Dec 30 2017

Rupee logs 1st yearly rise in Seven on Dollar inflows

 Weekly Synopsis


Date:- 30th December 2017


Markets from 26th December 2017 to 29th December 2017:-


Indian Rupee:-


  • The Indian rupee posted its first annual rise in seven years against the dollar, aided by robust foreign fund inflows throughout the year into the domestic market amid a globally weak greenback. On a yearly basis, the rupee rose 5.96%, its first annual rise since 2010 and the biggest yearly advance since 2007. The local currency gained 2.2% in October-December, marking its biggest quarterly rise in three quarters, while on a monthly basis, it jumped 0.9%, the biggest monthly advance since April. The rupee closes yesterday at 63.87 against the previous weekly close of 64.0450 on December 22nd, 2017 to a greenback. It trades in a weekly range between 64.2750 to 63.78 against the greenback.


  • India’s foreign exchange reserves rose for a second consecutive week to a fresh record high of $404.92 billion as of Dec. 22, from $401.39 billion in the previous week, the central bank said on Friday. The increase was due to a rise in foreign currency assets to $380.68 billion from $376.91 billion in the previous week, according to data from the Reserve Bank of India.


  • India reported a fiscal deficit of 6.12 trillion rupees ($95.77 billion) for April-November, or 112 percent of the budgeted target for the current fiscal year that ends in March.


  • On Wednesday, the finance ministry said it would borrow an additional 500 billion rupees ($7.82 billion) this fiscal year that could lead to it breaching its fiscal deficit target of 3.2 percent of gross domestic product. = 63.9250 Indian rupees).


Global Market:-


  • The dollar fell against a basket of major currencies on Friday as both the euro and pound made large gains to end the year on a bullish note.


  • The U S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.48% to 91.84. In what was the final trading day of the year, the dollar continued to drift lower and posted its worst performance since 2003.


  • The recent dollar weakness comes against expectations for further Federal Reserve rate hikes in 2018. Markets have priced in at least three rate hikes for 2018. Traders, however, have slashed their bearish bets on the greenback to the lowest level since mid-November.


  • The euro, meanwhile, added pressure on the dollar rising to $1.2024, up 0.69%, shrugging off renewed Eurozone political jitters as Italy announced an election slated for March 4. GBP/USD rose 0.68% to $1.3524 and USD/JPY fell 0.25% to Y112.62.


  • Italy will vote on March 4 in an election expected to produce a hung parliament, instability and possible market turbulence in the euro zone’s third largest economy. Prime Minister Paolo Gentiloni’s cabinet set the date of the vote after the president dissolved parliament on Thursday, formally opening an election campaign which in practice has already been raging bitterly for weeks.


  • Pending home sales in the U.S. unexpectedly advanced in November, bolstering optimism over the health of the housing sector, industry data showed on Wednesday. In a report, the National Association of Realtors (NAR) said its pending home sales index increased by 2%last month, compared to expectations for a drop of 0.4%. The reading on the index itself increased to 109.5 from the prior 109.3. That was its highest reading since June.


  • S. consumer confidence fell more than forecast in December, dampening optimism over the outlook for the consumption-driven economy, industry data showed on Wednesday. In a report, the Conference Board, a market research group, said its index of consumer confidencedeclined to 122.1 this month from a reading of 128.6 (revised down from an initial 129.5) in November. Analysts had expected the index to drop to just 128.0 in December.


  • S. markets offered caution signs for the new year in the year’s final hours of trading on Friday. Wall Street stocks and the U.S. dollar drooped, helping safe-haven bonds and gold, and a reminder that after a run-up with so few obstacles there may be little room for error. The Dow Jones Industrial Average fell 118.29 points, or 0.48 percent, to 24,719.22, the S&P 500  lost 13.93 points, or 0.52 percent, to 2,673.61, and the Nasdaq Composite dropped 46.77 points, or 0.67 percent, to 6,903.39.


  • European markets finished mixed as of the most recent closing prices. The FTSE 100 gained 0.85%, while the CAC 40 led the DAX lower. They fell 0.50% and 0.48% respectively.


Local Market:-


  • Indian shares ended higher on Friday, posting their biggest yearly gain in three, as strong foreign fund inflows, hopes of an improving economy and higher corporate earnings boosted investor confidence.


  • The BSE index rose 0.62 percent to end the year at 34,056.83, while the broader NSE index ended 0.5 percent higher at 10,530.70.


  • For the year, the NSE index has risen 28 percent, while the BSE index has climbed 27 percent.