Aug 13 2018

Rupee off record lows on likely central bank’s intervention

Financial Market Overview

13th August, 2018

Noon Update:-                                                                                  

Markets at Noon:-

Rupee:-

  • Indian rupee came off record low against the dollar in afternoon trade, as banks stepped up greenback sales after a suspected intervention by the central bank limited slump led by a fresh fall in the Turkish lira.
  • The rupee was last seen at 69.53 to a dollar, against 68.83 at previous close. It briefly slipped over 1% to 69.62 earlier today, breaching the previous record-low of 69.13 touched on Jul. 20. The rupee then reversed some losses on dollar sales by a large state-run and a large private bank, likely on behalf of the Reserve Bank of India.

Indian Equities:-

  • Indian shares fell for a second straight session on Monday tracking weak Asian peers, with financials accounting for more than half of the losses on the NSE index and the rupee hitting an all-time low against the dollar.
  • The Sensex is down 114.87 points or 0.30% at 37754.36, while the Nifty is down 35.25 points or 0.31% at 11394.55.

Global Markets:-

  • Asian markets finished lower today. The Hong Kong Hang Seng ended sharply lower by 1.52% and the Shanghai Composite closed down by 0.32%.
  • European markets are lower today. The Germany’s DAX is trading lower by 0.72% followed by the London’s FTSE 100 at 0.68% and the France’s CAC fell 0.48% .
  • The lira plunged as much as 12% against the greenback today, extending its 16% decline from Aug. 10 after the country’s President Tayyip Erdogan over the weekend struck a defiant tone as the U.S. President Donald Trump vowed to double steel and aluminum tariffs if Turkey did not comply with U.S. demands. It was last trading at 6.8450 after dropping to 7.2149 against the dollar.
  • Turkey’s Treasury and Finance Minister Berat Albayrak said an action plan will be coming into effect later today to defend the slump in lira. The nation’s central bank provided liquidity and cut lira and foreign currency reserve requirements for Turkish banks, also aiding the battered currency.
  • The euro also witnessed massive losses against the greenback, as well as other safe-haven currencies, after a Financial Times report on Aug. 10 cited two sources saying that the European Central Bank harbored some concerns over exposure of Eurozone banks to Turkey. The common currency was last trading off 0.3% at 1.1373 against the dollar, after dropping to its lowest in over a year.