Financial Market Overview
13th December, 2018
- The Indian rupee recorded its best day in two weeks and rose for the first time in four days against the dollar, as lower-than-expected retail inflation data at home lifted local sentiments and added to a risk-on rally in the global markets.
- The rupee settled at 71.68 to a dollar against 72.01 at previous close. It opened higher at 71.70 per dollar and extended gains to 71.51. The currency snapped a three-day losing streak, rising 0.5%, its biggest single-session rise since Nov. 29. Most Asian currencies also traded higher against the greenback.
- Yesterday’s retail inflation data and industrial output data were both positive for the rupee, while markets are expecting some easing in the liquidity front from the new RBI governor, so overall markets sentiments are positive for bonds, supporting appreciation in the rupee.
- Benchmark indices continued to gain for third consecutive session on Thursday, but ended off day’s high amid volatility. The consistent uptrend in rate sensitive stocks on hope of a rate cut after falling retail inflation, and positive Asian cues lifted sentiment. Benign CPI inflation at 2.3 percent, supported an improvement in RBI’s current stance of ‘calibrated tightening’.
- Additionally, The 30-share BSE Sensex gained 150.57 points to close at 35,929.64 after hitting 36,000 levels in early trade. The 50-share NSE Nifty failed to hold 10,800 levels, where generally technical experts expect some amount of profit booking. The index closed 53.90 points higher at 10,791.50.
- European markets are mixed. The DAX is higher by 0.04%, while the FTSE 100 is leading the CAC 40 lower. They are down 0.06% and 0.02% respectively.
- U.S. stocks closed up but well below their session highs on Wednesday as investors pulled back in the last few minutes of trading despite optimism about U.S.-China trade relations and some reassuring signs in British politics. The Dow Jones Industrial Average rose 157.03 points, or 0.64 percent, to 24,527.27, the S&P 500 gained 14.29 points, or 0.54 percent, to 2,651.07 and the Nasdaq Composite added 66.48 points, or 0.95 percent, to 7,098.31.
- Britain will outline its post-Brexit immigration policy next week, House of Commons leader Andrea Leadsom said on Thursday, confirming the publication of a long-awaited paper on one of the government’s central policies.
- Germany’s Ifo institute slashed its growth forecasts for Europe’s biggest economy, saying problems affecting the car industry would last until 2019 and trade conflicts and Brexit were also hurting business. The institute said on Thursday that it expected the German economy to expand by 1.5 percent this year, its lowest growth since 2013, and growth would slow further in 2019 to 1.1 percent.
- The scale of opposition to Prime Minister Theresa May’s Brexit deal means it is difficult to see how she can lead the Conservative Party forward, her former Brexit Secretary Dominic Raab said on Thursday.”We will have to back her as best we can but problem is that both in relation to Brexit and wider sustainability of the government given likelihood of any changes to the deal, given the likely scale of opposition, it looks very difficult to see how this PM can lead us forward.