Jan 14 2019

Rupee Falls As Global Risk-Off Sparks Outflow Fears

Financial Market Overview

14th January, 2019

Noon update

Indian Rupee:-

  • The Indian rupee extended losses to a near-one-month low against the dollar in afternoon trade, as an unexpected decline in Chinese trade data soured risk sentiment, pushing investors away from risk assets.
  • The rupee changed hands at 70.80 to a dollar, against 70.4850 at previous close. It opened little changed at 70.48 and briefly rose to the day’s high of 70.4550 before falling to 70.8875, its lowest since Dec. 18.

 Indian Equities:-

  • Indian shares fell in line with broader Asia on Monday after a shock contraction in Chinese exports raised fears of a sharper global slowdown, but the blow was cushioned by gains in Infosys Ltd after the IT major raised its revenue forecast and announced a buyback.
  • The broader NSE index fell 0.79% to 10,709.70 while the benchmark BSE index lost 0.71% at 35,753.61.

 Global Markets:-

  • Most Asian shares extended fall after data earlier today showed Chinese exports and imports surprisingly declined in December. The Hang Seng lost 1.59%, while the Shanghai Composite was down 0.71%.
  • European markets are also lower today. The CAC 40 is down 0.71% and London’s FTSE 100 is down 0.40% while Germany’s DAX is lost 0.58%.
  • Meanwhile, Brent crude was down 0.93% at $59.92, adding to Friday’s 2% retreat as weak Chinese data renewed concerns of global economic growth slowdown.
  • The dollar index was little changed at 95.56, after last week’s 0.5% decline. The index is hovering near its lowest level in three months amid bets that the Federal Reserve is unlikely to raise rates in the coming months.
  • The British pound gained 0.15% to $1.2834 at the start of what is expected to be a highly volatile week. Prime Minister Theresa May must win a vote in parliament on Tuesday to get her Brexit deal approved or risk a chaotic exit for Britain from the European Union. The numbers are not in May’s favor and her chances of winning the vote look extremely slim.