Dec 03 2018

Rupee Opened Lower As Oil, Weak Data Offset Trade Truce

Financial Market Overview

03rd December, 2018

Morning Coffee:-                                                                        

MARKETS AT OPEN:-

Rupee:-

  • The Indian rupee opened lower against the dollar as jump in crude oil prices and a weaker-than-expected domestic GDP data, which overshadowed a ceasefire in the trade war between the U.S. and China.
  • The rupee opened at 69.87 versus its previous close of 69.59, an account of the about 5% rally in Brent crude in early Asia trading on Monday, the 1-month NDF was back above 70 after having fallen to near 69.70 earlier. India’s GDP, fiscal deficit, and GST (Goods and Services Tax) collection data were “not encouraging,” a likely factor that could prompt the rupee’s underperformance vis-à-vis other regional currencies.
  • We expect USD/INR to trade in a range between 69.75 – 70.10 today.

 Indian Equities:-

  • Equity benchmarks have made a good start in the opening trade, with the Nifty trading above 10,900.
  • The Sensex is up 234 points or 0.68% at 36445, while the Nifty is higher by 60 points or 0.55% at 10937.00.

Global Markets:-

  • Asian markets are higher today as Japanese and Hong Kong shares show gains. The Nikkei 225 is up 1.41% while the Hang Seng is up 2.73%. The Shanghai Composite is trading up by 2.79%. The Australian ASX 200 is up by 98 points or 1.74%.
  • European markets finished lower on Friday with shares in London leading the region. The FTSE 100 is down 0.83% while Germany’s DAX is off 0.36% and France’s CAC 40 is lower by 0.05%.
  • Wall Street rose on Friday with the S&P 500 and Nasdaq posting their biggest weekly percentage gains in nearly 7 years after the U.S. Federal Reserve hinted at a more dovish approach to future interest rate hikes on Wednesday and investors hoped for progress in the U.S.-China trade dispute at a G20 summit.
  • The Dow Jones Industrial Average rose 199.62 points, or 0.79 percent, to 25,538.46, the S&P 500 gained 22.23 points, or 0.81 percent, to 2,759.99 and the Nasdaq Composite added 57.45 points, or 0.79 percent, to 7,330.54.
  • The Chinese yuan led regional currencies higher on Monday after U.S. President Donald Trump and Chinese leader Xi Jinping agreed to a truce in their ongoing trade war for a period of 90 days. The ceasefire came following a meeting between the two leaders on Saturday at the sidelines of the G-20 Summit. Trump agreed that Washington will not proceed with the planned increase in tariffs on $200 billion of Chinese imports to 25% from the current 10%, which were scheduled to take effect from January 1. In turn, China said it will increase the purchase of American farm produce, energy, and industrial goods.
  • Dollar index down 0.3% at 96.99. Ten-year US yield at 3.0388%.
  • Brent crude oil contract 4.4% higher at $62.10 per barrel, at over two-week high.