May 29 2018

Rupee extend its losses on global risk off

Financial Market Overview

29th May, 2018

Noon Update:-                                                                                  

MARKETS AT Noon:-

Rupee:-

  • Indian rupee extended losses against the dollar in afternoon trade and was poised to snap a three-day winning run, as looming uncertainty over Italy’s membership of the euro hurt the single currency, prompting investors to exit regional assets and buy into safe havens.
  • The rupee was last seen at 67.95 to a dollar, against 67.43 at previous close. It slipped to as much as 67.9850 so far today but has managed to pare some losses on dollar sales by several state-run banks at various levels, likely on the instruction of the Reserve Bank of India.

Indian Equities:-

  • The market is under pressure amid consolidation, as the rupee is moving towards 68 against the US dollar again. Banking stocks are under pressure, with the Nifty Bank index falling 200 points. Mahindra & Mahindra gained over a percent after March quarter earnings beat analyst expectations.
  • The Sensex declined 165.37 points to 35,000.11 and the Nifty fell 49.60 points to 10,639.05.

Global Markets:-

  • Asian markets finished broadly lower today with shares in Hong Kong leading the region. The Hang Seng is down 1.05% while Japan’s Nikkei 225 is off 0.55% and China’s Shanghai Composite is lower by 0.47%.
  • European markets are sharply lower today with shares in France off the most. The CAC 40 is down 1.60% while Germany’s DAX is off 1.49% and London’s FTSE 100 is lower by 1.37%.
  • The benchmark Brent crude rose 0.3% to $75.53 per barrel today. It fell 1.5% in overnight trade, having dropped about 7% until yesterday from its peak of $80.50 touched earlier this month.
  • The dollar index was last up 0.38% at 94.55, hovering near its highest level this year, primarily on account of the euro’s weakness. Chinese yuan and Korean won also traded in the red among the regional currencies, down over 0.2% each.
  • The euro fell to its lowest level in almost seven months versus the dollar yesterday and was last trading down 0.2%. The euro’s losses came amid increasing political uncertainty in Italy, which has prompted the 10-year Italian borrowing cost to climb to its highest level since late-2014.
  • Italy’s president set the country on a path to fresh elections yesterday after appointing a former International Monetary Fund official as interim prime minister. Italy, following the inconclusive March elections, has struggled to put in place a new administration, and the prospect of fresh elections raised fears that the vote could become sort of referendum on Italy’s euro membership.