Sep 01 2018

Rupee declined 1.6% on a weekly basis

Weekly Synopsis

Date:- 01st September 2018

Markets from 27th August 2018 to 31st August 2018:-

Indian Rupee:-

  • Indian rupee reached 71-level against the dollar for the first time on Friday, logging its biggest monthly decline against the U.S. currency in three years, hurt by a slide in emerging market currencies led by the Turkish lira and Argentinean peso amid surging crude oil prices. For the month, the rupee dropped 3.6%, its biggest monthly decline since August 2015 and fifth consecutive monthly fall. It declined 1.6% this week. The rupee closes on Friday at 70.99 against the previous weekly close of 69.9050 on Aug 24th, 2018 to a greenback. It trades in a weekly range between 71.00 to 69.700 against the greenback.
  • India’s April-July fiscal deficit totalled 5.40 trillion rupees, widening from 5.05 trillion rupees in the comparable year-earlier period, government data showed yesterday.
  • India’s economy grew at the fastest pace in over two years in April to June, trumping market expectations, as manufacturing powered expansion. The country’s gross domestic growth hit 8.2% in the April-June period, sharply quickening from a 13-quarter low of 5.6% growth in the year-ago period, when weak manufacturing output and stock clearance ahead of a goods and services tax launch, crimped overall activities. Yesterday’s reading also beat 7.7% in the January-March quarter, which helped cap last financial year’s annual expansion pace at 6.7%, and topped the median forecast of 7.6% expansion in a poll for the fiscal first quarter.
  • India’s foreign exchange reserves rose for the first time in five weeks to $401.29 billion as of the week ended Aug. 24, from $400.85 billion in the previous week, the central bank said on Friday. The increase was due to a rise in foreign currency assets to $376.59 billion from $376.21 billion in the previous week, according to central bank data.

Global Market:-

  • The dollar climbed for a second straight session on Friday as investors sought the safety of the U.S. currency after reports that the United States and Canada ended trade negotiations without any deal.
  • A key gauge of U.S. consumer confidence was revised higher in August, according to a survey released on Friday. The University of Michigan’s consumer confidence index was revised up to 96.2 from 95.3. Economists had forecast a reading of 95.5.
  • Inflation in the euro zone slowed in August, although the reading was unlikely to change the European Central Bank’s plan to wind up its asset purchase program this year. The bloc’s statistics agency Eurostat said its consumer price index rose 2.0% in August from the same month a year earlier. Analysts expected no change to July’s reading of 2.1%.
  • Emerging market currencies fell. The Argentinian peso, the world’s worst-performing currency this year, was down about 1 percent against the dollar, which last traded at 38.00 pesos. On Thursday, the Argentine peso tumbled 10 percent, bringing month-to-date losses to 27 percent. Argentina’s central bank voted unanimously at an emergency meeting on Thursday to raise its benchmark rate to 60 percent from 45 percent.
  • The number of people who filed for unemployment assistance in the U.S. last week rose less than expected, remaining in territory consistent with a strengthening labour market, official data showed on Thursday. The number of individuals filing for initial jobless benefits in the week ended August 25 increased by 3,000 to a seasonally adjusted 213,000 from the previous week’s total of 210,000, the U.S. Department of Labour said.
  • US. consumer spending remained steady in July, according to a report released on Thursday. The Commerce Department said consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.4% last month, matching June’s reading and analyst forecasts.
  • The U.S. economy grew at a slightly faster pace than originally estimated in the second quarter, according to data released Wednesday, with the rate of growth the fastest since late 2014. Gross domestic product expanded at a 4.2% annual rate in the three months to June, instead of the previously reported 4.1% pace, the Commerce Department said in its first GDP revision.
  • German business confidence ticked higher in August, according to survey data released on Monday, suggesting momentum in the euro zone’s biggest economy remains strong. The Munich-based Ifo economic institute said its business climate index, based on a monthly survey of companies, rose to 103.8 from 101.7 in July.
  • European markets finished sharply lower on Friday with shares in France leading the region. The CAC 40 is down 1.30% while London’s FTSE 100 is off 1.11% and Germany’s DAX is lower by 1.04%.
  • US. stocks were mixed after the close on Friday, as gains in the Consumer Services, Technology and Financials sectors led shares higher while losses in the Oil & Gas, Utilities and Telecoms sectors led shares lower. On Friday the Dow Jones Industrial Average fell 22.1 points, or 0.09 percent, to 25,964.82, the S&P 500 gained 0.39 points, or 0.01 percent, to 2,901.52 and the Nasdaq Composite added 21.17 points, or 0.26 percent, to 8,109.54.

Local Market:-

  • Indian shares ended little changed on Friday, as global sentiment remained muted after U.S. President Donald Trump made fresh trade threats against China, while gains in tech and healthcare were offset by losses in energy and financial stocks.
  • The benchmark BSE index closed down 0.12 percent, while the broader NSE index ended 0.03 percent higher. Both indexes marked a sixth straight weekly gain, with the BSE closing 1 percent higher and the NSE ending 1.07 percent firmer.
  • The BSE index gained 2.76 pct in August, while the broader NSE index climbed 2.85 pct, having hit 11 record highs this month. The indexes posted their biggest monthly gain for August since 2014.