Financial Market Overview
19th December, 2018
MARKETS AT OPEN:-
- The Indian rupee opened higher against the dollar after Brent crude plunged to its lowest in more than a year. The U.S. Federal Reserve’s decision on interest rates and projections for next year, due later today, will be closely watched.
- The rupee opened at 70.10 versus its previous close of 70.44. The oil’s “free-fall” since early-October and reduced concerns on domestic inflation have “improved the profile” of the rupee vis-à-vis other regional currencies. However, high political risk premium ahead of next year’s federal elections will mean that the currency is unlikely to be a major outperformer. From here on, the rupee’s performance will be more or less in line with other emerging market currencies, which will likely be a function of global risk appetite and U.S. yields.
- We expect USD/INR to trade in a range between 69.75 – 70.25 today.
- It’s a positive start for the market on Wednesday morning, with benchmarks seeing up.
- The Sensex is up by 107.37 points or 0.30% at 36454.45, while the Nifty is up 23.40 points or 0.21% at 10932.10. .
- All sectoral indices are witnessing buying happily today.
- Asian markets are lower today as Japanese and Hong Kong shares fall. The Nikkei 225 is off 0.43% while the Hang Seng is down 0.07%. The Shanghai Composite is trading down by 0.25%. Australian ASX 200 is down by -20 points or -0.36%.
- European markets finished broadly lower today with shares in London leading the region. The FTSE 100 is down 1.06% while France’s CAC 40 is off 0.95% and Germany’s DAX is lower by 0.29%.
- The S&P 500 ended little changed in a choppy trading session on Tuesday as the possibility of a partial government shutdown added to investors’ jitters ahead of a highly anticipated meeting of the Federal Reserve.
- The Dow Jones Industrial Average rose 82.52 points, or 0.35 percent, to 23,675.5, the S&P 500 gained 0.21 points, or 0.01 percent, to 2,546.15 and the Nasdaq Composite added 30.18 points, or 0.45 percent, to 6,783.91.
- Britain risks slipping from being the world’s fifth-biggest economy to its seventh-largest next year, when it is due to leave the European Union, with France and India on course to overtake it, accountancy firm PwC said. PwC projected economic growth in 2019 of 1.6 percent for Britain — assuming the country manages to avoid the shock of a no-deal Brexit in March — versus 1.7 percent for France and 7.6 percent for India.
- U.S. homebuilding rebounded in November, driven by a surge in multi-family housing projects, but construction of single-family homes fell to a 1-1/2-year low, pointing to deepening housing market weakness that could spill over to the broader economy. The report from the Commerce Department on Tuesday also showed housing starts fell in October instead of rising as previously reported. Underscoring the housing market weakness, single-family home completions dropped for a third straight month in November to their lowest level in more than a year.
- The Fed will almost certainly raise rates by a quarter percentage points later today, but its closely followed “dot-plots” is expected to shift policymakers’ projections for next year. Back in September, the Fed dot-plots showed the individual predictions of Fed members indicated three quarter percentage rate rises next year.