Feb 28 2018

Rupee opens sharply lower as Powell testimony lifts Dollar

Financial Market Overview

28th February, 2018

Morning Coffee:-                                                                                  



  • Indian rupee opens at 65.12 sharply lower against the dollar after the Federal Reserve chair’s upbeat economic assessment and optimism on achieving inflation target boosted the U.S. currency. Pair USDINR now at 65.11,  against 64.87 previous close.
  • India’s December-quarter GDP data is due for release after market closes today. Economists polled expects economic growth to have accelerated to 6.90% in the October-December period from 6.30% in the previous quarter.
  • Pair to tip in range between 64.95-65.15.

Indian Equities:-

  • Benchmark indices extended losses in opening on Wednesday, tracking weakness in global peers and due to selling pressure in banking & financials.
  • The 30-share BSE Sensex was down 265.86 points or 0.77 percent at 34,080.53 and the 50-share NSE Nifty slipped 86.60 points or 0.82 percent to 10,467.70.

Global Markets:-

  • Asian Shares are lower today, the Hong Kong’s Hang Seng is down 1.66%, the Shanghai Composite is trading lower by 1.27% and the Australian ASX200 fell by 0.72%.
  • European markets finished mixed to lower as of the most recent closing prices on Tuesday. Shares in Germany fell as the DAX dropped 0.29%. The FTSE 100 lost 0.10% while the CAC 40 in France closed unchanged.
  • US. stocks suffered their biggest daily drops since the sell-off almost three weeks ago after comments from Federal Reserve Chairman Jerome Powell on Tuesday sparked concerns about more interest-rate increases than expected this year. The Dow Jones Industrial Average fell 299.24 points, or 1.16 percent, to 25,410.03, the S&P 500 lost 35.32 points, or 1.27 percent, to 2,744.28 and the Nasdaq Composite dropped 91.11 points, or 1.23 percent, to 7,330.35.
  • The dollar index climbed 0.6% overnight, the 10-year and U.S. bond yield was back above 2.90% after the new Fed Chair Jerome Powell, testifying before the U.S. House of Representatives’ Financial Services Committee, opened the possibility of four Fed rate hikes this year. Powell said that his personal outlook for economy had strengthened since December and reaffirmed Fed expectations for U.S. inflation to rise toward its 2% target this year. Investors are now speculating whether there will more than three rate increases this year, as was projected by the Fed’s last round of economic projections in December.
  • Data released earlier today showed China’s manufacturing sector in February slowed more than expected to the weakest in over one-and-a-half years. Official Purchasing Managers’ Index (PMI) fell to 50.3 in February from 51.3 in the previous month and versus expectations of 51.2.
  • Korean won led regional currencies lower in Wednesday trading, down almost 1%. The Chinese yuan slipped 0.2% and the Malaysian ringgit declined 0.5% against the dollar.