Financial Market Overview
02nd January, 2019
MARKETS AT OPEN:-
- The Indian rupee opened lower against the dollar as most regional currencies and equities declined following disappointing manufacturing data from China.
- The rupee opened at 69.52 versus its previous close of 69.45. For the rupee to continue its recent rally, it will require incremental good news in the form of a further fall in crude oil prices or more easing of domestic inflation expectations. The risk-reward for rupee long positions is “very poor” at present levels and a move back above 70.
- The South Korean won, the Philippine peso, and the Indonesian rupiah paced losses in Asia currencies on Wednesday amid an equity selloff on Hong Kong and China bourses. The Hang Seng Index was down more than 2.5% and the Shanghai Composite slipped about a percent after the Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) dropped into contraction territory.
- We expect USD/INR to trade in a range between 69.30 to 69. 80 today.
- Equity benchmarks have had a negative start in opening trade. The Nifty is still above 10,800 level.
- The Sensex is down by 163 points or 0.45% at 36090, and the Nifty down 65.70 points or 0.60% at 10844.40.
- Asian markets are lower today as Chinese and Hong Kong shares fall. The Shanghai Composite is off -1.01% while the Hang Seng is down 2.55%. The Nikkei 225 is trading down too at -0.31%. Where Australia ASX is down by -50 points or -0.88%.
- European markets finished mixed as of the most recent closing prices. The DAX gained 1.71% and the CAC 40 rose 1.11%. The FTSE 100 lost 0.09%.
- Wall Street advanced in relatively low-volume trading on Monday as revelers gathered to ring in 2019, marking the end of the worst year for U.S. stocks in a decade.
- The Dow Jones Industrial Average rose 265.67 points, or 1.15 percent, to 23,328.07, the S&P 500 gained 21.21 points, or 0.85 percent, to 2,506.95, and the Nasdaq Composite added 50.76 points, or 0.77 percent, to 6,635.28.
- The Japanese economy contracted the most in over four years in the third quarter as companies slashed spending, threatening to chill the investment outlook in 2019 as the export-reliant nation grapples with slowing global growth and trade frictions. The slump in the world’s third-biggest economy adds to signs elsewhere in Asia and Europe of weakening momentum, with recent data in China and Australia showing a slowdown in growth and stoking concerns about the wider impact of the Sino-U.S trade war.
- Growth expectations will be the major focus point for all asset classes in the coming months. The recent decline in long-term U.S. bond yields, combined with the mostly poor economic data out of China, has increased the odds of a global economic slowdown. The 10-year Treasury yield edged lower on Wednesday, extending its recent decline to 11-month lows. The yield difference with the two-year bond was at 20 basis points.
- Dollar index little changed at 96.17. Brent crude oil contract 0.5% lower at $53.54 per barrel.
- Ten-year US yield at 2.6860%. The dollar eased against the yen on Wednesday as caution prevailed on the first trading day of the new year on wider concerns about global economic growth, the U.S. government shutdown and a slower pace of Federal Reserve rae hikes.