Financial Market Overview
31st December, 2018
- The Indian rupee, Asia’s worst performing unit this year against the dollar, logged its biggest annual decline in five years as higher crude oil prices and interest rate hikes by the U.S. Federal Reserve led to foreign fund outflows.
- The rupee settled higher today at 69.77 to a dollar, its highest since Dec. 20, and against 69.94 at previous close. The currency opened higher at 69.80 and extended gains to 69.72 before briefly turning lower. Asia’s worst performing currency in 2018 dropped 9.2% this year, its biggest yearly decline since 2013, and after gaining nearly 6% last year.
- The local unit, however, rose for the first time in four quarters and logged its best three months of gains since quarter ended March 2017, helping cut some of its yearly loss.
- It’s a rather somber end to the market on the last trading session of 2018. Mixed Asian and European cues kept the market in check. The Nifty ended 2018 below 10,900.
- Weakness was visible among index heavyweights, which dragged the indices. Meanwhile, among sectors, auto, metals and pharmaceuticals were all trading in the green.
- At the close of market hours, the Sensex was down 8.39 points or 0.02% at 36068.33, and the Nifty up 2.60 points or 0.02% at 10862.50. The market breadth was narrow as 1495 shares advanced, against a decline of 1095 shares, while 164 shares were unchanged.
- European markets are higher today as French and British shares show gains. The CAC 40 is up 0.95% while the FTSE 100 is up 0.08%. The German DAX is closed. The CAC 40 is up 0.96%
- The S&P 500 ended marginally lower in a choppy session on Friday, but major indexes posted weekly gains for the first time in December following a wild few days of trading that saw equities rebound from a prolonged slide.
- The Dow Jones Industrial Average fell 77.03 points, or 0.33 percent, to 23,061.79, the S&P 500 lost 3.18 points, or 0.13 percent, to 2,485.65, and the Nasdaq Composite added 5.03 points, or 0.08 percent, to 6,584.52.
- China’s factory activity contracted in December for the first time in more than two years, in a further sign of slackening demand and rising pressure on the world’s second-largest economy as it heads into 2019. The official Purchasing Managers’ Index (PMI) fell to 49.4 in December, below the critical 50-point level that separates growth from contraction, according to data released by the National Bureau of Statistics (NBS) on Monday.
- Jerome Powell had a bumpy first year as Federal Reserve chairman when it came to talking policy, by turns spooking and comforting investors even as economic data offered increasingly mixed signals and President Donald Trump stepped up his attacks on the U.S. central bank. And as 2018 closes out with a dramatic slump in stocks and a drop in bond yields, financial markets will need to brace for next year, when Powell is scheduled to make more unscripted public remarks than any Fed chief in. U.S. President Donald Trump said on Twitter that he had a “long and very good call” with Chinese President Xi Jinping and that a possible trade deal between the United States and China was progressing well.