Rupee Logs Best Day In 2 Months On Exit Poll Outcome

Rupee Logs Best Day In 2 Months On Exit Poll Outcome

20 May 2019 05:39 PM

Financial Market Overview

20th May, 2019

Evening Coffee

MARKETS AT CLOSE                                    

Indian Rupee

  • The Indian rupee recorded its biggest single-session rise against the dollar in two months, as most exit polls predicted a second term for Prime Minister Narendra Modi-led alliance, which lifted demand for local assets amid hopes of policy continuity.
  • The rupee settled at 69.7350 to a dollar, its highest since May 8, and against 70.22 at previous close. It surged 0.7%, posting its highest percentage gain in a single day since Mar 18. The unit rose to day’s high of 69.35 to dollar, before touching the intra-day low of 69.76 on importers’ greenback demand, while some foreign banks booked profits.
  • Crude oil prices rose, with the benchmark Brent crude contract rose above $73 per barrel in early trade, after Saudi Energy Minister Khalid al-Falih indicated there was consensus among OPEC and allied oil producers to continue limiting supplies.

Indian Equities

  • Sensex recorded the second highest one-session gain ever, closing 1,421.90 points up at 39,352. Nifty ended the day 421 points up at 11,828.
  • The primary reason for the surge was exit polls that clearly indicated Modi-led NDA to make a thumping return to power on May 23. New18-IPSOS survey projected NDA to get 336 seats while UPA to be limited to mere 82 seats out of the total 543 Lok Sabha seats.
  • Sensex saw its biggest surge on May 18, 2009 when it rallied the most in a single trading day. The index surged 2,110.79 points to close at 14,284.21.

Global Markets

  • European markets are broadly lower today with shares in France off the most. The CAC 40 is down 1.16% while Germany's DAX is off 1.15% and London's FTSE 100 is lower by 0.71%.
  • Wall Street ended lower on Friday as continuing trade tensions pulled industrial and tech shares down, and the Dow capped a fourth straight week of losses in its longest weekly losing streak in three years. The Dow Jones Industrial Average fell 98.68 points, or 0.38%, to 25,764, the S&P 500 lost 16.79 points, or 0.58%, to 2,859.53 and the Nasdaq Composite dropped 81.76 points, or 1.04%, to 7,816.29. While all three major U.S. indexes struggled for direction for much of the session, they turned decisively negative following a report from CNBC that U.S.-China trade negotiations have stalled.
  • British households turned more downbeat about their finances in May, according to a survey that hinted at weakness in the consumer economy which has been one of the bright spots for Britain during the Brexit ructions. Household Finance Index (HFI) fell to 42.5 from 43.8, its lowest level since September 2017 as worries grew about job security, particularly in retail and manufacturing. Britain's labor market has remained resilient in the face of Brexit, helping households whose spending has driven an otherwise fragile economy.
  • Japan's economic growth unexpectedly accelerated in January- March, driven by net contributions from exports and defying forecasts for a contraction in the world's third-largest economy. However, the surprise expansion was mostly caused by imports declining faster than exports, likely reflecting weak domestic demand, a point of concern for policymakers with a planned sales tax hike scheduled to take effect in October. Underscoring this challenge were private consumption and capital expenditure readings, which both fell in the first quarter, while exports suffered the biggest fall since 2015.


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