Financial Market Overview
02nd January, 2019
- The Indian rupee posted its biggest single-session decline in one month against the U.S. currency, as local shares slumped in line with regional peers after disappointing Chinese data.
- The rupee settled at 70.17 to a dollar, it’s lowest since Dec. 27, against 69.45 at yesterday’s close. The currency opened lower at 69.52 and extended losses to 70.24.
- The rupee, which was the worst performing unit in Asia last year, extended its decline to drop over 1% today, marking its biggest single-session fall since Dec. 3 and erasing yesterday’s 0.5% gain. Most Asian currencies ended mixed against the greenback.
- Weak global cues, dip in GST collections and fall in auto stocks weighed on equities on Wednesday. Though indices ended off low points, the closing levels reflected a day of negative trade..
- Meanwhile, the Sensex ended above 36,000-mark. At the close of market hours, the Sensex was down 363.05 points or 1.00% at 35891.52, while the Nifty down 117.60 points or 1.08% at 10792.50.The market breadth was negative as 941 shares advanced, against a decline of 1,577 shares declined, while 169 shares were unchanged.
- Global markets suffered steep declines on Wednesday after new data suggested that China’s vast manufacturing sector contracted in December. Hong Kong’s Hang Seng plunged 2.8% and the Shanghai Composite fell 1.2%. In Europe, Paris’ CAC 40 declined 2% while Frankfurt’s DAX and London’s FTSE 100 shed more than 1%.
- US stock futures were sharply lower. The Dow was poised to drop over 300 points. December was a particularly dreadful month: The S&P 500 was down 9% and the Dow was down 8.7% the worst December since 1931. In one seven-day stretch, the Dow fell by 350 points or more six times.
- Factory activity weakened across much of Europe and Asia in December as the U.S.-led trade war and a slowdown in demand hit production in many economies, offering little reason for optimism as the new year begins. A series of purchasing managers’ indexes for December released on Wednesday mostly showed declines or slowdowns in manufacturing activity across the globe.
- Euro zone manufacturing activity barely expanded at the end of 2018, providing disappointing reading for European Central Bank policymakers, just after they ended their 2.6 trillion-euro asset-purchase scheme. The UK manufacturing PMI rose to a six-month high, stronger than all forecasts in economists. An extended government shutdown in the United States is adding to investor fears.
- President Donald Trump has invited congressional leaders from both parties to the White House. While details on the meeting are still being worked out, it likely will occur Wednesday. The meeting would come as negotiations to re-open about a quarter of the federal government have been frozen for nearly two weeks, and just one day before Democrats take over as the majority party in the House.