Dec 06 2018

Rupee Opened Lower As Global Equities Extend Losses

Financial Market Overview

06th December, 2018

Morning Coffee:-                                                                        

MARKETS AT OPEN:-

Rupee:-

  • The Indian rupee opened lower against the dollar after regional equities extended their fall and U.S. equity futures pointed to more losses on Wall Street. The rupee opened at 70.79 versus its previous close of 70.46. The arrest of the CFO of a Chinese company, Huawei Technologies, by Canadian authorities had further soured risk appetite, which was already being battered by worries over the U.S. growth outlook. The arrest is related to violations of U.S. sanctions.

    The arrest could lead to a confrontation between China and the U.S. after both the countries made peace overtures at the G-20 Summit. While the rupee withstood the equity selloff yesterday, it is “highly unlikely that we would have a similar episode today.

  • We expect USD/INR to trade in a range between 70.75 – 71.15 today.

 Indian Equities:-

  • A weak day for Indian markets thanks to global cues but benchmark indices managed to pull back slightly towards the close of the session. The S&P BSE Sensex which is down over 225 points and opened at 35,659.
  • The Nifty50 witnessed deep cuts as it slipped below its crucial support placed at 10800 levels. The index finally opened at 72 points down at 10,710.

Global Markets:-

  • Asian markets are lower today as Japanese and Hong Kong shares fall. The Nikkei 225 is off 1.84% while the Hang Seng is down 2.67%. The Shanghai Composite is trading down by -1.31%. The Australian ASX 200 is down by -28 points or -0.50%.
  • European markets finished sharply lower today with shares in London leading the region. The FTSE 100 is down 1.44% while France’s CAC 40 is off 1.36% and Germany’s DAX is lower by 1.19%.
  • (U.S. equity and bond markets were closed Wednesday a day of mourning for former President George H.W. Bush
  • Wall Street tumbled more than 3 percent on Tuesday, led lower by bank and industrial shares, as the U.S. bond market sent unsettling signs about economic growth and investors worried anew about global trade.
  • The Dow Jones Industrial Average fell 784.99 points, or 3.04 percent, to 25,041.44, the S&P 500 lost 89.65 points, or 3.21 percent, to 2,700.72 and the Nasdaq Composite dropped 283.09 points, or 3.8 percent, to 7,158.43.
  • 10-year Treasury yields dipped to 2.90%. The appetite for risk assets continues to remain restrained amid sliding long-term U.S. yields, which has led to the Treasury curve to flatten and raised fears of a slowdown in the world’s largest economy.
  • Uncertainty about the terms of Brexit next March clobbered British services firms last month, leaving the economy at risk of contracting, a survey showed on Wednesday. The IHS Markit/CIPS UK Services Purchasing Managers’ Index (PMI) fell to 50.4 from 52.2 in October, the weakest reading since just after the 2016 Brexit vote and below all forecasts.
  • U.S. borrowers filed the most mortgage applications in nearly two months as 30-year home loan costs fell to their lowest levels since early October, the Mortgage Bankers Association said on Wednesday.The Washington-based group’s seasonally adjusted measures on consumer requests for a loan to buy a home and to refinance an existing one rose 2.0 percent to 340.5 in the week ended Nov. 30. This was the strongest reading since 346.7 in the week of Oct. 5.