Jan 18 2019

Rupee Falls For 2nd Week As Fiscal Woes Spur Outflows

Financial Market Overview

18th January, 2019

Evening Coffee                                                                        

Indian Rupee:-

  • The Indian rupee fell for a second week, as concerns that likely pre-election spending may lead the nation to deviate from its fiscal consolidation path triggered outflows from local bonds.
  • The rupee settled at 71.18 to a dollar against 71.05 at the previous close. Most Asian currencies ended mixed against the greenback. For the week, the domestic currency slipped 0.9%, after falling 1% last week. Amid domestic fiscal worries, inflows are subdued as investors are not very keen on investing in such country’s assets. The pressure will likely continue until some clarity is attained. However, U.S-China trade talks will be the next immediate trigger to influence rupee’s move.

 Indian Equities:-

  • Benchmark indices managed to end the session on a mildly higher note, with the Nifty holding on to 10,900-mark. Stable global cues along with rise in IT and consumption names helped the bulls put up a tough fight.
  • The market were largely trading around the flat line with bouts of negative moves. The last couple of hours witnessed erasing of losses. For the week, both the Sensex and Nifty ended 1 percent higher.
  • At the close of market hours, the Sensex was up 12.53 points or 0.03% at 36386.61, and the Nifty up 1.80 points or 0.02% at 10907.00. The market breadth was negative as 888 shares advanced, against a decline of 1633 shares, while 162 shares were unchanged.

 Global Markets:-

  • European markets are sharply higher today with shares in France leading the region. The CAC 40 is up 1.17% while London’s FTSE 100 is up 1.11% and Germany’s DAX is up 1.02%.
  • UK retail sales fell short of expectations in December, adding to evidence that uncertainty over the country’s departure from the European Union is hurting consumer sentiment. Retail sales fell 0.9% in December, and were up only 3.0% from a year earlier, the Office for National Statistics said on Friday. The forecast a 0.8% decline for the month and a 3.6% gain year-on-year. The monthly increase in November was also revised down to 1.3% from an initial estimate of 1.4%, while the annual increase was revised down to 3.4% from an initial 3.6% advance.
  • Japan’s key inflation gauge slowed in the first back-to-back decline since April, highlighting the difficulty of the Bank of Japan’s price goal ahead of its policy meeting next week. Consumer prices excluding fresh foods rose 0.7 percent from a year earlier in December, according to the ministry of internal affairs Friday. That’s slightly weaker than a median estimate of 0.8 percent.
  • U.S. consumers this month were the most downbeat on the economy since November 2016, a third straight drop after expectations reached a 16-year high just three months earlier, as the partial government shutdown wears on toward a fourth week. The Consumer Comfort Index’s monthly expectations gauge fell for a third month to 44.5 in January as more respondents said the U.S. economy is getting worse. Meanwhile, the weekly comfort measure declined to a four-month low of 58.1 as sentiment on the buying climate fell to its lowest since November.