Financial Market Overview
21st January, 2019
- The Indian rupee fell to an over one-month low against the greenback, tracking higher crude oil prices and a rally in the dollar index to a two-week high. The rupee closed at 71.2750 to a dollar, V/S its previous close at 71.18. The currency opened at 71.36 and extended losses to 71.52 to dollar. Other Asian currencies were also trading lower against the greenback, led by losses in Korean won.
- The Brent crude climbed 2.5% in the previous session to close at its highest since the middle of November. It was last trading up 0.6% at $63.05 per barrel tracking a rebound in global risk appetite.
- The contract is now up 25% from a more than one-year low of $49.93 reached on Dec. 24. India imports 80% of its oil requirements and refiners make payments in dollars.
- Benchmark indices ended higher on Monday but gave up some of its intraday gains in the last hour of trading.
- Nifty finished above 10,950 level with the help of energy stocks led by Reliance Industries.
- The Sensex was up 192.35 points at 36,578.96, while Nifty was up 54.90 points at 10, 961.90. About 930 shares have advanced, 1651 shares declined, and 155 shares are unchanged. Among sectors energy, IT and pharma indices led the gainers, while auto, infra, FMCG and metal indices ended in red.
- European markets are mixed. The FTSE 100 is higher by 0.23%, while the DAX is leading the CAC 40 lower. They are down 0.42% and 0.14% respectively.
- British households’ hopes for their finances over the year ahead remain near a five-year low, due to growing concern about job security ahead of Brexit, though easing inflation pressures have offered some short-term cheer. Household Finances Index picked up to a three-month high in January, on the back of households’ perception that their living costs were rising at the slowest rate since October 2016. The official measure of consumer price inflation dropped to its lowest in nearly two years in December at 2.1 percent. But households’ expectations for their finances over the year to come, when Britain is due to leave the European Union, remained close to their lowest level since early 2014.
- China’s economy cooled in the fourth quarter under pressure from faltering domestic demand and bruising U.S. tariffs, dragging 2018 growth to the lowest in nearly three decades and pressuring Beijing to roll out more stimulus to avert a sharper slowdown. The government has means to support the economy. They can expand infrastructure spending and they can cut banks’ reserve requirement ratio. So we don’t need to worry about capital spending.
- Confidence among Japanese manufacturers dropped for a third straight month in January to a two-year low, as worries over the health of the global economy and trade tensions take a toll on the corporate sector. The monthly poll, which tracks the Bank of Japan’s (BOJ) closely watched tankan quarterly survey, found service-sector sentiment held steady.