its rate hike cycle sooner than previously thought.
  • The 10-year Treasury note yield has dropped to a three-month low this week, with dovish comments from Fed officials and soft U.S. data further sharpening views on an imminent pause in the tightening cycle.