Oct 20 2018

Rupee biggest weekly gain in eight weeks

Weekly Synopsis

20th October, 2018

Markets from 15 October 2018 to 19 October 2018

Indian Rupee:-

  • The Indian rupee recorded its biggest weekly gain in eight weeks against the dollar, as the nation’s trade deficit narrowed to a five-month low amid easing crude oil prices. The rupee settled on Friday 73.32 to a dollar. The rupee rose 0.33% for the week, extending gains to a second straight week and posting its biggest weekly rise since week ended on Aug. 24. Other Asian currencies ended flat to higher against the greenback.

  • Hawkish remarks by the U.S. Federal Reserve and weak risk sentiment in global markets limited further gains. India’s trade deficit narrowed to a five-month low of $13.98 billion in September against $17.39 billion in the previous month, even as exports fell on year, data showed earlier this week.

  • Brent crude oil contract remained below $80 per barrel earlier this week and was set to post a weekly decline for the second straight week, as U.S. Crude inventories last week jumped 6.5 million barrels. The contract was last at $80.20, moving further away from a multi-year high of $86.74 hit at the beginning of this month.

  • The 10-year U.S. Treasury yield rose to 3.2170% overnight before easing to 3.1750% at close. The recent upbeat economic data is also expected to keep Fed on its course to increase rates again in December.

Local Markets:-

  • During the week, the Nifty made a high of 10710, while Sensex rose to a level of 35605, but could not able to sustain higher levels and recorded a fall of more than1 percent each. Nifty fell 168 points, while Sensex was down 417 points in the last week. The truncated week ended on negative note with Nifty closed a tad above the important support level of 10,300, while Sensex registered a fall of more than 400 points.

  • The benchmark BSE Sensex and the broader NSE index ended 1.33% and 1.43% lower, respectively, tracking weakness in regional shares. Reliance Industries led the losses as analysts saw some headwinds after the company reported record profit for the second quarter. HDFC and Infosys were also among the top losers along with the banks.

  • On the economy front, September CPI inflation was flat at 3.77 percent against 3.69 percent, MoM, while WPI inflation rose to 5.13 percent in September from 4.53 percent in August. August IIP was at 4.3 percent versus 6.5 percent in July.

  • The one-year and the benchmark five-year swap rates fell one basis point each to 7.16% and 7.48%, from 7.17% and 7.49% at previous close.

Global Markets:-

  • European markets finished mixed on friday. The FTSE 100 gained 0.32%, while the CAC 40 led the DAX lower. They fell 0.63% and 0.31% respectively. Global index into a fourth consecutive weekly loss, while the euro and sterling rallied against the dollar after a report said Britain is ready to drop a key Brexit demand.

  • The benchmark S&P 500 stock index slipped on Friday as strong earnings from Procter & Gamble Co were offset by ongoing concerns about rising interest rates and geopolitical tensions denting U.S. economic growth. The Dow Jones Industrial Average rose 64.89 points, or 0.26 percent, to 25,444.34, the S&P 500 lost 1 point, or 0.04 percent, to 2,767.78 and the Nasdaq Composite dropped 36.11 points, or 0.48 percent, to 7,449.03.

  • Highlights of Jobless Claims U.S. filings for unemployment benefits fell last week and continuing claims dropped to the lowest level since 1973, indicating the job market remains solid, Labor Department figures showed Thursday. Jobless claims decreased by 5k to 210k Continuing claims fell by 13k to 1.64m in week ended Oct. 6 (data reported with one-week lag) Four-week average of initial claims, a less-volatile measure than the weekly figure, increased to 211,750 from 209,750.

  • Gross domestic product increased 6.5 percent in the third quarter from a year earlier, compared to 6.6 percent in a Bloomberg survey and down from the 6.7 percent pace in the previous quarter. Industrial output rose 5.8 percent last month from a year earlier, versus the forecast of 6 percent, retail sales increased 9.2 percent in September, compared with the forecast 9 percent Fixed-asset investment climbed 5.4 percent in the first nine months, versus a forecast of 5.3 percent.

  • Japan’s key inflation gauge edged up in September, bringing the Bank of Japan back to the halfway point toward its price target, though gains are still largely limited to energy. The acceleration in Japan’s inflation backs up Governor Haruhiko Kuroda’s decision Thursday to upgrade his assessment of the current strength of price growth to around 1 percent from a range of 0.5 percent to 1 percent.

  • Germany’s Chambers of Industry and Commerce DIHK on Thursday cut its 2018 growth forecast to 1.8 percent from 2.2 percent and predicted a slowdown to 1.7 percent next year as Europe’s largest economy faces mounting risks at home and abroad.