Aug 04 2018

Rupee ended the week on a flat note

Weekly Synopsis

04th August, 2018

Markets from 30th July to 03rd August 2018:-

Rupee:-

  • The Indian rupee ended little changed against the dollar this week. On a weekly basis, the rupee rose less than 0.1%. The rupee closes on Friday at 68.6050 against the previous weekly close of 68.65 on July 27th, 2018 to a greenback. It trades in a weekly range between 68.26 to 68.84 against the greenback.
  • The Reserve Bank of India on Wednesday raised its policy repo rate as expected for the second straight meeting, citing inflation concerns but retained its “neutral” stance. The monetary policy committee raised the repo rate by 25 basis points to 6.50 percent, in line with predictions by 37 of 63 economists in a poll last week. Five of the six members on the rate panel voted for a rate increase. The reverse repo rate was also raised by 25 basis points, to 6.25 percent.
  • India’s foreign exchange reserves fell to $404.19 billion as of July 27, compared with $405.14 billion a week earlier, the Reserve Bank of India said on Friday.
  • India reported on Tuesday a fiscal deficit of 4.29 trillion rupees ($62.57 billion) for April-June, or 68.7 percent of the budgeted target for the current fiscal year compared with 80.8 percent a year ago.

Indian Equities:-

  • Indian shares ended 1 percent higher on Friday, reversing two sessions of losses, on gains in financial and consumer stocks, buoyed by a favourable weather forecast for the remainder of the monsoon.
  • The benchmark BSE index closed up 1.05 percent at 37,556.16 after losing close to 500 points in the last two sessions. For the week, the index ended 0.6 percent higher.
  • The broader NSE index ended 1.03 percent higher at 11,360.8, and gained 0.73 percent for the week. It had lost nearly 1 percent in the previous two sessions.
  • Index heavyweight Housing Development Finance Corp closed up 2.5 percent, after raising its retail prime lending rate by 20 basis points a day earlier. It had shed 4.8 percent in the previous three sessions.

Global Markets:-

  • The U.S. dollar was unchanged against a basket of peers on Friday after data showed U.S. job growth slowed more than expected in July. U.S. nonfarm payrolls increased by 157,000 jobs last month, more than the roughly 120,000 per month needed to keep up with growth in the working-age population. Economists polled had forecast an increase of 190,000. The jobless rate fell to 3.9% from 4.0% as expected. The dollar index, which measures the greenback against a basket of six other major currencies, was about flat on the day at 95.148, after dipping as low as 94.98. The index was up 0.5 percent for the week.
  • The rate of growth in the economy’s service sector slowed in July, according to a report released on Friday. The Institute of Supply Management said its non-manufacturing purchasing managers’ index fell to 55.7 in July, from 59.1 the previous month. Economists had forecast a reading of 58.6.
  • China’s central bank said it will adjust forex forward reserve requirement ratio to 20% from 0% and take counter cyclical measures to keep forex market stable, helping the offshore yuan to rise 0.8% against dollar. It hit 6.91 to a dollar on Friday, lowest since May 2017, impacted by worries over China’s trade war with the U.S.
  • The Bank of England raised interest rates Thursday, in what was widely anticipated decision, despite deepening worries over Brexit and indicated that any more hikes will be at a gradual pace. The BoE’s Monetary Policy Committee voted unanimously to raise rates by a quarter of a percentage point to 0.75%. It the highest level since March 2009.
  • The Federal Reserve left interest rates on hold as expected on Wednesday and signalled further increases in interests rates would remain appropriate should the U.S. economy continue to expand. The Fed kept the federal funds rate, which helps determine rates for mortgages and other borrowing, unchanged in a range of 1.75% to 2% at the conclusion of its two-day policy meeting.
  • The rate of growth in the economy’s manufacturing sector slowed in July, according to a report released on Wednesday. The Institute of Supply Management said its manufacturing purchasing managers’ index fell to 58.1 in July, from 60.2 the previous month. Economists had forecast a reading of 59.4.
  • Activity in the UK manufacturing sector grew at the slowest pace in three months in July, according to a closely watched business survey released on Wednesday. Research firm IHS Markit said its manufacturing purchasing managers’ index declined to 54.0, from a downwardly revised 54.3 in the previous month and below forecasts for a reading of 54.2.
  • The Chinese currency has tumbled about 10 percent since early April in offshore markets as investors speculated that its weakness would be encouraged by the People’s Bank of China to counter the impact of U.S. tariffs on its exports.
  • US. stocks were mixed after the close on Friday, as gains in the Consumer Goods, Utilities and Telecoms sectors led shares higher while losses in the Oil & Gas, Industrials and Technology sectors led shares lower. By the close, the Dow Jones Industrial Average has risen 136.42 points, or 0.54 percent, to 25,462.58, the S&P 500 gained 13.13 points, or 0.46 percent, to 2,840.35 and the Nasdaq Composite added 9.33 points, or 0.12 percent, to 7,812.02. For the week, the S&P 500 and Nasdaq posted gains, while the Dow was roughly flat.
  • European markets finished broadly higher on Friday with shares in London leading the region. The FTSE 100 closed up 1.10% while Germany’s DAX gained 0.55% and France’s CAC 40 ended higher by 0.33%.