Oct 26 2018

Rupee logged its first weekly decline in three weeks

Weekly Synopsis

26th October, 2018

Markets from 22 October 2018 to 27 October 2018

Indian Rupee

The Indian rupee logged its first weekly decline in three weeks against the dollar, as investors’ appetite for risk assets waned amid sell-off in the global equity markets.The rupee settled at 73.46 to a dollar from 73.28 at previous close. It briefly rose to the day’s high of 73.27 amid recovery in the Chinese yuan from 22-month low and dollar sales by foreign banks along with few exporters, On a weekly basis, the rupee fell 0.2%, snapping the winning streak of last two weeks.

India’s foreign exchange reserves fell for a fourth consecutive week to $393.52 billion as of the week ended Oct. 19, against last week’s $394.47 billion, according to central bank data released today. On friday decrease was due to a fall in foreign currency assets to $369.08 billion from 370 billion a week earlier, according to the data. The Reserve Bank of India has been intervening in the foreign exchange market to curb the rupee’s volatility. It has sold a net $8.61 billion from the spot foreign exchange market in January-August, compared with a net purchase of $19.36 billion in the same period of 2017.

The Brent crude oil contract headed for its third weekly fall of over 4%, after world’s biggest oil producer Saudi Arabia pledged to keep oil markets well supplied in the wake of looming U.S. sanctions on Iran from November. The contract was trading down 0.9% at $76.23 per barrel, after rising nearly 1% yesterday. India imports 80% of its oil requirements and significant.

The dollar index was headed for its third straight weekly rise amid rising safe-haven bets, drop in euro and upbeat economic data, which increased expectation that the Federal Reserve will hike rates one more time before end of 2018. The index was last trading up 0.1% ahead of U.S. advance gross domestic product numbers, due today, for further cues.

Local Markets

A largely choppy session has ended around the low point. However, the Nifty held psychological 10,000-mark, while the Sensex ended over 300 points lower.  The 50-share index has had a wobbly start to November series. Selling was visible across all sectors, with banks, consumption, IT, metals and pharmaceuticals witnessing weak trades. The Nifty Midcap was mildly lower.

The Sensex closed lower by 340.78 points or 1.01% at 33349.31, while the Nifty closed down by 94.90 points or 0.94% at 10030.00. The market breadth was negative 1,090 shares advanced, against a decline of 1,438 shares, while 1,087 shares were unchanged.India’s benchmark BSE Sensex ended at fresh seven-month low today, dropping 1% and marking the second consecutive weekly decline.

 

India’s fiscal deficit in the first half of the current financial year that started Apr. 1 totalled 5.95 trillion rupees, widening from 4.98 trillion rupees in same period a year ago, data showed yesterday.

Foreign investors net sold $181.92 million of Indian shares yesterday, data from National Securities Depository Ltd. showed. However, these investors were net buyers of domestic bonds this week until yesterday, having bought a net of $128.88 million.

Global Markets

 

Global stocks slid lower on Friday and were set for their worst week in more than five years, as anxiety over corporate profits added to fears about global trade and economic growth.European shares tracked U.S. stock futures lower after Alphabet and Amazon’s earnings missed expectations, further sapping risk appetite as European earnings also disappointed. The leading index of euro zone stocks fell 1.5 percent. Germany’s DAX was down 1.7 percent and France’s CAC 40 down 1.8 percent

 

U.S. Stock futures slide – NASDAQ FUTURES down 2.2 PCT, S&P 500 future down 1.2 Present , DOW JONES future down 0.9 persent in early morning trade.

 

Euro zone prices are expected to continue growing at 1.7 percent per year until 2020 despite weaker underlying inflation and economic growth, a European Central Bank survey showed on Friday. The ECB confirmed a day earlier plans to wind down its 2.6 trillion euro ($2.96 trillion) stimulus programme at the end of this year and raise interest rates sometime after next summer because it still sees inflation holding up despite uncertainties around growth. The companies signed up for $8.5 billion in new loans, leases and lines of credit last month, down from $8.7 billion a year earlier.

 

Contracts to buy previously owned homes unexpectedly rose in September, a bright mark in the United States’ struggling housing market although contracts on an annual basis have fallen for nine consecutive months.Pending Home Sales Index, based on contracts signed last month, rose 0.5 percent to a reading of 104.6. The previous month’s reading was revised slightly lower. Economists had forecast pending home sales falling 0.1 percent in September.

 

New orders for key U.S.-made capital goods fell for a second straight month in September and shipments were unchanged, suggesting that growth in business spending on equipment moderated further in the third quarter.The Commerce Department said on Thursday that orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, dipped 0.1 percent last month amid weakening demand for fabricated metals and electrical equipment, appliances and components.Data for August was revised up to show the so-called core capital goods orders decreasing 0.2 percent instead of the previously reported 0.9 percent decline.