Nov 14 2018

Rupee At Near 2-Month High Tracking Plunge In Oil Prices

Financial Market Overview

14th November, 2018

Evening Coffee                                                                        

Indian Rupee:-

  • The Indian rupee gained for a second session to a near-two-month high against the dollar, tracking an overnight plunge in crude oil prices that soothed worries over widening of current account deficit. The rupee settled at 72.31 to a dollar, highest since Sep. 21, against 72.67 at previous close. The currency opened at 72.16 and extended gains to 72, before making an intraday low of 72.41. Most Asian currencies trimmed early gains to end mixed against the greenback.
  • There are host of factors supporting the rupee, including a sharp decline in crude oil prices, which has eased worries over India’s current account deficit and reversal in dollar index from 16-month high. Dollar inflows in local equities have also helped.

 Indian Equities:-

  • Indian shares erased earlier gains to close little changed on Wednesday, with a firm rupee weighing on IT and healthcare stocks, while private sector lender ICICI Bank Ltd rose to a record close.
  • The broader NSE index closed 0.06 percent lower at 10,576.3, while the benchmark BSE index was down 0.01 percent at 35,141.99.Sun Pharmaceutical Industries Ltd fell 7.4 percent to its lowest close since June 7 after posting a surprise second-quarter loss in the previous session.HDFC Bank Ltd climbed 1.6 percent and ICICI Bank rose 1.6 percent, while Kotak Mahindra Bank Ltd declined 3.1 percent.

 Global Markets:-

  • European markets are lower today with shares in France off the most. The CAC 40 is down 0.58% while Germany’s DAX is off 0.45% and London’s FTSE 100 is lower by 0.29%.
  • A slowdown in growth in the euro area economy in the third quarter was confirmed by a preliminary estimate released on Wednesday. Eurostat said the euro area economy grew by just 0.2% in the third quarter, matching the initial flash estimate and economists’ forecasts.
  • The euro area economy had expanded by 0.4% in the second quarter. The economy expanded by an annualized 1.7% in the three months to September, also matching the initial estimate and slowing from a upwardly revised 2.2% in the second quarter.
  • The annual rate inflation in the UK unexpectedly remained steady in October, according to data released on Wednesday. The Office for National Statistics reported that the consumer price index was unchanged at 2.4% last month, matching the annual rate of inflation seen in September. Economists had expected the annual rate of inflation to tick up to 2.5%. Month-over-month, consumer price inflation held steady at 0.1% in October, compared to expectations for a gain of 0.2%.
  • Core CPI, which excludes food, energy, alcohol, and tobacco costs, was unchanged as expected at 1.9%.The euro zone economy grew at its slowest pace in four years in the third quarter of 2018, while employment growth also eased during the period, data released on Wednesday showed.
  • Euro zone gross domestic product (GDP) rose by 0.2 percent in the July-Sept period, confirming its earlier preliminary flash estimate from Oct. 30 This was the slowest rate of economic growth since the second quarter of 2014.