Dec 16 2017

Rupee logs best week in a month on Fed and Exit poll outcome

 Weekly Synopsis


Date:- 16th December 2017


Markets from 11th December 2017 to 15th December 2017:-


Indian Rupee:-


  • The Indian rupee posted its best weekly rise in more than a month against the dollar, as the U.S. central bank suggested it will tighten rates only gradually, while a slew of exit polls predicted Prime Minister Narendra Modi’s Bharatiya Janata Party will win Gujarat and Himachal Pradesh state elections. On a weekly basis, the currency rose 0.6%, its fifth straight weekly gain and the biggest since the week ended Nov. 3. The rupee closes yesterday at 64.04 against the previous weekly close of 64.4450 on December 08th, 2017 to a greenback. It trades in a weekly range between 64.55 to 64.0050 against the greenback.


  • India’s foreign exchange reserves fell for first time in five weeks to $400.90 billion as of Dec. 8, from $401.94 billion in the previous week, the central bank said yesterday. The decrease was due to a fall in foreign currency assets to $376.43 billion from $377.46 billion in the previous week, according to data from the Reserve Bank of India. Foreign exchange reserves had hit a record high of $402.51 billion as of the week ended Sep. 15.


  • India’s trade deficit narrowed to $13.83 billion from $14.02 billion in the previous month, government data showed on Friday. Merchandise exports for November rose 30.55 percent from a year ago to $26.20 billion. Goods imports last month were $40.02 billion, a gain of 19.61 percent from a year ago, data from the commerce and industry ministry showed.


  • India’s annual wholesale price inflation accelerated in November to an eight-month high, driven by faster rises in prices of food and fuel products, government data showed on Thursday. Annual wholesale price inflation last month increased to 3.93 percent from a year earlier, from a provisional 3.59 percent rise in October. The rise compares with a 3.78 percent increase forecast by economists in a poll.


  • India’s July-September current account deficit more than doubled from a year earlier after imports accelerated while crude prices surged, data published by the Reserve Bank of India showed on Wednesday. The July-September current account deficit (CAD) widened to 1.2 percent of gross domestic product, or $7.2 billion . That was wider than the 0.6 percent or $3.4 billion in the same period a year ago.


  • India’s annual retail inflation accelerated in November to a 15-month high of 4.88 percent, government data showed on Tuesday, mainly driven by faster rises in prices of food and fuel products. Analysts polled had forecast November’s CPI inflation to rise to 4.20 percent from October’s 3.58 percent.


  • India’s industrial output grew 2.2 percent in October from a year earlier, government data showed on Tuesday. Economists polled had forecast 3.0 percent growth in output compared with an upwardly revised 4.1 percent year-on-year increase in September.


Global Market:-


  • The dollar rose on Friday against a basket of major currencies amid easing uncertainty surrounding the progress of tax reform after news reports suggested that Republicans secured enough votes for the bill’s passage. The S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.22% to 93.84.


  • S. industrial production rose less than expected in November. Overall industrial output rose 0.2 percent following an upwardly revised 1.2 percent gain in October. Economists polled had forecast industrial output rising 0.3 percent last month.


  • The Federal Reserve approved its third rate hike of 2017, and forecasts further rate hikes despite growing concerns over the slow pace of inflation. In a move largely expected by financial markets, members of the policymaking Federal Open Market Committee (FOMC) agreed to raise its benchmark rate target by 0.25% to 1.25%-1.5%, and maintained its forecast for additional rate hikes in 2018.


  • Data showed on Wednesday, the U.S. Commerce Department said that consumer prices rose 0.4% in November from a month earlier, in line with forecasts and compared a 0.1% gain in the previous month. Year-over-year, consumer prices increased 2.2% last month, matching expectations and strengthening from the 2.0% advance seen in October. Furthermore, core CPI also dropped to an annualized rate of 1.7% in November, missing forecasts that it would repeat the prior month’s reading of a 1.8% rise.


  • The European Central Bank raised growth and inflation forecasts for the euro area on Thursday but stuck to its pledge to provide stimulus for as long as needed, predicting inflation would remain below target into 2020. The ECB kept its key rates on hold and also held rigidly to its script on its intentions for next year.


  • The Bank of England doesn’t follow the Fed in hiking rates, instead keeping its benchmark at 0.5%. The vote to hold was unanimous. The BOE had lifted rates 25 basis points at its previous meeting. Further modest increases are expected over the next few years.


  • Wall Street’s three major indexes climbed to record closing highs on Friday. The Dow Jones Industrial Average rose 143.08 points, or 0.58 percent, to 24,651.74, the S&P 500 gained 23.8 points, or 0.90 percent, to 2,675.81 and the Nasdaq Composite added 80.06 points, or 1.17 percent, to 6,936.58. The S&P 500 and the Dow closed higher for the fourth week in a row, while the Nasdaq saw its first weekly gain out of three.


  • European markets finished mixed as of the most recent closing prices on Friday. The FTSE 100 gained 0.57% and the DAX rose 0.27%. The CAC 40 lost 0.15%.


Local Market:-


  • Indian shares ended higher on Friday, led by banks, as early surveys forecast a victory for Prime Minister Narendra Modi’s Bharatiya Janata Party in the key Gujarat state elections.


  • The benchmark BSE index closed up 0.65 percent at 33,462.97, while the broader NSE index ended 0.79 percent higher at 10,333.25. Both the indexes rose over 0.6 percent in their second straight weekly gains.