Financial Market Overview
20th November, 2018
- The Indian rupee logged sixth consecutive sessions of gains against the dollar and rose to a fresh 11-week high, as outcome of the Reserve Bank of India’s crucial board meeting signaled a compromise between the government and the central bank. The rupee settled at 71.45 to a dollar, highest since Sep. 3, against 71.64 at previous close. It traded in 71.28-71.52 to dollar band today. The currency also posted its longest winning streak in over one year.
- Most Asian currencies also gained against the greenback. Indian money markets will remain closed tomorrow while financial markets will be closed again on Nov. 23 for local holidays.
- Indian shares fell on Tuesday in line with weakness in broader Asia and after the outcome of the central bank board’s meet to boost lending failed to impress investors, amid expectations the implementation of the proposed measures will take time. In its first meeting since the extent of a deep rift between the central bank and the government became public, the Reserve Bank of India (RBI) said on Monday its board would support small businesses and give banks more time to step up capital norms. It has also decided to form an expert committee to look into whether RBI reserves are adequate.
- NSE index fell 0.51 percent to 10,708.05, while the benchmark BSE index slipped 0.39 percent to 35,634.52.
- European markets are lower today with shares in Germany off the most. The DAX is down 0.89% while France’s CAC 40 is off 0.83% and London’s FTSE 100 is lower by 0.56%.
- Global stock markets have suffered a sharp shakeout in the past two months, pressured by worries of a peak in corporate earnings growth, rising borrowing costs, slowing global economic momentum and international trade tensions. Trillions of dollars were wiped off equities in a particularly torrid October month.
- The U.S. benchmark S&P 500 stock index dropped 1.7 percent following a decline in shares of Apple and its suppliers. The Wall Street Journal reported Apple had cut production orders in recent weeks for iPhone models it launched in September. The Dow Jones Industrial Average fell 395.78 points, or 1.56 percent, to 25,017.44, the S&P 500 lost 45.54 points, or 1.66 percent, to 2,690.73 and the Nasdaq Composite dropped 219.40 points, or 3.03 percent, to 7,028.48.
- The dollar index, which measures the greenback against major currencies, rose from its weakest in two weeks after cautious comments by Federal Reserve officials over the global outlook and weak U.S. economic data raised doubts on the pace of future rate hikes.
- The Fed has raised rates three times this year, making it more expensive to hold non-interest-bearing gold. While a fourth rate hike is expected next month and three more next year, a strong majority of economists polled by Reuters say the risk is that the Fed will slow that pace down.
- British Prime Minister Theresa May will travel to Brussels on Wednesday evening to meet European Commission President Jean-Claude Juncker as part of ongoing talks on future ties after Brexit, her office said on Tuesday.