Financial Market Overview
7th January, 2019
- The Indian rupee opened higher against the dollar after U.S. Federal Reserve Chairman Jerome Powell said low inflation will allow the central bank to be patient, boosting appetite for emerging market currencies.
- The rupee opened at 69.42 versus its previous close of 69.72.
- We expect USD/INR to trade in a range between 69.25 – 69.75 today.
- Equity benchmarks have witnessed a strong start with the Sensex rising over 260 points, while the Nifty has reclaimed 10,800.
- The Sensex opened up by 0.77% at 35971.18 while the Nifty opened higher by 0.72% at 10804.45.
- North and South American markets finished broadly higher on Friday with shares in U.S. leading the region. The S&P 500 is up 3.43% while Mexico’s IPC is up 0.98% and Brazil’s Bovespa is up 0.30%.
- European markets closed sharply higher on Friday with shares in Germany leading the region. The DAX is up 3.37% while France’s CAC 40 is up 2.72% and London’s FTSE 100 is up 2.16%.
- Asian markets are higher today as Chinese and Hong Kong shares show gains. The Shanghai Composite is up 0.48% while the Hang Seng is up 0.87%.
- Asian currencies and equities rose Monday after comments by Powell that the Fed was prepared to adjust policy quickly and flexibly if necessary to keep the U.S. expansion on track.
- Powell said that while the U.S. economy looks robust, the markets may be pricing in downside risks and that the Fed was listening carefully.
- Meanwhile, risk appetite received another boost in the form of a U.S. jobs report. Non-farm payrolls surged by 312,000 last month, much higher than the 177,000 jobs expected. Average hourly earnings climbed 0.4% on-month, beating estimates of a 0.3% increase.
- The Indonesian rupiah led Asian currencies higher on Monday, jumping over a percent. The onshore yuan advanced 0.3% and the South Korean won climbed 0.7%.