Financial Market Overview
7th January, 2019
- The Indian rupee rose for a second session against the dollar, as the Federal Reserve chairman’s comments that suggested the U.S. central bank will evaluate performance of the economy in deciding monetary policy raised bets over likely pause in policy tightening. However, heightened fiscal worries at home and likely dollar outflows limited gains in the local currency.
- The rupee ended at 69.68 to a dollar, against 69.72 at the previous close. It opened higher at 69.42 and extended gains to 69.2450, highest since Aug. 10, before turning lower at 69.93. The local unit also pared some initial gains in early trade after at least two state-run banks bought dollar apparently on behalf of the central bank.
- Indian shares rose on Monday along with global markets as upbeat U.S. data, a more dovish tone by the Federal Reserve, and the start of Sino-U.S. trade talks soothed investor nerves about a slowing global economy.
- The benchmark BSE index closed the session 0.43% higher at 35,850.16, while the broader NSE index ended up 0.41% at 10,771.80.
- European markets have turned lower today with shares in London off the most. The FTSE 100 is down 0.42% while France’s CAC 40 is off 0.35% and Germany’s DAX is lower by 0.31%.
- The benchmark Brent crude oil price contract traded 2.3% higher at $58.37 per barrel, rising for six consecutive sessions, also weighing on the rupee amid expectations that trade jitters would ease ahead of trade talks between the U.S. and China this week to be held in Beijing.
- The dollar index slipped 0.3%, heading for a third straight session of decline on dimmed hopes of rate hikes by the U.S. central bank despite a robust jobs report.
- Market participants will now focus on developments on the U.S.-China trade negotiations this week and the release of U.S. Federal Reserve Open market committee’s minutes, due on Jan. 9.