Financial Market Overview
09th January, 2019
MARKETS AT OPEN:-
- The Indian rupee opened marginally higher against the dollar after regional currencies and equities were boosted by signs that U.S. and China are making progress in their trade talks. However, crude oil’s “relentless recent rally” will likely keep the rupee’s advance in check.
- The rupee opened at 70.05 versus its previous close of 70.20. The currency will likely have to “pay for its repeated failure” to move past the 69.30 levels in recent days. In all probability, the pair has created an immediate-term bottom at the above level and unless Brent crude oil cool off, a revisit of 69.30 is “highly improbable.
- The Chinese yuan led Asian currencies higher on Wednesday amid optimism that Beijing and Washington will be able to resolve their trade differences, which hurt the outlook of both the economies. On Tuesday, U.S. officials said the two nations will continue their talks in Beijing for an unscheduled third day.
- We expect USD/INR to trade in a range between 69.85- 70.35 today.
- Equity benchmarks have witnessed a strong start with the Sensex rising over 204.30 points, while the Nifty positive in its opening trade and trading above 10,800.00 level.
- The Sensex is trading up by 204.30 points and 0.57% at 36185.23 while the Nifty opened higher by 0.59% at 10865.50 or 59.%.
- Asian markets are higher today as Japanese and Hong Kong shares show gains. The Nikkei 225 is up 1.16% while the Hang Seng is up 2.26%. The Shanghai Composite is trading higher at 1.59%. Where Australian ASX 200 is up by 53 points positive and 0.96%.
- European markets finished broadly higher today with shares in France leading the region. The CAC 40 is up 1.15% while London’s FTSE 100 is up 0.74% and Germany’s DAX is up 0.52%.
- The S&P 500 climbed to a three-week high on Tuesday, led by Apple, Amazon, Facebook and a rally in industrials on bets that the United States and China would strike a deal to end a trade war. The Dow Jones Industrial Average rose 256.64 points, or 1.09 percent, to 23,787.99, the S&P 500 gained 24.74 points, or 0.97 percent, to 2,574.43 and the Nasdaq Composite added 73.53 points, or 1.08 percent, to 6,897.00.
- There was more positive news flow on the trade talks. U.S. President Donald Trump said on Twitter that “talks with China are going well, citing people familiar with internal White House deliberations, that Trump was increasingly eager to make a deal with China to lift financial markets. Equities in the U.S. had suffered their biggest quarterly rout in the last quarter of 2018 amid trade worries and a flattening U.S. yield curve.
- On Wednesday, the onshore yuan was up 0.2% to the dollar. The Indonesian rupiah, the Thai baht, and the South Korean won were up by the same margin. In Asia equities, benchmark indexes of Hong Kong and South Korea added 1.7% each and China’s gauge was up 1.2%. U.S. index futures were higher, signaling a fourth day of advance on Wall Street.
- Dollar index 0.1% lower at 95.81, after climbing by 0.2% in previous session. Benchmark Brent crude oil contract 1.1% higher at $59.36 per barrel.
- Ten-year US yield at 2.73%. Yield now almost 20 basis points higher from last week’s lows amid upbeat risk appetite and robust US employment report.