Financial Market Overview
21st December, 2018
- The Indian rupee recorded its biggest weekly rise in more than five years against the dollar, tracking the slump in crude oil prices which eased concerns of widening of trade gap at home,
- The U.S. Federal Reserve lowered its rate hike outlook. The rupee settled lower at 70.15 to a dollar against 69.70 at previous close, amid risk aversion on expectation of slowdown in global growth, which weighed on regional and local shares.
- The currency strengthened 2.4% this week, its biggest weekly jump since week ended on Sep. 13, 2013.Falling crude oil prices are a game changer for India’s external sector.
- We expect the dollar rates to stay stable as the Federal Reserve adopts a more dovish stance and markets starts aggressively paring down expectations of further hikes.
- Indian shares ended around 2 percent lower on Friday, dragged by financials and IT heavyweights such as Infosys Ltd and ICICI Bank Ltd with the sentiment dampened by weak global cues.
- Domestic shares tracked broader Asian markets as the possibility of a U.S. government shutdown and further rate hikes by the Federal Reserve next year made investors jittery.
- The benchmark BSE index closed down 1.89 percent at 35,742.07 and fell 0.6 percent this week. The broader NSE index ended 1.81 percent lower at 10,754, shedding 0.48 percent in the week.
- Shares of software services exporters Infosys Ltd and Tata Consultancy Services Ltd closed 3.13 percent and 2.98 percent lower.
- European markets are lower today with shares in France off the most. The CAC 40 is down 0.90% while London’s FTSE 100 is off 0.47% and Germany’s DAX is lower by 0.44%.
- U.S. stocks slid on Thursday, with the Nasdaq close to confirming bear market territory as the Federal Reserve’s plan to continue its balance-sheet reduction and the threat of a partial government shutdown fueled investor anxieties.
- The Dow Jones Industrial Average fell 464.06 points, or 1.99 percent, to 22,859.6, the S&P 500 lost 43.89 points, or 1.75 percent, to 2,463.07 and the Nasdaq Composite dropped 108.24 points, or 1.63 percent, to 6,528.59.
- Britain’s annual economic growth for the third quarter went unrevised, according to figures released by the Office for National Statistics on Friday. GDP grew by 1.5% on a year-to-year basis in the quarter, unchanged from the preliminary estimate and in line with expectations.
- On a quarterly basis, growth came in at 0.6%, which was also in line with expectations for no change from the preliminary reading.
- British consumers are their gloomiest in more than five years, business sentiment is its weakest since the 2016 Brexit referendum and car output has tumbled this year, according to three surveys that paint an ominous picture for 2019.
- The number of Americans filing applications for jobless benefits rose marginally from near a 49-year low last week, suggesting underlying strength in the labor market and broader economy. While other data on Thursday showed factory activity in the mid-Atlantic region slowing to near a 2-1/2-year low in December, manufacturers reported hiring more workers and were upbeat about business conditions over the next six months.
- The dollar index dropped 0.8% yesterday, its biggest decline in seven weeks, amid shutdown worries and bets that the ongoing selloff in equities.