Rupee Positive For 2nd Week As Shares Rebound And Crude Prices Fall

Rupee Positive For 2nd Week As Shares Rebound And Crude Prices Fall

29 Dec 2018 03:21 PM

Weekly Synopsis

Date:-29th December 2018

 Markets from 24th December 2018 to 28th December 2018:-

 Indian Rupee

The Indian rupee rose for a second straight week against the dollar in a holiday-truncated week, tracking strength in regional and local shares amid volatile crude oil prices. The rupee settled at 69.94 to a dollar today, against 70.35 at previous close. Most Asian currencies ended higher against the dollar. For the week, the domestic currency gained 0.3%, adding to last week’s gains of over 2%. The currency trade in range bound this week, its gain straight this week ended on December. 28, 2018. The rupee closes on Friday at 69.94 against the previous weekly close of 70.14 on December 21st, 2018 to a greenback. It trades in a weekly range between 70.3975 to 69.7450 against the US Dollar.

India's foreign exchange reserves rose to $393.29 billion as of the week ended Dec. 21, from $393.12 billion in the previous week, according to central bank data released today.The reserves posted the biggest rise since week ended Nov. 30. The increase was mainly due to a rise in foreign currency assets to $367.97 billion from $367.87 billion a week earlier. The Reserve Bank of India has been intervening in the foreign exchange market to curb the rupee’s volatility. It has sold a net $15.84 billion from the spot foreign exchange market in January-October, compared with a net purchase of $21.47 billion in the same period in 2017.

The benchmark Brent crude oil contract started the week by declining 6% and extended the fall to a 17-month low of $49.93 per barrel tracking risk aversion and concerns about oversupply. It rebounded later to mark its best day in two years as global shares recovered, before dropping more than 4% yesterday. The Brent Contract was last trading at $52.82 per barrel. India imports about 80% of its crude oil requirements and the fall in crude oil prices had eased concerns about the widening of the nation’s trade deficit.

Gold prices on December 28 rose by Rs 170 to Rs 32,620 per 10 gram at the bullion market in the national capital amid increased demand and firm trend overseas. In line with gold prices, silver also spurted Rs 600 to Rs 39,250 per kg on fresh buying by industrial units and coin makers.

Global Market

The dollar index was last trading 0.2% lower, adding to overnight losses of 0.6%, as a drop in consumer confidence data underpinned concerns of a slowdown in the world’s largest economy.The index was headed to mark its biggest weekly decline in three weeks, weighed down by concerns over a partial U.S. shutdown and increasing difference between the White House and the Federal Reserve.

The U.S. Department of Commerce's Bureau of Economic Analysis and Census Bureau will not publish economic data during the ongoing partial government shutdown, the Wall Street Journal reported on Wednesday, citing an agency spokeswoman. The Commerce Department releases key figures on gross domestic product, inflation, personal income and spending, trade and new home sales, much of which are closely watched by investors and policymakers.

The number of Americans filing applications for jobless benefits rose marginally from near a 49-year low last week. Initial claims for state unemployment benefits increased 8,000 to a seasonally adjusted 214,000 for the week ended Dec. 15, the Labor Department said on Thursday. The number of people who filed for unemployment assistance in the U.S. last week came in below expectations, according to official data released on Thursday. The number of individuals filing for initial jobless benefits in the week ended Dec. 22 decreased by 1,000 to 216,000, the U.S. Department of Labor said. Figures for the prior week were revised up to 217,000 from the prior reading of 214,000.

Confidence among U.S consumers fell in December, marking its lowest level in five months, amid growing concerns of an economic slowdown. The Conference Board's index of consumer confidence decreased to 128.1 this month, compared to a reading of 133.7 forecast by economists.

Most financial market credit officers surveyed by the Federal Reserve in November said their big clients were exposed to emerging markets but were scaling back bets emerging market assets would rise in value, the U.S. central bank said on Thursday. The Fed surveyed senior credit officers at 23 institutions between Nov 6 and Nov 19, asking them about a range of market conditions.

Business leaders' confidence in the British economy has sunk to its lowest level in more than 18 months as the risk of a no-deal Brexit in a little over three months grows.The group, which represents business directors and leaders, said its confidence tracker briefly reached positive territory earlier this year when there was agreement on a Brexit transition period, but had fallen steadily since April and hit its lowest level this month.

Home prices in 20 U.S. cities slowed in October for a seventh consecutive month, extending the longest streak since 2014, a sign of waning demand amid higher mortgage rates and elevated property values. The 20-city index of property values increased 5 percent from a year earlier, after rising 5.2 percent in the prior month, S&P CoreLogic Case-Shiller data showed Wednesday. The median estimate in a Bloomberg survey of economists called for a gain of 4.9 percent. Nationally, home prices climbed 5.5 percent from October 2017.

Business confidence among entrepreneurs in China worsened in the fourth quarter compared with the previous one, and was at the lowest since the second quarter of 2017. The entrepreneurs' confidence index dropped to 67.8 percent in the fourth quarter, 3.4 percentage points lower than in the third quarter, the central bank survey showed.

China’s industrial profits fell 1.8% to 594.8 billion yuan in November from a year earlier, recording its first contraction since December 2015, the National Bureau of Statistics reported on Thursday in Asia. In the first 11 months of 2018, industrial profits rose 11.8% year-on-year, slower than a 13.6% rise in the January to October period, the data showed.

Manufacturing activity in the Chicago-area slowed this month, industry data showed on Friday. In a report, the Institute for Supply Management (ISM) said its Chicago purchasing managers’ index fell to a seasonally adjusted 65.4 this month, from 66.4 in November.

Local Market

After a weak start for a truncated week, the Indian indices recovered from the lows and ended with a percent gain.The Sensex rose 0.93 percent this week, or 334.65 points, to ending at 36,076.72, while Nifty was up 0.98 percent, or 105.9 points, to close at 10,859.9.

Indian banks' current level of provisions are not enough to cover their expected losses and a larger capital infusion may be required to boost credit growth, according to the central bank. The government has infused capital in PSBs intermittently. In the last three years (2015-18), however, more than 70 per cent of the infused capital was absorbed into losses incurred by them.

Foreign investors were net buyers of $224.29 million of Indian shares on Dec. 27, according to data from the National Securities Depository Ltd. These investors have net bought shares worth $462.50 million. Overseas investors have so far sold $4.59 billion worth of equities since Jan. 1, against net purchases worth $7.86 billion of Indian shares in 2017 and $2.90 billion in 2016.

The fiscal deficit in the first eight months of the current financial year totalled 7.17 trillion rupees, or 114.8% of government’s estimate, widening from 6.12 trillion rupees in the comparable year-earlier period, data showed yesterday. India is committed to achieve the fiscal deficit target for this financial year and variations, if any, will be minor.



Date : Dec-2018