Nov 29 2018

Rupee Opened Higher After Powell Softens Stance On US Rates

Financial Market Overview

29th November, 2018

Morning Coffee:-                                                                        

MARKETS AT OPEN:-

Rupee:-

  • The Indian rupee opened higher against the U.S. currency after Federal Reserve Chairman Jerome Powell’s comments suggesting a slower pace of rate increases triggered the biggest slide in the dollar index in a month.
  • The rupee opened at 70.11 versus its previous close of 70.62. Regional equities and currencies will receive a boost from Powell’s comments, which prompted a “significant relaxing” in expectations related to Fed rate hikes next year. The rupee, following the higher opening, may however not make further progress amid likely dollar buying by state-owned banks.
  • We expect USD/INR to trade in a range between 69.95 – 70.35 today.

 Indian Equities:-

  • t’s a gap-up opening on the market in pre-opening, with the Nifty surpassing 10,750.
  • The Sensex is up 239 points or 0.66% at 35958, and the Nifty up 60 points or 0.57% at 10790.

Global Markets:-

  • Asian markets are higher today as Japanese and Hong Kong shares show gains. The Nikkei 225 is up 0.91% while the Hang Seng is up 0.22%. The Shanghai Composite is trading up by 0.13%. The Australian ASX 200 is up by 37 points or 0.66%.
  • European markets finished mixed to lower as of the most recent closing prices. Shares in London fell as the FTSE 100 dropped 0.18%. The DAX lost 0.09% while the CAC 40 in France closed unchanged.
  • The S&P 500 and Dow edged higher on Tuesday after White House economic adviser Larry Kudlow said a meeting between President Donald Trump and his Chinese counterpart on Saturday was an opportunity to “turn the page” on a trade war.
  • The Dow Jones Industrial Average, rose 108.49 points, or 0.44 percent, to 24,748.73, the S&P 500 gained 8.67 points, or 0.32 percent, to 2,682.12 and the Nasdaq Composite added 0.85 points, or 0.01 percent, to 7,082.70.
  • The dollar dropped and U.S. equities rallied after Powell said the Fed benchmark interest was “just below” the neutral, echoing a similar view expressed by the Fed vice chair earlier this week. Powell’s comments, which suggested that the Fed may possibly be near the end of its current interest rate hikes, were a climb down from remarks he made a few weeks earlier. Just last month, Powell had indicated that U.S. interest rates were “a long way” from neutral, prompting fears of interest rates rising quicker than expected
  • Fed Chair Powell made an about-face, turning dovish just weeks after indicating the Fed had some ground to cover before approaching the neutral rate,” ING Bank said. While emerging markets will be lifted by the dovish Powell comments, advances may be capped ahead of the G20 meeting that begins tomorrow.
  • The Indonesian rupiah led Asian currencies higher on Thursday, climbing about a percent. The Chinese yuan, the South Korean won, and the Malaysian ringgit were up by 0.2% each