Financial Market Overview
11th December, 2018
MARKETS AT OPEN:-
- The Indian rupee is opened sharply lower against the dollar following the unexpected resignation of Reserve Bank of India Governor Urjit Patel.
- The rupee opened at 72.20 versus its previous close of 71.34. After markets closed yesterday, Patel said in a statement that he was stepping down from his position with immediate effect on account of personal reasons. His resignation comes amid recent differences between Prime Minister Narendra Modi’s government and the central bank over issues ranging from liquidity, governance, and regulation.
- The move is likely to spook investors as the government and RBI had seemingly ironed out their differences at the RBI’s last board meeting held on November 19. The resignation of RBI Governor Urjit Patel signals that the government has come out on top in its dispute with the central bank, but at the cost of undermining the RBI’s credibility and its inflation-fighting credentials
- We expect USD/INR to trade in a range between 72.05 – 72.60 today.
- Equity benchmarks have a gap-down opening, with the Nifty shedding a little over 1 percent.
- The Sensex is down 459.07 points or 1.31% at 34500.07, while the Nifty is down 148.90 points or 1.42% at 10339.60.
- Asian markets are higher today as Japanese and Hong Kong shares show gains. The Nikkei 225 is up 0.56% while the Hang Seng is up 0.27%. The Shanghai Composite is trading up at 0.37%. Australian ASX 200 is down by 113 points or -2.00%.
- European markets finished broadly lower today with shares in Germany leading the region. The DAX is down 1.54% while France’s CAC 40 is off 1.47% and London’s FTSE 100 is lower by 0.83%.
- U.S. stocks ended a volatile session slightly higher on Monday, helped by gains in technology shares, though uncertainty over Britain’s exit from the European Union kept investors on edge about global growth.
- The Dow Jones Industrial Average rose 31.94 points, or 0.13 percent, to 24,420.89, the S&P 500 gained 4.43 points, or 0.17 percent, to 2,637.51 and the Nasdaq Composite added 51.27 points, or 0.74 percent, to 7,020.52.
- Dollar index down 0.1% at 97.10, after climbing by 0.7% yesterday on the back of losses on the pound. The UK pound tumbled after Prime Minister Theresa May postponed a Parliament vote on her Brexit deal.
- The pound languished near 20-month lows against the dollar on Tuesday after British Prime Minister Theresa May postponed a crucial vote on her Brexit deal, rasing the risk of a chaotic exit from the European Union.
- The pound slumped to its weakest level in 20 months against the dollar on Monday as British Prime Minister Theresa May postponed a parliamentary vote on her Brexit deal, rekindling doubts about the United Kingdom’s departure from the European Union in March.
- U.S. Trade Representative Robert Lighthizer said on Sunday there was a “hard deadline” to the ceasefire and that Washington would impose new tariffs on Chinese goods unless trade talks wrapped up successfully by March 1.