Financial Market Overview
31st January, 2019
- The Indian rupee fell for the second straight month to post its biggest monthly fall in three against the dollar, as fiscal worries and surge in crude oil prices spurred outflows from local assets.
- The rupee, however, settled higher at 71.08 to a dollar against 71.12 at the previous close. The currency opened at 70.95 and extended gains to 70.85, its highest since Jan. 15, before slipping to the day’s low of 71.19. The unit fell 1.9% in January, its biggest monthly fall since October. Most Asian currencies ended higher against the dollar.
- Outflows from both local shares and bond markets dragged rupee lower this month, and so far the view remains that it is likely to continue in the next month as well from the equity market ahead of elections.
- Indian shares rose sharply on Thursday after the U.S. Federal Reserve pledged to be patient with further rate hikes, while investors awaited the 2019/20 Union Budget on Friday for further direction.
- The benchmark BSE index closed up 1.87 percent at 36,256.69, in its sharpest daily gain since Oct. 29, 2018. The broader NSE index ended 1.68 percent higher at 10,830.95.
- Most sectors closed in positive territory on the day of expiry of derivatives. Reliance Industries Ltd HDFC Bank and Infosys Ltd were among the top gainers, rising 2.6 percent, 2.2 percent and 3.26 percent, respectively.
- European markets are mixed today. The FTSE 100 is up 0.45% while the CAC 40 gains 0.14%. The DAX is off 0.04%.
- U.S. stocks ended sharply higher on Wednesday after the Federal Reserve said it would be patient in lifting borrowing costs further this year, reassuring investors worried about a slowing economy.
- The Dow Jones Industrial Average rose 436.5 points, or 1.78 percent, to 25,016.46, the S&P 500 gained 41.36 points, or 1.57 percent, to 2,681.36 and the Nasdaq Composite added 154.79 points, or 2.2 percent, to 7,183.08..
- The euro zone economy stuck to its lowest pace of growth in four years in the final three months of 2018, with the rate of expansion in the year as a whole also the slowest since 2014. Gross domestic product (GDP) in the 19 countries sharing the single currency rose by 0.2 percent in the quarter and by 1.2 percent year-on-year
- Germany’s jobless total fell by less than expected in January, data showed on Thursday, and the unemployment rate remained at a record low. The figures reflected seasonal factors like slower hiring in the construction sector over the winter months as well as weaker job growth in both the services and the manufacturing sectors. This should support a consumption-led growth cycle in Europe’s largest economy, which is experiencing a slowdown linked to trade frictions and concerns about Britain’s expected departure from the European Union. The Labour Office said the seasonally adjusted jobless total fell by 2,000 to 2.263 million. That compared with the forecast for a drop of 10,000.
- German retail sales plummeted by 4.3 percent on the month in December, the fastest rate in 11 years, data released by the state statistics office on Thursday showed, sending a worrying signal about household spending in Europe’s biggest economy. The fall in real terms was far weaker than a Reuters consensus forecast for a 0.6 percent drop. Sales also fell by 2.1 percent year-on-year