Financial Market Overview
04th January, 2019
MARKETS AT OPEN:-
- The Indian rupee opened higher against the dollar after data showed that U.S. manufacturing activity slowed to a two-year low, reaffirming fears of a growth slowdown in the world’s largest economy.
- The rupee opened at 70.05 versus its previous close of 70.19. The rupee “provided a good account of itself” in yesterday’s trading considering the risk-off mood, pointing to the currency recovering from below 70.50 to close almost unchanged. The direction of the rupee in the coming months will be a function of how the dollar reacts to the interplay between increasing prospects of Federal Reserve nearing the end of its monetary tightening cycle and the likely global risk aversion.
- We expect USD/INR to trade in a range between 69.75 to 70.25 today.
- Equity benchmarks have had a positive start in opening trade. The Nifty trading down at 10,800 level.
- The Sensex is up by 77.08 points or 0.22% at 35590.79, and the Nifty down 27.40 points or 0.25% at 10699.80.
- Asian markets are higher today as Japanese and Hong Kong shares show gains. The Nikkei 225 is up 2.59% while the Hang Seng is up 1.44%. The Shanghai Composite is trading positive by 1.81%.. Where Australia ASX is down by 45 points or -0.80%.
- European markets finished broadly lower today with shares in France leading the region. The CAC 40 is down 1.66% while Germany’s DAX is off 1.55% and London’s FTSE 100 is lower by 0.62%.
- U.S. stocks plunged on Thursday, with the S&P 500 down more than 2 percent, after slowing U.S. factory activity on the heels of a dire revenue warning from Apple fueled fears of a global economic slowdown.
- Based on the latest available data, the Dow Jones Industrial Average fell 660.02 points, or 2.83 percent, to 22,686.22, the S&P 500 lost 57.19 points, or 2.28 percent, to 2,452.84 and the Nasdaq Composite dropped 185.10 points, or 2.78 percent, to 6,480.84.
- The dollar index edged lower in Asia trading on Friday, adding to yesterday’s losses, after the Institute for Supply Management (ISM) said its index of U.S. national factory activity tumbled to 54.1 last month from 59.3 in November. The reading was the lowest since November 2016 and was below the 57.9 print expected by economists.
- The data in the New Year are justifying fears of the world economy losing its growth momentum. These fears will prompt bets that the Fed will not rate interest rates anymore, a positive for the rupee and other emerging market currencies. But at the same time, if the slowdown concerns prompt another equity rout, EM currencies will struggle.
- The dim U.S. data caused the 10-year Treasury yields to slip by more than 10 basis points to 2.55%, the lowest in almost a year. Safe-haven demand lifted the yen by over a percent yesterday against the dollar to its highest since April.
- OPEC oil supply fell by 460,000 barrels per day between November and December, to 32.68 million bpd, as top exporter Saudi Arabia made an early start to a supply-limiting accord, while Iran and Libya posted involuntary declines.