Financial Market Overview
03rd January, 2019
MARKETS AT OPEN:-
- The Indian rupee opened lower against the U.S. currency after the dollar index rebounded from near two-month lows. The drop in the U.S. equity index after iPhone maker Apple lowered its sales forecast is expected to further weigh on the rupee.
- The rupee opened at 70.29 versus its previous close of 70.17. The risk aversion triggered by Apple’s sales warning, coupled with yesterday’s jump on the dollar index, will make it a challenging day for the rupee. While the overall domestic economic fundamentals remain supportive for the rupee, the global news flow signal that the local currency is more likely to fall from current levels.
- We expect USD/INR to trade in a range between 70.00 to 70.50 today.
- Equity benchmarks have had a negative start in opening trade. The Nifty trading down at 10,800 level.
- The Sensex is down by 31.83 points or 0.09% at 35859.69, and the Nifty down 25.70 points or 0.25% at 10766.80.
- Asian markets are higher today as Chinese and Hong Kong shares show gains. The Shanghai Composite is up 0.26% while the Hang Seng is up 0.13%. The Nikkei 225 is trading down at -0.31%. Where Australia ASX is up by 67 points or 1.19%.
- European markets finished mixed as of the most recent closing prices. The DAX gained 0.20% and the FTSE 100 rose 0.09%. The CAC 40 lost 0.87%.
- Wall Street edged nominally higher on Wednesday after stumbling out of the starting gate on the first trading day of the new year as bargain-hunting was offset by fears of a global economic slowdown.
- The Dow Jones Industrial Average rose 18.78 points, or 0.08 percent, to 23,346.24, the S&P 500 gained 3.18 points, or 0.13 percent, to 2,510.03 and the Nasdaq Composite added 30.66 points, or 0.46 percent, to 6,665.94.
- The dollar strengthened against major currencies except for the yen yesterday following weak China manufacturing data. Safe-haven demand prompted a 0.7% rise in the dollar index and on the yen and incited the 10-year U.S. yield to plumb new 11 month lows. The yen rose further in Asia trading on Thursday, hitting above 105 to the dollar at one point. It was last trading at 107.44, up 1.3% from yesterday.
- The increase in volatility around the yen is indicative of how nervous investors are over the outlook for risk. This is further borne out by the declining U.S. yields. “Apple’s cut in sales forecast will add more strength to the growth slowdown narrative.
- China’s economic growth slowed to 6.5 percent in the third quarter of last year, the weakest since the global financial crisis. Reuters reported government advisers had recommended a growth target of 6.0 to 6.5 percent for this year at the annual meeting, though the final figure won’t be made public until parliament’s annual meeting in early March.
- A drop in crude-oil prices at the end of last year has helped sentiment in Asia’s oil-importing economies, where trade deficits are a key vulnerability.