Jun 08 2018

Rupee opens sharply lower tracking broad losses in EM currencies

Financial Market Overview

08th June, 2018

Morning Coffee:-                                                                                  

MARKETS AT OPEN:-

Rupee:-

  • Indian rupee opens sharply lower against the dollar at 67.46, weighed by the rise in crude oil prices to one-week highs and broad losses in emerging market currencies. Pair USDINR now at 67.51 against 67.12 previous close.
  • We expect the pair to tip in range between 67.30-67.70 today.

Indian Equities:-

  • Equity benchmarks have begun the day on a lower note, tracking negative global cues along with domestic issues of higher bond yields, crude prices as well as weak rupee.
  • The Sensex is down 132.72 points or 0.37% at 35330.36, while the Nifty is lower by 45.60 points or 0.42% at 10722.80. The market breadth is in favour of the declines as 346 shares have advanced against a fall of 668 shares, while 68 shares are unchanged.

Global Markets:-

  • Asian markets are lower today. The Hong Kong’s Hang Seng is down 1.22%, the Shanghai Composite falls 1.24% and the Australian’s ASX200 is trading lower by 0.07%.
  • European markets finished lower yesterday with shares in France leading the region. The CAC 40 is down 0.17% while Germany’s DAX is off 0.15% and London’s FTSE 100 is lower by 0.10%.
  • The S&P and Nasdaq fell on Thursday, as the technology sector snapped a rally and investors turned to safer bets while keeping an eye on global trade tensions and awaiting next week’s U.S. and European central bank meetings. The Dow Jones Industrial Average rose 94.81 points, or 0.38 percent, to 25,241.2, the S&P 500 lost 1.98 points, or 0.07 percent, to 2,770.37 and the Nasdaq Composite dropped 54.17 points, or 0.7 percent, to 7,635.07.
  • Emerging market currencies was the focus of attention on Thursday as central banks in Brazil and Turkey took measures to defend their currencies. Such currencies have come under pressure in recent weeks amid a balance sheet runoff by the Federal Reserve and outlook for higher U.S. interest rates. Heads of central banks in India and Indonesia have in recent days have talked about the consequences of the Fed policy tightening on emerging market currencies. Brazilian real led the emerging market currencies lower on Thursday, falling to its lowest level in more than two years, and forcing the nation’s central bank to increase sales of currency swaps. Meanwhile, the Turkish central bank shored up the defense for the lira by increasing interest rates for the third time in less than two months.
  • In other EM currencies, the South African rand dropped by over 2%, its biggest fall this year, and the Russian ruble dropped by almost a percent.