Oct 12 2018

Rupee Opened Higher After US Inflation Unexpectedly Slows

Financial Market Overview

12Th October, 2018

Morning Coffee:-                                                                        

MARKETS AT OPEN:-

Rupee:-

  • The Indian rupee opened higher against the U.S. currency after inflation in the world’s largest economy trailed estimates, pulling the dollar index down by the most in two weeks. The rupee is opened at 73.83 versus the dollar compared with its previous close of 74.12.
  • In addition to the slower-than-expected U.S. inflation, the rupee will be aided by the cooling oil prices, which are now nearly 8% down from last week’s highs.A combination of slowing inflation and tumbling U.S. equities will, to a small degree, alleviate fears of quicker Fed increases. “But how the overall U.S. economic data pans out in the coming months will be more important for the rupee and other emerging market currencies.
  • We Expect Pair to trade in the range between 74.15 to 73.60

Indian Equities:-

  • After the drubbing yesterday, equities have begun the session on a strong note. The Nifty has soared past 10,350, while the Sensex is higher by 400 points.  All sectoral indices are trading in the green, with maximum gains visible among banks, auto, metals and pharmaceutical sectors. The Nifty Midcap index is higher by 2 percent.
  • The Sensex is up 419.39 points or 1.23% at 34420.54, while the Nifty is higher by 135.10 points or 1.32% at 10369.80. The market breadth is positive as 624 shares advanced, against a decline of 168 shares, while 2635 shares were unchanged.

Global Markets:-

  • Asian markets are lower today as Japanese, Chinese and Hong Kong shares fall. The Nikkei 225 is off 0.45% while the Hang Seng is down 0.92%. The Shanghai Composite is off 1.11% And the australian ASX200 is up by 15 points and 0.25% up.
  • European markets finished sharply lower yesterday with shares in London leading the region. The FTSE 100 is down 1.94% while France’s CAC 40 is off 1.92% and Germany’s DAX is lower by 1.48%.
  • Wall Street indexes continued their slide in Thursday’s volatile session as investors worried about rising interest rates and braced for impact on corporate earnings from trade conflicts, a day before quarterly reporting season begins.
  • The Dow Jones Industrial Average fell 545.91 points, or 2.13 percent, to 25,052.83, the S&P 500 lost 57.31 points, or 2.06 percent, to 2,728.37 and the Nasdaq Composite dropped 92.99 points, or 1.25 percent, to 7,329.06.
  • U.S. consumer prices rose less than expected in September, held back by a slower increase in the cost of rent and falling energy prices, as underlying inflation pressures appeared to cool slightly.
  • The modest price increases come despite a U.S. labor market that looks robust by most measures. A separate report on Thursday showed an unexpected but moderate rise in the number of Americans filing for unemployment benefits last week. The Consumer Price Index increased 0.1 percent last month after rising 0.2 percent in August, the Labor Department said. In the 12 months through September, the CPI increased 2.3 percent, slowing from August’s 2.7 percent advance. Excluding the volatile food and energy components, the CPI edged up 0.1 percent for the second straight month. The so-called core index had increased 0.2 percent in May, June and July.
  • The dollar index declined 0.5% and the 10-year Treasury yields cooled to 3.13% on Thursday after data showed that consumer prices in the U.S. rose 2.3% in September, slower than the 2.4% pace expected by economists.