Dec 26 2018

Rupee Opened Higher As Crude Plunges

Financial Market Overview

26th December, 2018

Morning Coffee:-                                                                        

MARKETS AT OPEN:-

Rupee:-

  • The Indian rupee opened higher against the dollar, tracking the more-than-6% decline in Brent crude prices amid a broad weakness in the greenback.
  • The rupee opened at 69.88 versus its previous close of 70.14, Brent at $50 per barrel is a very positive factor for the rupee. Easing risk-off sentiments in global equity markets will also support the currency.
  • The Brent crude prices slumped 6.2% on Dec. 24 to $50.47 per barrel, its lowest since August 2017, amid concerns over a slowdown in global economic growth. The U.S. crude futures also fell to a year-low at $42.53 per barrel in the previous session as concerns about oversupply weighed.
  • We expect USD/INR to trade in a range between 69.60 – 70.00 today.

Indian Equities:-

  • It is a negative start on D-Street, with the Sensex falling over 150 points, while the Nifty tested 10,600.
  • The Sensex is down 155.73 points or 0.44% at 35314.42, while the Nifty is down 51.00 points or 0.48% at 10612.50. The market breadth is negative as 223 shares advanced, against a decline of 259 shares, while 39 shares were unchanged.
  • All sectoral indices are trading in the red, with maximum cuts visible among automobiles, IT, metals and pharma seeing the most pain. The Nifty Midcap index is almost half a percent lower.

Global Markets:-

  • Japanese shares are higher today as the Nikkei 225 gains 0.45%. The stock markets in Hong Kong are closed at this time and Shanghai is down by -0.02% .
    European closed yesterday.
  • U.S. stocks have fallen sharply in recent weeks on concerns over slowing economic growth and efforts by the U.S. Federal Reserve to tighten monetary policy, with the S&P 500 index on pace for its biggest percentage decline in December since the Great Depression and on the cusp of confirming it is now in a bear market. The Nasdaq has fallen nearly 22 percent from its Aug. 29 high.Trump on Monday blasted the independent U.S. central bank, saying on Twitter that the “only problem our economy has is the Fed. They don’t have a feel for the market.U.S. stocks followed broad indexes in Europe and Asia lower on Monday, with markets in Germany and Italy closed.The Dow Jones Industrial Average fell 653.17 points, or 2.91 percent, to 21,792.2, the S&P 500 lost 65.52 points, or 2.71 percent, to 2,351.1 and the Nasdaq Composite dropped 140.08 points, or 2.21 percent, to 6,192.92.
  • Aside from Mnuchin’s move, Trump’s budget director and chief of staff, Mick Mulvaney, on Sunday said a partial U.S. government shutdown could continue to Jan. 3, when the new Congress convenes and Democrats take over the House of Representatives.
  • Brent crude futures were down $3.02 a barrel at $50.80. U.S. crude futures fell $2.94 to trade at $42.65. Brent fell 11 percent last week and hit its lowest since September 2017, while U.S. futures slid to their lowest since July 2017, bringing the decline in the two contracts to 35 percent so far this quarter.
  • The dollar index closed 0.4% lower on Monday due to increasing uncertainty after a partial U.S. shutdown and reports about tension between the White House and the Federal Reserve.
  • Bank of Japan policymakers disagreed on the feasibility of allowing bond yields to move more flexibly around the central bank’s zero percent target, reflecting division within the board on how to address the growing dangers of prolonged easing, minutes of their October rate review showed on Wednesday.
  • Ten-year US yield was at 2.7365%.