Nov 15 2018

Rupee Jumps To 2-Month High

Financial Market Overview

15th November, 2018

Evening Coffee                                                                        

Indian Rupee:-

  • The Indian rupee gained for a third consecutive session to end at a two-month high against the dollar, as investors’ appetite for risk assets improved amid hopes that the U.S. and China can resolve their trade differences.
  • The rupee settled at 71.98 to a dollar, highest since Sep. 14, against 72.31 at previous close. It opened at 72.06 per dollar and fell to an intraday low of 72.19, before extending gains to 71.87. The rupee opened higher as most Asian currencies gained after the dollar index fell below 97 again. Risk-on rally in global markets further supported the local unit.
  • Though oil was higher, overall oil being below $70 could lower India’s CAD (current account deficit) by 1%, which allowed investors to sell dollars amid recovery in stock markets. FPIs have been net buyers in local debt and equity this month, helping stability in the rupee.

 Indian Equities:-

  • Indian shares edged higher in lacklustre trade on Thursday as weak crude oil prices kept investor sentiment upbeat, cushioning the blow from Yes Bank Ltd’s plunge after the private-sector lender’s chairman stepped down. Global oil prices have lost around a quarter of their value since early October, boding well for the rupee and boosting positive sentiment as cheaper oil lightens India’s import bill and eases inflation
  • The broader NSE index was up 0.24 percent at 10,601.55, while the benchmark BSE index was 0.31 percent higher at 35,250.16. The rupee firmed as much as 0.4 percent to 72.04 against the dollar, compared to its close of 72.305 on Wednesday.

 Global Markets:-

  • European markets are mixed. The FTSE 100 is higher by 0.06%, while the CAC 40 is leading the DAX lower. They are down 0.42% and 0.14% respectively.
  • Suella Braverman, a junior minister in Britain’s Brexit ministry, said on Thursday she had resigned over Prime Minister Theresa May’s draft Brexit deal.I now find myself unable to sincerely support the deal agreed yesterday by cabinet,” she said in a letter posted on Twitter. There is nothing better EU and UK negotiators can come up with for the Brexit deal given the mandates and red lines from both the bloc and London, a European Union official said on Thursday. British Prime Minister Theresa May’s cabinet approved the draft agreement on Wednesday but it faces an uncertain future in the UK parliament. Several of May’s ministers resigned over the deal on Thursday.
  • British retail sales growth unexpectedly slowed to a six-month low last month, as shoppers held off winter clothing purchases due to mild weather and cut back on other goods after a heavy-spending summer. Retail sales volumes in October alone dropped by 0.5 percent from September, in contrast to average forecasts in a Reuters poll of economists for them to rise by 0.2 percent.
  • U.S. consumer prices increased by the most in nine months in October amid gains in the cost of gasoline and rents, pointing to steadily rising inflation that likely will keep the Federal Reserve on track to raise interest rates again next month.